Chancellor Rishi Sunak has met business leaders for crisis talks today as firms warn of lost bookings.
Fears about the Omicron variant of coronavirus have prompted many people to cancel Christmas dinners and parties, hitting businesses.
Hospitality firms and business groups have told the chancellor their trading situation was deteriorating rapidly.
Mr Sunak said the government would do “whatever it takes” to support jobs, but that funding was already available.
This includes £250m that has been provided to local authorities in England for grants to support businesses.
It is understood that Mr Sunak met with major UK business groups including the British Chambers of Commerce (BCC), the Confederation of British Industry (CBI), the Institute of Directors, Make the UK, and the Federation of Small Businesses on Friday afternoon.
The BCC said it will ask the chancellor to revert VAT for the hospitality and tourism business back to the emergency rate of 5%. It also wants the government to reinstate 100% business rates relief for retail “to give businesses the financial headroom to weather this challenging period”.
In addition, it will ask the Treasury to “make additional grant funding available which can then be administered locally and distributed on a needs basis”.
On Thursday Mr Sunak was in California but held a hastily convened call with representatives from business groups and companies including Greene King, Nandos, and Whitbread, which owns Costa and Premier Inn.
Attendees described the chancellor as being in “listening mode” and said Mr Sunak appreciated the situation was deteriorating rapidly.
The chancellor asked what kind of assistance they were looking for, and there were specific requests for an extension of the discounted VAT rate of 12.5% beyond its scheduled end on 1 April.
The participants also requested a deferral of any business rates due in the first quarter of 2022, and grants to businesses in most dire need.
After Thursday’s meeting, Mr Sunak flew back to the UK a day early from his US trip where he was meeting technology firms to try to encourage inward investment.
Before flying, he said the situation in the UK with Omicron “is very different to what we’ve done and encountered before”.
“The government is not telling people to cancel things. It’s not closing down businesses.”