PM insists he is ‘not at war with the North’ as Sunak denies waiting until LONDON was in lockdown to step up coronavirus bailout after he unveils £3bn-a-month splurge to keep self-employed afloat and stop bars and restaurants laying off millions of workers

  • Chancellor has updated MPs this morning on a package of coronavirus support set to cost billions of pounds 
  • Stricken hospitality sector in Tier Two lockdown areas will now be entitled to grants of £2,100 a month 
  • Job Support Scheme being upgraded with lower hours threshold and less employer contribution needed
  • Self-employed grants will be doubled to 40 per cent of quarterly average profits, with a maximum of £3,750  
  • He is reaching deeper into Treasury’s coffers as figures showed Government’s daily £1bn borrowing
  • Efforts to bring Government spending under control have been derailed by a second surge of coronavirus 
  • Ministers announced yesterday that South Yorkshire would be moved into the top Tier Three restrictions 

Rishi’s new bailout 

  • Firms in Tier 2 lockdown eligible for £2,100-a-month grants, potentially benefiting 150,000 businesses. If there is full take-up it could cost £1.2billion.
  • Job Support Scheme changed so employers pay just 5 per cent of unworked hours – down from a third – and the minimum threshold for hours worked will be one day a week instead of 33 per cent. The Treasury said the costs were unclear because JSS will be ‘demand led’ but it will be ‘in the billions’.
  • Self-employed grants increased to cover 40 per cent of average profits, with maximum rising from £1,875 to £3,750. Officials said the grants are now expected to cost £3.1billion up to January – and could be twice that if the higher rate is maintained to April. 

Boris Johnson insisted he was not ‘at war’ with the North today as he and Rishi Sunak denied waiting until London faced lockdown to unveil eye-watering new bailout measures.

The PM is facing anger from northern leaders that many have been subject to local restrictions for weeks and months, but the support on offer has only been stepped up now.

The package announced today includes billions of pounds to keep the self-employed afloat and prevent stricken bars and restaurants in Tier Two laying off millions of workers. 

But Mr Johnson denied that the timing was related to the capital and places like Essex being put under restrictions. 

‘The issue is really one of basic fairness between various parts of the country that are having to experience regional restrictions, that’s what we were trying to achieve in the last 10 days,’ Mr Johnson told a press conference this evening.

‘What we are doing now is bringing forward measures that are designed to help businesses that can’t trade as they normally would and who are experiencing a fall in income.

‘And we are doing it across the whole country, it’s backdated to August.’

Mr Sunak said: ‘This is simply about fairness, it’s about treating people the same wherever they live and whatever their situation.’

He said when the earlier Job Support Scheme was designed, it was at a time when controls were being eased.

‘It was done over the summer with a view to the economy being open and restrictions being lifted. Obviously the last few weeks, that has not been as those businesses had expected,’ Mr Sunak said.

‘Those restrictions were coming back, they were having a cumulative effect on the ground, particularly in Tier 2 areas, particularly in hospitality.’

In a dramatic Commons statement earlier, the Chancellor boosted support for sectors like hospitality after a wave of anger at ‘loopholes’ in his existing provision.

He said he had listened to industry leaders and recognised that ‘open but struggling businesses require further support’. 

Mr Sunak admitted that he could not give any precise figures for the overall bill, saying the schemes were ‘demand led’.

But it appears the announcements today mean £20billion more spending by the government on just three flagship schemes over the next six months – with more than £200billion splurged in total to prop up the economy. 

They will fuel alarm at the spiralling outlay after it emerged the government has borrowed more than a billion pounds every day during the pandemic so far. 

The bold measures were welcomed by businesses, but Greater Manchester Andy Burnham raged that he would have agreed a Tier Three financial package this week if he had known they were coming.   


Boris Johnson (left) insisted he was not ‘at war’ with the North today as he and Rishi Sunak (right) denied waiting until London faced lockdown to unveil eye-watering new bailout measures

In a dramatic Commons statement, the Chancellor boosted support for sectors like hospitality after a wave of anger at ‘loopholes’ in his existing provision. Mr Sunak (right) and Robert Jenrick (left) hosted a roundtable with business leaders this morning before the announcement

The new system means workers could receive less overall than under the previous arrangements – but employers will contribute far less. The employer contribution will be just 5 per cent of the hours not worked, which could equate to as little as 4 per cent of the overall previous wage as illustrated here  

The government has been laying out huge sums on the coronavirus response while tax revenues have nosedived

Another £36.1billion was borrowed in September – the third-highest month on record and compared to just £7billion a year ago – as tax revenues slumped and the Treasury poured out bailout money

Who can apply for the bailout schemes and how?

