Everything we know so far about Rishi Sunak's new support for businesses hit by tier 2 covid restrictions

Chancellor Rishi Sunak has unveiled a new package of support for business hit by tier 2 coronavirus restrictions.
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Stung by criticism that the rules on local lockdowns were difficult to understand, the Government introduced a three-tier system earlier this month.

The “medium” alert level – which covers most of the country – was basically the same as the then-current national measures, which came into force on September 25, while the ‘high’ and ‘very high’ levels carried increasingly more stringent rules.

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Sunderland and South Tyneside were immediately placed in the second tier – ‘high’ – and have subsequently been joined by Hartlepool.

Chancellor of the Exchequer Rishi Sunak hosting a roundtable for business representatives at Franco Manca in Waterloo, London.Chancellor of the Exchequer Rishi Sunak hosting a roundtable for business representatives at Franco Manca in Waterloo, London.
Chancellor of the Exchequer Rishi Sunak hosting a roundtable for business representatives at Franco Manca in Waterloo, London.

What does being in tier 2 mean?

In addition to the restrictions imposed on areas in tier one – including the ‘rule of six’ and the requirement for pubs, bars and restaurants to close at 10pm – tier two bans all mixing between different households and support bubbles indoors.

So you can’t meet your friends at the pub, unless it has a beer garden.

Even then, the rule of six continues to apply outdoors.

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What has been announced today?

Chancellor Rishi Sunak has today acknowledged that the tier 2 restrictions present problems for businesses such as pubs and bars.

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Hospitality venues have seen takings plummet due to the rule banning families and friends mixing.

The Chancellor’s announcement today includes grants of £2,100 a month for businesses in Tier 2 areas of England

In a move which could be worth more than £1 billion, these grants will also be available retrospectively for areas which have already been subject to restrictions, and come on top of higher levels of additional business support for areas moving into Tier 3.

Mr Sunak also outlined a boost for the self-employed.

He told the Commons: “Businesses that are not closed but face higher restrictions in places like Liverpool, Lancashire, South Yorkshire and Greater Manchester, as well as the devolved nations, will be able to access greater support.

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“These changes mean more employers can access the scheme and more jobs will be protected.”

He added: “I’m increasing our contribution to the incomes of the self-employed as well. Today we are doubling the next round of the self-employed income support from 20% to 40% of people’s incomes, increasing the maximum grant to £3,750.”

How will money be allocated?

The Government will provide funding for local councils, who will then be responsible for allocating it to businesses.

Around 150,000 business in England could be eligible, the Treasury said.

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The Chancellor said: “I am introducing a new grant scheme for businesses impacted by Tier 2 restrictions, even if they aren’t legally closed.

“We will fund local authorities to provide businesses in their area with direct cash grants.

“It will be up to local authorities to decide how best to distribute these grants, giving them the necessary flexibility to respond to local economic circumstances.

“But I am providing enough funding to give every businesses premises in the hospitality, leisure and accommodation sectors a direct grant worth up to £2,100 for every month Tier 2 restrictions apply.

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“That is equivalent to 70% of the value of the grants available for closed businesses in Tier 3.”

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