U.K. Offers Glimmer of Hope on Aid for Pandemic-Hit Businesses
The U.K. dangled the prospect of more assistance for hospitality businesses hit by a record surge in coronavirus.
(Bloomberg) -- The U.K. dangled the prospect of more assistance for hospitality businesses hit by a record surge in coronavirus.
Chancellor of the Exchequer Rishi Sunak -- currently in California on a long-planned business trip -- will meet virtually later on Thursday with representatives of the hospitality industry, which has been clamoring for further measures to alleviate the wave of cancellations they’re suffering as a new Covid wave takes hold.
“We are in a very difficult and rapidly changing set of circumstances and it’s important that ministers act,” Treasury Minister John Glen told the House of Commons on Thursday. He said he and Sunak will meet the industry “to see what more needs to be done.”
Glen’s remarks offer a glimmer of hope to the country’s embattled pubs, restaurants and nightclubs, which have suffered a drop-off in bookings and surge in cancellations at a time of year they’d normally be at their busiest. That’s come as a wave of the fast-spreading omicron variant caused daily coronavirus cases to surge to a record 78,610 on Wednesday.
While Prime Minster Boris Johnson has stopped short of bringing in stringent rules on social mixing that have been used to fight previous waves of the virus, the Confederation of British Industry has warned of a “lockdown by stealth,” as Britons steer clear of social gatherings. On Wednesday, Chief Medical Officer Chris Whitty urged Britons to prioritize social interactions that matter to them and de-prioritize others.
With the virus resurgent, the UKHospitality industry group has forecast that pub and restaurant earnings will be down by as much as 40% for December due to cancellations.
But until now, Sunak has stood firm, with the Treasury arguing that measures in place already are sufficient for now. They include business rates relief and a VAT reduction that run through March, and the state backed Recovery Loans program, which runs through June.
Moreover, Glen said there’s still 250 million pounds ($331 million) of support available through its Additional Restrictions Grant program, with money allocated by local councils. Some three-quarters of local authorities have between 5% and 40% of their allocation left to distribute, he said.
But the pressure on the government to do more is growing. Pat McFadden, a Treasury spokesman for the opposition Labour Party, told Glen that there’s been “radio silence” from Sunak and urged ministers to communicate with “businesses who are losing bookings by the hour and watching their December profits vanish into thin air.”
And the pressure is coming from members of Sunak’s own Conservative Party too.
The longest-standing Member of Parliament, Peter Bottomley said that current measures focus on alleviating costs, and urged ministers to focus on making up for lost revenues as a result of the “reduction of Christmas cheer.”
Former minister Steve Brine said hospitality is now in an “effective lockdown” and that businesses face “complete ruin,” meaning the Treasury has to do more. And another Tory MP, Greg Smith said pubs in his constituency are losing 50% or 60% of their bookings. He asked Glen for an “assurance that there will be a decision by ministers” after the meeting this afternoon to “give businesses the clarity the need of the support that they’re going to get.”
©2021 Bloomberg L.P.