Boris Johnson Delays Reopening of Non-Essential Businesses Amid Rising COVID-19 Cases in England

Strategic Insights -

As businesses in England were preparing to reopen on Saturday, Prime Minister Boris Johnson announced a delay of at least two weeks, citing a rise in COVID-19 cases. This move comes on the same day the furlough scheme begins to wind down, leaving many employers with a difficult decision: lay off staff or pay a significant portion of their salaries. The Labour Party is urging the government to adopt a more flexible approach to avoid mass layoffs.

Key Takeaways:

  • The furlough scheme, which has supported 9.5 million jobs at a cost of £31.7 billion, will begin to taper off with National Insurance payments before employers start contributing 10% of furloughed employees' salaries from September, rising to 20% in October.
  • The delay in reopening non-essential businesses, including beauty salons, bowling alleys, and indoor performance venues, will impact millions of workers still being supported by the furlough scheme.
  • Labour's shadow business secretary, Ed Miliband, warned that ministers will be culpable for thousands of workers losing their livelihoods if they do not adapt the furlough scheme to recognize the scale of the jobs crisis.
  • The Treasury stated that the scheme will have run for a total of eight months, and businesses will continue to receive support through targeted measures, including tax deferrals and VAT cuts.
  • Professor Chris Whitty, the chief medical officer for England, cautioned that the nation has "probably reached near the limit or the limits" of what can be done to reopen society, suggesting trade-offs may be necessary to reopen schools next month.
  • Local lockdown measures were announced in parts of the North West of England and areas of West Yorkshire, restricting indoor gatherings and hospitality venue access for people from different households.

Statistics:

  • The furlough scheme has provided support to 9.5 million jobs at a cost of £31.7 billion over eight months.
  • The scheme begins to taper off on the same day employers start paying National Insurance and pension contributions for furloughed staff.
  • The number of people testing positive for coronavirus in England increased, with the prevalence of the virus in the community likely to be rising for the first time since May.

Sources:

  • "Boris Johnson delays reopening of non-essential businesses in England amid rising COVID-19 cases." The Guardian, August 8.
  • "Furlough scheme to 'grind to a halt' from October as Johnson delays reopening of non-essential businesses." The Telegraph, August 8.
  • Office for National Statistics. "COVID-19: Surveillance report."
  • PA Wire/PA Images. "Coronavirus: Boris Johnson delays reopening of non-essential businesses in England."