Coronavirus: UK workers to get two-thirds of wages if firms told to shut

Coronavirus: UK workers to get two-thirds of wages if firms told to shut

Rishi Sunak announces new furlough scheme with PM set to outline ‘three-tier’ approach to local lockdowns on Monday.

On Monday, Boris Johnson will make a Commons statement outlining a widely-trailed new “three-tiered” approach to how local Covid situations will be treated which is designed to simplify the current patchwork of restrictions.


Powered by Guardian.co.ukThis article titled “Coronavirus: UK workers to get two-thirds of wages if firms told to shut” was written by Richard Partington , Heather Stewart and Josh Halliday, for The Guardian on Friday 9th October 2020 17.46 UTC

Rishi Sunak has attempted to head off mounting anger over plans for imminent new Covid restrictions by announcing a new furlough scheme that will pay two-thirds of workers’ wages in hospitality firms ordered to close their doors.

The hastily arranged announcement was made in a video message from the Treasury, as Downing Street briefed local leaders in the north-east and north-west of England about tough curbs set to be introduced next week.

On Monday, Boris Johnson will make a Commons statement outlining a widely-trailed new “three-tiered” approach to how local Covid situations will be treated which is designed to simplify the current patchwork of restrictions.

The Guardian understands that under the new regime pubs and bars in Merseyside and other parts of northern England will be ordered to close but restaurants will be allowed to remain open until 10pm.

Similar restrictions are expected to be announced in Nottinghamshire as well as Greater Manchester, West Yorkshire and Newcastle. The rules will be reviewed after a month, sources said.

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To help alleviate the financial damage, Sunak said that from 1 November the government would subsidise pay by providing grants to all UK companies ordered to shut their doors – likely to be pubs, bars and restaurants.

Some leaders in the North of England, described the package as a “kick in the teeth” because it would not stave off the inevitable financial hardship of another lockdown.

In a joint statement, the mayors of Greater Manchester, the Sheffield and Liverpool city regions and North Tyne said: “What has been announced by the chancellor today is a start but, on first look, it would not appear to have gone far enough to prevent genuine hardship, job losses and business failure this winter.”

Industry experts also denounced the package. “The level of support announced by the Chancellor is nowhere enough to compensate pubs being forced to close,” said Greg Mulholland, of the Campaign for Pubs. “Many publicans will be forced into even more debt just to survive. There is real anger when pubs have been working hard to operate safely.”

With Downing Street under pressure from Tory MPs, local leaders and the hospitality industry, the chancellor set out yet another new scheme, insisting “we will do whatever is necessary to protect jobs and livelihoods as the situation evolves.”

There will also be new grants paid directly to businesses to help them meet other costs. The Treasury said the total cost of the package over six months would run into billions of pounds.

Ministers have been moved to act after a significant acceleration in the spread of the disease, despite local lockdown measures having been in place for weeks across a swath of north-east and north-west England.

Official figures showed 87 deaths were recorded on Thursday, while the latest survey data from the Office for National Statistics showed a sharp rise in the infection rate, with an estimated 17,200 new cases per day, up from 8,400 a day the previous week.

Despite the resurgence in the virus, many Conservative MPs remain sceptical about the need for widespread shutdowns and critical of Downing Street’s handling of the pandemic.

One senior Tory suggested Sunak, who told the Conservative party conference there was a “sacred duty” to repair the public finances, had been resistant to providing fresh economic support. “There’s a tussle going on: Rishi is essentially a 1930s small-c conservative: he wants to raise taxes and balance the books.”

However, Treasury officials insisted the new scheme was just an add-on to the job support scheme, and had already been worked out over the summer as part of a “menu” of options to be drawn upon if new coronavirus restrictions demanded it.

The move signals the government’s determination to press ahead with tough restrictions after what one government source called “lively conversations” in recent days about how a new three-tier system of controls should work.

It came little more than a fortnight after Sunak launched his winter economic plan and said it was “fundamentally wrong to hold people in jobs that only exist inside the furlough”.

The shadow chancellor, Anneliese Dodds, who had repeatedly called for a targeted furlough scheme to help firms told to close, said: “The fact the chancellor is having to tear up his winter economic plan before the autumn is out demonstrates the chaos and incompetence at the heart of government. His delay in delivering support has caused unnecessary anxiety and job losses.

“None of this was inevitable if the chancellor had just taken his fingers out of ears and listened to the warnings from Labour and others.”

