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Furlough extended for businesses forced to shut during local lockdowns

The Government has announced a new wage subsidy scheme for businesses forced to close due to local lockdown measures, which are currently in force across the North East and which are expected to be strengthened next week.

The news comes as hospitality businesses across the region decried the lack of support from Government at a time when existing restrictions have had a debilitating impact on trade.

Under the new scheme, UK businesses mandated to close because of coronavirus will be able to claim a grant for two-thirds of their employees’ salaries.

Grants of up to £2100 per month or 67 per cent of worker’s wages will be available from November 1 and will run for six months, with the scheme being reviewed in January.

Employees must be off work for a minimum of seven consecutive days to be eligible and businesses can only use the scheme while they are subject to restrictions.

Rishi Sunak made the changes just three weeks after announcing the less than generous Job Support Scheme, under which employers have to pay part-time 55 per cent of staff wages for 33 per cent of the work.

Pubs, bars and restaurants are likely to benefit most from the scheme as it is expected they will soon be legally required to shut in parts of the country where infection rates have risen sharply.

Coronavirus cases have increased exponentially in the North East over recent weeks, despite the ban on household mixing and the 10pm curfew for hospitality businesses.

Chancellor 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.”

Federation of Small Businesses (FSB) national chairman Mike Cherry added: “It’s good to see our recommendations concerning more generous furlough-level wage support and enhanced local cash grants for those in England prevented from operating adopted today.

“These new measures will bring some hope to those businesses which are still bearing the brunt of restrictions, six months on from the first lockdown, and are likely soon to have further restrictions expanded to include them.

“We now need to look at what comes next in terms of further evolution of support mechanisms, especially for those who will not directly benefit from today’s announcement.”