Covid-19: Rishi Sunak to announce help for shut down businesses

A man cleaning at a cafe in a maskEPA

The chancellor will set out on Friday more support for businesses forced to close by law, with tighter virus rules expected in England next week.

Rishi Sunak will outline the next stage of the Job Support Scheme to help firms that "may have to close in the coming weeks or months", the Treasury says.

An update on restrictions, which could see pubs and restaurants shut in the worst-affected areas, is due on Monday.

Regional leaders have called for more help for struggling firms.

The chancellor is expected to announce the new financial support scheme will be a six-month plan, with a three-month review point.

But Labour's shadow chancellor Anneliese Dodds said Mr Sunak's Job Support Scheme was "forcing businesses to flip a coin over who stays and who goes" because it was cheaper to employ one worker than two to do the same hours.

The Job Support Scheme, which will replace the furlough scheme from 1 November, will see eligible workers get three quarters of their normal salaries for six months.

To be eligible, employees must be in a ''viable job'' where they can work for at least one-third of their normal hours.

For the hours not worked, the government and employer will each pay one-third of the remaining wages. This means the employee would get at least 77% of their pay.

Nearly three million workers - or 12% of the UK's workforce - are currently on partial or full furlough leave, according to official figures. The current furlough scheme ends on 31 October.

But Labour's shadow chancellor Ms Dodds tweeted that the Job Support Scheme "makes it more expensive to bring staff back than many other international schemes".

She said the cost to an employer of bringing back two workers in the arts sector for half of the week versus one for the whole week was £163 in the UK, compared with £98 in the Netherlands, £69 in France and nothing in Germany.

"Once again it seems like the chancellor has waited to the last possible minute to start listening to Labour and bring in targeted support for those parts of the country under local restrictions," she said.

"The chancellor's constant flip-flopping on furlough is putting 900,000 jobs at risk, leaving workers in limbo and creating chaos in the midst of a pandemic."

In other developments:

A tiered system of measures for England is set to be announced by Monday, in an effort to stall rising infection rates, to replace the patchwork of existing rules across the country.

Under the new system, different parts of the country would be placed in different categories - although ministers are still discussing the precise details.

Pubs and restaurants could be closed in the worst-affected areas, while a ban on overnight stays is also being considered.

Conservative chief whip Mark Spencer has said MPs will be given a vote on the proposed new framework, saying the tiered system was "being worked on at the moment".

He told BBC Radio Nottingham that ministers and scientific advisers were striving to come up with a "very clear and easily understood system…so we all know what the aim is".

On Thursday, England's chief medical officer Chris Whitty presented evidence to MPs in a video call that a "significant proportion" of exposure to coronavirus was happening in the hospitality sector - but nothing more was shown on the scope, severity, timing or precise location of any new restrictions.

But there has been growing anger among MPs and local leaders about the way the government has communicated the proposed changes with them.

Greater Manchester Mayor Andy Burnham accused the government of treating the north of England with "contempt" after he learned ministers were considering shutting hospitality venues in the worst-affected areas in a newspaper report.

Mr Burnham said he would challenge the closure of pubs, bars and restaurants if the measure did not come with financial support.

He told BBC's Question Time: "The message I've given to the government is a pretty clear one - there can be no restrictions without support.

"And if it's going to be the tier three restrictions - effectively a national lockdown - we have to go back to a full furlough scheme for those staff, support for those businesses, otherwise the north of England is going to be levelled down this winter and I won't accept it."

In response, junior minister Gillian Keegan said the government had to act to stem the rise in cases.

"This is serious - it is getting out of control, and we have to do something to bring it back under control," she said.

But she acknowledged that communication with the worst-hit areas needed to improve.

There were 17,540 new cases of coronavirus recorded in the UK on Thursday, up from the 14,162 reported the day before, government data showed. A further 77 people died after testing positive for the virus within 28 days.

NHS England data published on Thursday showed the number of people waiting more than a year to start hospital treatment is at its highest level since 2008 - with some 111,026 people waiting more than 52 weeks to start hospital treatment in August.

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