Rishi Sunak announced a new local furlough scheme

Chancellor Rishi Sunak has announced a local furlough scheme for employees who work for UK firms forced to shut by law because of coronavirus restrictions across the country.

The six-month programme will see the Government pay two thirds of workers’ wages, up to a maximum of £2,100 per month per employee and the Treasury said they would protect jobs and enable businesses to reopen quickly once restrictions are lifted.

The scheme will begin on 1 November. Until November businesses that are asked to close can continue to use the existing furlough scheme. Chancellor Rishi Sunak said it would be a safety net for staff and businesses.

A restrictions update, which could see pubs and restaurants shut in the worst-affected areas, is expected on Monday, 12 October.

The support will only apply to businesses told to close - rather than those who choose to shut because of the broader impact of Covid restrictions.

Regional leaders have called for more help for struggling firms.

Meanwhile, Adam Marshall at the British Chambers of Commerce said of the latest support package: “More generous cash grants will be of some help, but for most this will not be enough to offset a sustained cash crunch”.

Roger Barker at the Institute of Directors welcomed the measures but urged ministers to "get on the front foot where possible" by cutting employer national insurance costs and offering tax reliefs to encourage new jobs.