Employees who work for UK companies have been forced to close by law due to coronavirus restrictions, they must receive two-thirds of their wages paid by the government.
The scheme, announced by Rishi Sunak, begins on November 1 for a period of six months, and a Treasury source said it could cost hundreds of millions of pounds a month.
On Monday, the restrictions are expected to be updated, which could lead to the closure of bars and restaurants in the hardest hit areas.
Commanders in the now-restricted areas said the scheme did not go far enough.
In a statement, the mayors of Greater Manchester, North Tyne, Sheffield and Liverpool said: “We are delighted that the government has heard and recognized that any new system of restrictions must come with a substantial package of financial support.”
But they said it was only a “beginning” and that more help was needed “to prevent real hardship, job losses and business failures this winter.”
This announcement comes after only two weeks from the government Work support scheme unveiled – Replace leave system – to increase the wages of employees who have not been able to return to the workplace full time.
The latter scheme will only apply to businesses that are being asked to close – rather than those choosing to shut down due to the wider impact of Covid restrictions.
The support will be reviewed in January. Until November, companies that are required to close can continue to use the existing vacation scheme.
The grants would be paid up to a maximum of £ 2,100 per employee per month and the Treasury Department said it would protect jobs and enable companies to reopen quickly once restrictions are lifted.
A pub manager in Utley, West Yorkshire, said the scheme “doesn’t even touch the sides” in terms of its impact on pubs.
“No two-thirds of someone’s wage will cut the amount,” said Mel Green, 41, of Black Bull.
“We are in a business where pretty much everybody is on a national minimum wage. They are the people who lose. A lot of them are already living side by side and really have reduced hours.”
The advisor said The latest measures For companies forced to close, it will provide “reassurance and a safety net for individuals and businesses before what can be a difficult winter.”
Additionally, for businesses forced to close in England, Mr. Sunak announced an increase in business grants – up to £ 3,000 a month paid every two weeks.
The Treasury says mandated departments in Scotland, Wales and Northern Ireland will receive increased funding allowing them to take similar actions if they so choose.
It’s a sign of just how quickly the coronavirus situation is getting soured, as the chancellor has to return to the policy he thought he had stopped less than two weeks ago when he announced his winter economic plan.
The government insists that this is not a renewal of the holiday plan, which is due to expire at the end of this month, but that in all important respects this is the second leave.
The crucial part is that small employers will not have to make any contribution to their workers’ wages if they are legally forced to close.
Larger companies will have to contribute about 5% of employee costs in the form of national insurance and pension contributions.
This is much more generous than the Expired Leave Scheme and is more generous than the Career Support Scheme announced by Sonak 10 days ago, which requires employers to pay 55% of active workers’ salaries.
The reason for this is simple – the measures that apply to companies that have been allowed to open up. This new system only applies to businesses that are not.
The other questions are not simple – who will be eligible? What about companies that have not been allowed to reopen since March?
Will it be applied by zip code? Would you be able to walk 10 minutes down the road to go to the open bar but have to pay 55% of the staff wages when you are less than half full?
And perhaps most importantly to the expected “beneficiaries” of this scheme – the hospitality industry – how strong is the evidence on which this policy is based and can we see it in detail?
The Labor Party said the government’s “slow, ineffective and hesitant” response had caused “unnecessary anxiety and job losses.”
Shadow advisor Anelise Dodds welcomed the measures but called for more changes to the plan to incentivize employers to keep more of their employees on duty.
Trade lobby group CBI said the scheme “should cushion the blow for the hardest hit and keep more people in action.”
“But many companies, including bars and restaurants, would still be very disappointed if they had to close their doors again after doing so much to keep customers and employees safe,” added Ms. Caroline Verbern, President of CBI.
Mike Sherry, president of the Small Business Association, said additional help for closed companies would be “welcomed by thousands of small businesses”.
The Usdaw store workers union said it is concerned that retailers facing limited business in an area subject to the new restrictions will not benefit from the scheme.
Meanwhile, the number of people in the UK who tested positive for the coronavirus rose by 13,864 – down 3,676 from Thursday’s figures – with another 87 deaths reported in Governmental dashboard.
A bunch of options
The consultant described his announcement as “a completely different scheme than we had before, this is not a universal approach, it is an expansion of the job support plan specifically for those people who work in the business that will be asked formally or legally to close.”
Asked whether the announcement indicated that the government would ask companies, such as those in the hospitality industry, to close, Sunak said: “The high number of cases and hospitalizations in certain parts of the country raises concern.
“It is right for the government to consider a range of options … But it is also right to engage with local leaders.
“That’s what is happening this afternoon and over the weekend, so those conversations can happen and we can collectively decide on the appropriate response.”
The job support scheme, which will replace the furlough scheme from November 1, will see eligible workers receive three-quarters of their regular six-month pay.
To qualify, employees must be in a “viable job” where they can work at least a third of their normal working hours.
For hours that aren’t working, the government and employer will pay a third of the remaining wages. This means that the employee will get at least 77% of their wages.
A tiered system of procedures for England is expected to be announced by Monday, In an effort to stem the rise in infection rates, to replace a patchwork of existing bases across the country.
Under the new system, different parts of the country will be categorized into different categories – although ministers are still debating the finer details.
Bars and restaurants could be closed in the hardest hit areas, including parts of the Northern England and the Midlands, while an overnight ban is also being considered.
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