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Boris Johnson has delayed June 21's so-called 'Freedom Day' by four weeks.
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The last stage in his 'roadmap' out of lockdown was set to happen next Monday but has been pushed back due to spiralling cases of the variant first detected in India, now codenamed Delta.
Weddings and wakes will be allowed to go ahead with more than 30 guests as long as social distancing is in place as will some test events like Euro 2020 games.
The Prime Minister now faces a Conservative backbench rebellion after announcing restrictions will now be lifted on July 19.
He addressed the nation from Downing Street 6pm, accompanied by England’s chief medical officer Professor Chris Whitty and the government’s chief scientific adviser Sir Patrick Vallance.
It's hoped by putting easing on hold more people in the most at risk categories can receive their second vaccine dose which will limit hospitalisations.
Read more: New vaccine timetable as easing pushed back
Cases are increasing by as much as 100% a week in some areas, while hospital admissions are going up by between 50% and 61%.
"Even if the vaccine programme is weakening the link between cases and admissions it is not severed," added Mr Johnson.
He added that deaths and ICU admissions were also increasing at a slower rate but that they were still going up and that without a delay in easing restrictions an exponential rise was likely.
"There is a real possibility [without the delay] the virus would outrun the vaccine," he said, while committing to a two-week assessment, meaning technically restrictions could be lifted before July 19 if numbers fall, although he admitted earlier easing was "unlikely".
"It is unmistakably clear that vaccines are working," added Mr Johnson but said now is the time to "ease off the accelerator."
Read more: What does delay mean for restrictions?
By delaying easing it is hoped all adults in the UK can receive at least one jab by July 19 while two thirds of over 18s and all over 50s will have had both doses.
Mr Johnson said he is "confidant" further delays will not be needed.
The announcement means that limits on numbers for sports events, pubs and cinemas remain in place, nightclubs will stay closed and people will be encouraged to keep up social distancing and working from home.
The move has been met with fury by some Tory MPs, with a vote this month expected to lead to a possible Conservative backbench rebellion.
Health minister Edward Argar said the delay means another 10 million second coronavirus vaccine doses could be given across the UK.
He told Sky News that while the number of people in hospital has been “creeping up a bit”, vaccination meant “we are seeing that severing of the link between the disease and hospitalisations and death.”
Mr Argar added: “I think that on that basis, everyone will recognise that there comes a point where we do have to live with this disease and recognise that you cannot go for a zero Covid approach, you have to live with it, and vaccination is the key to that.
“So I think once we have got those second doses in people’s arms, once we have got that level of protection up to around that 81%, then I think people will be more comfortable with it.”
But Conservative MP Peter Bone disapproved, saying he “can’t see the evidence why we should be postponing our freedom” and there should only be restrictions “if there is a very clear danger to society”.
Asked if he would vote against a delay in Parliament, he earlier told BBC Radio 4’s Today programme: “What I would do is listen to what the Prime Minister says, listen to the arguments, and if I’m not convinced that these restrictions are necessary then I would of course vote against it and I hope every member of the House of Commons will listen to the argument and make their minds up.”
Polling by Opinium of 2,000 adults suggested the majority of the public backed a delay before today, with 54% in favour and just 37% against.
It comes after scientists spent the weekend defending a delay, saying that the rapid spread of Delta risks a substantial third wave of infection.
Linda Bauld, professor of public health at the University of Edinburgh, said that any delay to the plan for easing was “proportionate” to prevent further lockdowns.
She told LBC: “We need to buy some more time to have more people receive a vaccine.
“We’ve just got about half of people with a second dose and we know that in the face of this Delta variant, that second dose is really important to provide the protection that is needed to avoid more people going into hospital.”
She added: “If we can provide more protection to the population through vaccines, then it means that we won’t have to take a step back again… So this is why an additional four weeks, which is what we expect will be announced, I think is proportionate.”
Meanwhile, Professor Anthony Harnden, deputy chairman of the Joint Committee on Vaccination and Immunisation (JCVI), told the Today programme that experts were “still very worried about the small numbers percentage wise, but probably large numbers of people that are still unvaccinated in the higher risk groups”.
He added that the JCVI was “looking carefully at what the Scottish Government has done” with regards to urging over-40s to have their second dose at eight weeks, adding that “it seems to be a sensible strategy, and we will advise the Government accordingly”.
The move to delay lockdown comes as a huge setback to many businesses – particularly in the hospitality sector – which had pinned their hopes on a full summer reopening to recoup some of the losses of the past year.
Westminster City Council leader Rachael Robathan warned of the “devastating” effects on London’s West End if the end of lockdown is delayed.
She said: “Central London cannot afford any slippage in the fight to revive our economy.
“Footfall numbers are still down, office workers are staying away in significant numbers and central areas of the city are hurting.
“That makes the case for action now even more compelling.”
Anthony Costello, professor of global health and sustainable development at University College London, suggested that if the Test and Trace system had had an “army” of contact tracers then the government would not have had to take action.
He told Sky News: “The question is, why are we in this position? The NHS has done a fantastic job on vaccines but why has there been such poor investment in public health infection control to supress these outbreaks?
“Patrick Vallance got it right in February when he said that as the numbers come down it is essential that we do find, test, trace and isolate.
“And our failure to do that three times in the past has led to three national lockdowns and 150,000 deaths.
“I’m quite angry about this. Where is the £38 billion going into Test and Trace for local public health? Why are the test results so slow? Why haven’t we got (an) adequate army of contact tracers? We’re in a war, we should have an army on the ground.”
Prof Costello added that there has been a “failure to invest in isolation”, adding: “I feel that, if we had the public health measures to complement the vaccination programme, we would be in a much safer place, we would have our economy able to open now and we wouldn’t have all of these pressures on livelihoods.”
Over the weekend, former minister Mark Harper, the chairman of the Covid Recovery Group (CRG) of Tory MPs, said any postponement would be a “political choice”.
He warned restrictions could carry on through the autumn and into the winter as other respiratory infections picked up.
“Variants and mutations will appear for the rest of time,” he said.
“We have to learn to live with it.
“If our very effective vaccines cannot deliver us freedom from restrictions, then nothing ever will.”
Analysis by political editor Paul Francis
He evaded being cast as the Grinch who stole Christmas but in postponing the date on which all coronavirus restrictions are supposed to be lifted risks being cast as the man who stole Summer.
In what was the worst kept secret of the day, Prime Minister Boris Johnson announced from his special podium that 'Freedom Day' had been postponed, leaving organisers of street parties wondering where to find any space to store rickety old trestle tables and Union Jack table cloths.
Could he find anything to sugar the pill? Not really and the promise of a review half-way-through is unlikely to send people out on the streets joyously dancing.
What was telling was his acknowledgement that the virus is never going to be completely defeated; his own demeanour suggesting that he’d finally come to terms with what top scientists have been saying for months.
Meanwhile, snap polling seems to indicate that the public tends, in the main, to support the idea of a postponement.
Of course it is bad news for some - particularly the hospitality sector which has, to be frank, had nothing but bad news since the pandemic gripped the country.
The throwing off of the Covid shackles has not disappeared but we may have - like the PM - to reconcile ourselves to the fact that the battle won’t be over on a random day in July. Just as it would not have been in June.