Rishi Sunak’s £1billion bailout for Britain’s hospitality industry to help firms hit by a collapse in Christmas bookings over recent weeks was today branded a ‘dud cracker’ and not even a ‘sticking plaster’ by hotel bosses.

Following days of intense lobbying by industry representatives, MPs, and firms in the wake of Omicron Covid-19’s rise, the Chancellor is now offering additional assistance to the leisure and hospitality sectors of England.

It includes one-off grants of up to £6,000 per premises for businesses in the affected sectors in England, which the Treasury expects will be administered by local authorities and to be available in the coming weeks.

Tim Rumney is the CEO of Best Western Hotels Great Britain. He stated that support doesn’t go far enough and added, BBC Radio 4’s PM program: “It feels like a Christmas cracker.

Tim Rumney, the chief executive of Best Western Hotels in Great Britain

Surinder Arora, founder and chairman of the Arora Group

Tim Rumney (left), chief executive of Best Western Hotels Great Britain said the support didn’t go far enough. Surinder Arora (right), founder of the Arora Group has been unimpressed with the package.

Rishi Sunak has released a £1billion bailout for the hospitality industry to help firms hit by a collapse in Christmas bookings

Rishi Sunak has released a £1billion bailout for the hospitality industry to help firms hit by a collapse in Christmas bookings

‘The support is always welcomed but it just does not go far enough in helping us with the current problems we are facing with hotel cancellations, and their impact on hotels’ finances.

“What we want to see are a reintroduction the support package which was available during lockdown so reinstatement furlough, commitment to extending VAT relief beyond April 1st, preferably reducing it to 5% as he initially saw, and suspension of business rates.

Which financial assistance is available now for businesses?

The Treasury has announced £1 billion of financial support for hospitality and leisure firms affected by the spread of the Omicron variant of Covid-19 in recent weeks. This is the list of support that is available to businesses:  

– Hotelity and Leisure Grants

The Treasury has allotted £683 million of funding for targeted grants for hospitality and leisure businesses in England.

Businesses will be eligible for one-off grants of up to £6,000 per premises, the Government said.

Other grants

There will also be £102 million of funding made available for further grants, to be given by local authorities to other businesses affected by the pandemic.

The additional funding will be available to retailers, suppliers, landlords and tenants of the affected companies.

Around 200,000 companies will be eligible to receive business grants. These will all be administered locally and available within the next few weeks.

Sick pay

According to the Government, it will cover the costs of sick pay in the UK for Covid-related absences as well as medium-sized employers.

These will be made possible by the Government’s reinstatement of its statutory sick-pay rebate program (SSPRS).

For firms employing less than 250 workers, the scheme will reimburse them with Covid-related sick wages for up to two weeks.

The scheme will apply to firms starting Tuesday, and they can make retrospective claims beginning in mid-January.

Cultural recovery funding

About £30 million of further funding will also be made available through the Culture Recovery Fund, enabling arts and culture organisations to access funding over the winter.

– Where else in the UK

The Treasury announced £150 million for the devolved administrations.

The funding, which will be issued in relation to the Barnett formula, will comprise about £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

– Prevailing measures

Sunak also highlighted several existing financial assistance measures that can be used to support firms.

These include reduced business rates relief to retail, leisure and hospitality firms during the remaining financial year.

In the financial year 2022/23, there will be a reduction of 50% in the business rates for these companies.

However, these reliefs will both have limited benefit for larger operators, with next year’s relief capped at £110,000 per business.

The Chancellor highlighted also the hospitality VAT rate at 12.5%. This is lower than 20% before the pandemic. Although it increased to 5% from October,

Pub owners have stated that the VAT support has limited benefits when takings are greatly reduced. However, it is not beneficial when closings occur.


The cash flow problem is the biggest challenge that hospitality and hotels face. For many businesses, December is their most crucial month and will see them through the first quarter next year.

‘A £6,000 grant really goes nowhere near protecting the cash position of our members in Best Western and of the wider hospitality industry.’

Surinder Arora (founder and Chairman of Arora Group), the UK’s largest private hotel owner/operator, was not impressed by the offer, which he claimed would be of little benefit to bigger companies.

According to him, the Government is in a difficult position. They had to make a decision quickly last year about furlough, business rates, VAT, etc. This time, I feel they have lost their focus, which makes it very hard.

“And I have heard other speakers talk about’sticking plaster’, but it doesn’t go nearly as far.

