The prime minister Boris Johnson has bowed to industry pressure and told cafés, restaurants and bars close their doors tonight in order to help combat the coronavirus pandemic. The move has been demanded by many industry figures to allow outlets to claim losses on their insurance policies.
In order to help businesses, the government has also announced the launch of the new and unprecedented Coronavirus Job Retention Scheme. It will help struggling employers to pay staff instead of making them redundant.
Of the closures, Johnson said: “Following agreement from all four nations of the United Kingdom, we are collectively telling cafés, pubs, bars and restaurants to close tonight as soon as they reasonably can and not to open tomorrow. Though, to be clear, they can continue to provide takeout services.
“The sad thing is we now need to keep people apart. We will review the situation each month to see if we can relax any of these measures.
“We want you, as far as possible, to stay at home. That’s how we can protect our NHS and save lives.
“I know how much workers and business deserve the financial reassurance that we are giving them. But we will get through this. We will get through it together and we will beat this virus.
“To ram that point home, the more effectively we follow the advice that we are given, the faster this country will stage a medical and economic recovery.”
Under the Coronavirus Job Retention Scheme, government grants will cover 80% of the salary of retained workers, up to a total of £2,500 per-person per-month. The figure is just above the median income. Employers will also have the option to top up salaries if they choose to.
The chancellor Rishi Sunak said: “I know it’s incredibly difficult out there. We in government are doing everything we can to support you.
“The government is, for the first time, going to step in and help to pay people’s wages. Any employer in the country, small or large, charitable or non-profit, will be eligible for the scheme.
“Employers will be able to contact HMRC for a grant to cover most of the wages of people who are not working but are kept on payroll, rather than being laid off. This means that employers in any part of the UK can retain their job, even if their employer can’t afford to pay them, and be paid at least 80% of their salary.
“The Coronavirus Job Retention Scheme will cover wages backdated to 1st March and will be open initially for three months, and I will extend it for longer if necessary. I am placing no limit on the amount of funding available. We will pay grants to pay wages for as many jobs as necessary. We have never had to have a scheme like this in our country and we are building the systems from scratch.”
The government is aiming to have the scheme implemented by the end of April. In the meantime, businesses will be supported via grants and guarantees. In a further boost, loans will now be interest-free for 12 months instead of the previously promised six. They will be available from Monday.
Sunak added that businesses will not have to pay any VAT between now and June, and they will then have until the end of the year to repay the saving. It amounts to over £30bn in VAT relief.
Further schemes will be announced next week to aid medium and large businesses.
Responding to the announcements, Kate Nicholls, chief executive of UKHospitality, tweeted: “It is vital now that all rent payments for hospitality businesses – due on Wednesday next week – are cancelled or deferred. Mass business failure likely without it as businesses have no cash.”