Chancellor Rishi Sunak is expected to extend governmental support to Tier 2 businesses later today.
He will give an update to Parliament on the Job Support Scheme (JSS) which will replace the Job Retention Scheme (furlough) from 1 November 2020.
The Prime Minister announced, on 12 October, a three-tiered system of Local Covid Alert levels in England.
- medium: applies the previous national Covid measures to most of the country, including the Rule of Six (no groups indoors beyond that number) and a 10pm curfew for businesses in the hospitality sector.
- high: prevents all mixing between different households or support bubbles indoors with the aim of reducing household-to-household transmission, in addition to the Rule of Six outdoors.
- very high: applies to most areas that already were in local lockdown – the government issues rules banning social mixing indoors and in private gardens, and pubs and bars and other facilities such as gyms and betting shops are closed.
Although the country has been divided into three tiers, there are only two levels of government support at present – hence the Chancellor’s expected statement.
Businesses that fall into Tier 2 argue that they have received minimal assistance from the government despite seeing a dramatic fall in trade.
In comparison, employees who work in tier three areas where businesses have been forced to close will be offered emergency support.
From 1 November Tier 3 workers will have access to financial support through the “lockdown Job Support Scheme”. The government will pay 67% of a workers’ wages up to £2,100 a month. Some workers are also eligible for Universal Credit.
Current support for Tier 2 businesses
Currently, In Tier 2 areas, business will only be able to depend on the “part-time Job Support Scheme”.
The scheme is:
- for “viable” jobs only
- requires workers to work at least a third of their normal contractual hours
- expects a much larger employer contribution
It is thought that many businesses will not be able to meet the requirements and will be forced to carry out redundancies.
Areas in Tier 2
Areas in tier two are considered to be at the second highest level of risk. This includes London, Essex, most of the West Midlands, Leicester, Nottinghamshire, Cheshire, West Yorkshire and north-east England.
The city council for Coventry said it will move to tier two Covid restrictions from midnight on Friday.
Pubs and restaurants in Tier 2 must close by 10pm, and households cannot mix indoors.
Economy in decline
The number of claimants for work-related benefits rose by 1.5 million since March, to 2.7 million in September.
According to the ONS, the three months leading up to August saw the highest level of redundancies since 2009.
And since Mr Sunak announced his initial winter economic plan, the government has introduced more limiting lockdown rules as the number of Covid cases rise, which have impacted businesses profitability, severely impacting the hospitality and leisure industries.
Source: Forbes – Money