UK chancellor Rishi Sunak to compensate firms hit by Tier 2 restrictions

Tom Belger
·Finance and policy reporter
·2 min read
Hospitality workers protest in Parliament Square in London, Monday, Oct. 19, 2020. Hospitality workers are demonstrating outside Parliament against tougher coronavirus restrictions and the amount of financial support given by the government to the industry.(AP Photo/Frank Augstein)
Hospitality workers protesting over a lack of support in London. Photo: Frank Augstein/AP

Hospitality firms in areas facing Tier 2 coronavirus restrictions are set for new support from the UK government, according to reports.

The chancellor Rishi Sunak is due to make a statement in the Commons at 11.30am on Thursday, and he is expected to unveil extra funding for restaurants, pubs, bars, cafes and other venues hit hard by government curbs. Officials say it will be a “generous” package, in his third announcement of new job support in less than a month.

The finance minister announced earlier this month the government would pay two-thirds of the wages of staff at hospitality firms forced to close under the strictest Tier 3 curbs in coronavirus hotspots.

But firms in areas with the second highest alert level have only far more limited support available, despite the hit to trade from a ban on indoor household mixing on top of the 10pm curfew, social distancing, remote working and other changes. Business and political leaders in affected areas have been heavily critical of the lack of support.

READ MORE: UK government debt at highest level in 60 years

London is among the areas to have been moved recently into Tier 2 as the government seeks to tackle rising cases.

But the UKHospitality trade body warned on Wednesday the extra curbs would spark “catastrophic business closures and widespread job losses” in a sector already battling to survive. The industry has already seen a wave of redundancies, with pub chain Marston’s slashing more than 2,000 staff in the past week alone.

Chief executive Kate Nicholls called Tier 2 the “worst of both worlds” for business. “They will be trapped in a no man’s land of being open, but with severe restrictions that will significantly hit custom, all while unable to access the job support available in Tier 3.”

READ MORE: UK inflation accelerated after the Eat Out to Help Out scheme ended

She warned London venues had already taken a hit from falling inbound tourism and many staff working from home. Hospitality firms also face a cliff-edge as furlough subsidies run out at the end of the month, with staff receiving significantly less wage support and firms forced to cover a larger share under the replacement scheme.

Sunak was due to meet hospitality leaders in a London restaurant to discuss new support ahead of his statement on Thursday morning, according to the Daily Telegraph.

WATCH: What is the job support scheme?