The UK Chancellor of the Exchequer on Thursday announced another round of expansions to his support schemes, in an effort to alleviate financial difficulties caused by the restrictions imposed to curb the spread of the CCP virus.
Chancellor Rishi Sunak, who had previously resisted calls to increase the government’s support schemes, said on Thursday that hospitality businesses in Tier 2 areas, though not required to close, are hit harder "than they had hoped" due to plummeting demand.
He said the government is going further as "the situation demands".
The Job Support Scheme coming into effect on Nov. 1, designed to prevent redundancies by helping to pay workers two-thirds of their wages for hours not worked, originally required employees to work at least a third of their normal hours, and their employers to contribute a third of the payment.
The Self-Employment Income Support Scheme (SEISS) will pay 40 percent of average trading profits to self-employed workers affected by the pandemic, doubling the original offer. The SEISS grant will be paid in a lump sum covering the three months from November to January, with the possibility of a second payment for the three months after.
Under a new grant scheme to support businesses in Tier 2 areas, the government will provide local authorities with "enough funding to give every business premises in the hospitality, leisure, and accommodation sectors a direct grant worth up to 2,100 pounds [$2,747] for every month Tier 2 restrictions apply," Sunak told Parliament.
"These grants will be retrospective," Sunak said. "Businesses in any area, which has been under enhanced restrictions, can backdate their grants to August."
Local authorities will have the power to distribute the grants according to local needs.
In Tier 3 areas, where most of these business are required to close, businesses had been offered 3,000 pounds every month.
Sunak said the new multi-billion pound support package came "on top of over 200 billion pounds of support" the government had provided since March.
Labour's Shadow Chancellor Anneliese Dodds criticised Sunak for acting too late.
"The deadline for large-scale redundancies came and went before the Chancellor announced the job support scheme. The deadline for small business redundancies passed before he realised he needed to amend it further," Dodds said.
Sunak defended the government's tiered approach. He said "there is no easy cost-free answer" to the problems, and the government is doing everything it can "to strike that balance between saving lives and protecting livelihoods".
Chief economist at accounting experts Deloitte Ian Stewart has said that the "higher case rate, new restrictions, and less government support are likely to push unemployment up over the winter months”.
"This was the highest debt to GDP ratio since the financial year ending (FYE) 1960," ONS said.