Businesses affected by the tier 2 level restrictions will be eligible for direct cash grants and an extension of support under the government’s Short Time Work Scheme, chancellor Rishi Sunak has announced.

Under the new grant scheme, businesses who aren’t legally forced to close but have seen trade significantly affected by restrictions will be legible for direct grants of up to £2,100 per site for every month they are under the alert level.

Total grant funding will be given directly to local authorities, who will in turn distribute the individual grants to businesses. 

Equivalent to 70% of the grants available for businesses forced to close in tier 3, the grants will be retrospective, meaning businesses in areas that have been subject to enhanced restrictions for longer can backdate grants to August.

In order to support jobs in tier 2 areas, the necessary hours worked to qualify for the Short Time Work Scheme will be reduced from 33% of normal hours to 20%, and the employer contribution for the hours not worked – originally set at 33% - will be reduced to 5%.

The scheme will apply to eligible businesses in all alert levels, regardless of whether they are subject to enforced closure.

Finally, he announced that the existing self-employed income support will be doubled from 20% to 40% of people’s incomes, increasing the maximum grant to £3,750.

Making “no apology” for “responding to changing circumstances,” Sunak concluded that “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,” he said.