British Chambers of Commerce Director General Adam Marshall has said the Government’s latest Job Support Scheme does not go far enough to help businesses facing local lockdown restrictions.
The Government has announced it would expand the Job Support Scheme to support businesses that were required to close due to local Coronavirus restrictions.
Government will pay two thirds of employees’ salaries to protect jobs over the coming months, while cash grants for businesses required to close in local lockdowns will increase to up to £3,000 per month.
Dr Marshall (pictured) said: “The enhanced Job Support Scheme will provide some additional relief for businesses forced to close due to intensified restrictions. It is right that the Chancellor has responded to our long-standing calls for more local support, as so many areas across the UK now face restrictions and closures. More generous cash grants will be of some help, but for most this will not be enough to offset a sustained cash crunch.
“As welcome as this new support will be for companies shut down by government decree, additional local restrictions and lockdowns will have a material impact on many other firms, especially in supply chains and in town and city centres. Their cash flow concerns, and worries about future demand, must be heeded.
“At the end of the day, no fiscal support will ever be a substitute for an open, functioning economy. While the Chancellor deserves thanks for enhancing the support on offer, the goal of all governments across the UK must be to get to a point where wide-ranging restrictions, and the economic disruption they bring, are no longer needed.”
Under the Government’s expansion of the Job Support Scheme, firms whose premises are legally required to shut for some period over winter as part of local or national restrictions will receive grants to pay the wages of staff who cannot work – the Government will pay two thirds of each employees’ salary (or 67%), up to a maximum of £2,100 a month.
Chancellor of the Exchequer, Rishi Sunak, said: “Throughout the crisis the driving force of our economic policy has not changed. I have always said that we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.
“The expansion of the Job Support Scheme will provide a safety net for businesses across the UK who are required to temporarily close their doors, giving them the right support at the right time.”
Under the scheme, employers will not be required to contribute towards wages and only asked to cover NICS and pension contributions, a very small proportion of overall employment costs. It is estimated that around half of potential claims are likely not to incur employer NICs or auto-enrolment pension contributions and so face no employer contribution.
Businesses will only be eligible to claim the grant while they are subject to restrictions and employees must be off work for a minimum of seven consecutive days.
The scheme will begin on November 1 and will be available for six months, with a review point in January. In line with the rest of the JSS, payments to businesses will be made in arrears, via a HMRC claims service that will be available from early December. Employees of firms that have been legally closed in the period before 1 November are eligible for the CJRS.
In addition to expansion of the JSS, the Government is increasing the cash grants to businesses in England shut in local lockdowns to support with fixed costs.
These grants will be linked to rateable values, with up to £3,000 per month payable every two weeks, compared to the up to £1,500 every three weeks which was available previously.