Coronavirus UK: Northern leaders REJECT measures as they call Rishi Sunak's bailouts 'insufficient' - Money

Andy Burnham has called on MPs to ‘reject’ Rishi Sunak’s new coronavirus bailout programme because it will lead to ‘severe redundancies’ across the North of England

Manchester Mayor Andy Burnham today called on MPs to ‘reject’ Rishi Sunak‘s new coronavirus bailout programme because it will lead to ‘severe redundancies’ across the North of England.

The local Labour leader claimed the furlough-style scheme, which allows workers to claim two-thirds of their wages up to £2,100 if their workplaces are ordered to close, would ‘surrender our residents to hardship in the run-up to Christmas and our businesses to potential failure’.

Speaking at a press conference also attended by mayors from Liverpool and North Tyne, Mr Burnham added the scheme and further restrictions would cripple the local economy and cause the North to ‘level down’.

‘To accept the Chancellor’s package as outlined yesterday would be to surrender our residents to hardship in the run up to Christmas and our businesses to potential failure or collapse,’ he said.

‘We are not prepared to do that. It will level down the north of England and widen the north-south divide.’

His comments come as Boris Johnson is set to outline a new three-tiered system of restrictions on Monday with measures expected to see pubs and restaurants shut across the north of England.

Under the three-tier system, different parts of the country would be placed in different categories, with areas in the highest level expected to face tough restrictions such as hospitality venues closing.

However, local leaders urged the Government not to punish the North East with draconian lockdown restrictions as they claim the number of daily new coronavirus infections in the region has begun to fall.

Mr Sunak announced yesterday that workers in businesses which are forced to close under the new restrictions will have two thirds of their wages paid by the Government. In other coronavirus developments:

Doctors warn face masks should be mandatory inside and outside in England to curb the spread of infections;
A think-tank warns furlough mark two could cost the Treasury more than £2.4billion in six months as it estimates 444,000 hospitality employees will qualify for the scheme;
Revellers are filmed spilling into London’s Leicester Square and dancing together with no regard for social distancing measures after 10pm curfew;
London Mayor Sadiq Khan warns the capital could face tougher restrictions as leafy Richmond becomes the worst-hit borough – but one report suggests the R rate in the city is below 1;
Scottish drinkers have been making the most of their last day at the bar before pubs shut down at 6pm for two weeks in a bid to crackdown on coronavirus.

Liverpool Mayor Joe Anderson said he expected his city to be in the highest category of restrictions. Speaking on BBC Radio 4’s Today programme, he added: ‘I do believe that the measures that will be introduced will be a lockdown of public houses from Wednesday within the city of Liverpool and beyond the city of Liverpool in terms of the whole region

Chancellor Rishi Sunak announced yesterday that workers in businesses which are forced to close under the new restrictions will have two thirds of their wages paid by the Government

Mr Burnham said he was calling for cross-party support from MPs across the north for a vote in Parliament on the support proposals announced by the Chancellor.

‘I would not rule out a legal challenge,’ he said.

In an open letter published alongside the press conference the leaders added: ‘We believe the Government should bring forward a separate vote on the financial package to provide an opportunity to reject the current financial package and requiring the Government to return with an improved package taking account of the important points we have raised.

‘We would ask that you use whatever routes might be open to you to bring about a vote in the House.’

The letter is signed by Mr Burnham, Liverpool City Region Mayor Steve Rotheram, Sheffield City Region Mayor Dan Jarvis, Mayor of North of Tyne Jamie Driscoll, and Sir Richard Leese, leader of Manchester City Council.

Labour Leader Sir Keir Starmer was also critical of the business aid package and said there were gaps in it.

Speaking at a Co-operative Party virtual conference he said: ‘I think, though, that the Government has lost sight of the guiding principle, and the guiding principle should be that restrictions are always accompanied by appropriate economic support.

‘If that had been the principle throughout, we wouldn’t be in the mess that we are in at the moment.’

Earlier today, Liverpool Mayor Joe Anderson said he expected his city to be in the highest category of restrictions.

Speaking on BBC Radio 4’s Today programme, he added: ‘I do believe that the measures that will be introduced will be a lockdown of public houses from Wednesday within the city of Liverpool and beyond the city of Liverpool in terms of the whole region.

‘We do believe that there will be a concession to restaurants in terms of allowing restaurants to stay open until 10 o’clock.’

Real estate adviser Altus Group has said there are 7,171 pubs in areas with restrictions across the north of England at risk of temporary closure.

