rishi’s £350bn kiss of life
Three-month mortgage holiday if you’ve got virus ++ Business loans up to £5m ++ SNP pledges to hand ‘every penny’ to Scots firms
Rishi sunak unveiled an astonishing £350billion rescue package yesterday to try to stave off economic disaster.
With coronavirus threatening to wipe out entire industries, struggling firms will be able to tap low-interest loans from a new fund worth £330billion.
Another £20billion will pay for a business rates holiday and cash handouts to smaller companies. Business interruption loans will be increased to £5million – up from the £1.2million announced at last week’s Budget – with no interest due for six months.
Banks have agreed to offer three-month mortgage holidays for those whose finances are hit by the pandemic. And a law change will allow pubs and restaurants to convert into takeaways without planning consent.
The Chancellor said more measures were to come, including direct ‘employment support’ for jobs and incomes and rent holidays for tenants. Mr Sunak appealed for employers to
delay lay-offs until they have seen the full package of support, saying: ‘We will help them get through this. They don’t need to rush these decisions.’
He defended the unprecedented spending, saying it was ‘not a time for ideology and orthodoxy, this is a time to be bold, a time for courage’.
He added: ‘Many businesses are frankly struggling right now. They haven’t done anything wrong but are watching their finances fall off a cliff.’
The astonishing package came at a Downing Street press conference where Boris Johnson vowed that his administration ‘must and will act with a profound sense of urgency’ and would be like a ‘wartime government’.
Despite a business backlash over the dramatic ‘social distancing’ measures announced just 24 hours before, the Prime Minister warned that Covid-19 was so dangerous that without drastic action it would ‘overwhelm the NHS’.
As the UK virus death toll rose by 14 to 71 and total cases hit 1,950:
The Government’s chief scientist warned the virus has already infected up to 55,000 patients in the UK as Scotland suffered its second death from Covid-19;
Scotland’s NHS staff were put on an ‘emergency footing’ for at least three months as non-urgent elective operations are cancelled;
A desperate race against time began to manufacture vital medical ventilators;
The Government’s chief scientific adviser revealed that a vaccine for coronavirus is set to be tested in the UK from next month;
The First Minister said a blanket closures of schools could be announced within days;
Women were advised not to have IVF while the outbreak continues, while people with coronavirus symptoms were told to take ibuprofen;
Social distancing guidance was clarified for those over 70 and they would still be allowed to leave the house as long as they are healthy;
The pandemic rocked the entertainment industry, causing the cancellation of major events and leaving the future of others in doubt;
Churches in Scotland cancelled services until further notice in an unprecedented interruption to the nation’s religious life;
Donald Trump unveiled a huge US economic bailout package but sparked a diplomatic row with Beijing after labelling the epidemic a ‘Chinese virus’;
The Foreign Secretary told British travellers to avoid leaving the country for at least the next month;
It was revealed that the Queen will base herself at Windsor Castle from the end of this week during the coronavirus threat – leaving her husband, Prince Philip, at Sandringham;
Supermarkets said they would hire thousands of staff to boost home deliveries and will set up a ‘food parcel’ service for the elderly;
Brexit trade talks due to start today were postponed because of the coronavirus, amid growing speculation that the transition period may be extended beyond the end of the year;
Communities across Scotland rallied round to help those in need. On Monday night, Mr
Johnson urged the public to work from home where possible and avoid going to pubs, cinemas restaurants and other social activities.
The move prompted warnings that the hospitality sector would collapse. The airline industry, which is set to benefit from a separate deal later this week, is also teetering on the brink of disaster.
Speaking ahead of Mr Sunak’s announcement, the former Treasury minister Jim O’Neill warned that hundreds of thousands of jobs were at immediate risk without government action.
The Prime Minister last night said the scale of the financial package reflected the huge challenge the virus now posed to the economy as well as the health system.
Mr Johnson said ministers would have to ‘act like any wartime government and do whatnot
‘Desperate race against time’
ever it takes to support our economy’.
He added: ‘We must support millions of businesses and tens of millions of individuals and families through the coming months.’
The PM warned the ‘extreme’ measures designed to slow the spread of the virus ‘may have to go further and faster to protect lives and the NHS’.
Under the terms of the new financial package, large firms will be able to apply to the
Bank of England for loans at ‘below market rates’.
Smaller firms will be eligible for government-backed loans from their banks.
In both cases, the Government will fund all interest payments for the first six months.
All firms in the hospitality sector will benefit from a yearlong business rates holiday.
Firms in the sector with a rateable value of less than £51,000 will be given cash grants worth up to £25,000.
Another 700,000 small firms across the economy will get grants worth £10,000 each to help tide them over.
Mr Sunak said more support was coming to help households, including ‘new forms of income support to protect people’s jobs and incomes through this period.’
Trade body UK Hospitality, which warned on Monday of a ‘catastrophic’ impact on jobs and business, last night gave the Chancellor’s plans a cautious welcome.
Chief executive Kate Nicholls said Mr Sunak had ‘clearly been listening’, adding: ‘The focus now has to be on making sure that hospitality businesses can draw down the support loans and other funds while they still have businesses to operate.’
Tim Martin, founder of pub chain Wetherspoon, said he welcomed ‘what sounds like a wholehearted attempt to help business and the country.’
However he warned: ‘It’s very expensive and loans will have to be paid back.’
The British Beer and Pub Association called for specific measures within 24 hours.
Comment – Page 22
‘New forms of income support’