'For businesses who can open, it is now clear the impact of restrictions on them, particularly in the hospitality sector'

Chancellor Rishi Sunak has announced further support for those businesses struggling under Tier Two restrictions, saying the updated grant schemes are ‘better for businesses, better for jobs and better for the economy’.

This morning he met with business and union representatives including those from the hospitality industry, to discuss the new restrictions. The message he said was clear, ‘the impact of the health restrictions on their businesses is worse than they’d hoped’.

“New restrictions have caused a significant fall in consumer demand causing profound economic harm to their industry.”

The government will fund local authorities to provide businesses in their area with direct cash grants. It will be up to local authorities how best to distribute these grants, giving them the flexibility to respond to local economic circumstances.

Enough funding will be provided for every business premises in the hospitality, leisure and accommodation sectors with a direct grant up to £2,100 for every month tier two restrictions apply. The equivalent of 70% of the grants available to closed businesses.

Grants will be retrospective and can be backdated to August.

The chancellor added that to protect jobs, the job support scheme will be ‘more generous’. If businesses are legally required to close the government will cover the full cost of employers paying two thirds of people’s salary where they can’t work for a week or more.

He said: “For businesses who can open, it is now clear the impact of restrictions on them, particularly in the hospitality sector, is more significant than we had hoped.”

There will be two changes:

1. Under the original scheme employees had to work 33% of their normal hours, now they only need to work 20%

2. The employer contribution for the hours not worked will not be 33%, or 20% as it is in the October furlough scheme, it will reduce to 5%. It will apply to all eligible businesses in all alert levels.

Speaking to people who are now living under Tier Three restrictions, he said: “Understand your frustration, but they are not forever they are temporary. There are difficult days and weeks ahead but will get through together.”