Pub and restaurant bosses welcome Rishi Sunak's 'new furlough scheme'

Pub and restaurant bosses today welcomed Rishi Sunak's 'new furlough scheme' to help those in the hospitality sector - as others warned it will still be a tough winter for many. 

The Chancellor has unveiled yet another bailout in a bid to boost support for stricken businesses struggling under Tier Two lockdown and the self-employed.

Under the Job Support Scheme, the Government will now cover more of the cost of staff on reduced hours, with only a five per cent contribution required from employers rather than 33 per cent. 

Businesses in 'high risk' Tier Two areas will also be eligible for grants of up to £2,100 a month, with the move backdated to ward off criticism from northern hotspots that have been under restrictions for months.

Speaking in the Commons today, Mr Sunak said 150,000 businesses across England could benefit from the move, with the costs potentially hitting £1billion.  

Government support for the self-employed has also been scaled up, with grants increased from 20 per cent to 40 per cent of average profits until April - meaning the maximum quarterly payment will now be £3,750.

Business leaders today welcomed the latest bailout, with Dame Carolyn Fairbairn, the Confederation of British Industry's director-general, dubbing the scheme 'a welcome and much-needed successor to the furlough scheme.'

Rishi Sunak (pictured today) has unveiled another bailout worth billions of pounds in a bid to boost support for stricken businesses under Tier Two lockdown and the self-employed

Rishi Sunak (pictured today) has unveiled another bailout worth billions of pounds in a bid to boost support for stricken businesses under Tier Two lockdown and the self-employed

While businesses forced to close in the harshest Tier Three areas can access significant funding, there is less available for 'high risk' Tier Two regions such as London and Essex - even though the ban on households mixing indoors means that many are getting hammered

Business bosses today welcomed the latest bailout, with Dame Carolyn Fairbairn (pictured), the Confederation of British Industry's director-general, dubbing the scheme 'a welcome and much-needed successor to the furlough scheme'

Pictured: Paul Johnson, director of the Institute for Fiscal Studies

Business bosses today welcomed the latest bailout, with Dame Carolyn Fairbairn (left), the Confederation of British Industry's director-general, dubbing the scheme 'a welcome and much-needed successor to the furlough scheme' while Paul Johnson (right), director of the Institute for Fiscal Studies, said said the bailout would change 'incentives to keep people' employed, but questioned the lack of 'infomation of expected cost' to the UK economy. 

She added: 'It's right that businesses contribute if they wish to access this scheme. 

'But with a tough winter ahead, significantly increased Government contributions to non-worked hours across all regions will do even more to protect people's livelihoods.'

Ms Fairbairn said the 'missing middle of pubs, cafes and theatres in Tier Two along with other businesses across the UK who are seeing demand fall away, but with little extra support, will be relieved to see that anomaly come to an end.' 

Rishi's new bailout 
Firms in Tier 2 lockdown eligible for £2,100-a-month grants, potentially benefiting 150,000 businesses. If there is full take-up it could cost £1billion. Job Support Scheme changed so employers pay just 5 per cent of unworked hours – down from a third - and the minimum threshold for hours worked will be one day a week instead of 33 per cent. The Treasury said the costs were unclear because JSS will be 'demand led' but it will be 'in the billions'. Self-employed grants increased to cover 40 per cent of average profits, with maximum rising from £1,875 to £3,750. Officials said the grants are expected to cost £3.1billion up to January - and could be twice that if the higher rate is maintained to April. 

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'This is a big step towards a more standardised approach of support for areas going into tiers two and three and those businesses that face tough times who operate within them,' she said. 

While businesses forced to close in the harshest Tier Three areas can access significant funding, there has been less available for 'high risk' Tier Two regions such as London and Essex - even though the ban on households mixing indoors means that many are getting hammered. 

Tory MPs have been increasingly alarmed at the gap, amid warnings that the crisis is set to drag on well into next year. 

Shocking official figures also show that 17 per cent of firms in the accommodation and food services industry are at 'severe' risk of becoming insolvent. 

Business leaders today praised Mr Sunak's bailout as 'a very significant improvement in the support available to businesses struggling with the impact of increasing restrictions across the UK.'

A British Chambers of Commerce spokesman added: 'Chambers have been campaigning for greater support for businesses experiencing big falls in demand as a result of new restrictions, and a number of the steps announced today, including the lowering of employer contributions and the number of hours worked needed to qualify for the scheme, respond directly to our calls.

'Backdated grants for hospitality firms in tier two and enhanced grants for the self-employed will go some way to alleviating pressure on many of those who have been particularly vulnerable to the economic impact of the pandemic.'

Rebecca McDonald, Senior Economist at the Joseph Rowntree Foundation, said: 'Holding back the coming wave of unemployment is no easy task and it is right that the Chancellor has taken steps to protect more jobs and correct the shortcomings in the Winter Economic Plan - boosting the grants and support available to businesses, workers and the self-employed.

'With four million workers in poverty before coronavirus, we can't expect people to stay afloat on an ever-smaller fraction of their existing income when their costs have not changed.

'It's right that more support will now be available for people working in businesses affected by a loss of demand rather than just forced closures, but that needs to be enough for workers and their families to keep the roof over their head and food on the table through a very difficult winter.'

In a dramatic Commons statement, the Chancellor boosted support for sectors like hospitality after a wave of anger at 'loopholes' in his existing provision. Mr Sunak (right) and Robert Jenrick (left) hosted a roundtable with business leaders this morning before the announcement

In a dramatic Commons

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