Concern over closures
Chancellor unveils £330bn package of business support
Rishi Sunak: whatever it takes
Chancellor Rishi Sunak tonight announced a £330 billion rescue package to keep the keep economy functioning through the coronavirus outbreak.
The funding is equivalent to 15% of GDP and will take the form of government guaranteed loans. Mr Sunak said that if more help was required he would provide more funds.
Saying he would do “whatever it takes’ he also extended the business rates holiday to every English business in the retail, hospitality and leisure sectors. He offered cash grants of up to £25,000 for smaller businesses in the hospitality sector which do not have insurance.
There will be £10,000 grants for the smallest businesses.
Scotland and the other devolved administrations will share £3.5 billion in extra funding and will also have to decide whether to follow the Chancellor’s announcement on business rates.
He said the level of government intervention was “on a scale unimaginable only a few weeks ago”.
Mortgage lenders will provide three-month mortgage holidays for those that need them.
In the coming days I will go much further to support people’s financial security– Rishi Sunak, Chancellor
Mr Sunak will extend the business loan scheme for medium and small companies from the £1m announced in his Budget last week to £5m with no interests due for the first six months.
He is also discussing a potential support package for airlines and airports.
“In the coming days I will go much further to support people’s financial security,” he added, saying he would be talking to trade unions and business groups to arrange new support.
Adam Marshall, director of the British Chambers of Commerce, was pleased with the scale of the package, but said it was now imperative to get cash “to the frontline” quickly to help businesses in need.
David Lonsdale, director of the Scottish Retail Consortium, said: “The steps to guarantee liquidity for businesses come at a time where cash reserves may become critically stretched.
We think it’s reasonable Scottish retailers should have the same business rates holidayDavid Lonsdale, SRC
“However, some of the measures will only directly affect English businesses. On Saturday the Scottish Government made a series of positive announcements on business rates which we backed. Things have moved on.
“With very significant new Barnett Consequential revenues coming to Scotland, we think it’s reasonable Scottish retailers should have the same business rates holiday for the next year as English stores.”
John McDonnell, Shadow Chancellor, said the package did not respond to immediate needs.
“People are being laid off today and losing their incomes. We are disappointed that this package does not address their concerns.
John McDonnell: strong safety net required (pic: Terry Murden)
“The further announcements laid out by the Chancellor lack the certainty required amidst growing public anxiety, and still do not go far enough in protecting workers, renters and those who are losing their jobs, or in fully supporting businesses at the scale necessary.
“In particular, the Chancellor’s claim that new forms of employment support will be developed does not appreciate the urgency and gravity of the situation. Workers and businesses need to know now that they will be supported, not in a few days’ time.
“Labour will continue to engage with the Government to ensure we have the proper scale of interventions required to secure proper funding of public services at the time of crisis, public control and oversight of those key services, a strong safety net, and the wellbeing of all.”
Kate Nicholls: catastrophic (pic: Terry Murden)
Scottish Economy Secretary Fiona Hyslop said: “We now need urgent clarification from the UK Government on what funding will come to Scotland so we can provide support to businesses as quickly as possible.”
Hospitality and leisure businesses had warned that new limits on social gathering will mean thousands of pubs, restaurants and theatres face closure without a massive bailout.
Mr Sunak will head up an economic and business response committee which is also expected to oversee support for the airline industry.
Companies across all sectors have warned of massive impact on their bottom line. Flutter, which owns betting company Paddy Power Betfair, expects a £90m to £110m hit while Transport for London said it may lose as much as £500m.
Hospitality businesses have expressed alarm at Mr Johnson’s call to “avoid pubs, clubs, theatres and other such social venues”.
Kate Nicholls, chief executive of trade body UK Hospitality, said Mr Johnson’s announcement had been “catastrophic”.
The Chancellor last week unveiled a £12bn package of support to try to counter the shock of the coronavirus outbreak.
It includes business rates relief which was later backed by the Scottish Finance Secretary Kate Forbes.
The Bank of England had already slashed interest rates from 0.75% to 0.25%.
Mr Johnson and Mr Sunak met the new Bank of England governor Andrew Bailey yesterday to discuss the UK’s fiscal and monetary response including action taken last week.
China has reported just one domestic case of coronavirus today but found 20 more cases imported from abroad, threatening to spoil its progress.
The single case in Wuhan will boost China’s view that it has ‘basically curbed’ the spread of the pathogen which emerged in the city last December.
But the country is now concerned about an influx of cases from abroad, with an average of 20,000 people flying into China every day.
In a reversal of roles, Beijing is now requiring almost all international arrivals to go into 14-day quarantine in designated hotels.