Jobs Support Scheme 

The scheme will be open from 1 November until the end of April 2021. 

Employers will be able to make a claim online through Gov.uk from December. 

The subsidies for wages will be paid by the government on a monthly basis, in arrears.

They will be issued with grants after payment to the employee has been made and reported to HMRC via an RTI return. 

Self-employed grants 

The grants to the self-employed are being provided through HMRC, and they are running a claiming service.

To be eligible people must have completed a 2018 to 2019 Self Assessment tax return, and have trading profits of no more than £50,000.

If individuals are not eligible based on the 2018-2019 tax return, previous years can be considered. 

The next grant will cover from November to January, and after that from the start of February until the end of April. 

The first will be set at 40 per cent of average profits, up to the ceiling, and HMRC will review the level of the second grant ‘in due course’.

The grants are subject to Income Tax and National Insurance Contributions.

Business grants 

Firms will be able to apply to local authorities for grants of up to £2,100 per month if they have been ‘severely impacted’ by lockdown curbs, but not formally closed.

Town halls will receive funding based on the number of hospitality, hotel, B&B, and leisure businesses in their area. 

For properties with a rateable value of £15,000 or under, grants will be £934 per month; rateable values of between £15,000 and £51,000 will receive £1,400 per month; and at £51,000 grants will be £2,100 per month.

That is equivalent to 70 per cent of the grant amounts given to legally closed businesses. 

As the Chancellor poured more money into struggling UK plc:

  • The UK recorded another 18,980 infections today, up 11.9 per cent on the same day last week; 
  • Sir Patrick Vallance claimed as many as 90,000 people could be catching the virus every day but conceded that the outbreak does appear to be slowing;
  • Coventry, Stoke-on-Trent and Slough have been upgraded to Tier Two as talks to put Nottinghamshire into the ‘very high risk’ category are said to be close to completion;
  • Mr Johnson said test and trace was helping ‘a bit’ in the fight against the virus, but admitted that it needed to improve;
  • Andy Burnham has invited the PM to Manchester for face-to-face talks to ‘clear the air’ as he said he does not want a ‘lingering political argument’ with the Government;  
  • Coronavirus infection rates in England’s worst-hit student areas dropped by half in the first two weeks of October amid hopes that young people have been shocked into following social distancing rules. 

In crucial changes to the Job Support Scheme, the government will cover more of the cost of staff on reduced hours, with just a 5 per cent contribution required from employers towards unworked hours, instead of 33 per cent. 

There will be a one day a week minimum hours requirement, down from 33 per cent – lowering the threshold for what classes as a ‘viable’ job. The new scheme is expected to cost a billion pounds a month for every two million people who used it – which could be £12billion over the next six months.

Firms in ‘high risk’ Tier Two areas will get bolstered grants of up to £2,100 a month, with the move backdated to ward off criticism from northern hotspots that have been under restrictions for months.

 Mr Sunak said 150,000 across England could benefit, with the costs potentially hitting £1.2billion over the next six months. Extra cash will be handed to Scotland, Wales and Northern Ireland for their own schemes. 

The package for the self-employed is being hugely scaled up, with grants increased from 20 per cent to 40 per cent of average profits until April – meaning the maximum quarterly payment will now be £3,750. The cost up to January is estimated at £3.1billion, but could end up double that by the spring if the higher rate is maintained.

While businesses forced to close in the harshest Tier Three areas can access significant funding, there has been less available for ‘high risk’ Tier Two regions such as London and Essex – even though the ban on households mixing indoors means that many are getting hammered. 

Tory MPs have been increasingly alarmed at the gap, amid warnings that the crisis is set to drag on well into next year. Shocking official figures today show that 17 per cent of firms in the accommodation and food services industry are at ‘severe’ risk of becoming insolvent. 

