Britain offers $1.3 billion in aid to hospitality and leisure businesses.
The move comes as businesses have voluntarily closed their doors, either as a precaution against the Omicron variant or because too many staff members are sick to operate.
About 200,000 hospitality and leisure businesses in Britain will be eligible for a grant of up to ?6,000 per site.Credit…Andrew Testa for The New York Times
The British government has responded to pleas for help from bars, restaurants and leisure businesses amid a surge in Omicron cases that has led to a wave of cancellations, staff shortages and closures.
The Treasury said on Tuesday it would provide a package of grants and tax relief amounting to ?1 billion ($1.3 billion).
“We recognize that the spread of the Omicron variant means businesses in the hospitality and leisure sectors are facing huge uncertainty, at a crucial time,” Rishi Sunak, the chancellor of the Exchequer, said in a statement.
About 200,000 hospitality and leisure businesses will be eligible for a grant of up to ?6,000 per site. The government will also cover the cost of legally required sick pay for small and midsize businesses and is topping up a culture fund for organizations including theaters, orchestras and museums, with another ?30 million.
The Treasury had been pulling back on pandemic-related support measures, with some of the largest programs, including the furlough program, ending in September. But late last week London declared a “major incident” because of the spread of Omicron. Across the capital bookshops, gyms, pubs and restaurants have voluntarily closed their doors, either as a precaution against the virus or because too many staff members are sick to operate.
The government said it was providing “generous grants” which are equivalent to the monthly amount made available earlier in the year when the businesses were legally forced to close.
“You could feel Christmas was coming,” Amanda Whiteside, a manager at Gordon’s Wine Bar in London, said of the crowds and buzz. “And then it was gone.”
Throughout Britain and parts of Europe, new government restrictions combined with heightened anxiety over the highly contagious Omicron variant have drastically reduced business at restaurants, pubs, event venues and retail stores, prompting urgent calls for additional government assistance.
In Britain, the government responded Tuesday, announcing ?1 billion, about $1.3 billion, in aid for the hospitality industry, with one-time grants of ?6,000 and rebates for employees’ sick pay.
The grants, said Rishi Sunak, the chancellor of the Exchequer, are comparable to what was “provided to hospitality businesses when they were completely closed.” He said this latest initiative was in addition to assistance already in place.
The promise of more aid comes as a fresh wave of anxiety over the coronavirus and the economy washes over the region. Spain’s government has scheduled an emergency meeting with regional leaders on Wednesday to discuss whether to adopt new restrictions, and Italy’s government is meeting on Thursday.
“We are in a different phase now where lockdown will be potentially more costly,” said Claus Vistesen, chief eurozone economist at Pantheon economics. “Up until now we’ve been used to lockdowns followed by support form the government. I think that will be the case as well, but support will be more conditional, less comprehensive than before.”
Britain recorded the highest number of Covid-19 cases in Europe over the last seven days, according to the World Health Organization.
On Monday, organizations representing more than 100,000 businesses around the country sent an open letter to Prime Minister Boris Johnson, demanding more tax relief and grants to tide them over.
Such concerns were echoed elsewhere. In Germany, businesses are pressing the government to lift new requirements that customers show proof of vaccination or recent recovery. And in the Netherlands, where the government announced a lockdown over the weekend, calls to the nation’s business registry asking for help climbed past 400 on Monday — seven times the number logged the previous Monday.
Although the surge of coronavirus cases brought on by the fast-moving Omicron variant has not yet resulted in the kind of strict lockdown imposed by the Dutch government over the weekend, British businesses argued that the combination of mask mandates, vaccination requirements and uncertainty during the peak holiday season imperils their survival.
The retail, hospitality and leisure sectors “are teetering on the brink,” said Matthew Sims, who helped orchestrate the campaign and leads a business improvement group in Croydon, south of London.
Restaurants, pubs and bars have said that since the government added a new series of restrictions, known as Plan B, on Dec. 8 as a response to the highly transmissible Omicron variant, dinner and party cancellations have been rolling in and foot traffic has disappeared in some areas.
At Gordon’s Wine Bar in central London, it was common to find every table in its cavelike cellar and on its outdoor patio full and a long line of customers waiting to get in before Plan B was implemented.
The drop-off, Ms. Whiteside, the administrative manager, said, “was very dramatic.”
Customers thinned out and several staff members got Covid, she said. Gordon’s, which calls itself the oldest wine bar in London, is now offering only outside service, and Ms. Whiteside estimates that sales are down about 25 percent.
She said that the government had previously been generous with support, but she was uncertain of what it should do next. “I wouldn’t want to be in those shoes,” Ms. Whiteside said. “They’re in a no-win position.”
Half a mile away, in Soho, the Coach and Horses pub was similarly contending with fewer customers and sick staff. Last week, business was off by a third of what would normally be expected, while on Monday, it fell “off the edge of a cliff,” said Alison Ross, the manager.
Three of the four full-time staff members and two of the four part-timers had contracted Covid. Ms. Ross has hired temporary help and plans to close several hours early on a few days.
