In a change of policy, Treasury chief Rishi Sunak has responded to calls from businesses, local leaders and unions to provide a financial support package to prevent mass job losses in sectors that will be subject to new restrictions.
Pubs and restaurants in large parts of the north of England, where the coronavirus is spreading fastest, are expected to face a government order to shut their doors again, barely three months after reopening from lockdown. Restrictions are already being tightened Friday in Scotland, where pubs in the two biggest cities, Glasgow and Edinburgh, have been ordered to close for 16 days.
“I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves,” Sunak said. “The expansion of the Job Support Scheme will provide a safety net for businesses across the U.K. who are required to temporarily close their doors, giving them the right support at the right time.”
Under the salary support program, the government will pay 67% of the salaries of workers who won’t be able to work, up to a maximum of 2,100 pounds ($2,730) a month. Employers will not be required to contribute towards wages.
Sunak said cash grants for businesses required to close will also be increased to up to 3,000 pounds per month.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of 7 consecutive days. The changes will take effect from Nov. 1 and will be available for six months, with a review in January.
The move comes ahead of a widely anticipated announcement in the coming days of further restrictions in virus hot spots around England, such as the big northern cities of Liverpool, Manchester and Newcastle.
Hundreds of thousands of jobs could be affected, particularly at pubs and restaurants, which the government’s chief medical officer says have been largely behind the recent spike in new coronavirus infections.
A more generous nationwide program will expire at the end of October. At the height of that program, the government paid 80% of the salaries of furloughed workers, keeping a lid on unemployment. That is being succeeded by the narrower Jobs Support Scheme, which will see the government pay up to 22% of wages for workers who return to work from their furlough from Nov. 1.