Addressing MPs today, Mr Sunak said there were ‘difficult days and weeks ahead’.

‘Let me speak first to the people of Liverpool, Lancashire, South Yorkshire and Greater Manchester and indeed other areas moving into or already living under heightened health restrictions,’ he said.

‘I understand your frustration, people need to know this is not forever. These are temporary restrictions to help control the spread of the virus.

‘There are difficult days and weeks ahead, but we will get through this together. People are not on their own. We have an economic plan that will protect the jobs and livelihoods of the British people wherever they live and whatever their situation.’ 

Mr Sunak said: ‘I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today.

‘These changes mean that our support will reach many more people and protect many more jobs.

‘I know that the introduction of further restrictions has left many people worried for themselves, their families and communities.

‘I hope the Government’s stepped-up support can be part of the country pulling together in the coming months.’ 

Cementing his position as the leading hawk in Cabinet, Mr Sunak attacked Labour’s support for a ‘blunt’ national ‘circuit breaker’ lockdown. 

‘Just as we have throughout this crisis, we will listen and respond to people’s concerns as the situation demands,’ he said.

‘And I make no apology for responding to changing circumstances and so today we go further.’

He added: ‘The evidence is clear – a regional, tiered approach is the right way to control the spread of the virus.’

How the government’s new JSS arrangements would break down for a worker who usually is on a £1,100 a month full-time wage. They could also be eligible for universal credit, depending on circumstances

Meanwhile, Boris Johnson met with Iraqi Prime Minister Mustafa Al-Kadhimi in Downing Street today

ONS figures today suggested nearly a fifth of hospitality firms are at ‘severe’ risk of going bust 

Firms borrow £4.6bn from Treasury in a month 

New figures from the Treasury today show businesses have borrowed around £4.6billion in Covid-19 support loans in the last month.

The data show that 6,509 companies borrowed £1.71billion under the coronavirus business interruption loan scheme between September 20 and October 18.

Meanwhile, 75,380 companies borrowed £2.18 as part of the bounce back loan scheme.

Some 57 companies borrowed around £730 million from the coronavirus large business interruption loan scheme.

Firms forced to close in Tier Three, such as betting shops and soft play centres, will be able to furlough their workers on two-thirds of wages.

But there has been an outcry from hospitality firms in Tier Two, whose business models have been wrecked by restrictions that mean people can no longer meet socially indoors.

Tier Two restrictions now cover many of the most heavily populated parts of the country, including London, Birmingham, York, Essex and the North East. 

Under the Jobs Support Scheme (JSS), which officially launches from November 1, staff can have their wages topped up to 77 per cent of normal. 

The state and employer each fund 50 per cent of the cost of hours not worked. But critics have warned that the scheme gives too little incentive to firms to retain staff.

But Mr Sunak cut the cost of the employer’s contribution, with the state picking up more of the bill. 

The Treasury has modelled costings of £1billion per month for every two million people on the scheme. 

That would give a £6billion cost over the next six months, although much of that money was already committed. 

However, the bill could rise dramatically if more people sign up. 

Mr Sunak also increased the amount of profits covered by the forthcoming self-employed grant from 20 per cent to 40 per cent, meaning the maximum grant will increase from £1,875 to £3,750.

That means a ‘further’ £3.1bn of support to the self-employed between November to January alone, according to the Treasury.

If the next grant covering February to April is kept at the higher rate that would be roughly the same again. 

Meanwhile, Mr Burnham invited the PM to Manchester for face-to-face talks to ‘clear the air’ as he said he does not want a ‘lingering political argument’ with the Government.

The Labour Mayor has suffered a bruising week after talks with ministers over moving Greater Manchester into Tier Three coronavirus restrictions collapsed, prompting Mr Johnson to unilaterally impose the rules.

Accommodation and food companies warn of insolvency threat 

Nearly four in 10 accommodation and food industry firms say they are at moderate or severe risk of going bust.

The shocking scale of the problem was revealed in figures released by the ONS today.

Some 17 per cent of the sector responded to a survey saying they were at ‘severe’ threat of becoming insolvent.

And another 21 per cent said the risk was ‘moderate’. 

The level was far higher than for other major sectors of the economy that have been less directly hit by Covid. 

