Chancellor Rishi Sunak announces more support for businesses hit by Tier 2 rules

Video report by ITV News Political Correspondent Libby Wiener

The chancellor is announcing a new support package for businesses hit by Tier 2 Covid rules.

Speaking in the House of Commons, Rishi Sunak is unveiling a new plan to help firms who have seen their trade drop as a result of the social restrictions in the “high” category.

Under Tier 2 rules, people from different households cannot meet up indoors, hitting the number of people visiting pubs, restaurants, cafes and other hospitality venues.

Covid tiers: - What are the differences between each alert level?

  • Medium (Tier 1) - Rule of six applies indoors and outdoors. Pubs and restaurants close at 10pm.

  • High (Tier 2) - Households must not mix indoors in any setting including pubs and restaurants. Rule of six applies outdoors

  • Very high (Tier 3) - Households must not mix indoors, or in private gardens. Rule of six applies in outdoor spaces including parks. Pubs and bars which don't serve meals will be closed

Currently businesses in Tier 2 areas such as London and Birmingham do not benefit from the same government aid as those in Tier 3, including business grants and higher wage subsidies, because they can remain open.

ITV News Political Correspondent Shehab Khan has more:

In Tier 3, social mixing is banned both indoors and in private gardens, while pubs and bars must close unless they can operate as a restaurant.

For businesses in this band that are unable to legally operate due to Covid-19 restrictions, the government will pay employees 66% of their wage, with the employer still contributing to pensions and National Insurance.

Watch the statement in full:

Meanwhile, companies in Tier 2 can only claim on a scheme where employers have to pay around 55% of staff wages with a smaller subsidy from government, while still being subject to bans on household mixing indoors.

It is though Mr Sunak will unveil financial measures to help Tier 2 firms following complaints from industry leaders and MPs that thousands of jobs were at risk ahead of Christmas.

A spokesperson for Mr Sunak said: “The chancellor is due to update the House of Commons on the economic situation, in particular, and so far as it relates to the new restrictions.

“And, what we have always said is that our package of support is always flexible and always up for review to make sure that it is dealing with the situation as it evolves.”

Greater Manchester Mayor Andy Burnham said he would be “looking closely” at the announcement, after he was embroiled in debates with ministers for days over what support businesses in his region should get for their move into the Tier 3.

He said: “Greater Manchester has been in ‘high’ alert for three months but our hospitality businesses haven’t had any emergency support.

“We asked for this to be taken into account in Tier 3 negotiations. The Government refused.”

Kit Malthouse, the police minister, said "obviously there are issues in Tier 2 in particular with hospitality" and "every MP's email inbox has been filled with distress calls from that sector".

He said Mr Sunak has been "trimming and tacking the sale throughout the crisis and I think that's what he'll do this afternoon".

He added "agility is the key" when it comes to reactive economic support.

The business help comes as talks with local leaders in South Yorkshire were branded a “charade” as the area was confirmed to move up to Tier 3 this weekend.

Sheffield City Council leader Julie Dore said it was clear Downing Street officials and ministers were “going through the motions” in 10 days of negotiations just to “try and prove they were listening”.

Ms Dore was speaking after Sheffield City Region mayor Dan Jarvis, who led the discussions, admitted he could not have secured any more cash, saying he “moved heaven and earth to secure the maximum amount of resource that we could”.

Ms Dore said: “I can assure you that Dan has been fighting vociferously for the people of Sheffield and South Yorkshire, just like I have been, because we genuinely thought we were in proper discussions and negotiations.”

It is understood talks to move parts of the North East into Tier 3 have been put on hold, but Coventry will be moved up from the “medium” Tier 1 restrictions this weekend, joining other Midlands neighbours in Tier 2 after a rise in cases.

West Midlands mayor Andy Street said the new rules will present a “serious economic challenge” and called on central government to update their support.

He tweeted: “Currently, there’s no extra financial support available for our hospitality sector in Tier 2 which cannot possibly be right.

“I will continue to press Govt on this & I’m confident we will get a breakthrough soon.”

Wednesday saw the UK report its highest daily rise in lab-confirmed coronavirus cases since the outbreak began.

The government announced a further 26,688 lab-confirmed cases of Covid-19 in the UK, taking the total number to 789,229, a jump of more than 5,000 on the 21,330 positive cases confirmed on Tuesday, while a further 191 people died within 28 days of a positive test, meaning the death toll reached 44,158.

Amid the continuing increase in cases, a Sage scientist warned that the UK can expect thousands of deaths from the second wave of the disease.

Professor John Edmunds told MPs: “We’ll see peaks around Christmas, in the new year of very severe numbers of cases throughout the UK.”