Chancellor Rishi Sunak is drawing up plans for new Treasury support for businesses worst affected by new local lockdown restrictions, as the spread of coronavirus continues to accelerate in the north of England.
Prime Minister Boris Johnson is expected to announce this month plans for a simplified three-tier system of local and regional lockdowns; curbs in the worst-hit areas could include the closure of hospitality and leisure businesses.
To soften the blow of tougher local lockdowns, Mr Sunak is said by government officials to be drawing up a new support package, focused particularly on companies required to close.
Mr Sunak has already provided grants of £1,500 to companies forced to close under local lockdowns and said this week the government was prepared to move with “pace and scale” to deal with new problems as they arose during the crisis.
England recorded another sharp increase in Covid-19 infections on Tuesday with 14,542 new cases reported. Many large cities in northern England have seen the rate of infection rise close to or beyond 500 per 100,000 residents over the past week.
In the House of Commons on Tuesday, Anneliese Dodds, shadow chancellor, argued that the economic support given to areas under increased coronavirus restrictions had been “inconsistent”: she called for greater transparency on the methodology behind the decisions.
“The millions of people living under local restrictions deserve better,” she said. “When will the government grasp the scale of the challenge and act to recover jobs, retrain workers and rebuild businesses?”
Steve Barclay, Treasury chief secretary, said that while a series of measures had already been put in place, including a £100 million package for areas worst hit by Covid-19, the government would be “flexible” in its approach.
He said: “We will keep listening, and we will keep striving to be creative in response to the challenges that we face”. The Treasury declined to comment.
The three-tier local lockdown system to replace the patchwork of local and regional restrictions is designed to end the widespread confusion, which Mr Johnson himself has demonstrated, about what is and is not permissible.
The Guardian obtained a leaked government document suggesting the highest tier — Alert Level 3 — would see the closure of hospitality and leisure businesses, no social contact outside a household in any setting and the banning of organised non-professional sport.
Areas categorised as level two, could see restrictions on visiting care homes and non-essential travel, meanwhile level one areas would be subject to restrictions similar to that already imposed on a national level such as the “rule of six” and 15-person limit on weddings. Mr Johnson’s allies insisted it would not be a “traffic light system”.
Meanwhile, dozens of Conservative MPs believe Mr Johnson’s coronavirus restrictions have already gone too far and are threatening to vote against the government’s 10pm pub curfew next week.
Steve Baker, former Brexit minister, is acting as a convener for Tory rebels who are concerned about the social and economic impact of lockdown measures, especially on the hospitality sector.
Mr Baker estimated that about 80 Tory MPs would be prepared to vote against the 10pm curfew when it is retrospectively put to a Commons vote, expected next week.
“I want to show the government there is an alternative path, with political support, which doesn’t rely on us suppressing our society, pending the development of a vaccine which may never come and may never work.”
Around 80 Tory MPs were thought to be willing to vote against Mr Johnson last week by demanding a Commons vote on new restrictions; in the end the prime minister partially backed down.
Mr Baker said he was determined not to run “a party within a party”, but said: “It’s not surprising the number of MPs telling me they want to be part of a vote against it [the curfew] is growing.” Leading rebels met on Tuesday to discuss tactics.
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Labour has so far backed the government over coronavirus restrictions, but Mr Johnson will be paying careful attention to an apparently growing body of Tory opinion that believes he is overreacting to the Covid-19 crisis.
Another Tory MP said he and colleagues would watch carefully to see whether admissions to hospitals or deaths from Covid-19 over the next two weeks rose sharply, in line with the rapid rise in infections.
“If that doesn’t happen, you have to ask why on earth we are doing all this stuff,” the MP said, arguing that Mr Johnson needed to consider the threat posed by coronavirus compared with other diseases. However admissions to hospital linked to Covid-19 cases rose sharply on Tuesday.