Chancellor Rishi Sunak is set to hold talks with UK hospitality business leaders on Friday as firms warn that the new Omicron variant is affecting bookings.
A rising number of Brits are said to be cancelling Christmas gatherings across UK venues amid fears of the rapid spread of the new strain, with business groups warning that trade is deteriorating in the run up to Christmas.
Earlier this week, England’s chief medical officer, Chris Whitty, said that people should limit their social contact in order to have a better chance of spending Christmas Day with relatives.
The finance minister will meet business leaders for crisis talks after an earlier warning that more support was needed in the industry, as well as the reinstatement of the furlough scheme if further restrictions are put in place.
Sunak said the government would do “whatever it takes” to support jobs, but that funding was already available, including £250m ($332m) that had been provided to local authorities for grants.
The Treasury added: “Our £400bn COVID-19 support package will continue to help businesses into spring next year. We will continue to respond proportionately to the changing path of the virus.”
It comes as the chancellor was criticised for missing an online roundtable meeting with pub and hotel bosses. He cut his four-day US trip short, in which he met tech entrepreneurs and investors, to meet with the UK hospitality firms on Friday.
On Thursday he did, however, hold a video call from San Francisco with business groups including the Federation of Small Businesses, the Confederation of British Industry, UKHospitality, as well as executives from well-known leisure and hospitality chains.
The participants of the meeting requested a deferral of any business rates due in the first quarter of 2022, and grants to businesses in need.
"Until spring of next year, most businesses in the hospitality industry are only paying a quarter of their normal business rates bill. They are benefiting from a reduced rate of VAT all the way through to next spring,” Sunak said.
"And thirdly, there is about a quarter of a billion pounds of cash sitting with local authorities that's been provided by the government to support those businesses who need it."
But Kate Nicholls, UKHospitality's chief executive, said: "Christmas trade is always crucial for the hospitality industry, making up as much as a quarter of the year's profit for many businesses.
"Last year Christmas was cancelled and so much rested on this December period for businesses already staggering under a burden of debt incurred from the pandemic and facing rising costs across the board.
"If operators are unable to trade profitably over the next month, many will simply not survive — and those that do make it through face a return to 20% VAT in April."
Meanwhile, Torsten Bell, head of the Resolution Foundation thinktank, said: “Surging case rates mean economic pain for British firms, whether or not new restrictions are introduced. And either way the Treasury will have little choice but to introduce support for hard hit firms in the days ahead.”
According to the government’s figures, a record 88,376 new cases of COVID-19 were confirmed on Thursday, while 745,183 booster jabs were administered on Wednesday.