Treasury will extend support for businesses and potentially reintroduce furlough if a lockdown is mandated

The Treasury is prepared to extend business support and possibly reintroduce a furlough scheme of some description should another lockdown be necessary to tackle the spread of the Omicron variant of coronavirus, according to The Times.

Senior government sources told the publication that Rishi Sunak will increase the business support package again if pubs, bars and restaurants are asked to close - even though it is still too early to say whether such measures will be needed.

“If we do get to a position where we are telling businesses that they have to shut their doors then it is not unreasonable for them to expect additional government support," a source said.

"That could mean a return to the furlough scheme but depending on what, if any, further restrictions are necessary there might be other ways of providing that support.”

The news comes following calls from the GMB Union, the Night Time Industries Association (NTIA) and UKHospitality for support in the face of new 'Plan B' restrictions, as they warned that livelihoods are being put at risk by the lack of support in the face of mass cancellations.

UKHospitality issued a statement in which it said that anything short of full business rates relief, grants, rent protection and extended VAT reduction "would prove catastrophic" given the massive loss of footfall in hospitality caused by the new rules.

'We need a clear plan'

Meanwhile, the NTIA deplored the Plan B restrictions, including vaccine passports for large events and work from home guidance, stating that they would have a"devastating impact" on demand.

The organisation's CEO, Michael Kill, also called into question the motivation for holding the speech when the Prime Minister chose to do so given the fall-out faced by government from accusations that a Christmas party was held in Downing Street at the height of restrictions last year.

"Nightclubs and bars must not be thrown under the bus for the prime minister to save his own skin," he said.

National Health Director for the GBM national trade union, Dan Shears, said that should the restrictions lead to workers being laid off, that the organisation "supports reintroduction of the furlough scheme, or something very like it."

"We need a clear plan from the government around this so workers and businesses know what's coming," he added.

"As during previous waves of Covid, GMB will be calling for full sick pay for all workers who suffer Covid-related absence, so no one has to make a choice between the greater good and feeding their families."

The £400bn package

Defending the roll-out of the government's controversial - even in its own ranks - 'Plan B', on which  Parliament is due to vote later today, a Treasury spokesperson said: “We’re taking the action set out in our Winter Plan and are acting early to help control the virus’s spread - while avoiding unduly damaging economic and social restrictions.

"Our £400bn Covid support package will continue to help businesses into spring next year and we will continue to respond proportionately to the changing path of the virus, as we have done since the start of the pandemic.”