Johnson guarantees 80% of workers’ wages in lockdown

Bloomberg

UK Prime Minister Boris Johnson said he was extending the government’s wage support program as part of a new partial four-week lockdown for England and offered home owners more financial reprieve.
Under the package announced by the prime minister, state payments will be made to furloughed workers of as much as 80% of their wages through the new lockdown period.
Another key announcement involved those with a mortgage: Borrowers hurt by the virus will be entitled to a six-month mortgage holiday, and those who have already suspended payments will be allowed to extend the arrangement by the same period without it being recorded on their credit file.
Existing wage programs had been due to end this weekend and be replaced by less generous assistance. The extension will help workers with Covid-19 symptoms who might have gone to work to stay at home, slowing the spread of the virus.
The furlough plan has protected 9.6 million jobs since it began in March, with the latest figures putting the cost to the government at 41.4 billion pounds ($54 billion).
The Treasury said employers will only have to cover some tax contributions for their furloughed workers, a more generous system than the current rules which see firms have to pay 20% of their wages. In addition, companies forced to close in England are to receive grants worth as much as 3,000 pounds per month.

UK raises Covid’s spread by subsidising diners
The UK’s Eat-Out-to-Help-Out program, hailed as an economic cure for its ailing restaurant industry, may have substantially worsened the pandemic, research showed.
The government spent 500 million pounds ($647 million) subsidising the cost of restaurant meals and other items by as much as 50% in August, even after evidence had emerged that Covid-19 could easily spread in hospitality settings, a study from the University of Warwick found.
The program succeeded in filling tables and getting cash into the hands of hospitality businesses, but may be responsible for 8% to 17% of all UK coronavirus cases during the summer, as well as asymptomatic infections that may have helped drive an explosive second wave of the pandemic, said Thiemo Fetzer, an associate professor of economics and a visiting fellow at the London School of Economics.
The program began on August 3 and ended on August 31, two months before Prime Minister Boris Johnson became Europe’s latest leader to retreat from a no-lockdown pledge. On Saturday, he ordered a one-month stay-at-home policy for all of England beginning November 5 to curb surging Covid-19 cases.
Restaurant visits more than doubled in the last week of the program, compared with the same period a year earlier, encouraged by a discount of as much as 10 pounds per person to eat out in tens of thousands of participating restaurants on Mondays, Tuesdays and Wednesdays, when patronage typically ebbs. Subsidies on almost 100 million meals valued at about 1 billion pounds were claimed during the program’s four-week period, preliminary data show. Fetzer estimated the cost to taxpayers at about 500 million pounds.
He found areas that had more participating restaurants saw a notable increase in the emergence of clusters of Covid-19 cases about a week after the program started, with patterns of movement corroborated by Google mobility data and aggregate data from restaurant booking sites. Wet weather appeared to deter diners, corresponding with a reduction in Covid-19 incidence.
The UK started to see an uptick in Covid-19 cases at the same time as the program was operating, said Toby Phillips, a public policy researcher at the University of Oxford.