Chancellor Rishi Sunak has announced that companies struggling in the Tier 2 coronavirus alert areas which have been hit by the restrictions will be eligible for cash grants of up to £ 2,100 a month.
The movements, which are expected to benefit the hospitality, accommodation, and leisure sectors primarily, follow significant pressure from unions and business groups on the government.
Mr. Sunak also announced the extension of the Job Support Scheme and the provision of assistance to self-employed workers.
There are Tier 2 restrictions in large areas of London and the South East, plus parts of the North East and the Midlands, where pubs and restaurants have found it difficult to trade profitably, but where there is no additional support for Tier 3 areas.
"Rishi Sunak said the correct way to control the spread of the virus was a tiered approach, but that" it is clear that even companies that can remain open face profound economic uncertainty.
Informing the Commons that on Thursday morning he had spoken to hospitality representatives, the Chancellor said: "Their message was the clear-the effect of health restrictions on their companies is worse than they hoped."
Mr. Sunak added: "So today I am taking three more steps."
Mr. Sunak said the government would offer grants through local authorities that would give grants of at least £ 2,100 a month to hospitality, accommodation, and leisure companies backdated to August.
The number of hours worked for the Job Support Scheme was also reduced and the contribution employers will need to make.
And he said he was doubling the amount of self-employed support available.
He added: "We are making the Job Support Scheme more generous to employers in order to protect jobs." The Government will cover the full cost of employers paying two-thirds of the salary of people where they can not work for a week or more if companies are legally required to close as we have already outlined.
For companies that can open it, it is now clear that the impact of restrictions on them is more significant than they had hoped, particularly in the hospitality industry.
So, to make it easier for those companies to keep employees on rather than make them redundant, I am making two changes to the short-time work scheme.
First, employees had to work 33 percent of their normal hours under the original scheme. We're going to ask them now to only work 20 percent of those hours.
Second, as originally planned, the employer contribution for the hours not worked will not be 33 percent or even 20 percent as in the October furlough scheme, it will decrease to 5 percent and the scheme will apply to eligible undertakings at all alert levels.'
The next round of self-employed income support will rise from 20 % to 40% of the income of individuals, raising the maximum grant to £3,750.
Anneliese Dodds of Labour told the Commons: "This is becoming like a long-running television show, series three, the Winter Economy Plan."
But you know the twist is that the winter didn't last, it didn't do enough to help the economy, and it wasn't a plan, either.
"Instead of always running to keep up, we have to get ahead of this crisis."
Ms Dodds repeated the desire of Labour for a lockdown of a national circuit-breaker.
The package was welcomed by Adam Marshall, the director-general of the British Chambers of Commerce.
"This is a very important improvement in the support available to companies struggling with the impact of increasing constraints across the UK," he said.
As a result of new restrictions, Chambers has been campaigning for greater support for companies experiencing large drops in demand, and a number of the steps announced today, including reducing employer contributions and the number of hours worked needed to qualify for the scheme, respond directly to our calls.
"Backdated Tier 2 grants for hospitality companies and increased grants for self-employed workers will somehow alleviate pressure on many of those who have been particularly vulnerable to the pandemic's economic impact."
"Mike Cherry, Chairman of the Federation of Small Businesses, said:" Such measures will help to protect jobs, businesses, and livelihoods in a time of immense struggle for many small businesses. The Chancellor has shown a willingness to be flexible and adapt interventions as the second wave of the virus escalates.
The expansion of the Job Support Scheme will help reduce the burden on small businesses and give them a shot at surviving this crisis with the furlough scheme coming to an end in just a few days while offering millions of jobs a critical lifeline. This will be helpful for small businesses in all levels of restrictions and businesses in all sectors.
But it is not only businesses that are forced to close, which need support, but also those in the supply chains of the affected companies, as well as those without premises, in particular those in the hospitality sector, that need to make these funds available.
"Business grants, including those retrospectively applied to those in Tier 3 regions, will be a welcome relief to thousands of companies who have been left wondering how they will survive in the coming weeks and months."