Our financial support for jobs and businesses

By October 23, 2020NEWS

Throughout this pandemic, our economy priority remains the same: protect jobs. But as the situation evolves: policy evolves.

We have already set out our economic package of support for businesses who are legally required to close, including the expanded Jobs Support Scheme, more generous and frequent cash grants, and more help for the self-employed.

We’re building on our Job Support Scheme

In September we announced the ‘Job Support Scheme OPEN’ to support companies facing periods of low demand over winter, helping them to keep staff on reduced hours rather than laying them off, and protecting people’s wages.

A company will continue to pay its employee for time worked, but the burden of hours not worked will be shared equally between the employee, employer and government – a third each way, with the employer contributing 33% of unworked wages and the employee receiving 67% of their wages for time not worked. The scheme is also designed to incentivise work, so employees need to be working at least a 33% of the time.

We then built on this by then announcing the ‘Job Support Scheme CLOSED’. In order to protect jobs in UK businesses whose premises are legally required to close as a result of local or national coronavirus restrictions, the government will provide a grant for employees unable to work, covering two-thirds of their usual wages. Other than National Insurance contributions, there is no employer contribution and no requirement for the employee to work.

Now, we are increasing the eligibility and generosity of the Job Support Scheme OPEN. More regions and businesses are moving into High Local Covid Alert Level restrictions – meaning more businesses that remain open, but experiencing a significant fall in revenues and demand.

That is why we are rebalancing contributions between employer and government, to ensure that the government shoulders the burden of the cost as the virus remains with us for the near future.

Cash Grants for Hospitality and Leisure Businesses

We recently announced that businesses forced to close due to national or local restrictions will receive up to £3,000 per month. We also extended the scheme to include businesses which have been forced to close on a national rather than a local basis, or which have not been legally able to reopen since the first lockdown in March – such as nightclubs.

Now, we are providing additional funding through the Local Restrictions Support Scheme to provide grants to businesses in High Local Covid Alert Level areas which are not forced to close, but which are facing reduced demand due to social distancing. These grants will be distributed to local authorities who will determine exactly which businesses are eligible for grant funding in their local areas, and how much to grant.

This grant is primarily designed for hospitality and leisure businesses affected by High Alert Level restrictions. Each council will receive an amount of funding based on the number on hospitality, leisure and accommodation businesses in that area.

These new grants will be equivalent to 70% of the grants given to legally closed businesses and will be backdated until August for areas which have had enhanced restrictions since then, such as Manchester.

More help for the self-employed

We recently announced a grant extension for self-employed small businesses who used the existing SEISS

Now, we are increasing the value of that grant to 40%, meaning the maximum available grant will increase from £1,875 to £3,750. And on top of that, there will be an extra grant payment covering February to April.

This increase reflects the increase in government contribution to the wages of those who are employed on the scheme, and ensures parity for those who are in self-employment.

Grants will be available for any self-employed person who has either been ordered to temporarily stop trading, or who is facing significantly reduced demand, regardless of whether they live in a Medium, High or Very High COVID alert area. This will bring the total support for the self-employed during this crisis to £13.2 billion.

Extra Support for Regions that Need it

We are also providing local authorities in High or Very High Alert Level levels 3 with significant new funding to support public health.

We have introduced a national funding formula of £1 per head in medium alert areas; £3 per head in High Alert Areas; and £8 per head in Very High Alert Areas, to assist with public health activities such as local enforcement and contact tracing.

That means nearly half a billion pounds for High or Very High Local Covid Alert areas, and comes on top of the more than £6 billion we’ve already provided to local authorities.

We are also providing funding for local authorities in Very High Alert Areas to support businesses. We have already reach agreements with Greater Manchester, Liverpool City Region, Lancashire and South Yorkshire.

We’re Giving Businesses the Confidence they Need

Alongside our Winter Economy Plan, these announcements will give businesses, whether they are open or required to close, the flexibility to adjust and plan over the coming months.

And this comes on top of the £200 billion package of support we have committed since the beginning of the crisis.

We stood behind Britain’s businesses and workers as we came into this crisis. And we continue stand behind them as we come through the other side.