Rishi Sunak said the expansion of the Jobs Support Scheme would protect jobs and provide “reassurance and a safety net” for people and businesses across the UK in advance of a potentially “difficult winter”.
It comes as ministers are expected to outline a three-tier local lockdown system on Monday, October 12 – which could see hospitality venues in coronavirus hotspots being temporarily closed to combat the spread of the virus.
North East council bosses have already vowed to oppose any Government plans for further possible coronavirus restrictions in the region, including closing bars and restaurants.
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Gateshead Council leader Martin Gannon told the PA news agency: “We do not want further restrictions. We need more time, clearer messaging and greater support from Government.”
According to Mr Sunak’s announcement, firms whose premises are legally required to close because of restrictions will receive grants to pay the wages of staff who cannot work, with the Government meeting two thirds of each employee’s salary (67%) up to a maximum of £2,100 a month.
Employers will not be required to contribute towards wages, but will be asked to cover national insurance and pension contributions.
Businesses will be able to claim the grant when they are subject to restrictions and employees are off work for at least seven consecutive days.
The scheme will launch on November 1 and run for six months, with a review expected in January.
Businesses which are already legally closed, such as nightclubs, will also be eligible.
A Treasury source said the expanded Jobs Support Scheme would cost “hundreds of millions” of pounds a month.
Ministers will also increase cash grants to businesses in England which are forced to close to support with fixed costs, with the grants linked to rateable values.
Up to £3,000 per month will be payable every fortnight, the Treasury said.
Mr Sunak told reporters: “Throughout this crisis my priority has always been to protect jobs so today I’m announcing an expansion of our Jobs Support Scheme, specifically to protect those jobs of people who work in businesses who may be asked to close."