Coronavirus: “Rescue package” of loans worth £330bn to protect UK businesses
Chancellor Rishi Sunak has promised to do “whatever it takes” to protect jobs
In the second of UK prime minister Boris Johnson’s daily Coronavirus press conferences, chancellor of the exchequer Rishi Sunak announced that government-backed loans worth £330bn will be made available to prevent businesses from going under.
The chancellor and prime minister said they will be acting like a ‘wartime government’, with Mr Sunak declaring that he will do ‘whatever it takes’ in order to protect jobs and ease the pandemic’s impact on the economy.
He went on to announce a cash grant of £25,000 per business – and confirmed that all businesses in the retail, leisure and hospitality sectors will be exempt from rates for a year.
He said, “Today I am making available an initial £330billion of guarantees equivalent to 15% of our GDP.
“That means that any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government backed loan or credit on attractive terms.
“And if demand is greater than the initial £330billion I am making available today, I will go further and provide as much capacity as required.
“I said whatever it takes and I meant it.”
The announcement of the rescue package follows the US government’s unveiling of its own $850bn plan to weather the Coronavirus crisis – which includes delaying tax bills, upping sick pay and supplying emergency food. The US government may even go as far as giving each American citizen a $1,000 cheque to keep the economy afloat.
Yesterday, panic surged through the hospitality sector when the prime minister urged the public to avoid frequenting pubs and restaurants as a ‘social distancing’ measure – a move which Kate Nicholls, chief executive of trade association Hospitality UK, said would be "catastrophic for businesses and jobs".
However, Mr Sunak said, “Following the changes in medical advice yesterday, there are concerns about the impact on pubs, clubs, theatres and other hospitality, leisure and retail venues.
“Let me confirm that for those businesses which do have a policy for insurance that covers pandemics, that the government's action is sufficient and will allow businesses to make an insurance claim against their policy.
“But many of those businesses don't have insurance so we will need to do more. I announced last week that businesses in the retail, hospitality and leisure sectors with a rateable value of less than £51,000 will pay no business rates this year.
“Today I can go further and provide those businesses in those sectors with an additional cash grant of up to £25,000 per business to help bridge through this period.
“Additionally I am also extending today the business rates holiday to all businesses in those sectors irrespective of their rateable value.
“That means every single shop, pub, theatre, music venue, restaurant and any other business in the retail, hospitality or leisure sector will pay no business rates whatsoever for twelve months.”