Business groups and the Labour Party say they are concerned about the “ripple effect” caused by new lockdown rules expected to be announced today (Monday).
Prime Minister Boris Johnson is expected to introduce a range of new measures including a three-tiered ranking for Covid risk level, with the highest risk areas experiencing a further shutdown of pubs and restaurants.
On Friday, the chancellor Rishi Sunak said that staff at businesses told to close would receive 67% of their pay as part of the Job Support Scheme. However, there was no information relating to businesses affected in the supply chain.
Business groups and Labour are concerned that a lack of support for those firms will result in huge job losses, with up to one million at risk. It estimates as many as 500,000 workers in the wedding industry, nearly 370,000 in sport and 142,000 caterers.
Shadow business secretary Ed Miliband said: “There are massive holes in the new safety net.”
A spokesperson for the Treasury said: “We do not recognise these figures,” adding that Labour had “incorrectly” listed some sectors as not benefitting from the scheme.
The spokesperson added: “Companies that are open can use the other element of the Job Support Scheme which is aimed at those able to open but at lower levels of demand.
“And of course they can also access the other help we have made available, including billions of pounds of grants, loans and tax cuts.”
Mr Miliband added: “Ministers must urgently rethink their damaging sink or swim approach which consigns whole sectors of our economy to the scrapheap.”
He warned that thousands of businesses would be effectively forced to close, leaving them without support “on a technicality”.
Roger Barker, director of policy at the Institute of Directors, said the measures announced by Rishi Sunak on Friday as a “useful step”, but stressed that they “don’t account for the ripple effects of restrictions across the economy”.
He added: “It is becoming increasingly clear that the chancellor’s previous strategy of phasing out business support and allowing supposedly ‘unviable’ companies to fail was premature in the face of a resurgent virus.
“Friday’s measures should be seen as the start of renewed efforts to sustain the survival of companies and jobs if long-term damage to the economy is to be prevented.”
Separately, the Centre for Economics and Business Research (CEBR) warned that the total number of people unemployed could reach three million by Christmas.