By Jack Denton
U.K. Prime Minister Boris Johnson introduced new restrictions aimed at stemming the spread of the coronavirus outbreaks on Tuesday, including 10 p.m. curfews for pubs and restaurants as well as stricter measures on wearing face masks.
The new rules, which are set to apply for six months, include hefty fines and the threat of closure for businesses that don’t meet COVID-secure guidelines. Johnson also said that everyone able to work from home should do so.
Johnson announced the measures in a speech to Parliament on Tuesday afternoon, ahead of a planned television address to the nation in the evening. The government’s decision comes as coronavirus cases continue to rise in the U.K., with 4,926 new cases recorded on Tuesday — the highest daily figure since early May.
“This is by no means a return to the full lockdown of March,” Johnson said in announcing the new restrictions, which he said are being implemented to prevent a rise in cases and “shelter the economy from the far sterner and more costly measures” that would be required if the virus continues to spread.
However, Johnson didn’t rule out further measures should the new rules not suffice. “If all these actions fail we reserve the right to use greater fire power with significantly greater restrictions,” he said.
Some regions of the U.K. have stricter rules, with more than 13 million people were living under separate local restrictions.
The new rules include making face masks necessary for all restaurant and bar staff, retail workers, and people in taxis, with fines for individuals failing to wear a mask rising to £200. Businesses failing to abide by COVID-secure guidelines now face fines of £10,000 and could be closed, the Prime Minister said.
Johnson also scrapped the plan to begin reopening sports venues on Oct. 1. “We have to acknowledge that the spread of the virus is now affecting our ability to reopen business conferences, exhibitions at large sporting events,” he said.
Pubs and restaurants will remain open but must now offer table service only, and close by 10 p.m.
Johnson’s comments brought a rally to London stocks, with pub and restaurant companies among those buoyed on the news that the country wouldn’t be facing a second full-blown lockdown.
Shares in Mitchells & Butlers /zigman2/quotes/209008939/delayed UK:MAB -1.23% rose more than 8% and Marston’s Brewery /zigman2/quotes/203821737/delayed UK:MARS -1.74% stock rose 5.4%, with J D Wetherspoon /zigman2/quotes/209658419/delayed UK:JDW +4.70% , Restaurant Group /zigman2/quotes/207518837/delayed UK:RTN +0.54% , and City Pub Group /zigman2/quotes/210522456/delayed UK:CPC 0.00% joining the collection of gainers for the day. Stock in all five of these companies plunged on Monday amid initial fears of a second national lockdown.
“The London market gained ground in the wake of the update as the rules weren’t as tough as some originally feared,” said David Madden, an analyst at CMC Markets. “The restrictions have more to do with social distancing and health precautions, and the economic impact is unlikely to be as bad as initially thought.”
The jump in pub and restaurant shares were part of a larger rebound in London stocks on Tuesday, with Mitchells & Butlers part of the charge leading the FTSE 250 index into the green.
While markets reacted positively to the news, Milan Pandya, a partner at tax and advisory firm Blick Rothenberg, said that the restrictions will hit businesses in the hospitality, retail, and leisure sectors hard.
“Encouraging people to work from home and stay out of the town centers will be a final hammer blow rendering their business unviable. For them working from home is simply not an option,” Pandya said, adding that “it is imperative that the support measures introduced by the Chancellor are also extended, otherwise businesses will suffer and unemployment will rise.”
Opposition lawmakers put questions to Johnson in Parliament over support for workers and businesses. The expansive furlough program, in which the government subsidized a portion of employees’ wages to keep workers on the payroll, is ending next month.