What did Rishi Sunak announce: Chancellor pledges to support firms and workers hit by coronavirus restrictions

Abbianca Makoni
PA
PA

Chancellor Rishi Sunak has announced a support package for businesses and workers living under Tier 2 coronavirus restrictions.

Grants worth £2,100 will be available for firms in Tier 2 areas of England. They are particularly targeted at hospitality and leisure venues, which have been hit hard by the restrictions on households mixing.

In a move that could be worth more than £1 billion, these grants will also be available retrospectively for areas which have already been subject to restrictions. It comes on top of higher levels of additional business support for areas moving into Tier 3.

Mr Sunak’s decision to make the business grants retrospective came after criticism from northern leaders about why extra support was announced only after London moved into Tier 2.

According to the Treasury, around 150,000 businesses in England could be eligible for the grants.

The grant will primarily focus on helping hospitality and leisure venues (Getty Images)
The grant will primarily focus on helping hospitality and leisure venues (Getty Images)

What is happening with the Job Support scheme?

It was also announced that the Job Support Scheme, which comes into effect from November 1 and replaces the current furlough system, will be made more generous.

Instead of only being open to people in “viable” jobs working a third of their normal hours, it will now cover employees doing just 20 per cent of their usual work.

The amount that employers are required to pay to top up their wages has also been reduced to just 5 per cent of unworked hours, down from 33 per cent.

Extra help for the self-employed will see the amount covered by grants increase from 20 per cent of profits to 40 per cent, meaning the maximum payout will increase from £1,875 to £3,750.

Extra help for the self-employed will see the amount covered by grants increase from 20% of profits to 40% (Getty Images)
Extra help for the self-employed will see the amount covered by grants increase from 20% of profits to 40% (Getty Images)

This will amount to a potential further £3.1 billion of support to the self-employed through November to January, with a further grant to follow covering February to April.

How much will these new support packages cost?

The Treasury estimates the enhanced Job Support Scheme will cost £1 billion a month for every two million people on it, while the grants for Tier 2 firms in England would add another £200 million a month.

It suggests that over the course of six months, the total cost to the taxpayer could run to over £13 billion.