Sunak described the measure as part of an “economic toolkit”, and Treasury officials insisted it was not a new furlough scheme. But economic experts said the structure of the scheme was very similar to the one in place for much of this year, and questioned why it had not been established earlier.

Torsten Bell, the director of the Resolution Foundation, a thinktank, described Sunak’s move as a U-turn and said the delay in announcing it was likely to have cost jobs.

“It has been clear for some time that this form of a more sectorally and geographically targeted furlough scheme would be required to see us through a difficult winter. The delay in putting it in place will have come at a high price in jobs lost,” he said.

Ministers are preparing to follow Scotland with tougher new local restrictions, starting in the north where Covid-19 cases have dramatically increased in recent weeks.

Official figures show that more than one in 10 workers in Britain – almost 3 million people – were still furloughed in early September.

Marston’s – 2,150 jobs
15 October: Marston’s  – the brewer which owns nearly 1,400 pubs, restaurants, cocktail bars and hotels across the UK – said it would cut 2,150 jobs due to fresh Covid restrictions. The company has more than 14,000 employees. 

Whitbread – 6,000 jobs
22 September: Whitbread, which owns the Premier Inn, Beefeater and Brewers Fayre chains, said it would cut 6,000 jobs at its hotels and restaurants, almost one in five of its workforce

Pizza Express – 1,100 jobs
7 September: The restaurant chain confirms the closure of 73 restaurants as part of a rescue restructure deal.

Costa Coffee – 1,650 jobs
3 September: The company, which was bought by Coca-Cola two years ago, is cutting up to 1,650 jobs in its cafes, more than one in 10 of its workforce. The assistant store manager role will go across all shops.

Pret a Manger – 2,890 jobs
27 August: The majority of the cuts are focused on the sandwich chain’s shop workers, but 90 roles will be lost in its support centre teams. The cuts include the 1,000 job losses announced on 6 July.

Marks & Spencer – 7,000 jobs
18 August: Food, clothing and homewares retailer cuts jobs in central support centre, regional management and stores.

M&Co – 400 jobs
5 August: M&Co, the Renfrewshire-based clothing retailer, formerly known as Mackays, will close 47 of 215 stores.

WH Smith – 1,500 jobs
5 August: The chain, which sells products ranging from sandwiches to stationery, will cut jobs mainly in UK railway stations and airports. 

Dixons Carphone – 800 jobs
4 August: Electronics retailer Dixons Carphone is cutting 800 managers in its stores as it continues to reduce costs.

DW Sports – 1,700 jobs at risk
3 August: DW Sports fell into administration, closing its retail website immediately and risking the closure of its 150 gyms and shops.

Marks & Spencer – 950 jobs
20 July: The high street stalwart cuts management jobs in stores as well as head office roles related to property and store operations.

Ted Baker – 500 jobs
19 July: About 200 roles to go at the fashion retailer’s London headquarters, the Ugly Brown Building, and the remainder at stores.

Azzurri – 1,200 jobs
17 July: The owner of the Ask Italian and Zizzi pizza chains closes 75 restaurants and makes its Pod lunch business delivery only

Burberry – 500 jobs worldwide
15 July: Total includes 150 posts in UK head offices as luxury brand tries to slash costs by £55m after a slump in sales during the pandemic.

Boots – 4,000 jobs
9 July: Boots is cutting 4,000 jobs – or 7% of its workforce – by closing 48 opticians outlets and reducing staff at its head office in Nottingham as well as some management and customer service roles in stores.

John Lewis – 1,300 jobs
9 July: John Lewis announced that it is planning to permanently close eight of its 50 stores, including full department stores in Birmingham and Watford, with the likely loss of 1,300 jobs.

Celtic Manor – 450 jobs
9 July: Bosses at the Celtic Collection in Newport, which staged golf’s Ryder Cup in 2010 and the 2014 Nato Conference, said 450 of its 995 workers will lose their jobs.

Pret a Manger – 1,000 jobs
6 July: Pret a Manger is to permanently close 30 branches and could cut at least 1,000 jobs after suffering “significant operating losses” as a result of the Covid-19 lockdown

Casual Dining Group – 1,900 jobs
2 July: The owner of the Bella Italia, Café Rouge and Las Iguanas restaurant chains collapsed into administration, with the immediate loss of 1,900 jobs. The company said multiple offers were on the table for parts of the business but buyers did not want to acquire all the existing sites and 91 of its 250 outlets would remain permanently closed.

