Speaking in the Commons today Rishi Sunak said there were “difficult days and weeks ahead”, as he announced businesses in Tier 2 areas will receive further financial support.
But he faced accusations that new support had only been introduced now London was impacted, while the North had been under restrictions for many weeks.
Mr Sunak told MPs: “First, 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.
“That is equivalent to 70 per cent of the value of the grants available for closed businesses in Tier 3.”
And he said these would be able to be backdated to August, which would help areas such as Calderdale, Kirklees, Bradford, and Leeds where restrictions have been in place for longer.
The Government is also making the Job Support Scheme “more generous for employers”, Mr Sunak said.
He added: “To protect jobs, we are making the Jobs Support Scheme more generous for employers. If businesses are legally required to close as we’ve already outlined the Government will cover the full cost of employers paying two-thirds of people’s salary where they can’t work for a week or more.
“For businesses who can open it is now clear the impact of restrictions on them particularly in the hospitality sector is more significant than they had hoped.
“So, I am making two changes to the short-time work scheme to make it easier for those businesses to keep staff on rather than make them redundant.
“First, under the original scheme employees had to work for 33 per cent of their normal hours. Now we will ask them to work only 20 per cent of those hours.
“Second, the employer contribution for the hours not worked will not be 33 per cent as originally planned, or even 20 per cent as it is in the October furlough scheme, it will reduce to five per cent and the scheme will apply to eligible businesses in all alert levels.”
And 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 per cent to 40 per cent of people’s incomes, increasing the maximum grant to £3,750.”
He concluded: “This is our plan. A plan for jobs, for businesses, for the regions, for the economy, for the country. A plan to support the British people.”
But Shadow Chancellor Anneliese Dodds said the Government had only acted now that the impact of restrictions had hit London.
She said: “For months we have urged the Chancellor to get ahead of the looming unemployment crisis and act to save jobs.
“Instead, we’ve had a patchwork of poor ideas rushed out at the last minute.”
Ms Dodds asked how many jobs have been lost as a result of the Chancellor’s “inaction” and pressed him to explain what has changed which means “this is the right thing to do now, but wasn’t when parts of the North and midlands” entered Tier 2-style restrictions several weeks ago.
She said: “The Chancellor has only caught up and listened to the anxieties of workers and businesses when it looks like these restrictions will be affecting London and the West Midlands.
“Will he apologise to those who have already lost their jobs, seen their businesses slip through their fingers in those areas which have not had that support until now?”