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Omicron’s impact on the UK economy: Rishi Sunak unveils £1bn support package

December 23, 2021

Chancellor Rishi Sunak has announced a £1 billion grants package for the hospitality and leisure sector. The announcement comes in response to the growing number of cases of Covid’s Omicron variant, which is forcing most British citizens into quarantine. The impact of the new variant led to the cancellation of numerous corporate events and Christmas festivities in December alone and had a major negative impact on the hospitality sector.

Partly due to the government measures, the hospitality and leisure sectors were recovering in the second half of this year, returning to pre-pandemic levels. Under the new measures, businesses in the hospitality and leisure sectors will be eligible for a one-off grant of up to £6,000, while a further £100 million will be made available to local authorities to support other businesses.

The government will also cover the cost of Covid-related sick pay for small and medium-sized businesses across the UK. Rishi Sunak also announced support for the cultural sector, allocating £30 million through the Culture Recovery Fund to help theatres, museums and orchestras until March 2022.

The government also announced that throughout the period, HMRC is ready to support any business hardly hit by the pandemic through the Time to Pay scheme, giving the option of a slight delay and payments in instalments, especially for the hospitality and leisure sectors. The chancellor also decided to provide support to other businesses affected by the impact of Omicron, such as suppliers to the hospitality and leisure sectors, by allocating more than £100 million to the Additional Restrictions Grant (ARG) fund for local authorities.

These authorities will be able to allocate the funding to the businesses that need it most. The top-up to the ARG fund will be prioritised for those who have already distributed the majority of their existing allocation. The top-up to the ARG fund is in addition to the £250m of funding previously allocated to help local authorities.

During the cabinet meeting, Rishi Sunak acknowledged the huge uncertainty created by the spread of the Omicron variant and the impact it is having on businesses in the hospitality and leisure sectors, so he called for an urgent £1 billion intervention to support the most affected businesses.

Domenico Santomasi

Photo by Isaac Quesada on Unsplash

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