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Tue, 27 October 2020

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Rishi Sunak Will Give Extra Cash To Businesses Forced To Close Due To Coronavirus Restrictions Amid Fury From Northern Leaders

Rishi Sunak Will Give Extra Cash To Businesses Forced To Close Due To Coronavirus Restrictions Amid Fury From Northern Leaders

Companies forced to closed can claim two-thirds of their employees wages from the government (PA)

4 min read

The government has promised to pay two-thirds of employees' salaries if their business is forced to close due to local or national coronavirus restrictions.

Employers will only have to cover the national insurance and pension contributions of their staff, and can claim up to £2,100 a month for each person on their payroll.

It is expected that the government will announce a new three-tier system of coronavirus restrictions early next week to replace the patchwork of existing local restrictions.

Areas with less than 100 cases per 100,000 are understood to fall under tier one and will be required to follow national restrictions such as the ‘rule of six’, while areas with infection rates above 100 will be subject to stricter rules such as bans on household mixing.

Tier three areas—those with significantly higher levels of infection—will likely face full lockdowns, with only supermarkets, schools and other essential businesses allowed to stay open.

This new system is expected to come into force in mid-October, while the fresh support announced by the government will become available to businesses once the Job Support Scheme (JSS) begins on 1 November.

The JSS—which succeeds the government’s furlough scheme—will be available for six months pending a review in January, and firms who have been forced to close prior to the start date can still claim the two-thirds of their employees salary. 

Chancellor Rishi Sunak said: “Throughout the crisis the driving force of our economic policy has not changed.

“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.

“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”

The announcement comes after council leaders and regional mayors became increasingly irate with Downing Street on Friday on what local lockdown measures they should expect, and when.

Meetings that had been scheduled for this morning were later cancelled and then put in the diary again for this afternoon and early evening.

There is a growing feeling that local authority leaders and mayors have not been kept in the loop as many learnt about potential new measures from briefings appearing in newspapers.

One regional mayor told PoliticsHome that the details around new restrictions for the north had been chaotic and no-one from No 10 could say they had been consulting with the regions regularly with “a straight face”.

The Treasury said today’s announcement “comes alongside intensive engagement with local leaders today on potential measures are coming in their areas”. 

Tonight Eddie Lister, a senior adviser to the prime minister who worked with Boris Johnson when he was mayor of London, will give each metro mayor a 30-minute briefing about what the new restrictions will mean for their area.

Concerns are growing that whole regions will be moved into tier three, even though they have a low number of cases.

There are particular worries that Wakefield will be categorised as tier three, even though it has far fewer cases than Leeds.

Likewise Rotherham’s cases are lower than Sheffield, which is expected to move into tier three.

A local government source said: “The metro mayors should be getting this news from a minister, they don’t know why it’s an adviser. I think No 10 is feeling a little chastened by the strength of feeling particularly from the north of England that we have not been properly involved.

“There will be disquiet from those areas that would be tier two that will be told they need to go into tier three as well.”

The country’s Metro mayors – which were championed by ex-Chancellor George Osborne – had their first meeting of the entire pandemic with the communities and local government secretary Robert Jenrick only this week.

They had one face to face meeting with Boris Johnson last September.

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