The chancellor Rishi Sunak has increased support for workers and jobs hit by tougher COVID-19 restrictions following a barrage of protests from businesses, particularly those in Tier 2 areas.
Many firms in Tier 2 areas such as London and Birmingham had said they would be better off if forced to close under Tier 3 measures. Mr Sunak said he was greatly increasing the generosity of the taxpayer contributions to wages in his job support scheme replacement, which replaces the furlough arrangements in 10 days’ time.
The chancellor has announced grants for businesses affected by Tier 2 rules,with additional funding to support cash grants of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sector who may be adversely impacted by the restrictions in high-alert areas. The grants will be retrospective and can cover any business affected by the enhanced restrictions since August.
Councils will be able to distribute the grants, said the chancellor. The grants will be available retrospectively for areas who have already been subject to restrictions, and come in addition to higher levels of additional business support for local authorities moving into Tier 3. The Treasury has said that if scaled across the country these could be worth more than £1bn.
The Treasury released detail on how much the new business grants could be worth, saying councils will receive grants of £934 per month for properties with a rateable value of £15,000 or under, grants of £1,400 per month for those with a rateable value of between £15,000-£51,000 and grants of £2,100 per month for those with a rateable value of £51,000
A more generous job support scheme (JSS) has also been made available. When originally announced the JSS, which will come into effect on November 1, would have seen employers paying a third of employees’ wages for unworked hours, and required employees to be working 33% of their normal hours. Today’s announcement cuts the employers’ contribution to those unworked hours to 5%, and reduced the minimum hours requirements to 20%, so those working just one day a week will become eligible. Employers will keep receiving the £1,000 job retention bonus.
There will also be extra help for the self-employed, with the maximum grant increasing from £1,875 to £3,750. The Treasury has said this is a potential further £3.1bn of support to the self-employed from November to January alone, with a further grant to come covering February to April.
Responding to the announcement of a new business grant scheme to be distributed by councils, Cllr Richard Watts, chair of the Local Government Association’s Resources Board, said: 'It is councils who are leading local efforts to support communities and businesses through this crisis.
'This includes distributing more than £11 billion to 880,000 small businesses through the previous grant scheme earlier this year. This has been a vital lifeline to businesses struggling and worried about the future, so it is good that government has announced this new scheme. Councils stand ready to work again to distribute this new funding. It is good that they will have flexibility to ensure as many businesses can benefit as possible.'