RISHI Sunak’s offer of up to £6,000 for hospitality businesses hit by a wave of cancellations has been described as a “drop in the ocean” by Dorset businesses.

The chancellor announced grants of between £2,700 and £6,000, as well as £30million for arts venues and £100m for councils to distribute to other businesses.

Andy Lennox, who founded the Dorset industry group Wonky Table and runs the Zim Braai and Nusara restaurants, said some business’s grants “won’t even cover the costs of the wasted food”.

“All support is welcome but it’s a bit of a drop in the ocean and they’ve still got a lot to do on VAT,” he said.

Hospitality businesses recently saw VAT rise from five per cent to 12.5 per cent– and the rate is due to return to 20 per cent from April.

Businesses also face higher energy bills and a rise in the national minimum wage next year.

Restaurants and pubs have seen a huge number of cancellations since the Omicron variant of Covid-19 was identified. England’s chief medical officer, Professor Chris Whitty, last week urged people to limit their social events, prompting a further slump.

Poole’s Lakeside Restaurant closed for a staff party on Sunday and tweeted that it was “hardly worth opening the restaurant anyway with the muddled messages from Westminster”.

The fish and chip business said it had suffered its worst trading day at Poole’s Lifeboat Quay since it opened there in 2010.

Owner Jason Lee said: “Though the grant will be welcomed, £6,000 is a drop in the ocean with increased wages and piling up debt from deferred VAT, tax and rents.

“VAT reform is needed to kickstart hospitality in spring 2022.”

Dorset Chamber president Caron Khan said: “These new measures will help soften the blow for businesses in the county’s hard-pressed hospitality sector.

“They are welcome and will provide some respite but could prove to be a drop in the ocean for those worst hit by cancellations and falling trade over the festive period.

“It is pleasing to see the government listen to the voice of businesses in Dorset and elsewhere through the British Chambers of Commerce. However, wider support will undoubtedly be required if restrictions persist or are tightened further in the coming days or weeks.”

The Treasury said many hospitality businesses had lost 40-60 per cent of their December trade. It said around 200,000 would be eligible for its new grants, which were equivalent to the monthly grants issued when hospitality was forced to close.

The government will also cover the cost of statutory sick pay for Covid-related absences for small and medium sized employers.

Rishi Sunak said: “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 £1billion 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.

“Ultimately the best thing we can do to support businesses is to get the virus under control, so I urge everyone to get boosted now.”

The grants for hospitality and leisure business are £2,700 for premises with a rateable value of up to £15,000; £4,000 if the rateable value is from £15,000 to £51,000; and £6,000 if it is more than £51,000.