£90billion ...the eye-watering cost of propping up jobs and businesses
THE soaring cost to taxpayers of propping up firms and jobs during the coronavirus crisis has now surged past £90billion.
New figures released by the Treasury yesterday showed more than £50billion has been handed to businesses in loans.
These include almost 1.4 million “bounce back” capital injections at a cost of £34billion.
Figures also showed that nearly 120,000 Coronavirus Business Interruption Loans have now been approved, providing £13billion worth of funding.
The data revealed 887 applications worth more than £3.2billion have now been approved for larger firms using the Government’s Coronavirus Large Business Interruption Loan Scheme (CLBILS).
A total of 537 convertible loans have been awarded through the Future Fund, totalling £534million.
Confidence
Meanwhile, 9.6 million jobs have been furloughed as firms have claimed £33.8billion to keep staff in employment. And some 2.7 million self-employed people have claimed grants worth £7.8billion.
Responding to the updates, Federation of Small Businesses (FSB) national chairman Mike Cherry said: “Nine in 10 people who moved from unemployment back into the workplace after the financial crash did so through a small business or self-employment.
“Many were striking out on their own for the first time, so support for new businesses over the months ahead – especially through the Start-up Loans Programme and New Enterprise Allowance – will be integral to recovery.
“Small firms and their staff need to be confident the infrastructure is there to tackle this virus.
“We were promised a worldbeating Test and Trace system, and such a system is integral to getting businesses firing on all cylinders again. While most have benefited from direct government support, many have not. Thousands of directors and newly self-employed people have been left with no help for many months now.
“As we look to the autumn, the Government needs to think carefully about how it will help those who have been left behind.
“The Bounce Back Loan Scheme has provided critical cash injections for huge swathes of the small
business community. Firms now need a guarantee they won’t have to start making repayments until they’re making a profit.
“Such a pledge would give them the confidence to invest, recruit and expand today, rather than hoard cash for fear of what’s coming down the line.”
As furlough unwinds and comes to an end in October, experts are worried that the scheme could be masking a big drop in employment that is yet to come. Chancellor Rishi Sunak has promised that companies who bring back staff from furlough will get £1,000 per head from the Treasury if they keep the employee on their books until the end of January at the latest.
Regardless, there is predicted to be a spike in unemployment.
The Organisation for Economic Co-operation and Development has forecast that up to 14.8 per cent of the workforce could be unemployed if a second wave of Covid-19 hits Britain.
The latest data release came the day after many Britons were meant to return to their workplaces after official Government guidance was altered to dissuade people from working from home.
But many offices, factories and other workplaces across the country have remained closed.
Last week the Office for National Statistics (ONS) said almost a fifth of workers, an estimated six million people, had remained on furlough, despite Government attempts to bring the economy back to life.
It said roughly one in three furloughed workers in Britain went back to their jobs in the first two weeks of July.
Many had returned as the hospitality industry began to reopen to the public after lockdown.
However, the number of Whitehall civil servants returning to their offices has plummeted further, despite the pleas from Boris Johnson.
The largest drop was at the 800,000sqft Home Office HQ, where only 94 staff arrived – 50 fewer than last-Wednesday.
Meanwhile, only one per cent of the Department for Education’s London workforce were seen entering its seven-floor block, that held up to 2,000 people before lockdown.
The two dozen observed on Monday was down on the 34 seen last Thursday. Offices are understood to be running at a reduced capacity of 30 per cent.