Chancellor Rishi Sunak has announced an expansion of the Job Support Scheme, to help businesses that may have to close due to coronavirus restrictions imposed by the government.
For those businesses, government will pay two thirds of employees’ salaries to protect jobs over the coming months and hand out cash grants of up to £3,000 per month to support companies.
The government will pay employees who cannot work, up to 67% of their salaries, to a maximum of £2,100 a month. Employees must be off work for a minimum of 7 consecutive days to be eligible.
UKHospitality has welcomed the increase in grants for closed hospitality businesses, but repeated its call for a much more comprehensive package of support for the whole sector to cover rent and other overheads to ease the strain on businesses.
UKHospitality chief executive Kate Nicholls said: “Paying two-thirds of wages for employees in lockdown is a welcome step and it is encouraging to see that the Chancellor has introduced flexibility and a sector-specific approach into the JSS and recognises that this is an evolving situation. Support for nightclubs and other businesses left in limbo, still unable to reopen, is very welcome. It will help save jobs in a sector that would be sorely missed it were allowed to die.
“However, worryingly, it does nothing to address the issues faced by sector businesses operating well below capacity due to restrictions and consumers avoiding travel and struggling to keep their workforce employed.
“The curfew has been crippling for many hospitality businesses, with sales down around 30% even in areas of low infection. A more comprehensive support package for our businesses affected must follow swiftly if they are to survive the winter and avoid contributing to mass unemployment. If the Government is serious about saving jobs, it needs to rethink the mandatory curfew in areas where COVID rates are low.”
The chancellor laid out his plans on Friday. He said: “The expansion of the Job Support Scheme is specifically to protect those jobs of people that work in businesses which may be asked to close. If that happens, those workers will receive two thirds of their wages for the time that they are unable to go to work.
“I hope that this provides reassurance and a safety net for people and businesses in advance of what may be a difficult winter.”
The scheme begins on 1 November and will last for 6 months. To qualify, employees must have be employed with a company on or before 23 September.
This could be particularly useful for companies in the hospitality sector and its supply chain, with local lockdowns and curfews impacting sites’ ability to trade.
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions.
This scheme will cover businesses that, as a result of restrictions set by one or more of the four governments in the UK, are legally required to close their premises. This includes businesses that are required to provide only delivery and collection services from their premises, or food and drink outdoors from their premises.