Govt announce boost to Covid job support but it may not help ‘worst hit workers’

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Coronavirus job support has received a boost as Chancellor Rishi Sunak tore up his own economic scheme.

Mr Sunak announced new support measures after warnings that tens of thousands of jobs could be lost in Tier 2 lockdown areas as customers dry up under the new restrictions.

He said: "It is now clear the impact of restrictions on particularly the hospitality sector is more significant than they had hoped."

As part of the announcement firms in Tier 2 Covid-19 alert areas, which have been hit by the restrictions, will be eligible for cash grants worth £934 to £2,100 a month for hospitality, accommodation and leisure venues.

But today's major changes to the Job Support Scheme will make it more generous for businesses but less generous for the very worst-hit workers, reports Mirror Online.

Under the previously announced scheme, workers on a third of their hours (the minimum) would get just under 78 per cent of their salary.

The changes will see workers who go onto a fifth of their hours, which is the new minimum, receive just 73 per cent of their salary.

But it is more generous to employers, slashing their contributions and reducing the minimum hours requirement. Mr Sunak also confirmed that grants for the self-employed will be doubled to 40 per cent of previous earnings, but they will stop well short of the 70 per cent and 80 per cent offered in previous rounds of the same grants.

Mr Sunak warned of "difficult week and months ahead" and said he "understands" the frustration of workers and business owners hamstrung by lockdown but insisted that all the restrictions were "temporary".

The changes to the Job Support Scheme take effect from November 1, when furlough comes to an end.

The Chancellor said he was introducing the scheme to eligible businesses "even if they aren't legally closed".

He told MPs: "We will fund local authorities to provided businesses in their area with direct cash grants.

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"It will be up to local authorities to decide how best to distribute these grants, giving them the necessary flexibility to respond to local economic circumstances.

"But I am providing enough funding to give every businesses premises in the hospitality, leisure and accommodation sectors a direct grant worth up to £2,100 for every month Tier 2 restrictions apply.

"That is equivalent to 70 per cent of the value of the grants available for closed businesses in Tier 3."

Labour's Anneliese Dodds responded: "This is becoming like a long-running television show – the Winter Economy Plan, series three.

“But you know the twist is it didn’t last the winter, it didn’t do enough to help the economy and it wasn’t a plan.

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“We’ve got to get ahead of this crisis instead of always running to keep up.”

The Job Support Scheme is expected to cost £1billion a month for every two million people that take it up.

Under last month's Winter Economy Plan, Mr Sunak replaced furlough from November 1 with a system where the state pays 22 per cent of wages – and people must work at least one-third of their hours.

But hospitality chiefs warned that could lead to more than 500,000 redundancies by Christmas – as employers had to pay 55 per cent of wages for a worker on one-third time.

With the leaves not even off the trees, Mr Sunak then came back to announce major changes to his winter plan.

The Chancellor then extended the state wage support to 67 per cent – but only for workers whose venues are directly and completely ordered to shut by law.

More than 28 million people are now living in ares with Tiers 2 or 3 restrictions in England, with thousands of pubs and restaurants facing ruin.

  • Coronavirus

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