‘I really wish and hope the Government would look at this urgently and support businesses such as ours – not just smaller, medium sized businesses, but when you’re talking about £5,000 or £6,000 support for a business.

‘If I was just to mention one of my hotels, for example, the rateable value is nearly £6million a year. You’re paying about 50p in the £1. So the business rates alone for one hotel are about £250,000 a month. Where does £6,000 take year? 

“I had a question about it last week with one of my colleagues and was thinking, “Well surely we wouldn’t be paying full rate now that the business has collapsed.” The team replied that they didn’t believe it. They looked at turnover from 2015/16 to calculate the rateable values.

“Well that is impossible, so I feel the Government must help other businesses as well. Because we need people to come in, we thought we could get some VAT relief.

Additionally, the government plans to spend taxpayers’ funds to help cover Covid-related sick absences at firms employing fewer that 250 people.

Cultural organisations in England can also access a further £30 million funding during the winter via the culture recovery fund, the Treasury said.

After he cancelled a Government trip to California, Sunak made the announcement in crisis talks with business leaders.

Due to Omicron spreading fearfully, businesses have witnessed their takings drop.

Boris Johnson, the Prime Minister of Canada, stated that the increased Omicron funding has led to people being more cautious about how they live their lives. It is affecting our leisure, hospitality, and cultural sector at what is often the busiest season of the year.

‘That’s why we’re taking immediate action to help with an extra £1 billion in grants to these industries and reintroducing our Statutory Sick Pay Rebate Scheme.

“I appeal to all citizens of the United States to get their vital protection now, so that your family and friends can be protected.”

Sunak stated that businesses operating in the leisure and hospitality sectors will be facing significant uncertainty due to the Omicron variation.

‘So we’re stepping in with £1 billion of support, including a new grant scheme, the reintroduction of the Statutory Sick Pay Rebate Scheme and further funding released through the culture recovery fund.’

Treasury stated that the additional support is a continuation of existing assistance programs for small businesses.

The devolved administrations will receive around £150 million of funding through the Barnett formula as part of the support announced, the department added.

This includes around £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.

As much as 30% of the industry’s annual revenue comes from Christmas sales, it relies on them to fund its operations through January/February. Critics welcomed the offer of help but argued the £6,000 grants would not be enough.

Closed restaurants and empty pavements on Earlham Street in London's Soho last night at about 7pm

Earlham Street was closed last night around 7pm.

Few people walk through Wardour Street in London's West End last night at about 9.15pm as Britons stay at home

Few people walk through Wardour Street in London’s West End last night at about 9.15pm as Britons stay at home

A quiet evening on Brewer Street in London's West End yesterday evening with this photo taken at about 9.15pm

Yesterday evening was quiet on Brewer Street, London’s West End. This photograph was taken about 9.15pm.

People cross the road in Oxford Circus last night at about 8.45pm as London's West End area remains quiet

As London’s West End is still quiet, pedestrians walked along Oxford Circus in the late evening.

Harry Potter and the Cursed Child is one of the West End shows still running. The Palace Theatre is seen at 7.30pm last night

Harry Potter and the Cursed Child, one of the West End plays still in production is Harry Potter and the Cursed Child. At 7.30pm, last night’s Palace Theatre performance was. 

Jonathan Neame is the boss of Britain’s oldest brewery Shepherd Neame. He said that while we appreciate the Government’s attention, it does not seem sufficient to make up for the millions of sales lost.

Des Gunewardena, who runs the D&D restaurant chain, said £6,000 would not even cover his restaurants’ Christmas decorations.

He added: ‘Many of our larger restaurants lost £100,000-plus from cancellations last week. This week it is the same as last week. Heaven knows what happens to New Year’s Eve.

‘So each of those businesses is facing £200,000-plus losses and has been offered £6,000 which doesn’t even cover the cost of our Christmas decorations.’

The Institute of Directors stated that the assistance will provide ‘welcome relief’ to businesses.

Roger Barker is the policy director. He stated: “However with the dismantling of several support schemes at the close of Q1 2022 such as the VAT cut for hospitality or business rates support, businesses still need to have the assurance that these support measures will last into 2022.

Rain Newton-Smith is the chief economist of Confederation of British Industry. He stated that any new lockdowns must be matched up with additional support.

She stated that the Government should closely monitor the situation and make sure any restrictions are accompanied by targeted cashflow support.