Workers and businesses affected by Covid restrictions will be given further financial support - what you need to know

Businesses that are within an area under tier 2 restrictions will be eligible to receive further financial support, Chancellor Rishi Sunak has announced.

Mr Sunak confirmed the introduction of a new grant scheme in the House of Commons on Thursday (22 October), which aims to support firms impacted by the ‘high’ Covid alert level measures, even if they are not legally closed.

What support will be available for businesses?

The Chancellor confirmed that the government will provide funding to local authorities in tier 2 areas to distribute to businesses in their locality.

It will be the responsibility of the authority to decide how best to distribute these cash grants, “giving them the necessary flexibility to respond to local economic circumstances”.

Mr Sunak also confirmed that the government will provide enough funding to give every business premises in the hospitality, leisure and accommodation sectors a direct grant worth up to £2,100 for every month tier 2 restrictions apply.

This amounts to the equivalent of 70 per cent of the value of the grants available for businesses that are closed in tier 3 areas.

These grants will be retrospective and businesses in an area of England which has been subject to enhanced restrictions can backdate their grants to August.

The move to make the payments retrospective comes following criticism from parts of northern England which have been under tougher restrictions for months.

Around 150,000 businesses in England could be eligible for the support, the Treasury said.

What about employees?

The Chancellor also announced that the government is making changes to the Job Support Scheme.

The scheme, which will replace the current furlough scheme from November 1, will be made “more generous to employers” across the country.

Instead of only being open to people in “viable” jobs working a third of their normal hours, the scheme will now cover employees that are doing just 20 per cent of their usual work.

Additionally, the amount that employers are required to contribute to top up their staff wages has also been reduced to just five per cent of unworked hours, down from the previous 33 per cent.

People who are self-employed will also be given extra help, with the amount covered by the grants to increase from 20 per cent of profits to 40 per cent.

This means that the maximum payout will increase from £1,875 to £3,750.

In total, this will amount to a potential £3.1 billion of additional support to the self-employed from November to January, with a further grant to follow next year, covering February to April.

Mr Sunak said: “I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today.

“These changes mean that our support will reach many more people and protect many more jobs.

“I know that the introduction of further restrictions has left many people worried for themselves, their families and communities.

“I hope the government’s stepped-up support can be part of the country pulling together in the coming months.”

A version of this article originally appeared on our sister site, Yorkshire Evening Post.