High Street stops and pubs were handed a £20billion ‘lifeline’ by the Chancellor today as he vowed to help small businesses fight off the ravages of coronavirus.
As businesses reeled from the effect of consumers being told to stay at home and avoid social contact he unveiled a package of measures to keep businesses afloat and workers in jobs.
Among the measures he unveiled were government-backed loans of up up to £5million – including six months interest-free, and a year-long business rate holiday for all firms, irrespective of size.
Additionally he announced emergency cash grants of up to £25,000 per firm for businesses with a ratable value below £51,000.
And for the smallest going concerns, cash grants of £3,000 announced at the Budget last week have been increased to £10,000 – a move that will affect 700,000 traders.
British Chambers of Commerce director general Dr Adam Marshall said: ‘These measures could be a lifeline for many businesses across the UK who are now experiencing wholesale disruption as a result of the pandemic.
‘The key to the success of these measures is whether they get cash to businesses on the front line, fast.
‘Companies need practical details, at great speed, for these interventions to have the desired impact, and to reassure firms across the UK.’
As businesses reeled from the effect of consumers being told to stay at home and avoid social contact Mr Sunak (left) unveiled a package of measures to keep businesses afloat
Among the measures he unveiled were government-backed loans of up up to £5million – including six months interest-free, and a year-long business rate holiday for all firms, irrespective of size
And Helen Dickinson, chief executive of the British Retail Consortium, congratulated the Chancellor ‘for listening carefully to the concerns of retailers’, saying he had delivered ‘a big, bold package of measures that will be a huge cashflow boost and will improve confidence for those affected’.
She added: ‘Business rates are a huge burden for retailers at the best of times. The business rates holiday, together with the announcement of a loan package, represent a vital shot in the arm for a sector facing enormous uncertainty.
‘We still need to see the details and make sure that retailers can access cash with the minimum of delay, but it is a welcome and necessary first step to protect jobs.
‘The Chancellor has said he will do whatever is necessary to support business and he has shown that he can respond to the changing need of retailers.
‘While these are the right decisions today, the Government may have to take further steps as the full effects of the situation unfold.’
Addressing the nation at 10 Downing Street, Mr Sunak said: ‘Taken together, on top of the unlimited lending capacity I have already announced, this is a package of tax cuts and grants, in this financial year, worth more than £20billion.’
The lockdown announced by Boris Johnson last night has sparked panic among businesses and fears millions could be made unemployed, while the self-employed and those in the ‘gig’ economy could also struggle to work.
Venue owners have vented fury at the PM for not formally ordering them to close, saying that means they cannot claim on insurance.
However Mr Sunak sought to allay that fear, saying: ‘Following the changed medical advice yesterday, there are concerns about the impact on pubs, clubs, theatres and other hospitality, leisure and retail venues.
‘Let me confirm that, for those businesses which do have a policy that covers pandemics, the government’s action is sufficient and will allow businesses to make an insurance claim against their policy.’
Paul Johnson, director of the Institute for Fiscal Studies think tank, said that it was likely the Chancellor would have to ‘come back with more’.
‘The biggest injection will come through guaranteed loans to businesses,;’ he said.
‘These will be welcome. It is worth noting though that as loans that need to be paid back, the long term value and viability of businesses taking up the loans will be reduced.
‘This could still leave some which would otherwise have been viable for the long run no longer viable without refinancing.
‘The long run costs of these loans for the public finances is highly uncertain.’
Shadow chancellor John McDonnell said the Government measures to support the economy through the coronavirus outbreak did not go far enough.
‘People are being laid off today and losing their incomes. We are disappointed that this package does not address their concerns,’ he said.
‘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.’
The huge intervention comes after the US put forward its own $850billion plan to weather the storm ravaging the globe. offering to delay tax bills, bolster sick pay and supply emergency food.
Every American could also be handed a $1,000 cheque to help keep the economy moving.