Arcadia – 500 jobs
1 July: Arcadia, Sir Philip Green’s troubled fashion group – which owns Topshop, Miss Selfridge, Dorothy Perkins, Burton, Evans and Wallis – said in July 500 head office jobs out of 2,500 would go in the coming weeks.

SSP Group – 5,000 jobs
1 July: The owner of Upper Crust and Caffè Ritazza is to axe 5,000 jobs, about half of its workforce, with cuts at its head office and across its UK operations after the pandemic stalled domestic and international travel.

Harrods – 700 jobs
1 July: The department store group is cutting one in seven of its 4,800 employees because of the “ongoing impacts” of the pandemic.

Harveys – 240 jobs
30 June: Administrators made 240 redundancies at the furniture chain Harveys, with more than 1,300 jobs at risk if a buyer cannot be found.

TM Lewin – 600 jobs
30 June: Shirtmaker TM Lewin closed all 66 of its outlets permanently, with the loss of about 600 jobs.

Monsoon Accessorize – 545 jobs
11 June: The fashion brands were bought out of administration by their founder, Peter Simon, in June, in a deal in which 35 stores closed permanently and 545 jobs were lost.

Mulberry – 470 jobs
8 June: The luxury fashion and accessories brand is to cut 25% of its global workforce and has started a consultation with the 470 staff at risk.

The Restaurant Group – 3,000 jobs
3 June: The owner of dining chains such as Wagamama and Frankie & Benny’s has closed most branches of Chiquito and all 11 of its Food & Fuel pubs, with another 120 restaurants to close permanently. Total job losses could reach 3,000.

Clarks – 900 jobs
21 May: Clarks plans to cut 900 office jobs worldwide as it grapples with the growth of online shoe shopping as well as the pandemic.

Oasis and Warehouse – 1,800 jobs
30 April: The fashion brands were bought out of administration by the restructuring firm Hilco in April, with all of their stores permanently closed and 1,800 jobs lost.

Cath Kidston – 900 jobs
21 April: More than 900 jobs were cut immediately at the retro retail label Cath Kidston after the company said it was permanently closing all 60 of its UK stores.

Debenhams – 4,000 jobs
9 April: At least 4,000 jobs will be lost at Debenhams in its head office and closed stores after its collapse into administration in April, for the second time in a year.

Laura Ashley – 2,700 jobs
17 March: Laura Ashley collapsed into administration, with 2,700 job losses, and said rescue talks had been thwarted by the pandemic.

Under the new plan, the government will support eligible businesses by paying two-thirds of each employee’s salary, up to a maximum of £2,100 a month.

This is a higher payout than the furlough scheme is offering currently. It originally offered 80% support but had been gradually reduced to 60%, with a cap of £1,875, from the start of this month.

The new grant that is designed to help cover other fixed costs is worth up to £3,000 per month for firms in England. Devolved administrations in Wales, Scotland and Northern Ireland will receive a total of £1.3bn in increased funding this year to cover similar measures.

The Treasury said businesses would only be eligible to claim the grant while they were subject to lockdown restrictions. Employees must be off work for a minimum of seven consecutive days. The new scheme will be available for six months, with a review in January, and will be UK-wide.

The chief whip, Mark Spencer, indicated on Friday that there would be a vote in parliament next week on the new lockdown plans. “MPs will get to discuss and vote upon these new systems next week, I hope, and then we’ll be able to move forward,” he said.

Despite widespread concern about the economic impact of the measures, Tory rebels said they would be unlikely to try to vote them down unless Labour did so.

The Conservative MP Steve Baker, a ringleader of a group who have successfully pushed for more parliamentary scrutiny of restrictions in recent weeks, told the Guardian: “All the time Labour are voting for or abstaining from voting on government measures, the government will get its way, and therefore I will not be organising rebellions against the government.

Sir Graham Brady, the chair of the 1922 Committee of Conservative backbenchers, said: “I will wait to see what the government proposes before I take a position. But it is essential that both the initial arrangements are approved by parliament and subsequent changes moving areas, or moving significant parts of the country into higher levels of restrictions should also be subject to regular review by parliament.

“If the restrictions were to lead to the complete closure of the hospitality sector, that would cause massive damage and significant unemployment.”

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