The Chancellor, Rishi Sunak, has announced unprecedented support for business and workers to protect against the economic emergency caused by the coronavirus.
This includes unlimited loans and guarantees to support firms and help them manage cash flows through this period, with the Chancellor confirming he will make available an initial £330 billion of guarantees – equivalent to 15 per cent of UK GDP.
“The interventions I am setting out today will help support businesses of all sizes – so they can continue operating during these unprecedented times,” Mr Sunak said.
At last week’s budget, the Chancellor provided £30 billion of support to the economy to deal with the crisis by investing in public services, increasing support for vulnerable people and providing business with tax relief and loans.
However, having reviewed the situation further, Mr Sunak has announced several new measures including an increase in the amount businesses can borrow through the Coronavirus Business Interruption Loan Scheme from £1.2 million to £5 million. He explained that businesses can access the first six months of that finance interest free, as the government will cover that cost.
Additionally, Mr Sunak has pledged £20 billion of business rates support and grant funding to help the most affected firms manage their cash flow through this period by:
- giving all retail, hospitality and leisure businesses in England a 100 per cent business rates holiday for the next 12 months;
- increasing grants to small businesses eligible for Small Business Rate Relief from £3,000 to £10,000; and
- providing further £25,000 grants to retail, hospitality and leisure businesses operating from smaller premises, with a rateable value over £15,000 and below £51,000.
In regard to large firms, Mr Sunak outlined support for their liquidity, with a major new scheme being launched by the Bank of England to help them bridge coronavirus disruption to their cash flows through loans.
Furthermore, mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of COVID-19, including through payment holidays of up to three months.
“This will give people the necessary time to recover and ensure they do not have to pay a penny towards their mortgage in the interim,” Mr Sunak said.
He confirmed that the government advice to avoid pubs, clubs and theatres etc is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover for pandemics in place.
Mr Sunak also advised that the government will be providing support for the food industry by relaxing planning regulations to allow pubs and restaurants to start providing takeaways without a planning application.
The action announced on Tuesday means that over £3.5 billion in additional funding will be provided to the devolved administrations for support to businesses in Scotland, Wales and Northern Ireland.