Extra funding is announced for North East firms
CHANCELLOR ANNOUNCES EXTRA CASH BUT TOLD 100S OF JOBS ALREADY LOST
CHANCELLOR Rishi Sunak has announced that working people in the North East and Teesside will be eligible for extra government funding, if their employers are affected by local lockdown rules.
People likely to benefit include staff in bars and restaurants.
Mr Sunak told the House of Commons there will more support for staff whose hours are cut as a result of “tier two” lockdown rules. This includes the seven North East authorities of Newcastle, Northumberland, North Tyneside, South Tyneside, Gateshead, County Durham and Sunderland. It also includes the Teesside authorities.
Other parts of the country in tier two include Birmingham and London.
Mr Sunak’s plans also include cash grants given directly to businesses.
The changes include improving a scheme designed to help workers whose hours are cut. The aim is to help people if employers need to reduce their hours because lockdown rules mean they have fewer customers.
Workers can receive 77% of their usual salary, even if their hours are cut significantly. Previously, they needed to work one third of their normal hours to be eligible, but now they will only need to work one fifth of their normal hours.
It means people who used to work fulltime will get help as long as they work one day a week.
And employers will now be expected to pay just 5% of the cost of the unworked hours, with the Treasury paying the rest.
Secondly, businesses in tier two areas will receive additional grants of up to £2,100 per month.
The cash is for hospitality, accommodation and leisure businesses, who may be adversely impacted by the restrictions in high-alert level areas, and the money will be distributed by local councils.
Funding for self-employed people in tier two areas has also been increased.
Employers welcomed the changes. British Chambers of Commerce Director General Adam Marshall said: “This is a very significant improvement in the support available to businesses struggling with the impact of increasing res t r i c t i o n s across the UK.”
Bishop Auckland Conservative MP Dehenna Davison said: “Ex c e l l e nt news with new grants for the hospitality sector, more support for job protection, and more support for the self employed.
“Thank you to Rishi
Sunak and the Treasury team for listening to the pleas of the hospitality and leisure sectors.”
However, Adrian Waddell chief executive of NE1, said it while the funding is welcome hundreds of people have already lost their jobs.
Some 10% of Newcastle’s hospitality businesses have closed as a result of coronavirus and those that have remained open report an average downturn in trade of 69%.
He said: “For over four weeks, the hospitality sector in Newcastle and the North East has been calling on the Government for help as businesses struggle to survive under the Tier 2 restrictions - there have been real and dire consequences of the delay in providing this help with hundreds of thousands of jobs lost and more under threat.
“The extra financial is welcomed but should have been offered weeks ago and it is questionable whether the support will go far enough.
“There is also great disappointment among businesses that the furlough scheme has not been extended to Tier 2 businesses. The Job Support Scheme is seen by many businesses as overly complex.
“London is in its fourth day of Tier 2 restrictions and this extra financial support has been introduced- Newcastle and the North East have been struggling under the same strictures for four weeks with no additional help until now and the delay has cost this region dearly. “The deadline for large scale redundancies has already passed and we know that hundreds of jobs have already been lost in the hospitality sector. “Things could have been different if the help that is being offered today had come sooner. Even the retrospective grant payments to businesses will not bring back these jobs. “The hospitality sector in Newcastle is under profound economic distress - urgent clarification is now needed on the new grant payment system and clear guidance given to Local Authorities so they can distribute the new money as quickly as possible. Businesses need this cash now.”