Pub and restaurant chefs today welcomed Rishi Sunak's "new vacation program" to help those in the hospitality industry – winter is still going to be a tough winter for many, as others have warned.
The Chancellor has presented another rescue package to increase support for affected companies that are struggling under tier two lockdown and self-employed.
As part of the job support program, the government will now pay a larger share of the personnel costs for working time reductions, with only a five percent contribution from employers instead of 33 percent.
Firms in Tier Two high risk areas can also receive grants of up to £ 2,100 per month to help fend off criticism from hotspots in the north that have been restricted for months.
Mr Sunak spoke in the House of Commons today that 150,000 businesses across England could benefit from the move, at a possible cost of £ 1 billion.
State support for the self-employed has also been increased. By April, the grants had increased from 20 percent to 40 percent of average profit – meaning the maximum quarterly payment is now £ 3,750.
Business leaders today hailed the recent bailout with Dame Carolyn Fairbairn, Director General of the Confederation of British Industries, calling the program "a welcome and much-needed follow-up to the vacation program".
Rishi Sunak (pictured today) has unveiled another billion pound rescue package to increase support for affected companies under the Tier 2 ban and for the self-employed
While businesses forced to close in the toughest tier three areas have access to significant funding, less is available for high risk tier two regions like London and Essex – despite the ban on shuffling households in Indoor spaces mean that many of them are under pressure
Business leaders today welcomed the latest bailout. Dame Carolyn Fairbairn (left), director general of the Confederation of British Industry, described the program as a "welcome and much-needed successor to the vacation program" while Paul Johnson (right), director of The Institute for Fiscal Studies, said the bailout would provide the incentives for changing people's employment, however, challenged the lack of information on the expected cost to the UK economy.
She added: “It is right for companies to contribute if they want to access this system.
"But in the face of a harsh winter, significantly higher government contributions to non-working hours in all regions will do even more to protect people's livelihoods."
Ms Fairbairn said that "the lack of a center of pubs, cafes and theaters in Tier 2 along with other businesses across the UK that are in decline but with little additional support will be relieved when this anomaly ends".
Rishi's new rescue package
- Tier 2 lockdown companies receive grants of £ 2,100 per month, potentially benefiting 150,000 businesses. At full use, this could cost £ 1 billion.
- The Job Support Scheme has changed so that employers only pay 5 percent of unemployed hours – up from a third – and the minimum threshold for hours worked is one day per week instead of 33 percent. The Treasury Department said the cost was unclear as JSS will be "demand driven" but "billions".
- Self-employed grants rose to 40 percent of average profit, with the maximum amount increasing from £ 1,875 to £ 3,750. Officials said the grants are expected to cost £ 3.1 billion by January – and could double if the higher rate is maintained through April.
"This is a big step towards a more standardized approach to supporting level two and three areas, as well as companies that operate and operate in difficult times," she said.
While businesses forced to close in the toughest Tier 3 areas have access to significant funding, less is available for high-risk Tier Two regions like London and Essex – despite the ban on mixing households in Indoor spaces mean that many of them are under pressure.
Tory MPs are increasingly alarmed about the loophole and warn that the crisis will continue well into next year.
Shocking official figures also show that 17 percent of companies in the lodging and catering industry are at “serious” risk of bankruptcy.
Business leaders today hailed Mr. Sunak's bailout as "a very significant improvement in support for businesses grappling with the effects of increasing restrictions across the UK".
A spokesman for the UK Chambers of Commerce added: "The Chambers have been advocating increased support for businesses that have seen severe demand from new restrictions, and a number of the steps announced today, including lowering employer contributions and the number of hours worked to qualify for the program to respond directly to our calls.
"Retrospective second-tier hotel grants and increased self-employed grants will help ease 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 not an easy task, and it is right that the Chancellor has taken steps to protect more jobs and address the shortcomings in the winter economic plan fix the grants and support for businesses, employees and self-employed.
“With four million workers in poverty before the coronavirus, we cannot expect people to stay afloat with an ever smaller fraction of their existing income if their costs have not changed.
“It is true that more support will now be available to people working in companies that are experiencing a loss of demand, rather than forced closings, but that must be enough to keep workers and their families roof over their heads and eating up Can hold the table through a very difficult winter. & # 39;
The government has spent huge sums on coronavirus response while tax revenues have declined
Another £ 36.1 billion was borrowed in September – the third highest month on record and compared to just £ 7 billion a year ago – when tax revenues plummeted and the Treasury released bailouts
Paul Johnson, director of the Institute for Fiscal Studies, tweeted, “A huge change to the Job Support Scheme. To keep employees in jobs, companies now have to pay 20 percent for their working hours plus an additional five percent, with the government paying 75 percent.
