London (Brussels Morning) UK chancellor Rishi Sunak announced billions of pounds of further aid to flailing businesses as a second coronavirus wave and harsher social restrictions have prevented their recovery, threatening to harm the economy further.
In Sunak’s third announcement on business support, he told the House of Commons that cash grants of £2,100 would be given to firms in high-risk areas under its new localised three-tier strategy, aimed at stemming the spread of the virus.
Self-employed people will also be able to access twice the amount they could previously claim, and under the government’s job support scheme, employees will only need to work a fifth of their regular hours, rather than a third, to be eligible for the grant.
Sunak also said the burden on employers paying wages for part-time staff would be reduced.
The new provisions mark a u-turn on the government’s previous pledges, which many critics said came too late as further support for businesses was foreseeable.
The UK has harboured the worst of Europe’s pandemic, its daily new cases reaching 26,688, while 44,000 people have died from COVID-19 related deaths.
“I’ve always said that we must be ready to adapt our financial support as the situation evolves, and that is what we are doing today”, said Sunak.
He maintained, however, the economy was under tremendous strain and that jobs would still be lost.
The total cost of support provided so far could amount to £13 billion (€14.3 billion).
Government borrowing reached £209 billion between April and September this year, six times the amount before the pandemic.
Britain’s debt has also exceeded 100 percent economic output for the first time since the 1960s, according to official figures.
Torsten Bell, head of think tank the Resolution Foundation, said the government made the right move although the delay was unwarranted:
“Doing it earlier, given the obvious flaws, would have saved more jobs, but at least we’ve got to the right place 10 days ahead of the Job Support Scheme coming into effect”.