Chancellor to unveil new jobs support scheme for firms facing lockdown closure

9 October 2020, 08:14 | Updated: 9 October 2020, 11:39

Chancellor Rishi Sunak will announce the next stage of the Job Support Scheme later today

Businesses in the north of England are facing the prospect of further stricter lockdown measures next week amid a growing backlash against the plans, which have not yet been announced.

Areas experiencing a surge in Covid-19 cases may have pubs and restaurants closed among measures to combat the spread.

It is reported the new measures will include a new furlough scheme which will pay two thirds of the wages of people who cannot work because of local lockdown restrictions.

Read more: plans for 'three-tier' lockdown in the north of England

A Treasury spokeswoman said this morning: "The Chancellor will be setting out the next stage of the Job Support Scheme later today that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months."

It comes as Mr Sunak faced renewed pressure to extend the furlough scheme as pubs and restaurants in coronavirus hotspots look set to face new restrictions.

Read more: economy grew by 2.1% in August

The Liberal Democrats urged Mr Sunak to guarantee that the Government will help to pay the wages of employees who cannot work before any new shutdowns are mandated.

In a letter to the Chancellor, the party's treasury spokeswoman Christine Jardine said the "fundamental premise for ending the furlough scheme no longer holds".

She wrote: "We are now in the midst of a second coronavirus wave with reports that businesses, especially those in the hospitality industry, could be ordered to shut within days.

"The first Government-imposed lockdown was followed by the Job Retention Scheme. Now that Government is about to bring back business shutdowns, it must retain the furlough scheme.

"(Mr Sunak's) Winter Economy Plan ruled out an extension to furlough with the argument that 'as the economy reopens it is fundamentally wrong to hold people in jobs that only exist inside the furlough'.

"But it is now perfectly clear that the economy is not reopening - it is facing new Government-mandated closures."

Ms Jardine continued: "When Government orders businesses to close, it should be good practice to support the livelihoods of their employees - and ensure that businesses remain viable until restrictions are lifted.

"I urge you to commit to the extension of the Job Retention Scheme to support the jobs and businesses that will not be allowed to operate. It is essential that this guarantee is given before new shut-downs are mandated."

The Government's furlough scheme - which supported millions of workers during the height of the pandemic - will end at the end of October.

It will be replaced by a less generous Jobs Support Scheme, which will see the Government pay up to 22% of wages for workers who come back part-time from November 1.