Britain offers $1.3 billion in aid to hospitality and leisure businesses

The British government has responded to pleas for help from bars, restaurants and leisure businesses amid a surge in cases of the omicron variant of the coronavirus that has led to a wave of cancellations, staff shortages and closures.

The Treasury said Tuesday it would provide a package of grants and other relief amounting to 1 billion pounds ($1.3 billion).

“We recognise that the spread of the omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time,” Rishi Sunak, the chancellor of the Exchequer, said in a statement.

The festive period is critical for the hospitality industry and often described as the “golden quarter,” when a substantial portion of profits are made between Halloween and New Year’s Eve.

About 200,000 hospitality and leisure businesses will be eligible for a grant of up to 6,000 pounds per site. The government will also cover the cost of legally required sick pay for small and midsize businesses and is topping up a culture fund for organizations including theaters, orchestras and museums, with an additional 30 million pounds.

The Treasury had been pulling back on pandemic-related support measures, with some of the largest programmes, including the furlough programme, ending in September. The announcement Tuesday was the first major provision of pandemic-specific support since March. The government’s most recent fiscal plans attempted to divert the country toward a post-pandemic economy, with spending focused on education, the National Health Service and job skills.

But late last week, London declared a “major incident” because of the spread of omicron. Across the capital, bookshops, gyms, pubs and restaurants have voluntarily closed their doors, either as a precaution against the virus or because too many staff members are sick to operate. Last weekend, half of London's West End theaters had to cancel performances.

The government said it was providing “generous grants” that are equivalent to the monthly amount made available earlier in the year when the businesses were legally forced to close.

On Monday, there were more than 45,000 confirmed omicron cases in Britain, but the true number is believed to be much higher. In the past week, there has been a 60 percent increase in the overall number of COVID cases. People are required to isolate for 10 days, which has left businesses and hospitals short of staff.

The government has not required hospitality businesses to shut, but new measures in England, such as asking people to work from home and requiring COVID passes for large events, have led to Christmas party cancellations and fewer people socializing outside their homes. Last week, England’s chief medical officer encouraged people to go only to events that “really matter” to them.

The grants have been broadly welcomed by the hospitality industry. Kate Nicholls, CEO of UKHospitality, a trade group, said it was a “generous package.” It provides “an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated,” she added in a statement.

But with government ministers in tense talks about whether more restrictions will be needed over Christmas, there are already concerns that the grants might not be enough.

“Whilst these measures are a positive starting point, if restrictions persist or are tightened further, then we would need to see a wider support package,” Shevaun Haviland, director general of the British Chambers of Commerce, said in a statement.

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