Business leaders, metro mayors and northern politicians have given a mixed reaction to Rishi Sunak’s announcement that the government will pay 67% of wages for staff in businesses forced to shut because of Covid-19 restrictions.
The chancellor described the expanded jobs support scheme as a safety net to protect jobs over a difficult winter period and pledged to pay grants to affected businesses – and their staff up to £2,100 per month.
It is higher than the support Sunak pledged two weeks ago but short of the 80% (up to £2,500) paid in the original furlough scheme. The chancellor announced other measures for businesses that are legally required shut due to local lockdowns or national restrictions put in place to try and halt the spread of the coronavirus.
‘Not enough to prevent genuine hardship, job losses and business failure this winter’
A joint statement by mayors from across the north of England said: “We are pleased that the government has listened and recognised that any new system of restrictions must come with a substantial package of financial support.”
The mayors – Liverpool’s Steve Rotherham, North Tyne’s Jamie Driscoll, Sheffield’s Dan Jarvis and Greater Manchester’s Andy Burnham – continued: “What has been announced by the chancellor today is a start but, on first look, it would not appear to have gone far enough to prevent genuine hardship, job losses and business failure this winter.”
The mayors said they and “leaders from across the north” will meet tomorrow to discuss the plan in more detail and “will make a further statement then.”
Jim McMahon, MP for Oldham West and Royton – and shadow transport secretary – was far more critical, calling Sunak’s plan an insult and questioning why the support is “so much less” given operating costs remain the same if it is a local lockdown or a national one.
“This is a northern intervention and they think they can get away with doing it on the cheap,” said McMahon. “That’s the beginning and end of it.”
Business reacts to Sunak’s statement
Sunak’s scheme “should cushion the blow for the most affected and keep more people in work,” said the head of the Confederation of British Industry (CBI) Dame Carolyn Fairbairn. “But many firms, including pubs and restaurants, will still be hugely disappointed if they have to close their doors again after doing so much to keep customers and staff safe.”
Mike Cherry, head of the Federation of Small Businesses (FSB) said the scheme will be “welcomed by thousands of small businesses”, while Usdaw – the trade union for shop workers – expressed concern about the impact on retailers who will remain open in areas subject to new restrictions but facing reduced trade.
Jobs support scheme details
The expanded jobs support scheme is UK wide and begins on November 1 – the day after the current furlough scheme ends. It will only apply to businesses that are told to shut and employers will still have to pay pension and national insurance contributions for their staff – estimated at approximately 5% of employee costs.
As well as the 67% of staff wages, businesses will also be eligible for cash grants worth from £1,300 up to £3,000 per month.
“Today’s announcements significantly strengthen our toolkit for protecting jobs and businesses over the weeks and months to come,” tweeted the chancellor.
Traffic light system to be announced on Monday
Boris Johnson will make a statement to MPs on Monday about new restrictions that have been widely trailed as a new “traffic light system” that will put regions under different rules according to the number of Covid cases in those areas.
The three tier system is expected to see the closure of pubs and restaurants in some towns and cities – most likely in northern England and the Midlands, areas that are already subject to tighter restrictions.
The BBC report that a ban on overnight stays is also being considered by the government.
The latest figures released today (Friday) show 13,864 positive new cases and 87 deaths. There are 3,660 Covid patients in hospital – 436 of whom are in ventilator beds – with 597 new hospital admissions.