Conservative MPs have stepped up pressure on the chancellor to renew support for businesses hit by the latest coronavirus restrictions, as backbenchers warned the prime minister they are unlikely to support many more curbs on freedoms.
A number of Tory MPs have called on Rishi Sunak to rethink plans to end the furlough scheme for all sectors – or to at least provide additional sectoral support for workers and business owners who are facing the prospect of being unable to rebuild for at least six months.
The Labour leader, Keir Starmer, who is to do his own address to the nation on Wednesday evening following Boris Johnson’s appearance on Tuesday night – where the prime minister warned restrictions on hospitality, culture and sports venues could continue until the spring. Starmer has sought to make ending the furlough scheme a key dividing line on the strategy to tackle the virus.
Sunak is understood to be weighing up plans to replace the furlough scheme with German-style wage subsidies as part of a wider emergency support package to help businesses through a second wave of Covid-19.
Sources from business and industry told the Guardian the Treasury has been consulting on options for the end of the furlough scheme as concerns mount over increasing numbers of job losses, and as rising infections and tougher restrictions risk derailing Britain’s economic fightback from the pandemic.
The governor of the Bank of England, Andrew Bailey, has said Sunak should “stop and rethink” his proposal to end the furlough scheme next month.
Julian Knight, the chair of parliament’s culture select committee said: “These developments make unarguable the need to extend beyond October the furlough scheme which offers a lifeline for many who work in the arts and leisure sectors, a case we have already made to the chancellor.”
The former sports minister Tracey Crouch has also called for further support measures. “Sport is a complex ecosystem that contributes billions to the economy both directly and indirectly,” she said. “Without financial support we could see parts of the sector decimated and lost forever.”
Nickie Aiken, the Conservative MP for the Cities of London and Westminster, said the impact on local businesses “will now be overwhelming” and called for an urgent rethink of support available.
She said cafes and bars could be forced to close by the cumulative impact of fewer customers and restricted hours and that the conference and events sector was “reeling from the announcement that their work will not start on 1 October and potentially may not restart for six months.”
She said the central London economy needed “enhanced and targeted support to businesses that have further restrictions put on them” and said there was a significant threat to the entire UK economy if central London was unable to recover.
As well as an extension to the furlough scheme for sectors that are impacted by restrictions, Aiken said the Treasury should also consider direct grants for businesses impacted by the latest measures. “I look forward to a statement from the chancellor on how he will support businesses who have had further restrictions placed upon them,” she said.
Tory sources said whips had consulted MPs ahead of Tuesday’s announcements about what measures could carry the support of the restive party.
An amendment is expected to be tabled by Sir Graham Brady to give MPs more scrutiny of government powers to restrict freedoms when MPs debate the renewal of the Coronavirus Act. Should that go to a vote, MPs could use that as a mark in the sand that they will not tolerate any further restrictions.
One new-intake Conservative MP said: “The mood from colleagues and from my constituents is, ‘this far and no further’.”
Ben Bradley, the Conservative MP for Mansfield, said economic support was needed for affected sectors but MPs could tolerate today’s measures.
“No 10 is caught between a rock and a hard place here, and I know that they need to be seen to take action for a variety of reasons,” he said. “What I’m very conscious of though is a general feeling among many of my constituents that they don’t want further restrictions.”
“Of course, from an ideological perspective neither I nor most colleagues are naturally comfortable with ‘big government’ and draconian measures, nor is that what the public voted us in for. I think we’ve perhaps reached the point where we’d find it really difficult to sell much more than this to our constituents.”