The Chancellor expanded on his support for business during the Covid-19 pandemic and announced that the Government will pay two thirds of the wages of employees who are unable to work because they are in businesses which are legally required to close due to stricter Lockdown measures.
The scheme will start on November 1st and run for six months with a review in January. Until November businesses that are asked to close can continue to use the furlough scheme.
The grants will be paid up to a maximum of £2,100 per employee a month and the Treasury said they will protect jobs and enable businesses to reopen quickly once restrictions are lifted.
The announcement followed calls, largely from the Pub and Hospitality industry, following recent curbs to opening hours and anticipated further lockdown restrictions on the way, particularly in the North of England.
There will also be an increase of up to £3,000 for business grants to assist affected businesses.
Alan Lewis, Partner at Constantine Law Said, “Those in the hospitality sector had to survive months of lockdown with zero turnover (save for some take-out food sales), had a reprieve for a few weeks, which was then curbed to 10pm – 5am closing times and now pubs and restaurants in high risk areas in England are facing another forced lockdown.
The furlough scheme and flexible furlough scheme went some way to preventing large scale redundancies but we have not even seen the start of the Job Support Scheme (due to begin on 1 November)- so it is reassuring to see some help for employers in the pub and restaurant trade in these high risk areas.”
However the Chancellor has admitted he does not know what the take up will be and what the cost of this expanded JSS will involve.
And as Alan Lewis continued: “Employers will need to ensure they agree changes to working hours with staff, otherwise they face acting in breach of contract. Those changes ought to be agreed in writing with staff, even if that can only be done by email in view of the short timescale involved. Having staff on 66% of their wages may also not be enough support and it remains to be seen whether or not we will see multiple redundancies during the next few weeks. ”