Hospitality and leisure businesses are set to benefit from a £1 billion fund signed off by the chancellor today, but outbound travel firms do not feature in the support measures.
Rishi Sunak said the “generous” fund would include cash grants of up to £6,000 per premises for each eligible firm.
However, the government is giving a boost of £102 million to the Additional Restrictions Grant (ARG) fund for local authorities in England, which travel companies can apply for.
The ARG grants are handed out by councils, which have the discretion to allocate this funding to businesses most in need – and can be given to travel companies. The government said the top up will be prioritised for those councils that have distributed the most of their existing allocation and is on top of the £250 million of previously-allocated funding that remains with local authorities.
Abta has previously pointed out that the government has recommended that local authorities prioritise “those sectors that remain closed or are severely impacted by the extended restrictions, even if those businesses have already been in receipt of Restart Grants”.
However, travel agencies have had mixed success using the scheme, with some being offered ‘laughable’ sums and others refused financial aid.
Sunak said the government would also help certain firms with the cost of Statutory Sick Pay for Covid-related absences for small and medium-sized across the UK and announced an extra £30 million to help theatres and museums.
The government said about 200,000 businesses will be eligible for business grants which will be administered by local authorities and will be available in the coming weeks.
As part of the support package, the devolved administrations will receive around £150 million of funding through the Barnett formula, comprising around £80 million for the Scottish government, £50 million for the Welsh government and £25 million for the Northern Ireland Executive.
Rain Newton-Smith, the chief economist for the Confederation of British Industry (CBI), said “The latest targeted package offers a fair variety of support to help keep businesses open” but stressed: “The international travel and tourism sector remains disappointingly out of scope despite the heavy toll it has taken for many months and its vital role in enabling international trade and supporting jobs.”
Newton Smith added: “Business stands ready to work in partnership with Government to lift confidence as we head into 2022 and the critical new year booking period. Ramping up mass-testing, lifting international restrictions as soon as possible, and clear, forward guidance for firms will all be crucial to protect jobs and growth.
“But if infection and hospitalisation rates continue to grow across the country, the potential of further measures will weigh on firms. The Government must monitor the situation closely and ensure that any new restrictions go in lock-step with further targeted cashflow support to those firms most in distress across sectors impacted.”
Airport Operators Association chief executive Karen Dee said: “Aviation ranks with hospitality and tourism as one of the worst-hit sectors in the UK economy. Airports have lost billions in revenue already in this pandemic and, with omicron hitting aviation before any other sector, airports continue to accrue losses at an alarming rate following the most recent government-imposed travel restrictions.
“Yet despite the critical role airports and aviation connectivity play in the economy, the chancellor time and again overlooks our sector when he announces sector-specific support measures. Meanwhile, our airport competitors in the US, Germany and Italy have received generous grants so they can maintain their critical operations and be ready for the recovery.
“The lack of significant government support means that the UK’s aviation connectivity recovery will be longer and harder than the recoveries of our competitors. This will hurt UK jobs, damage our economy and undermine the UK government’s global Britain ambitions.”
Sunak did not comment on whether further help would be made available should further restrictions to tackle the spread of Omicron be announced.
But he insisted the Treasury would “always respond proportionately and appropriately to the situation we face” and said he believes the measures announced today are comparable to the grants on offer when businesses were fully closed earlier this year.
Making the announcement, Sunak said: “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.
“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.
“Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to Get Boosted Now.”