When Rishi Sunak unveiled his winter economy plan last month, the idea was that the new financial support packages would be enough to help struggling businesses through a turbulent period. So the fact that the Chancellor appeared before the Commons today just a few weeks later to announce new measures shows that events are overtaking government plans. With a backlash growing from industries in tier two over the limited financial support available, Sunak has announced new support for workers hit by coronavirus restrictions.
The biggest change is to the job support scheme, which will replace the furlough scheme when it winds down at the end of the month. The scheme is to be expanded so that the government will now pay a larger share of workers’ wages for those companies struggling to operate with the restrictions they’re under. While this is not exclusively for those under tier two, the idea is that it addresses a gap in support for those companies that are able to partially operate but are facing severe obstacles in doing so. There will also be new funding for cash grants of up to £2,100 per month aimed at firms in leisure, hospitality and accommodation.
Given that the grant funding is available retrospectively, this ought to help the government calm tensions within the party over its regional strategy. Tory MPs representing seats in the north took the opportunity in the Commons to praise the change. While local government figures such as Greater Manchester mayor Andy Burnham have been quick to ask why these measures didn’t come sooner, Sunak did not face any killer blows from the opposition in the Commons. Shadow Chancellor Anneliese Dodds’s attack lines were blunted by the fact that she ended her response by calling for a national circuit break. This allows Sunak to focus on defending the regional approach more generally rather than whether he had been too slow to react.
Explaining his reasoning for the new measures, Sunak said that in his discussions with the hospitality industry it had become clear that the impact of tier two restrictions ‘is worse than they hoped’. But the new measures hint at a wider shift in Treasury thinking on the issue. They suggest the Chancellor believes the restrictions could be with us for a very long time — that it is not viable to ask a business to just ride out a bumpy few weeks. Instead, they face months of this. Today’s statement is a reminder of how hard this winter is going to be — and how long these restrictions are likely to last.
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