On Saturday 31 October, the Prime Minister held a press conference alongside the Chief Scientific Adviser, Sir Patrick Vallance, and Chief Medical Officer Professor, Chris Whitty, to announce that England will go into a second lockdown from Thursday 5 November. Elsewhere, the devolved nations have their own COVID restrictions in force.
What the second lockdown in England means for business
With COVID-19 cases continuing to rise across the country, on Saturday 31 October the Prime Minister spoke of the remorseless advance of the second wave. Mr Johnson highlighted that despite existing measures serving to bring the R rate to a lower level than it otherwise would be, the rate remained stubbornly above one.
To bring down the R rate and control the virus, protect the NHS and speed the path to recovery, the Prime Minister announced a second national lockdown. This will see restrictions implemented across England from Thursday 5 November, until Wednesday 2 December.
Following this the government will seek to ease restrictions, going back into the tiered system on a local and regional basis according to the latest data and trends.
Measures introduced across England will require people to stay at home and prevent people you do not live with gathering, except for specific purposes. Everyone who can work effectively from home must do so, although, those who cannot - for instance people who work in critical national infrastructure, construction or manufacturing - should continue to travel to work. This is essential to keeping the country operating and supporting vital sectors and employers.
Further to this, certain businesses and venues will have to close. These include all non-essential retail, indoor and outdoor leisure facilities, entertainment venues and personal care facilities. However, food shops, supermarkets, garden centres and certain other retailers providing essential goods and services can remain open. Essential retail will need to follow COVID-secure guidelines to protect customers, visitors and workers.
Responding to the announcement, the CBI highlighted that the decision to implement a second national lockdown was one for government, not business, and went on to confirm that firms share the Prime Minister’s ambition to defeat the virus.
However, CBI Director-General Carolyn Fairbairn pointed out that for many businesses, a second national lockdown marks the start of a bleak midwinter. While welcoming the extension of the furlough scheme, Carolyn said that for some sectors, more tailored support in the coming weeks may still be needed to help protect jobs and livelihoods.
Understanding restrictions in the devolved nations
While the above restrictions apply to England only, in recent weeks devolved administrations have been implementing their own restrictions to help bring down the R rate.
In Wales, a two-week ‘firebreak’ lockdown has been in force since 6pm on 23 October with people being asked to stay at home and all non-food retail required to close. Following the firebreak, on Monday 2 November the First Minister, Mark Drakeford, announced that from 9 November there will be no travel restrictions in Wales and two households will be able to form a bubble. Pubs, bars and restaurants, gyms, and other businesses will be allowed to reopen. However, advice remains that people in Wales should avoid non-essential travel.
Following the announcement of a second lockdown in England, the First Minister acknowledged this will be a tricky time for Wales as it is set to come out of lockdown. Of greatest concern is the movement of people across the border which will be restricted to a list of essential purposes rather than usual “to-ing and fro-ing”.
In Scotland, the First Minister, Nicola Sturgeon, has introduced a five-tier system for COVID restrictions to suppress the virus, while striving to return to a more normal life for as many people as possible. The measures came into place on November 2 and can apply to specific council areas or nationwide if necessary.
Following the announcement of a second lockdown in England, the First Minister also advised against travel between England and Scotland unless absolutely essential.
In Northern Ireland, following an increase in coronavirus cases, additional restrictions have also been introduced. These new restrictions have been put in place to help reduce the spread of coronavirus and to help manage the pressures on the health and social care system. The new restrictions started on 16 October and will last for four weeks.
New business support announced
Alongside announcing restrictions across England, the Prime Minister also announced business support to ensure the economic impact of a second lockdown is limited. Despite the Prime Minister originally highlighting that the Job Retention Scheme (JRS) being extended until 2 December, the Chancellor addressed the House of Commons on 5 November with an update on business support.
In his statement, the Chancellor announced that the furlough scheme would be extended until the end of March with the policy set to be reviewed in January to examine whether the employer contribution should increase. The Job Retention Bonus which was due to be rolled out in February, will now fall away, with Mr Sunak indicating may be redeployed at an appropriate time.
Further to the JRS extension, the Chancellor also confirmed that with mortgage payment holidays not coming to an end on 31 October, borrowers impacted by COVID who haven't had a mortgage holiday will be entitled to a 6-month break. Those who have already started a mortgage holiday can top up to 6 months without it being recorded on a credit file.
The Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme and the Future Fund have all been extended until 31 January.
The Self-Employment Income Support Scheme is increasing funding from 40% to 80% of average trading profits in November. People will be able to apply from the end of November rather than the middle of December, with support provided faster.
Further to this support, as of Thursday 5 November, automatic grants up to £3000 per month will be given to every business told to close in the new lockdown in England. Additionally, with a £1.1bn fund for discretionary grants being made available to local authorities.
For the devolved nations the Chancellor emphasised that the furlough scheme was designed by the UK on behalf of all the people of the UK wherever they live. With that in mind, Mr Sunak announced the upfront guaranteed funding for the devolved administration is increasing from £14bn to £16bn. The devolved administrations can use this funding as they see fit.
This above support is undoubtedly a vital step to helping protect livelihoods but the CBI will continue to work closely with the government and HM Treasury, ensuring policy-makers remain agile with further support where needed.