Business relieved as Budget adds £50bn more of Covid-19 assistance

BUSINESSES today gave a cautious welcome to the the Chancellor’s Budget providing £50 billion in new support for companies struggling from Covid.

Companies have long criticised Rishi Sunak for failing to pledge to extend furlough and other schemes earlier.

Those delays have added to the difficulties companies in sectors like hospitality and retail have had in obtaining bank loans and overdraft extensions this year.

However, today he was saying that furlough, which had been due to end in April, was now going to be extended to June in its current form before being whittled down until the end of September, with businesses then paying all wages for staff not working.

Speaking to the Evening Standard before the Budget speech, Bank of England chief economist Andy Haldane said it was crucial not to withdraw fiscal stimulus too soon.

“We need to make sure enough private demands come on-stream before public demand is reduced to prevent too many jobs being lost and activity recovering fast enough.”

He added it was crucial to deploy public and private-sector spending into longer-term infrastructure projects. “Where we change the climate, as distinct from the weather, is by investing public and private. I hope that’s the conversation we end up having as this crisis abates over the next few months.”

The Chancellor was also given a boost by data on the service sector which showed it stabilising in February despite the lockdown dragging on.

On a score where anything below 50 is contraction, the Purchasing Managers Survey registered business activity of 49.5 in February, up from January’s eight month low of 39.5.

Meanwhile, there were cheers in most parts of the City for the Chancellor’s nod for last night’s Hill Review recommendations for sweeping reforms of rules on share listings.

Entrepreneurs looking to IPO in London would be able to float as little as 15% of their company and have dualclasses of shares enabling them to wield more power than outside shareholders. Founders would also be allowed a “golden share” giving them right to block takeovers.

The CEO of fast-growing AI group Blue Prism, who has threatened to decamp his shares from London to New York, welcomed the move, giving rise to speculation he will remain in London but move up from the junior Aim market to the main exchange.

Jason Kingdon said: “These changes are a welcome first step in making London more competitive. More than ever, technology companies have a choice of international venues when considering a listing and it is important the UK does all it can to ensure its markets are a competitive option.”

Some fund managers worry standards are slipping in London, meaning it could lose its Rolls-Royce status.

We change the climate … by investing public and private. I hope that’s the conversation over the next few months

Andy Haldane