“Too little, too late” - sector reacts to Omicron grants

By Joe Lutrario

- Last updated on GMT

“Too little, too late” sector reacts to Omicron grants

Related tags Coronavirus Rishi Sunak

The Chancellor’s Omicron support package, which includes grants of up to £6,000 per site and the return of Statutory Sick Pay for Covid-related absences, has been met with a lukewarm reception by the hospitality industry.

Gaucho and M Restaurants CEO Martin Williams said the package was “too little, too late” and would only “act as a sticking plaster on major challenges for the sector”.

“The return of Statutory Sick Pay (SSP) is welcome but must be extended to all businesses to avoid mass layoffs,” continued Williams, alluding to the fact that the SSP is only available to small and medium businesses. 

“What small and large business alike need right now is a 2022 strategy which sees the extension of 75% Business Rates Relief and the introduction of a permanent 12.5% VAT rate. These two levers have been effective in supporting the hospitality sector throughout 2021 and will be paramount in the continued survival of hospitality.”

D&D London CEO Des Gunewardena assessment was more damning, describing the figure of £6,000 per site as “wholly and shockingly inadequate”. 

“Many of our larger restaurants in central London - including Quaglino’s, 100 Wardour Street and Coq d’Argent - each lost over £1000,000 revenue from cancellations last week. And the same again this week. And heaven knows what’s going to happen to our New Year’s Eve. It doesn’t even cover the cost our Xmas decorations,” continues Gunewardena, who went on to accuse the Government of “crudely discriminating” against the owners and staff of larger restaurants.

“Quaglinos employs 100+ staff and gets 6k. If those same 100 staff were employed by 10 smaller restaurants we’d get 60k. Why?”

Around 200,000 businesses will be eligible for business grants​ which will be administered by local authorities and will be available in the coming weeks.

JÖRO director and co-owner Stacey Sherwood-French called for more help with VAT as well as Covid-related loan repayments’ timescales. 

“It’s clear that the support package recognises the hospitality industry and any assistance is welcomed and appreciated,” she says. “However, for a lot of companies there have been significant losses across the board from December trade, heading into January with uncertainty and empty bank accounts - the industry needs to see extended long term assistance. This is a short-term plaster on big wounds." 

Sam Morgan, CEO of the Birmingham-based About Dining Group, said that the package would once again result in businesses needing to take out substantial debt to survive.

“It shows an absence of appreciation for the scale of the problems caused by the pandemic and the government’s response. At face value £1 billion sounds like a large amount of money, however when you consider £6000 is equivalent of 7.4% of the lost business of my restaurant, you realise it really isn’t.” 

Liverpool-based publican Iain Hoskins was a little more upbeat in his assessment, describing the grant as "a start, at least". 

"Our industry has been asking this question for weeks. So it appears without furlough for now the plan is to let us stay open but the reality remains that trade has dropped hugely at the busiest time of the year for hospitality. It’s devastating.

“The point is that it costs me more to stay open than when we are closed and while I don’t think anyone is expecting to have all lost Christmas sales reimbursed by the government, the £6k grant is a drop in the ocean at this time of year. That’s not being ungrateful – that’s the truth."

Trade bodies, including UKHospitality and the BII, have struck a more positive tone with the latter announcing that it was "encouraging to see the Chancellor once again recognising the unique part that pubs play in both the economy and in every community".

"The support he has announced is hugely welcomed as our members running pubs across the UK are now struggling to pay the bills with reduced levels of trade. They are facing increased costs through inflation and with most of our members having built up over £50,000 of pandemic specific debts, they now have extensive debt repayments to be made." 

 “Critical to their short term survival is cash flow and this support in the form of cash grants is hugely welcomed. They will however, now need ongoing support particularly with business rates and an extended period of low VAT as their recovery will be significantly extended due to the lost trade from Christmas.”

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