The hospitality industry, which lost out on the holiday bump in sales last year, was reviving but had still not bounced back to prepandemic levels. Many had been counting on a busy season.
Simon Emeny, the chief executive of Fuller, Smith & Turner, which owns roughly 400 pubs, has called on the Johnson government for more aid.
“We are right back to where we were in March 2020 with the government keeping hospitality open, while effectively telling the public not to socialize,” Mr. Emeny said in statement. “December should be our busiest trading period — and the revenue generated during this time is crucial for the sector.”
The company has temporarily closed 20 pubs, a spokeswoman said.
The fledgling electric truck manufacturer Nikola agreed to pay $125 million to settle an investigation into allegations that the company and its founder had defrauded investors by making misleading claims about its products and technology, securities regulators said on Tuesday.
Nikola is settling the case, with the Securities and Exchange Commission, nearly five months after federal prosecutors filed criminal charges against Trevor Milton, the company’s founder and former chief executive, who has pleaded not guilty. The S.E.C. also filed civil fraud charges against Mr. Milton.
“Nikola Corporation is responsible both for Milton’s allegedly misleading statements and for other alleged deceptions, all of which falsely portrayed the true state of the company’s business and technology,” Gurbir Grewal, director of the S.E.C.’s enforcement division, said in a statement.
The S.E.C., in a civil order resolving the investigation, found that Mr. Milton embarked on a campaign on Twitter and in news releases to pump up the price of Nikola’s shares with a series of misleading statements. The regulator said Nikola compounded that by making its own misleading statements about the refueling times for its planned products.
The company, which neither admitted nor denied the allegations in the civil order, said in a statement: “We are pleased to bring this chapter to a close as the company has now resolved all government investigations.”
The S.E.C. said Nikola was continuing to cooperate with its open investigation, a reference to the case against Mr. Milton.
Last month, the company said it expected to reach a $125 million settlement with the S.E.C. and would “seek reimbursement” from Mr. Milton for any costs associated with the investigation.
Nikola is the latest company that merged with a cash-rich special purpose acquisition company to either be charged with making false statements to investors or being investigated for potential wrongdoing.
SPACs are speculative businesses that raise money from investors in initial public offerings and then go searching for operating companies to buy. The market for these investment vehicles has been red-hot in the past two years — they have raised nearly $200 billion from hedge funds and other investors.
The S.E.C. has opened a number of investigations into claims made by some of these companies during the merger process. Regulators have argued that hedge fund investors in SPACs and the sponsors of these deals fare far better than retail investors who often buy shares in the open market after a deal is announced.
Mr. Milton resigned from Nikola in September 2020, several months after the merger with a SPAC called VectoIQ was completed. The S.E.C., in the civil complaint filed last summer against Mr. Milton, said his misleading statements about the company’s prospects helped inflate the stock, enabling him to reap “tens of millions of dollars in personal benefits.”
Last week, lawyers for Mr. Milton filed a motion in federal court in Manhattan to dismiss several of the criminal charges against him.
Nikola’s stock closed on Monday at $9.25, down from a high of more than $60 in the summer of 2020.
Jurors are set to deliberate for a second day on Tuesday in the fraud trial of Elizabeth Holmes, the founder of the blood testing start-up Theranos.
Ms. Holmes, who has pleaded not guilty, faces 11 counts of wire fraud and conspiracy to commit wire fraud. Closing arguments in the case concluded last week. On Monday, jurors began deliberating at around 8:30 a.m. They left the courthouse around 4 p.m.
If the jury of eight men and four women does not reach a verdict on Tuesday, additional time is scheduled for Thursday. Further days will be scheduled on Thursday if needed.
The deliberations are the final stage of the nearly four-month trial, which has drawn long lines of spectators eager to watch a high-profile Silicon Valley entrepreneur defend herself in a case viewed as a referendum on start-up culture.
Before her company faltered, Ms. Holmes, 37, exemplified the genius founder. She founded Theranos in 2003, dropped out of Stanford University the next year to focus on the company and raised $945 million from investors. At its peak, Theranos was valued at $9 billion.
Ms. Holmes also sold her entrepreneurial vision and styled herself as a Steve Jobs-like founder, down to wearing a uniform of black turtlenecks. She became a billionaire on paper, graced the covers of many magazines and was widely celebrated.
But a 2015 Wall Street Journal investigation found that Theranos had inflated many of its claims about its technology and business relationships. The company officially shut down in 2018.
A verdict in the case boils down to intent. Prosecutors argued that Ms. Holmes purposely deceived investors and patients as she sought investments and business for her start-up. The defense sought to paint her as a well-meaning entrepreneur whose failure was not a crime.
Testimony from Ms. Holmes anchored the defense’s case. She blamed senior lab employees for her company’s problems, argued that her own actions were misunderstood and said she believed the claims she had made about Theranos’s technology. She also said Ramesh Balwani, her ex-boyfriend and Theranos’s former chief operating officer, had emotionally and physically abused her, accusations he has denied.