by 27th May 2020
27th May 2020 UK Political, Economic and Social Update during Covid-19

27th May UK Political Update  – Boris’s top aide under fire in huge row

While Parliament is on recess, the political headlines this week have been dominated by the story that Boris Johnson’s top political aide, Dominic Cummings, broke strict lockdown rules in March by visiting his parents in Durham, 260 miles from London.
This row is splitting the Tory party, with many MPs under siege from their furious local voters who believe that Cummings should resign for breaking the rules. These MPs in turn are also calling for Cummings to resign.

As the Times comments today, this boiling row reflects the exasperation even the most mild-mannered Brits feel at the moment. With 37,048 virus deaths reported as of yesterday, we’re all feeling a constant undercurrent of worry about our own health and vulnerable loved ones.

People have lost their jobs or are unsure about when they can return to work. Nobody’s done anything fun for the last ten weeks. Some people have not seen any friends or family in that time.

The goodwill which buoyed the government at an earlier stage of the crisis has started to wear thin, as we grow weary of lockdown and apprehensive about the economic struggle ahead.

Boris is probably hoping to tough it out and keep his key advisor in place while distracting us with better news.  He has recently announced a further easing of lockdown – friends can meet in groups outside from next week, schools begin to return from 1 June and non-food shops will begin to open from 15 June. But dentists, gyms, beauticians and hairdressers all remain closed until further notice.

Hospitality and leisure businesses in the UK (e.g rental cottages, outdoor attractions) may be allowed to open from 4th July if they are able to adhere to the social distancing rules.

27th May UK Economic Update – End of the furlough scheme in sight

The jobs of more than ten million people in the UK are now being bankrolled by the Treasury, new figures show, with a cost to the Exchequer of £21 billion.

Since the start of May the number of employees who have been furloughed has risen by a quarter to 8.4 million. Another 2.3 million self-employed workers have applied for the government’s income support scheme.

At the same time the Treasury has granted more than 43,000 businesses nearly £9 billion in coronavirus business interruption loans (CBILS) to help them through the economic disruption. A further £18.49 billion in so-called bounceback loans has been granted to 608,000 small businesses.

While the rate of growth in furloughed workers does show signs of slowing, ministers will be concerned that overall numbers have not fallen despite Boris Johnson’s appeal to businesses to begin re-opening this month.

The Times reports today that Rishi Sunak, the Chancellor, is expected to announce this week that the government will stop companies from putting any more employees into furlough in an attempt to begin winding the scheme down.

He will also unveil details of the contributions the government will expect employers to start making from August if they want to continue using the scheme.
Ministers acknowledge that when the scheme is wound down some of those workers will not have jobs to go back to.

However the plan is to encourage companies to bring workers back part time in a bid to ease them back to business as normal while reducing the cost to the taxpayer.

But business leaders have warned that if the government reduces support too quickly, firms that would otherwise be viable may not be able to survive in the months ahead.

An example of this is the UK’s retail sector. Only a limited selection of non-food shops will open when lockdown is eased next month as retailers grapple with fears of weak consumer demand and the costs of recalling furloughed staff.

Click here for PWC’s weekly report

27th May UK Social Update  – Holidays in Portugal looking possible 

Britain is in talks with Portugal over plans to create an “air bridge” that would allow UK holidaymakers to travel there this summer without quarantining on their return.
It emerged yesterday that a restriction-free travel deal could be brokered with the Portuguese before any other country when the blanket quarantine measures  are eventually relaxed.

Quarantine measures will come into force from June 8, with any arrivals into the UK forced to self-isolate for two weeks. UK citizens returning from abroad will have to comply or run the risk of £1,000 fines.

It is likely to prevent the vast majority of Britons travelling abroad. However, the government has confirmed that it is working on plans to ultimately relax the restrictions in favour of more focused “air bridges” that can allow Britons to travel to and from countries with low coronavirus rates, such as Portugal, while avoiding quarantine. The quarantine will be reviewed at the end of June and then every three weeks.

Last year more than 16 million foreign tourists visited Portugal — almost 20 per cent of them were from Britain.
Ryanair, Europe’s busiest airline, confirmed yesterday that it would operate 1,000 flights a day from July 1, equivalent to 40 per cent of its total schedule. The airline will principally focus on routes between northern Europe and holiday hotspots in Spain, Portugal, Italy, Greece and Cyprus.

All passengers will have to wear facemasks in the airport and on the aircraft. Other measures include requesting to use the toilet to avoid queues.