Chancellor Rishi Sunak has laid out a dramatic £330 billion finance plan to keep businesses afloat as they battle the coronavirus pandemic.
The move – announced 24 hours after Boris Johnson asked people to stay at home and avoid pubs and clubs – is designed to avert business failures and save jobs across sectors damaged by the outbreak.
He said: “Any business which needs access to cash to pay their rent, salaries, suppliers or purchase stock, will be able to access a government-backed loan on attractive terms,” the chancellor said in today’s government press conference, the daily briefing which has been instituted due to the international coronavirus crisis.
“And if demand is greater than the initial £330bn I am making available today, I will go further and provide as much capacity as required.”
He detailed that the support will be delivered through two main schemes. For larger firms, a lending facility has been agreed with the governor of the Bank of England to provide what Sunak described as “low cost, easily accessible commercial paper”.
While for small and medium sized businesses, the government is extending the business interruption loan scheme previously announced in the budget to prove loans of up to £5m, increased from £1.2m, with no interest due for the first 6 months.
Hospitality remains one of the sectors hardest hit, with the prime minister’s request yesterday – which stopped short of actually ordering people to keep out of restaurants – leaving the industry enraged due to the insurance implications.
For those sector businesses who have an insurance policy that covers pandemics, Sunak believes that the government’s action is sufficient and will allow businesses to make an insurance claim against their policies.
However, for hospitality businesses which don’t have insurance, the chancellor detailed: “I announced last week that for businesses in the retail, hospitality and leisure sectors with a rateable value of less than £51,000, they 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 them through this period.
“Additionally, I am also extending the business rates holiday in those sectors to all businesses, irrespective of their rateable value. That means every single shop, pub, theatre, music venue and restaurant in the retail and hospitality sector will pay no business rates whatsoever for 12 months. And if they have a rateable value of less than £51,000 they can also get a cash grant as well.”
The measures will be introduced by the start of next week, with more support to be announced later this week, he said.