Rishi Sunak unveils billions of pounds of support for businesses in Tier 2 areas

22 October 2020, 12:36 | Updated: 22 October 2020, 13:44

By Asher McShane

The Chancellor has announced a package of measures to help businesses in Tier 2 regions weather the storm of the coronavirus crisis.

In a statement to the House of Commons, Mr Sunak announced that the coronavirus Job Support Scheme will be made more generous, with employer contributions reduced and the minimum hours requirement also cut.

He also announced grants for businesses in Tier 2 areas of up to £2,100 per month they are in the category, that can be backdated to August.

There will also be additional help for the self employed.

The grant package alone is expected to cost over £1 billion and around 150,000 business in England could be eligible, the Treasury said.

Mr Sunak said there will be difficult days and weeks ahead.

He told the Commons: "Let me speak first to the people of Liverpool, Lancashire, South Yorkshire and Greater Manchester and indeed other areas moving into or already living under heightened health restrictions.

Rishi Sunak unveiled the measures in the Commons today
Rishi Sunak unveiled the measures in the Commons today. Picture: PA

"I understand your frustration, people need to know this is not forever. These are temporary restrictions to help control the spread of the virus.

"There are difficult days and weeks ahead, but we will get through this together. People are not on their own. We have an economic plan that will protect the jobs and livelihoods of the British people wherever they live and whatever their situation."

"Just as we have throughout this crisis, we will listen and respond to people's concerns as the situation demands.

"And I make no apology for responding to changing circumstances and so today we go further."

He added: "The evidence is clear - a regional, tiered approach is the right way to control the spread of the virus."

He said businesses in Tier 2 areas will receive further financial support in the form of a new grant scheme, the government will cover more of the cost of staff on reduced hours, with a 5 per cent contribution required from employers.

The minimum hours requirement, will be reduced from 33 per cent of normal hours to one day per week.

Help for the self-employed is being increased with grants raised from 20 per cent to 40 per cent of average profits until April.

The three measures:

More generous job support scheme

Employer contribution to staff's unworked hours is reduced to just 5%. The minimum hours requirement is reduced to 20%, making those working just one day a week eligible.

Grants for businesses affected by tier 2 rules

Cash grants will be available of up to £2,100 per month primarily for businesses in the hospitality, accommodation and leisure sectors. The grants will be available retrospectively backdated to August for areas that have already been subject to restrictions .

Extra help for the self-employed

An increase to the amount of profits covered by the two forthcoming self-employed grants from 20% to 40%, meaning the maximum grant will increase from £1,875 to £3,750.

Shadow chancellor Anneliese Dodds told the Commons: "For months we have urged the Chancellor to get ahead of the looming unemployment crisis and act to save jobs.

"Instead, we've had a patchwork of poor ideas rushed out at the last minute."

Ms Dodds asked how many jobs have been lost as a result of the Chancellor's "inaction" and pressed him to explain what has changed which means "this is the right thing to do now, but wasn't when parts of the north and midlands" entered Tier 2-style restrictions several weeks ago.

She said: "The Chancellor has only caught up and listened to the anxieties of workers and businesses when it looks like these restrictions will be affecting London and the West Midlands.

"Will he apologise to those who have already lost their jobs, seen their businesses slip through their fingers in those areas which have not had that support until now?"

SNP Treasury spokeswoman Alison Thewliss said Rishi Sunak's economic plan goes "nowhere near" his promises of doing whatever it takes.

She said: "This is the third statement from the Chancellor in the space of a month but this is not a sign of good management, this is a sign of panic and chaos from this Government and none of this should be coming as a surprise to them.

"It's telling that the Government has put out more under embargo today than they gave out to opposition spokespeople, a sign of real disrespect to the other parties in this House."

Separately, Nottingham City Council has confirmed it is set to enter further talks with the Government on Thursday over the possibility of further coronavirus restrictions in the region.

Councillor David Mellen, leader of Nottingham City Council, said: "We can confirm we have received a diary invite for an introductory meeting with a Government minister later this afternoon along with the leader of the county.

"We will be keen to robustly discuss and understand any impact of Tier 3 given the approximate two-week time lag before we see any potential impact, especially as we are starting to see the numbers reduce now in the current Tier 2 level.

"As part of what we expect will be ongoing discussions starting today, we will be focused on negotiating a financial support package that will help protect the health of local people, save lives and also the livelihoods of local people and businesses in the city."

Prime Minister Boris Johnson will hold a press conference at 4pm regarding the coronavirus situation alongside Rishi Sunak and chief scientific adviser Sir Patrick Vallance.