The government has promised to do “whatever it takes” to shore up the economy and support businesses as the coronavirus crisis intensifies.
Speaking at a press conference this afternoon (17 March), chancellor Rishi Sunak said the UK government would give people and businesses “the tools you need to get through this”. And he promised support for “jobs, incomes and business”, as well as investment to help protect loved ones.
He described the budget and the £30bn promised to business last week as a “first stage” of the economic response. And he unveiled the next stage, while suggesting more would be necessary as the pandemic evolves.
“This struggle will not be overcome by isolated interventions but by a collective national effort,” he said. “This will be underpinned by government interventions in the economy on a scale that is unimaginable.
“This is not a time for ideology or orthodoxy. This is a time to be bold, a time to have courage.”
The package of measures includes £330bn in government-backed loans – equal to 15% of the UK’s GDP for any business that needs access to cash to pay rent, salaries or for stock. And, if demand is greater, the government will provide “as much capacity as required”.
This will take the form of two schemes – a lending facility with the Bank of England for larger firms and the extension of the business interruption loan scheme for small and medium-sized businesses, with loans available up to £5m and no interest due in the first six months.
The government also promised a “support package” specifically for airlines and airports. And there are plans to convene meetings for the most affected sectors to see how and where the government can support them.
For the hospitality, retail and leisure industries, the government promised that insurance companies would pay out if they have insurance that covers pandemics. For those that don’t, it is offering £25,000 in cash grants per business and extending its business rates holiday for 12 months.
For individuals, the government has asked mortgage lenders to offer a three-month payment holiday for those in financial difficulty. And has said it will work with trade unions to develop new forms of employment support to help protect jobs and incomes.
Sunak also promised the NHS would get “whatever resources it needs” to deal with the public health emergency.
“We have never faced an economic fight like this one, but we are well prepared and we will do whatever it takes,” said Sunak.
“The state is asking people to make considerable changes to their lives, therefore it is only right the state stand behind them as they make those changes and look after people through thick and thin.”
The support package has been broadly welcomed by the ad industry, particularly given the high proportion of small businesses in the sector.
Advertising Association CEO Stephen Woodford says: “We welcome the business support measures announced today that should help keep people employed and businesses functioning during this unprecedented period of economic and social disruption. We are also recognise the government’s ‘whatever it takes’ commitments to keep these measures under review and that more may still be needed to help the UK economy keep functioning.
“We are particularly conscious of the high proportion of SMEs in our industry and the intense pressure they are under to maintain service and retain staff. Measures such as the government-backed loans announced today are needed to help these firms manage their cashflow to survive and play their part in the recovery. They are vital to UK advertising’s capabilities which is a proven engine of the economy.”