Sunak set to introduce local furlough for businesses hit by lockdown

Ahead of the rumoured closure of pubs and restaurants in northern England next week​​, the Treasury has confirmed that Sunak will set out additional financial support later today (9 October).

According to The Times​​, the Government will subsidise two thirds of the wages of workers in businesses forced to close under the new scheme. 

A Treasury spokesperson said: “The Chancellor will be setting out the next stage of the Job Support Scheme later today that will protect jobs and provide a safety net for those businesses that may have to close in the coming weeks and months."

The local furlough scheme will remain in place for as long as businesses are locked down, and marks a significant improvement to the Job Support Scheme​ set out in the Chancellor’s Winter Economy Plan.

However, it is not be as generous as the original Coronavirus Job Retention (or furlough) Scheme, which covered 80% of employee's wages.

Speaking on Sky News ​this morning, Shadow Business Minister Lucy Powell said an extension of the furlough scheme in local lockdown areas 'would not be sufficient' to save businesses, and called on the Government to resume giving cash grants 'as a matter of urgency'.

"I welcome any extension of the furlough scheme for lockdown-hit areas, but that alone won't be sufficient to save jobs and business if there are further local lockdowns.

"Businesses have many other overheads besides paying staff - they have rent to pay, and many will have stock including food and beer to throw away.

"Many of them have already taken out loans, so we are calling on the Government to restart and re-issue the cash grant support scheme that was there back in March and April. There's about £1.3bn of that money that has not been spent, and was clawed back by the Treasury recently.

"As a matter of urgency, they should now be distributing at least that amount of money to the hardest hit businesses in the hardest hit areas."