A bailout package worth about £1bn for businesses losing trade because of the Omicron surge was announced by the chancellor, Rishi Sunak, on Tuesday.
The funding will primarily help firms in the leisure and hospitality sector, and follows concerns that they have faced cancelled bookings and plummeting custom since the government implemented its Covid plan B.
According to UKHospitality, many businesses have lost up to 60% of their trade in December, which is usually their most profitable month.
Sunak said the government was intervening because “the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time”.
The bailout package consists of four elements:
Grants for hospitality and leisure businesses in England, worth up to £6,000 per premise. The Treasury has set aside £683m for these payments, which will be administered through local authorities and will be available in the coming weeks.
Further grants for businesses in England, worth £102m, intended to help businesss most in need, and again administered through local authorities.
The resumption of the statutory sick pay rebate scheme, which will reimburse employers in the UK with fewer than 250 workers for the cost of paying statutory sick pay for Covid-related absences for up to two weeks.
In addition, the Scottish government will receive £150m, the Welsh government £50m and the Northern Ireland executive £25m to offset the England-only spending.
Kate Nicholls, the chief executive of UKHospitality, which represents the sector, said: “Now is the time to get emergency cash support to businesses to struggling with revenue hit and cashflow squeeze and they will help them protect jobs and keep business afloat.
“We hope that this will be a short period of restrictions and that then we can get back to managing to live with the virus and reverse restrictions as quickly as possible to allow business to recover rapidly.”