U.K. Steps In to Save Railways as Johnson Warns of Lockdown

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(Bloomberg) --

The U.K. stepped in to shore up the country’s rail operators after Prime Minister Boris Johnson warned Britons they face “tougher measures” to fight the coronavirus outbreak, including a potential lockdown if they continue to ignore calls to stop social gatherings.

The Department for Transport said on Monday it will take on the revenue and cost risk for the nation’s rail services for six months, with operators continuing to manage day-to-day services for a “a small, predetermined management fee.”

With the U.K.’s weekend newspapers full of reports about people meeting in parks and traveling to coastal towns, the prime minister said his government may be forced to take more stringent methods to enforce social distancing, and will consider its options over the next 24 hours. The U.K. death toll surged to 281 on Sunday from 177 on Friday, with total cases rising above 5,500.

“We need to think about the kinds of measures that we’ve seen elsewhere, other countries that have been forced to bring in restrictions on people’s movements altogether,” Johnson said at a televised news conference on Sunday. “Some people are not making it easy for us because they are congregating in a way that helps spread the disease.”

‘Nothing Off Table’

Johnson’s spokesman, James Slack, told reporters on Monday that the government is studying data on social interactions and “won’t hesitate to do so and do so quickly” if it decides further steps are necessary. A major advertisement campaign on social distancing is also planned, he said.

Health Secretary Matt Hancock told the BBC “nothing is off the table” when it comes to tackling the outbreak, and said the police had been given powers to shut pubs, bars and restaurants if they weren’t already heeding the government instruction to close.

This week, the government will seek to fast-track emergency legislation through Parliament, giving it more power to close meeting places and detain people who are a danger to public health. The measures reflect the growing sense of crisis, with Johnson warning on Saturday that the National Health Service is as little as two weeks away from being swamped.

In the face of a potential cross-party revolt over the legislation, which as currently written would last for two years, the government said it will seek to amend its own bill to include a vote for Parliament to renew the measures every six months.

U.K. Steps In to Save Railways as Johnson Warns of Lockdown

The government has faced criticism over its handling of the crisis, with medical experts demanding more urgent action. Johnson responded by implementing a series of tougher measures last week, with schools and leisure facilities ordered to close, and people instructed to stay indoors.

The latest move is to tell 1.5 million people with severe underlying health issues to self-isolate for at least three months. The government pledged to use local councils and even military personnel to ensure they get the food and medicines they need.

Vulnerable Railways

The action to shore up the railways adds to three packages of emergency assistance to businesses and workers announced in the past two weeks by Chancellor of the Exchequer Rishi Sunak. Rail services are being reduced from Monday, with the government calling for a halt to non-essential travel including trips to second homes.

Britain is acting to protect a privatized rail industry that’s uniquely vulnerable in Europe, where most train operators have the cushion of being state owned.

The U.K. sector is doubly exposed because many franchises are run by those same continental companies -- Deutsche Bahn AG, Abellio of the Netherlands and Trenitalia among them -- which are grappling with their own national concerns as the coronavirus spreads.

Some of the U.K.’s support to business became available on Monday, with the Treasury opening its Coronavirus Business Interruption Loan Scheme to applications from small and medium-sized companies. The Bank of England’s Covid Corporate Financing Facility has also opened, allowing firms to raise working capital by selling short-term corporate debt.

International Pressure

Until Sunday, the prime minister had publicly resisted calls to emulate countries including Italy, France and Spain in implementing tight restrictions on citizens’ movement.

According to the French newspaper Liberation, President Emmanuel Macron called Johnson on Friday morning to tell him that France would close its borders to travelers from Britain if Johnson didn’t take more steps to stop the spread of the coronavirus -- hours before the British prime minister ordered pubs, restaurants and leisure centers to close.

A U.K. official said the decision was made purely on scientific advice and was always in the government’s road map for dealing with the outbreak.

But, with the disease spreading rapidly and the death toll rising, Johnson struck an at times exasperated tone on Sunday as he laid out the option of a stricter social distancing regime. He made clear it was not his preference.

“It’s so important that that pleasure and that ability is preserved, but it can only really be preserved if everybody acts responsibly,” Johnson said of curtailing people’s right to go outside if they don’t keep to social distancing rules. “If we can’t do that then, yes, I’m afraid we’re going to have to bring forward tougher measures.”

©2020 Bloomberg L.P.

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