& # 39; Under the program announced last month, the government only covered 45 percent. This changes the incentives to keep people busy.
"Again, it is very strange to have such a large announcement with no information about the expected cost, as far as I can see."
Jonathan Geldart, Director General of the Institute of Directors, also welcomed the program, adding, “The new and improved Job Support Program is to be welcomed and should help alleviate the fears of business leaders.
& # 39; A significant reduction in employer contribution is a critical step reflecting the concerns of our members.
"A national approach will help remove the confusion between different tiering systems and back room political negotiations."
Others, however, have warned of the "sad reality" that thousands of companies are likely to close over the winter "regardless of the financial aid packages the Chancellor is offering".
Jonathan Geldart (left), Director General of the Institute of Directors, also welcomed the program. Right picture: Aude Barral, co-founder of the developer recruitment platform CodinGame
Aude Barral, co-founder of developer recruiting platform CodinGame, added, “The government needs to recognize the importance of retraining and retraining to get the country back on its feet as soon as possible.
& # 39; The hospitality, tourism and retail sectors have been decimated by the pandemic, but there are sectors like technology with great employment potential.
"We need significantly more investment in future retraining to open these sectors to people who have transferable skills and want to get back to work."
Other business owners agreed that government support was welcome, but insisted that "it will not be enough to help us if they maintain the same restrictions".
Mark Dogan, 50, who runs the Gizel kebab shop in Clapham, told MailOnline, “Anyone who has to leave the pubs before 10pm means we won't have a shop. That is not enough.
& # 39; And what are the details. Do they pay every week or just every month? So yes, I suppose so, but they're not doing enough to help. & # 39;
Malik Ahmed, a waiter at Clapham Common's Argan restaurant, has also criticized the new system that allows wages to be raised to 77 percent of normal.
He said: “We live in London, although 100 percent of our wages still cannot cover all of our bills.
“Now we're getting even less. How can I afford rent, travel, and all these other expenses?
'This program assumes that everyone has savings, but many don't. We're really in trouble right now, the business is dead because of all the restrictions.
“Look around, it's lunch and there is hardly anyone here because the customers stay away. We need to lift the restrictions now – we want to work hard and get our full wages. & # 39;
When Sunak announced the latest bailout in the House of Commons today, he said he had listened to industry leaders and realized that "open but difficult companies need further support".
"Their message was clear – the impact of health restrictions on their businesses is worse than hoped," he said.
The Chancellor admitted that he could not give exact figures for the total bill because the regulations were "demand-oriented".
But it seems that today's announcements mean the government will spend £ 13 billion more over the next six months – on top of more than £ 200 billion already spent on propping up the economy.
Mark Dogan, 50, who runs the Gizel kebab shop in Clapham, told MailOnline, “Anyone who has to leave the pubs before 10pm means we won't have a shop. That is not enough
Malik Ahmed, a waiter at Clapham Common's Argan restaurant, has also criticized the new system that allows wages to be raised to 77 percent of normal
They will sound the alarm in the face of rising spending after it is revealed that the government has borrowed more than £ 1 billion every day to date during the pandemic.
Companies that have to close in the third stage, such as betting shops and soft play centers, can leave their employees with two-thirds of their wages.
But there has been an outcry from Tier Two hotel companies whose business models have been ruined by restrictions that mean people can no longer socialize indoors.
Tier 2 restrictions now apply to many of the most densely populated parts of the country, including London, Birmingham, York, Essex and the North East.
As part of the Jobs Support Scheme (JSS), which will be officially introduced from November 1, employee wages can be raised to 77 percent of normal wages.
The state and the employer each finance 50 percent of the cost of the hours not worked. However, critics have warned that the system does not provide companies with enough incentive to keep employees.
But Mr. Sunak cut the cost of the employer's contribution, and the state took more of the bill.
The Treasury Department has modeled a cost of £ 1 billion per month for every two million people in the system.
That would cost £ 6 billion over the next six months, although much of that money was already tied up.
However, the bill could go up dramatically as more people sign up.
Mr Sunak also increased the amount of profits covered by the upcoming Self Employment Grant from 20 percent to 40 percent, meaning the maximum grant will be increased from £ 1,875 to £ 3,750.
According to the Treasury, this means a further £ 3.1 billion in support for the self-employed between November and January alone.
If the next grant for February through April is held at the higher rate, it would be roughly the same again.
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