The Chancellor has come forward with additional help for the hospitality and leisure sectors in England following days of urgent lobbying from MPs, firms and industry officials.
It includes one-off grants of up to £6,000 per premises for businesses in the affected sectors in England, which the Treasury expects will be administered by local authorities and to be available in the coming weeks.
The government also intends to use taxpayers’ cash to cover the cost of statutory sick pay for Covid-related absences for firms with fewer than 250 employees.
Cultural organisations in England can also access a further £30 million funding during the winter via the culture recovery fund, the Treasury said.
Mr Sunak’s announcement follows crisis talks with business leaders after he cut short a Government business trip to California.
Businesses have seen takings plummet due to Christmas festivities being scaled back amid fear over the spread of Omicron.
It comes as Sir Jeremy Farrar, director of the global charitable foundation Wellcome, warned “we’re in the most difficult, most uncertain time, perhaps of the whole pandemic, certainly since March of 2020”.
Paul Hunter, Professor in Medicine at the University of East Anglia (UEA), also said the previous rapid increase in cases appears to be slowing and, if that is true, there is no need for a lockdown.
Prime Minister Boris Johnson said of the new funding: “With the surge in Omicron cases, people are rightly exercising more caution as they go about their lives, which is impacting our hospitality, leisure and cultural sectors at what is typically the busiest time of the year.
“That’s why we’re taking immediate action to help with an extra £1 billion in grants to these industries and reintroducing our Statutory Sick Pay Rebate Scheme.
“I urge people across the country to please get boosted now to secure vital protection for yourselves, your loved ones and your communities.”
Mr Sunak added: “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.”
The extra support builds on existing schemes in place to assist businesses, the Treasury said.
The devolved administrations will receive around £150 million of funding through the Barnett formula as part of the support announced, the department added.
This includes around £80 million for the Scottish Government, £50 million for the Welsh Government and £25 million for the Northern Ireland Executive.
UK Hospitality chief executive Kate Nicholls said: “This is a generous package building on existing hospitality support measures to provide an immediate emergency cash injection for those businesses who, through no fault of their own, have seen their most valuable trading period annihilated.
“It will help to secure jobs and business viability in the short term, particularly among small businesses in the sector, and we particularly welcome the boost to funds for the supply chain and event and business catering companies so badly affected by the reintroduction of work from home guidelines.”
Ms Nicholls added there is a “real urgency” to get the funding to businesses.
British Chambers of Commerce director general Shevaun Haviland said: “These measures will provide some welcome respite to many of those businesses who have been hit hardest by the latest Covid measures.”
Earlier, leading expert Sir Jeremy told BBC Radio 4’s Today programme: “Omicron is spreading unbelievably fast. It is a phenomenal variant, transmission is eye-wateringly high, but there is great uncertainty.
“What is it going to lead to in terms of pressure on the health system, people going to hospital, people dying, but also what impact is it going to have on the broader society, staff absences, the ability to have functioning other services? So there is great uncertainty.
“My personal view is that I think we can wait at the moment until there are more restrictions formally placed, but each of us can do a lot of things today that would make the chances of further restrictions lighter.
“More data will be available today and tomorrow, and I would act on those if transmission is rising still and if hospitalisations are going up across the country.”
Meanwhile, Michael Kill, chief executive of the Night Time Industries Association, said newly-announced support for the culture sector was “far too little” and “borders on the insulting”.
He said: “Businesses are failing, people are losing their livelihoods and the industry is crippled.
“Mixed messaging, coupled with additional restrictions, have had a catastrophic impact on our sector over the last two weeks.
“At this critical point, we need strong leadership and a clear pathway from Government with a long-term strategy for new Covid variants.
“The open/close strategy is crucifying businesses. Every pound of help is much needed. But this package is far too little and borders on the insulting.”