Rishi Sunak will spend the weekend considering calls for a new support package for pubs and restaurants suffering a collapse in business in the face of the Omicron surge in the UK.
The British chancellor is said by allies to be looking at possible financial help which could run to hundreds of millions of pounds if the disruption caused by the coronavirus intensifies.
But Sunak, who cut short a visit to California to hold a second day of talks with business leaders on Friday, is said by allies to be determined that any new support is targeted, affordable and proportionate.
“We recognise how important the festive period is for so many businesses,” the Treasury said. “The government will continue to engage constructively on how it can best provide ongoing support to the businesses and sectors affected.”
Sunak has previously indicated that £250m from an earlier “additional restrictions grant” fund remains unspent, but business leaders are hopeful the chancellor will go beyond that in the coming days.
Ministers are considering whether new Covid restrictions will be needed to deal with the Omicron surge; any tightening of rules would make a dire situation for pubs and restaurants even worse.
If Sunak does decide to help the hospitality sector, he will have to choose how best to provide assistance, with business groups urging the chancellor to consider a range of options.
Some businesses want upfront cash; others favour an extension of VAT and business rates relief beyond March to help them through the spring. A deferral of “bounceback loan” repayments is also being considered.
Business leaders also stressed in talks with Sunak the need for clear messaging from the government over the risks posed by Omicron, following a press conference this week where Chris Whitty, chief medical officer, struck a much more cautious tone than prime minister Boris Johnson.
Johnson has not yet ordered any closures or restrictions on opening times of hospitality venues, but the public health advice issued by Chris Whitty, chief medical officer, has had a chilling effect on business.
Des Gunewardena, chief executive of D&D London, which owns restaurants in the City of London including Coq d’Argent and 14 Hills, said: “What you need to address is a short-term impact of your revenue being taken away.” He pointed to France where in earlier lockdowns, D&D’s Paris restaurant had been reimbursed by the government for loss of revenue, allowing it to continue paying its staff and rent.
Meanwhile the City of London Corporation has called on Sunak to help hard-hit shops, restaurants and pubs in the Square Mile as offices have emptied following the government’s advice to work from home.
In a letter seen by the Financial Times, the local authority covering the capital’s financial centre warned that businesses could fail as a result of the government’s attempts to slow the spread of the Omicron coronavirus variant through its so-called Plan B.
Corporation policy chair Catherine McGuinness expressed concern about the impact of the measure “on these businesses who rely on office-worker footfall”.
McGuinness warned that the number of people travelling to the City was already dropping, and added that there was now concern that “some businesses which have survived so far, may even fail”.
The letter from McGuinness adds to pressure on the government from other business leaders who have been calling for direct financial support to help the companies hardest hit by the Plan B measures.
Sunak to consider financial help for Covid-hit UK pubs and restaurants
Pinoy Variant