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 coming weeks.
The announcement came on a day Prime Minister Boris Johnson confirmed there would be no further restrictions in England before Christmas.
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The devolved administrations will receive around £150 million of funding through the Barnett formula as part of the support announced, the Treasury department said.
This includes around £80m for the Scottish Government, £50m for the Welsh Government and £25m for the Northern Ireland Executive.
First Minister Nicola Sturgeon claimed the money generated “no further funding for Scotland”.
She added: “I can, however, announce that the Scottish Government will allocate a further £100m from elsewhere in our Budget between now and the end of the financial year.
“This will involve difficult really decisions but the impact of the current crisis on business is such that we consider it essential.”
Ms Sturgeon stressed a fund of £375m overall would help Scottish businesses hit by the latest coronavirus restrictions over the next three weeks.
The UK 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 in 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 appeared to be slowing and, if that is true, there is no need for a lockdown.
Mr 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 £1bn 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 £1bn 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.
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 was 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.”
Mr Johnson has meanwhile claimed there is not enough evidence on the severity of Omicron, the hospitalisation rate and the impact of the booster rollout to justify tougher measures before Christmas.
He insisted the UK Government would continue to monitor the data closely and would not hesitate to act after Christmas if necessary.
Mr Johnson said: “The situation remains extremely difficult, but I also recognise that people have been waiting to hear whether their Christmas plans are going to be affected.
“So what I can say tonight, is that naturally we can’t rule out any further measures after Christmas – and we’re going to keep a constant eye on the data, and we’ll do whatever it takes to protect public health.
“But in view of the continuing uncertainty about several things – the severity of Omicron, uncertainty about the hospitalisation rate or the impact of the vaccine rollout or the boosters, we don’t think today that there is enough evidence to justify any tougher measures before Christmas.”