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Speaking to the House of Commons as restrictions are eased in England, Zahawi said that 'large crowded settings' such as nightclubs and events spaces would require proof of vaccination, but that the rules won't take effect until late September, when all over 18s have had the chance to receive both jabs.
He said: "By the end of September everyone aged 18 and over will have the chance to receive full vaccination and the additional two weeks for that protection to really take hold.
"So at that point we plan to make full vaccination a condition of entry to nightclubs and other venues where large crowds gather. Proof of a negative test will no longer be sufficient.
"Any decisions will of course be subject to parliamentary scrutiny and we will ensure that appropriate exemptions for those who have genuine medical reasons of why they can't get vaccinated, and I'm clear we will always look at the evidence available and do all we can to ensure people can continue to do the things they love."
Zahawi told Parliament that he wanted businesses to 'use the NHS Covid pass in the weeks ahead', and said the government will 'be keeping a close watch on how it is used by venues and reserve the right to mandate if necessary.'
Cases and hospitalisations continue to rise across England, despite the government pushing ahead with the plan to drop restrictions today.
Zahawi said: "Cases and hospitalisations have risen over the past week, as we predicted, and we know that these numbers will get worse before they get better.
"Although there's never a perfect time to take this step, making the move today gives us the best chance of success. We're cautiously easing restrictions when we have the natural firebreak of the school holidays and when the warmer weather gives us an advantage.
"So we will move forward with caution, drawing on the defences we have built as we set out in our five-point plan two weeks ago."
He told MPs: "Today marks an important milestone in our fight against this virus and we take step four on our road map.
"It is a long-awaited moment for the businesses who now can open their doors at long last, the happy couples who can have weddings without curbs on numbers and, of course, the people who can see more of their loved ones in care homes.
"Although we have made huge advances in our race between the vaccine and the virus, we are not at the finish line yet, instead we are entering what I believe to be the next stage, a stage where we continue with caution while doing what it takes to manage the risk of this virus which is still with us and still poses a threat."
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