Businesses will be supported with new state funding, including a potential return to furlough, if Boris Johnson brings in a further lockdown, it has been reported.
MPs will vote today on whether England will go ahead with further restrictions. Boris Johnson is expected to face the largest rebellion of his premiership as MPs from his own party plan to vote against proposals for mandatory mask wearing, daily testing, certification, vaccine passports and mandatory vaccinations for NHS staff.
In Wales, the First Minister has said there will be weekly reviews to consider the impact of the Omicron variant and today Wales' health minister Eluned Morgan will give a press conference. You can read the latest news from Wales this morning here. It comes as Wales' chief medical officer has warned there could need to be curbs on the numbers of people meeting before Christmas.
The furlough scheme, which met the cost of salaries when businesses were forced to close, ended in September and had a cost of almost £70bn. The scheme was in operation across all the devolved nations. Welsh Government has been clear that without such a scheme, it could not go ahead with lockdowns. It previously clashed with the UK government last autumn when it wanted to bring in a firebreak lockdown but was limited on its timing as Westminster controlled furlough.
The Times has today reported that furlough and support for businesses could be back on the table if there is another lockdown. It's not clear if this support is only available if England decides to go into lockdown or would be available if Wales or any of the other devolved administration to into lockdown independently.
The newspaper has been told that Rishi Sunak will increase the Treasury’s business support package again if pubs, bars and restaurants are ordered to close. Senior government sources said it was too early to say whether such measures might be necessary but that officials were working on a range of options.
A Treasury source said: “If we do get to a position where we are telling businesses that they have to shut their doors then it is not unreasonable for them to expect additional government support. That could mean a return to the furlough scheme but depending on what, if any, further restrictions are necessary there might be other ways of providing that support.”
They added that this did not mean that further restrictions were now more likely but simply that the impact of Omicron was not yet known. The Treasury has come under pressure from businesses hit by cancellations, vaccine passports and the new work-from-home guidance to increase the support it is already providing.
The Night Time Industries Association said their sector was facing “12 days of Christmas misery” because the government was allowing businesses to trade while telling consumers to reduce social contact. It said this meant that businesses, most of which still had large unpaid pandemic debts, were facing reduced revenues and rising costs.
“It is vital that the government . . . recognises the impact of [its] public health messaging and swiftly implements proportionate financial support to ensure businesses and jobs are protected during this extremely challenging period,” Michael Kill, its chief executive, said.
Tony Danker, director-general of the CBI, the employers’ organisation, said: “With plan B coming in, the net effect is that demand in some sectors will be suppressed. Cashflow will clearly be an issue for some firms in the next few weeks.”
Lord Bilimoria, the chairman of Cobra beer and the CBI, criticised the chancellor’s plan to increase national insurance contributions in April and raise corporation tax in 2023. He told The Daily Telegraph: “This is absolutely the wrong time to have the highest tax burden for 70 years. We need to be helping our economy and businesses that have suffered so much.”
The Treasury pointed to a range of measures still available to support firms, including business rates relief for retail, hospitality and leisure businesses in England until March next year. Hospitality and tourism businesses will also benefit from a VAT reduction, paying only 12.5 per cent until March. A Treasury spokesman said: “Our £400 billion Covid support package will continue to help businesses into spring next year.”
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