The Government’s new regime would see hospitality taking another hit as local restrictions would see pubs and bars in Merseyside and other parts of the North ordered to shut their doors. In a sign of official confusion, however, restaurants will be allowed to remain open until the curfew (pictured, a deserted Mathew Street in Liverpool city centre)

It comes amid fears that coronavirus cases are rising in the North of England as a result of young people going to hospitality venues. However, MPs have accused public health officials of ‘cherry-picking’ data retrospectively to justify their closure of pubs and bars

Evidence that pubs are a major source of Covid-19 transmission is ‘very weak’, economists claim as official PHE data shows only 5% of cases are linked to hospitality venues

The Government’s assertion that 30 per cent of all coronavirus transmissions may be happening in pubs, bars, cafes and restaurants is based on ‘very weak’ evidence economists have said, after furious MPs accused ministers of ‘cobbling together’ the numbers to ‘justify’ their point of view.

Experts from the Institute for Economic Affairs (IEA) rubbished the official claim, reminding ministers that data shows less than five per cent of those contacted by NHS Test and Trace had been in close contact with another person in a hospitality venue.

They also pointed to the enforced closure of hospitality venues in Bolton and Leicester, saying it had failed to curb the spread of the disease. The latest Public Health England data reveals cases surged by 39 per cent in Bolton this week, with the rate rising to 250.6 per 100,000 people, and in Leicester they rose by 35 per cent to 120.2.

A business minister today defended the Government’s ‘flimsy’ data based on fewer than 100 pubs, saying he would have used the ‘quite representative’ sample size while working in the business sector.

Nadhim Zahawi MP told LBC this morning: ‘I used to work in the serving industry and I can tell you when you do business surveys, 98 businesses, or 100 businesses, is actually quite a representative sample. If you’re doing public opinions, 1,000 interviews is a representative sample. It’s actually a pretty robust sampling.’

And the Prime Minister’s deputy spokesman dug his heels in today claiming that hospitality venues account for the ‘highest rates of common exposure to Covid-19, especially for those under 30 years old’.

His claim comes after enraged MPs slammed the Government for presenting the ‘early analysis’ figures to them, and criticised officials’ decision to include a three-month-old American study from which they cherry-picked the figures to bolster their claims.

Slides from yesterday’s press briefing led by Professor Chris Whitty – and published today after they were leaked – claimed food outlets and bars made up as much as 41 per cent of transmission among the under 30s. But this was in stark contrast to Public Health England’s own data, which suggested only four per cent of Covid-19 outbreaks can be traced back to the venues.

Meanwhile, on Friday evening the leaders of West Yorkshire councils also warned another lockdown will have a ‘devastating’ effect on the town and city centres and regional economy.

In a joint letter to the Chancellor and health and housing secretaries on Friday, the leaders said ‘significantly’ more financial support was needed to prevent an even deeper economic catastrophe.

They added: ‘In a three-level approach, there must be significantly more support available to businesses in areas that are in either level two or level three to avoid an even deeper economic catastrophe.’

Talks between the Government and local leaders are to continue over the weekend.

Landlords are furious with Boris Johnson’s expected plans to order pubs to shut across northern England in a new coronavirus clampdown while restaurants can stay open until 10pm.

The Government’s new regime would see hospitality taking another hit as local restrictions would see pubs and bars in Merseyside and other parts of the North ordered to shut their doors.

In a sign of official confusion, however, restaurants will be allowed to remain open until the curfew.

Similar measures are expected to be announced in Nottinghamshire as well as Greater Manchester, West Yorkshire and Newcastle, while the rules will be reviewed after a month.

Industry experts also denounced the package, with Greg Mulholland of the Campaign for Pubs saying: ‘The level of support announced by the Chancellor is nowhere enough to compensate pubs being forced to close.

‘Many publicans will be forced into even more debt just to survive. There is real anger when pubs have been working hard to operate safely.’

Emma McClarkin, Chief Executive of the British Beer & Pub Association, doubted whether locking down will have ‘any material impact at all on transmission’.

‘We do still have serious questions over the effectiveness such lockdowns will have in stopping the spread of the virus,’ she said.

‘The latest Covid-19 surveillance report from PHE today shows just 30 incidents of Covid-19 were from hospitality settings. NHS Test and Trace numbers linked to pubs across the UK remain exceptionally low.

‘Based on these insights we must ask why the Government isn’t taking evidence-based, proportionate measures to tackle the virus?

‘It remains the case there is no hard evidence as yet to suggest that pubs, with their strict adherence to Government guidelines, are unsafe, making it unclear if local lockdowns, or indeed the 10pm curfew, will have any material impact at all on transmission.

‘The Government must review its measures on a regular basis and commit to removing them if they are found not to effectively reduce the spread of the virus.’

A further 13,864 lab-confirmed cases of coronavirus in the UK were reported on Friday, and 87 more deaths were confirmed of people who died within 28 days of testing positive for coronavirus.

