The chancellor is expected to announce an extension to the coronavirus furlough scheme on Friday, according to reports.
Rishi Sunak will reportedly make the scheme available to employers on a local level ‘as long as pubs, restaurants and other businesses’ are shut, The Times says.
The Government would subsidise two thirds of wages of staff working in those establishments as part of the plans.
It comes as further local lockdown measures are expected as infection rates continue to soar across the UK.
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.’
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It comes as pubs across northern England are set to be closed next week in a bid to tackle the second wave in a new three-tier ‘traffic light’ system.
One minister told The Times there has been ‘frustration in Government’ at the failure of the Treasury to bring forward the measures sooner.
They argued the package should have been ready two weeks ago alongside the chancellor’s winter economic plan, because it was ‘obvious that the additional funding would be needed’.
The Liberal Democrats this week also called on Mr Sunak and the Government to pay the wages of employees who cannot work in new local lockdowns.
In a letter to the Chancellor, the party’s treasury spokesperson Christine Jardine said the ‘fundamental premise for ending the furlough scheme no longer holds’.
She wrote: ‘We are now in the midst of a second coronavirus wave with reports that businesses, especially those in the hospitality industry, could be ordered to shut within days.
‘The first Government-imposed lockdown was followed by the Job Retention Scheme. Now that Government is about to bring back business shutdowns, it must retain the furlough scheme.
‘(Mr Sunak’s) Winter Economy Plan ruled out an extension to furlough with the argument that ‘as the economy reopens it is fundamentally wrong to hold people in jobs that only exist inside the furlough’.
‘But it is now perfectly clear that the economy is not reopening – it is facing new Government-mandated closures.’
Ms Jardine continued: ‘When Government orders businesses to close, it should be good practice to support the livelihoods of their employees – and ensure that businesses remain viable until restrictions are lifted.
‘I urge you to commit to the extension of the Job Retention Scheme to support the jobs and businesses that will not be allowed to operate. It is essential that this guarantee is given before new shut-downs are mandated.’
The Government’s furlough scheme, which supported millions of workers during the height of the pandemic, will end on October 31.
It will be replaced by a less generous Jobs Support Scheme, which will see the Government pay up to 22% of wages for workers who come back part-time from November 1.
The country recorded another huge jump in coronavirus cases yesterday, with 17,540 more people testing positive in 24 hours.
That is a huge leap from Wednesday, when cases doubled in the space of a week with 14,162 new infections.
The Department of Health said another 77 deaths were recorded on Thursday, raising the death toll to 57,347.
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