Roadmap to end lockdown puts spotlight on Budget
Prime Minister Boris Johnson today unveiled his exit plan for the England lockdown. But businesses will have to wait until the 3 March Budget for news on the economic support package and the Covid support scheme extensions.
Johnson’s “crucial but irreversible” roadmap for re-opening the country starts with schools returning on 8 March, much to the relief of accountants who have juggled tax returns and homeschooling.
The four-stage lockdown timetable focuses first on social interaction outside, with gyms, hospitality and non-essential businesses having to wait until 12 April at the earliest. Under step two of relaxing lockdown, outdoor venues such as pubs and restaurants will be able to re-open.
But these hospitality businesses and other indoor venues such as cinemas, hotels, B&Bs and group exercise classes will have to wait until step three – which would be no earlier than 17 May – to allow patrons back inside their premises.
It won’t be until the final step, which will come no later than 21 June, when all legal limits on social contact will be removed and everything up to and including nightclubs will re-open.
While the timetable gives businesses a roadmap to prepare for their re-opening, the government is putting "data before dates" and will reflect on the impact of relaxating the restrictions before each step.
Today’s timetable extends past the expected 30 April 2021 end of the furlough scheme and the business rates holiday. As Labour's Anneliese Dodd pointed out, indoor hospitality won't re-open until 17 May at the earliest which is "more than a month after these businesses have to start paying business rates and more than two weeks after furlough ends".
However, Johnson emphasised that the government will “not pull the rug out” from businesses relying on Covid support and confirmed that further announcements will be made by the Chancellor at the 3 March Budget.
"For the duration of the pandemic, the government will continue to do whatever it takes to protect jobs and livelihoods across the UK," said Johnson.
We won’t know until Sunak steps up to the dispatch box to find out whether it will be a blanket furlough extension or a more targeted support for the sectors hit hardest by the pandemic.
Why wait until the Budget?
However, the leader of the opposition Keir Starmer questioned why businesses are having to wait until the Budget for an answer. Starmer said there was "nothing stopping" the prime minister from announcing today if the government is going to extend their support schemes, such as the business rates holiday, the furlough scheme or the VAT reduction for hospitality.
Starmer also pressed the PM to act now to help the 3m excluded self-employed who have fallen through the cracks of the Chancellor’s Covid support.
The PM deferred any further announcements to the Chancellor and the 3 March Budget. However, when he was asked by Plaid Cymru MP Saville Roberts about whether he'd raise statutory sick pay, Johnson said: “We will continue to look after people. Throughout the pandemic we've increased benefits, there's the payment of £500 and other payments we will make available."
More support for businesses
Starmer's Labour cohort and shadow business secretary Ed Milliband also criticised the lack of economic assurances in the prime minister's statement.
“Once again Ministers have set out public health restrictions for businesses but not the economic support that will be available, causing uncertainty and worry. Business owners are planning their futures and those of their staff now - they should not have to wait for the Budget,” said Milliband on Twitter.
Once again Ministers have set out public health restrictions for businesses but not the economic support that will be available, causing uncertainty and worry. Business owners are planning their futures and those of their staff now - they should not have to wait for the Budget.
— Ed Miliband (@Ed_Miliband) February 22, 2021
Meanwhile, Conservative MP Iain Duncan Smith agreed with the PM's cautious roadmap on Twitter, but urged Johnson to review the re-opening of pubs and restaurants.“The Hospitality sector is a big employer of the poorest in this society and it’s them that have suffered the most in income and nearly half of those businesses are talking about closing.
“Would the PM review again the nature of opening up inside those restaurants and pubs and checking that there is no real risk beyond any of the other elements that he’s opening up. If that is the case to take that bold decision as and when the data dictates it.”
Cautious but optimistic
The prime minister ended his speech to Parliament by defending the government's "cautious" approach and that he couldn't rule out re-imposing restrictions at local or regional level. But the success in vaccinating more that 17.5m people across the UK has "dramatically changed the odds" and has given him confidence to proceed with the roadmap.
He signed off by sympathising with the "exhaustion and the stress" people and businesses have experienced after so long in lockdown.
"But to them I say that today the end really is in sight and a wretched year will give way to a spring and a summer that will be very different and incomparably better than the picture we see around us today."
Accountants in lockdown
Johnson’s announcement comes seven weeks after the nation was plunged into tough lockdown measures on 4 January.
Over this time accountants have continued to support clients with ongoing furlough claims and securing the Chancellor’s one-off lockdown grants for businesses in hospitality, retail and leisure.
Meanwhile, some accountants have also struggled with the working from home restrictions during tax season. But today's announcement means these accountants will have to endure the isolation of remote working until the summer.
Roadmap to exit lockdown
Step 1: 8 March
Step 1: 29 March at earliest
Step 2: 12 April at earliest
Step 3: 17 May at earliest
Step 4: 21 June at earliest