The two sides failed to reach an agreement after Mr Burnham initially demanded a £90 million bailout for businesses before saying he could not accept less than £65 million but the PM would go no higher than £60 million.

The failure to reach an agreement prompted a furious war of words but Mr Burnham said this morning he now wants to ‘reset things on a better footing’ as he claimed to be ‘misunderstood down there’ in Westminster.

He later told MPs that the Government still ‘holds all of the power and all of the money’ and that mayors have to ‘go on bended knee’ to ministers to secure funding as he called for devolution to be made a ‘reality’.

However, the chances of a repairing of relations appears slim after Commons Leader Jacob Rees-Mogg accused Mr Burnham of ‘playing party politics of the cheapest and most disagreeable kind’. 

Torsten Bell, chief executive of the Resolution Foundation think tank, said: ‘Rishi Sunak has now created a fit for purpose part time work scheme that firms can actually use. A policy that might work in the real world as well as in spreadsheets.

‘The Chancellor has totally done the right thing today. Doing it earlier (given the obvious flaws) would have saved more jobs, but at least we’ve got to the right place 10 days ahead of the Job Support Scheme coming into effect.’

Adam Marshall, director general of the British Chambers of Commerce, said a number of the steps outlined by the Chancellor responded directly to calls from chambers across the country.

‘Backdated grants for hospitality firms in Tier 2 and enhanced grants for the self-employed will go some way to alleviating pressure on many of those who have been particularly vulnerable to the economic impact of the pandemic,’ he said.

Pub and restaurant bosses Sunak’s ‘new furlough scheme’ to help hospitality sector… but warn it will STILL be a tough winter for many

Pub and restaurant bosses today welcomed Rishi Sunak’s ‘new furlough scheme’ to help those in the hospitality sector – as others warned it will still be a tough winter for many. 

Dame Carolyn Fairbairn, the Confederation of British Industry’s director-general, dubbing the scheme ‘a welcome and much-needed successor to the furlough scheme.’ 

Speaking today, Dame Carolyn said: ‘It’s right that businesses contribute if they wish to access this scheme. 

‘But with a tough winter ahead, significantly increased Government contributions to non-worked hours across all regions will do even more to protect people’s livelihoods.’

Ms Fairbairn said the ‘missing middle of pubs, cafes and theatres in Tier Two along with other businesses across the UK who are seeing demand fall away, but with little extra support, will be relieved to see that anomaly come to an end.’ 

‘This is a big step towards a more standardised approach of support for areas going into tiers two and three and those businesses that face tough times who operate within them,’ she said.  

A British Chambers of Commerce spokesman added: ‘Chambers have been campaigning for greater support for businesses experiencing big falls in demand as a result of new restrictions, and a number of the steps announced today, including the lowering of employer contributions and the number of hours worked needed to qualify for the scheme, respond directly to our calls.’ 

Jonathan Geldart, director general of the Institute of Directors, also welcomed the scheme, adding: ‘The new and improved jobs support scheme is to be welcomed, and should go some way to easing company directors’ fears.

‘A substantial reduction in the employer contribution is a crucial step, reflecting our members’ concerns.

‘Taking a national approach will help to cut through the confusion of different tiering systems and backroom political negotiations.’

However, others have warned the ‘sad reality’ is that thousands of businesses are likely to close over the winter ‘whatever financial support packages the Chancellor offers up.’ 

Aude Barral, co-founder of developer recruitment platform CodinGame, added: ‘The Government needs to recognise how important reskilling and retraining is going to be in helping the country get back on its feet as quickly as possible.

‘The hospitality, tourism and retail sectors have been decimated by the pandemic, but there are sectors such as technology that have huge employment potential.

‘There needs to be significantly more investment in retraining for the future, opening up these sectors to people who have transferable skills and are keen to get back to work.’

Other business owners agreed that the Government support is welcome, but insisted ‘this isn’t enough to help us if they still keep in place the same restrictions.’

Mark Dogan, 50, who runs Gizel kebab shop in Clapham, told MailOnline: ‘Everyone having to leave pubs before 10pm means we get no business then. This isn’t enough.

‘And what are the details. Will they pay every week or only each month? So yes, I’ll take it, but they’re not doing enough to help.’