Separate figures suggested coronavirus cases are doubling about twice as fast in the North West, Yorkshire and the West Midlands as for the whole of England.

In North Wales, new coronavirus restrictions are being introduced in Bangor following a sharp rise in cases, the Welsh Government has announced.

From 6pm on Saturday, people will not be allowed to enter or leave the area without a ‘reasonable excuse’ and can only meet people they do not live with outdoors, it said.

Northern leaders write open letter to Government calling for lockdown financial support

Dear Colleague,

LOCKDOWN FINANCIAL SUPPORT

With the number of positive cases rising in most parts of the North, the health of our residents is paramount and we need to take whatever evidence-based measures are needed, so we understand why the Government is looking to clarify, simplify and possibly strengthen local restrictions in parts of the North.

Yesterday, in meetings with civil servants, Mayors and local leaders were updated on the government’s plans for restrictions in their areas. We welcome that and discussions with the Government on the final shape of restrictions for local areas are continuing throughout this weekend.

However, we were also told that the financial package announced by the Chancellor on Friday afternoon was final and was not open for negotiation.

We have great difficulties with that.

Despite many requests, it has taken a long time for the Government to recognise that a proper support package for people and businesses affected by local restrictions would be needed.

When it finally appeared late yesterday, it was not sufficient to protect our communities through the challenging period which lies ahead.

Specifically, we cannot understand why people whose place of work is forced to close by Government imposed restrictions are only being offered two thirds of their wages. While it may be possible for people on middle or higher earnings to live on two thirds of their salary, that is not the case for the low-paid staff who work in hospitality. They do not have the luxury of being able to pay only two thirds of their rent or their bills.

Earlier this year, the Government set its national furlough scheme at 80%. We can see no justifiable reason why the local furlough scheme should be set at 67%. To accept it would be to treat hospitality workers as second-class citizens and we think that is wrong. Many of these workers have already faced severe hardship this year.

On top of this, the timetable for the introduction of the scheme also presents a major problem. It will start in early November which means that payments will not be made until early December, six weeks after businesses have been forced to close.

We also have serious concerns that the local furlough scheme will be limited to businesses forced to shut. There are many other businesses who supply the hospitality sector who will see their own trade collapse if their customers are to close. In fact, the effect of restrictions might be to choke off footfall in many of our towns and cities and many more businesses and venues such as theatres, arenas and cinemas are likely to be impacted by new restrictions. We believe that any local furlough scheme should be much more widely available to businesses in areas with the highest level of restrictions who can demonstrate a severe impact on trade arising from them.

In addition, we believe that financial support should be extended to those areas in Tier 2. Many businesses and individuals will be impacted by the proposed measures included in Tier 2, and indeed by limiting financial support to Tier 3 only, it could create a perverse incentive for areas to move into Tier 3 to support local businesses.

It is also regrettable that there is no additional support on offer for people who are self-employed. Closure of hospitality businesses will have a severe knock-on effect on people working in the taxi trade and security. Many of those people are self-employed. We believe that there needs to be a local self-employment support scheme to recognise this.

Finally, we are also worried that the more general business support package is woefully inadequate. Whilst we acknowledge the Chancellor’s move in increasing the existing payment to businesses forced to close in lockdown areas, £3,000 per month – or less for many smaller businesses – may not be anything like enough to prevent businesses from collapsing after what has already been an extremely difficult year. Many are now on a knife-edge and this payment will not be enough to save them. Again, we fail to understand why a local lockdown does not attract a business support package equal to that provided during national lockdown given that the effect is the same. More broadly, tougher local restrictions will have an impact on businesses across the local economy and we believe that there is a strong case for a discretionary grant scheme under the control of local authorities to help them.

And while the ‘surge funding’ for local authorities is welcome, only £80m is left in the pot to share between local authorities across the whole country. Councils across the North have already been hit by millions of pounds in extra costs and lost revenue, with only around a third of that being covered by central Government so far.

For the reasons we have given above, to accept the Chancellor’s package at this point would be to surrender our residents, your constituents, to severe hardship in the run-up to Christmas. We are not prepared to do that.

It would also run the risk of significant redundancies and multiple business failures. That would cause long-term damage to the already fragile economies of large parts of Northern England and weaken the recovery when it finally comes. It would do the precise opposite of what the Government was elected to do and level down the North.

So we are asking you to work with your Parliamentary colleagues on all sides of the House to seek to improve substantially the financial package on offer. We believe the Government should bring forward a separate vote on the financial package to provide an opportunity to reject the current financial package and requiring the Government to return with an improved package taking account of the important points we have raised. We would ask that you use whatever routes might be open to you to bring about a vote in the House.

We are of course available at any time to speak to you at any point over the coming days.