Chancellor Rishi Sunak to reveal next stage of Jobs Support Scheme ahead of new Covid restrictions on hospitality sector

Video report by ITV News Political Correspondent Shehab Khan

The Chancellor is to announce further support for jobs and businesses affected by coronavirus shutdowns amid calls to help the hardest-hit industries and regions.

Rishi Sunak will detail “the next stage” of the Jobs Support Scheme on Friday, ahead of new restrictions expected for the hospitality sector.

Vast swathes of northern England are expecting the government to impose a forced closure of pubs, bars and restaurants in an attempt to stem a surge in Covid-19 cases.

Leeds City Council Leader Judith Blake says local leaders have seen no detail of the plans and have not been consulted:

A Treasury spokeswoman said: “The Chancellor will be setting out the next stage of the Job Support Scheme later today, that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months.”

Business minister Nadhim Zahawi told ITV News there is support already in place for "struggling" businesses but added the government will "want to go further if we're having to introduce further interventions in the economy".

The government says hospitality accounts for 30% of all settings in which people are exposed to Covid-19.

Sources were saying it was wrong to describe the new package as a local furlough scheme, which some have called for the Government to develop.

The furlough scheme, which has supported millions of workers and warded off larger levels of job losses, will cease at the end of the month.

It will be replaced by the less generous Jobs Support Scheme, where the Government will pay up to 22% of wages for workers who come back part-time.

Shadow chancellor Anneliese Dodds said the scheme is “forcing businesses to flip a coin over who stays and who goes” because it is cheaper to employ one worker than two to do the same hours.

She said the cost to an employer of bringing back two workers in the arts sector for half of the week versus one for the whole week is £163 in the UK – compared with £98 in the Netherlands, £69 in France and nothing in Germany.

“The Chancellor’s sink-or-swim Job Support Scheme is forcing businesses to flip a coin over who stays and who goes,” she tweeted.

Shadow business minister Lucy Powell said she welcomed the scheme but warned it was not "sufficient".

She said: "[It] won't stop businesses going bust and that means higher levels of unemployment.

"Businesses have many other overheads like rent, like stock that they are now going to have to throw away, bills to pay. And without more support from the Government we are I'm afraid going to see thousands of businesses going bust and the resultant large-scale redundancies."

Business Minister Zahawi admitted he is "concerned by the state of the British economy" but was optimistic that the UK will "bounce back in 2021".

She said that extra funds should be allocated to local authorities to support businesses.

Ministers are expected to outline a three-tier local lockdown system on Monday, which may see high-risk individuals told to stay at home for months and fresh measures for businesses.

There are particular concerns for the hospitality sector, as it faces new restrictions with data indicating it is linked to a significant number of transmissions.

Chief medical officer for England Chris Whitty on Thursday briefed MPs representing constituencies in northern England and the Midlands, where infection rates are at their highest.

Slides shown to MPs revealed hospitality accounts for 30% of coronavirus common exposure settings.