Chancellor Rishi Sunak has set out an updated package of financial support measures to help businesses keep afloat as swathes of the nation come under new restrictions in the fight against the second wave of Covid-19.
The Treasury said the measures – worth at least £4.1bn – would “significantly increase the generosity and reach” of the previously announced winter support schemes “to ensure livelihoods and jobs across the UK continue to be protected in the difficult months to come”.
Today’s announcement comes barely a week after the Treasury insisted that it would not hand out any more money to regions under tier 2 restrictions because of the local level of coronavirus cases. At the time a department source said the Treasury believed it had “covered all bases” in the support being offered. It also follows yesterday's confirmation from Sunak that plans for a full Comprehensive Spending Review were being halted in favour of a one-year settlement.
The updated help now on offer under the expanded coronavirus support package for firms includes a reduction in the contribution businesses experiencing “considerable difficulty” need to make to staff wages under the Job Support Scheme. The move will see contributions drop to 5% from the 33% set out last month.
Grants of up to £2,100 a month will be made available to businesses in “particularly affected sectors” – such as the hospitality and leisure sectors – in areas categorised as on “high alert” or tier 2. London has been in tier 2 since the weekend.
The increased support measures also double the assistance offered to self employed people whose businesses are affected by the pandemic. They will now be able to claim 40% of their earnings, up to a cap of £3,750, to cover the three months from November to January, based on evidence of previous years’ trading. The figure announced in September was 20%.
Sunak said the additional support being offered demonstrated the government’s ability to think on its feet.
“I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today,” he said.
“These changes mean that our support will reach many more people and protect many more jobs.
“I know that the introduction of further restrictions has left many people worried for themselves, their families and communities. I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”
The Treasury said the expansion in the level of support on offer to the self-employed would make a further £3.1bn available to those eligible, and that a further grant would follow covering February to April 2021.
It said the cost of the tier 2 business grants would add up to £1bn to the support already been announced for tier 3 areas. The department said the grants would be available retrospectively.
No figure was given for the cost of the reduction in employer contributions to the Job Support Scheme for eligible firms.