Malik Ahmed, a waiter at Argan restaurant by Clapham Common, was also critical of the new scheme, under which wages can be topped up to 77 per cent of the normal figure.

He said: ‘We live in London, even with 100 percent of our wages we still can’t cover all our bills.

‘Now we are getting even less, so how am I going to afford rent, travel and all those other costs?

‘This programme assumes that everyone has savings, but many don’t. We are really struggling at the moment, business is dead because of all the restrictions.

‘Look around, its lunch and there’s hardly anyone here because customers are staying away. We need the restrictions gone now – we want to work hard and earn our full wages.’ 

‘The true test of these reforms will be whether they help businesses on the ground get through the difficult months ahead.

‘This is a very significant improvement in the support available to businesses struggling with the impact of increasing restrictions across the UK.’

Frances O’Grady, general secretary of the British Trades Union Congress (TUC), said: ‘Today’s measures are a step forward but there are still big holes in the government’s plan.

‘Low-paid workers will face real hardship if they have to get by on less than 80% of their wages and the support for the self-employed is still too low.

‘The Chancellor should have increased support for all workers to at least 80% and we still need decent sick pay for people forced to self-isolate.

‘With the public health crisis worsening across the country we will continue to keep up the pressure for the government to protect jobs and livelihoods, and we’ll continue to call for ministers to invest in job creation, high-quality training and a significant increase to universal credit.’

Carolyn Fairbairn, CBI director general, said: ‘The Job Support Scheme will be a welcome and much-needed successor to the furlough scheme and will protect many livelihoods when it begins.

‘It’s absolutely right that businesses contribute if they wish to access this scheme. But with a tough winter ahead, significantly increased Government contributions to non-worked hours across all regions will do even more to protect people’s livelihoods.

‘The missing middle of pubs, cafes and theatres in Tier 2, who are seeing demand fall away but with little extra support, will be relieved to see that anomaly come to an end.’

Stephen Phipson, chief executive of Make UK, said: ‘The Chancellor has said that he would work hard to protect jobs and today’s statement is another critical step, particularly making the Job Support Scheme much more accessible to employers.’

Jonathan Geldart, director general of the Institute of Directors, said: ‘More help for the self-employed is another positive, but there continues to be a glaring gap.

‘The exclusion of small company directors, a major part of the dynamic entrepreneurial heart of our economy, from key support schemes becomes all the more pressing as the virus wears on. It’s deeply frustrating that this issue still hasn’t been addressed.’

Mike Cherry, chairman of the Federation of Small Businesses, said: ‘At a time of immense struggle for many small businesses, these interventions will help to protect jobs, businesses and livelihoods.

‘The Chancellor has shown a willingness to be flexible and adapt interventions as the second wave of the virus escalates.’ 

Other business owners agreed that the Government support is welcome, but insisted ‘this isn’t enough to help us if they still keep in place the same restrictions.’

Mark Dogan, 50, who runs Gizel kebab shop in Clapham, told MailOnline: ‘Everyone having to leave pubs before 10pm means we get no business then. This isn’t enough.

‘And what are the details. Will they pay every week or only each month? So yes, I’ll take it, but they’re not doing enough to help.’

Malik Ahmed, a waiter at Argan restaurant by Clapham Common, was also critical of the new scheme, under which wages can be topped up to 77 per cent of the normal figure.

He said: ‘We live in London, even with 100 percent of our wages we still can’t cover all our bills.

‘Now we are getting even less, so how am I going to afford rent, travel and all those other costs?

‘This programme assumes that everyone has savings, but many don’t. We are really struggling at the moment, business is dead because of all the restrictions.

‘Look around, its lunch and there’s hardly anyone here because customers are staying away. We need the restrictions gone now – we want to work hard and earn our full wages.’ 

New figures from the Treasury today show businesses have borrowed around £4.6billion in Covid-19 support loans in the last month.

The data show that 6,509 companies borrowed £1.71billion under the coronavirus business interruption loan scheme between September 20 and October 18.

Meanwhile, 75,380 companies borrowed £2.18 as part of the bounce back loan scheme.

Some 57 companies borrowed around £730 million from the coronavirus large business interruption loan scheme. 

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