Demand in pubs and restaurants has collapsed after bans on households mixing were introduced in many areas

The chancellor is expected to unveil new support for workers in parts of England under tier two restrictions.

Rishi Sunak will announce an update to the Job Support Scheme (JSS) – which is set to replace furlough in November – in the Commons on Thursday.

Critics say not enough is being done for companies in tier two areas that have seen demand collapse without being formally required to shut.

In tier three areas, workers at firms ordered to shut get emergency support.

Talks were held throughout Wednesday, with the government said to have acknowledged that while there are three tiers of alert level – medium, high, and very high – there are only two tiers of support.

The chancellor’s spokesperson said: “What we have always said is that our package of support is always flexible, and always up for review, to make sure that it is dealing with the situation as it evolves.”

In tier three areas, the government will pay 67% of affected workers’ wages, up to £2,100 a month, from 1 November (“lockdown Job Support Scheme” in the chart below). Some workers can also claim Universal Credit.

But in tier two regions, the only help available will be the standard JSS (“part-time Job Support Scheme” in the chart below).

That is meant to support “viable” jobs only, requires employees to do at least a third of their normal hours, and demands a much larger contribution from employers.

Business groups and unions say this means many firms will not be able to use it and will have to lay off workers instead.

Areas in tier two – the second-highest risk level – include London, Essex, much of the West Midlands, Leicester, Nottinghamshire, Cheshire, West Yorkshire and north-east England.

Coventry is to move to tier two Covid restrictions from midnight on Friday, the city council has said.