Chancellor Rishi Sunak has laid out a new package of additional support for businesses impacted by new coronavirus restrictions introduced last week. Speaking in the House of Commons this morning, and coming after a week of pressure from those in the hospitality industry, Sunak announced extra grants, enhanced wage support for employees, and additional funds for those self-employed.
Firstly, the grant system, previously available only to those under tier 3 (“very high risk”), will be extended to businesses under tier 1 and tier 2 (as London is) coronavirus restrictions. This means cash grants of up to £2,100 a month even for those businesses, such as restaurants, which are currently not forced to close, but which are nonetheless operating at a dramatically lower level of capacity and trade. Grants will be backdated to August.
The announcement came after the chancellor hosted a roundtable breakfast meeting with business leaders and trade body representatives at the Waterloo branch of pizza chain Franco Manca this morning. Appearing to acknowledge the demands and protestations from across the hospitality sector this week, Sunak said: “It is now clear the impact of restrictions on [businesses]— particularly in the hospitality sector” had exceeded that which had been anticipated.
With that, the chancellor said that the percentage of contracted hours an employee now needs to work to be eligible to enter the new Job Support Scheme (JSS), which replaces the furlough scheme from 1 November, would reduce from 33 percent to 20 percent.
Moreover, the employer’s contribution to hours not worked will reduce from 33 percent to five percent, with the government now funding 62 percent of the wages for hours not worked, whereas before they’d pledged to commit just 22 percent.
Although changes to the JSS do not increase the amount of take-home salary for employees, it is a measure designed to reduce the burden on businesses which are making less money and have been pushed to offer even minimum hours to employees, such has been the twin impact of the 10 p.m. curfew and tier 2 restrictions on London restaurants. How this fares with prominent members of the industry who have this week said the scheme was “unworkable and too expensive” remains to be seen.
Or indeed whether it will at least temporarily pacify the likes of Yotam Ottolenghi, who this morning said on BBC Radio 4’s Today programme that businesses like his were “on their knees” and would better off if they were shutdown, and supported, rather than open without custom.
The third measure announced affects those self-employed, with Sunak announcing that government contributions would double, raising income support from 20 to 40 percent of “average profits” — and increasing the maximum grant to £3,750.
While Labour’s shadow chancellor Anneliese Dodds responded to Sunak’s new pledge by calling it a “patchwork of poor ideas, rushed out at the last minute,” UK Hospitality boss Kate Nicholls said it was “a generous package of support, which will make a huge difference in safeguarding hospitality jobs.”
Nicholls added: “It is great that the chancellor has listened to our concerns and those of hospitality businesses. We have been hammered harder than any other sector and this enhanced support will be crucial in making sure businesses stay afloat and jobs kept secure.”