The Government has confirmed it will not heed calls from industry to further extend furlough and other financial support as the Prime Minister announced a delay to his original road map out of restrictions.
The treasury has said there will be no changes to the original timings regarding the end to current financial support measures.
Prime Minister Boris Johnson confirmed this evening that the road map easing earmarked for 21 June, which would remove all social distancing restrictions in England, will be delayed for four weeks to 19 July.
This means that pubs, restaurants, cinemas and many other venues will continue to face limits on numbers and distancing restrictions, while nightclubs will remain shut.
Furlough support currently allows businesses impacted by the pandemic the ability to keep workers on with an 80% wage subsidy from the state.
This is due to taper off from the end of this month, moving to a 70% state subsidy supported by a 10% employer contribution in July, tapering further before ending completely in September.
It is understood that the Government’s original decision to taper support until the autumn was due to potential uncertainty regarding the schedule of the road map. Speaking to press after the announcement Boris Johnson said: “We always made sure the furlough scheme would continue until September…on the basis of what we can see now in the data, on the basis of the vaccine effectiveness we can see now, we don’t think we will need to change that.”
Hard-hit hospitality, leisure and retail firms have also benefited significantly from the current business rates holiday and ban on commercial evictions, which will also alter in the coming weeks.
These firms will pay no business rates until the end of this month, with this changing to a 67% discount with a £2 million cap until the end of the financial year.
Meanwhile, commercial property evictions have been banned until the end of June and landlords will have the potential to take tenants to court again from next month for not paying rents despite some still being impacted by restrictions.
Sector leaders and trade groups had called for these support measures to be extended until all pandemic restrictions are lifted.
Jace Tyrrell, CEO of New West End Company, which represents 600 businesses on Oxford St, Bond St, Regent St and in Mayfair, said of today’s announcement: “While the decision to delay the easing of restrictions is understandable in ensuring the safety of our customers and colleagues, and we prefer an irreversible decision rather than more stop-start measures, a month’s delay with just a week’s notice will have heaped extra costs on already vulnerable businesses.
“Across the West End we are seeing around 50% of usual footfall but, until restrictions are fully lifted, workers return in force to the capital’s offices and international travellers are welcomed back to British shores, any meaningful commercial recovery will have to wait.
“If businesses are to survive this latest blow, the Government must commit to extending business rates relief to at least October, and must consider relaxing Sunday Trading laws. It is vital that we give businesses the best possible chance to survive and thrive once shoppers can return to the high street.”
London Mayor Sadiq Khan warned that no further financial assistance could have “devastating” consequences for many businesses in the capital. “Many of our businesses are already struggling for survival, and the announcement today will add to their worry and anxiety.
“The planned reduction in financial support at the end of June could now have dire consequences for jobs and livelihoods, pushing more businesses in sectors such as culture, nightlife and hospitality to the brink of collapse.
“The Government must now act urgently to extend economic support to all businesses who need it – including extending the full business rates holiday, the evictions moratorium and the existing furlough scheme until all restrictions are lifted.”
Boris Johnson sought to reassure a cynical business community that he was confident that 19 July would be a “terminus” date for the end of social distancing and other restrictions but he could not rule out the possibility that a full re-opening would not go ahead.
“By July 19 we do think we will have built up a very considerable wall of immunity among the general population.
“At that stage, on the basis of the evidence that I can see now, I’m confident that we will be able to go forward with the full Step 4, the full opening.
“That, of course, does not exclude the possibility – I’m afraid, and we have got to be honest about this – the possibility that there is some new variant that is far more dangerous, that kills people in a way that we currently cannot foresee or understand.”
The delay to the lifting of full restrictions is down to the rapid growth in infections from the so-called Delta variant of the coronavirus, which is said to have originated in India. The delay will give the Government the chance to fully and partially vaccinate more adults. By 19 July the aim would be to have around two thirds of the entire population fully vaccinated with all adults having had at least one jab. At present around 56% of the population is fully vaccinated.