UK unveils £330bn of government-backed loans as G7 governments continue response to Coronavirus

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UK unveils £330bn of government-backed loans as G7 governments continue response to Coronavirus

UK chancellor Rishi Sunak has unveiled a raft of financial measures to shore up businesses and families hit by the Coronavirus pandemic.

Speaking at a press conference at Downing Street, Sunak said the pandemic was a public health emergency but also an "economic emergency".

There would be government intervention of an "unimaginable" scale to support businesses hit by the effective-lock down.

"This is a time to be bold, a time for courage. The government will stand behind business small and large," he said.

UK government-backed loans amounting to £330bn will be made available from Monday.

Any business who needs access to cash will be able to access government-backed credit, Sunak said. He added that if the original £330bn on the table was insufficient he would go further. There would be as much capacity as required, he added.           

Sunak said there would be two main schemes. One for larger businesses through the Bank of England and the other for small and medium-sized businesses which is an extension of the loan scheme announced in the Budget last week. The scheme has been extended to £5m maximum loads with no interest due for the first six months.

Sunak said he would also be taking the legal powers in an upcoming coronavirus bill to exercise "whatever further financial support is necessary".

He also added the government would provide specific reassurance for airlines and airports both of which have been particularly hard hit by travel restrictions.

Leisure and retail

Pubs, clubs and theatres have all been asked to shut down leaving workers and firms in a precarious situation.

Sunak said for the smaller businesses in that sector who don't have insurance he says he will provide cash grants of £25,000 per business "to help bridge through this period".

He added businesses in the vulnerable sector would get a "business rates holiday".

The Chancellor also confirmed any business with insurance would be covered for nationwide measures implemented due to the coronavirus pandemic. "For those businesses that have a policy to cover pandemics the government's position is sufficient," Sunak said.

Mortgages

Sunak also vowed to better support people in financial trouble. He announced a three-month mortgage holiday for affected people. 

"I will go much further to support people's financial security in the coming days," he added.

Speaking at the second daily national briefing, Boris Johnson said he would act like a wartime government to protect the nation.

"The government must respond with a profound sense of urgency. This enemy can be deadly but it is also beatable and we know how to best it and we will beat it.

"We have the resolve and the resources to win the fight."

Earlier, chief scientific adviser Patrick Vallance said the government hopes to keep the death toll from coronavirus to 20,000 or lower. "Which is horrible," he admitted.

He added the government would unsure how long the effective lock down would be in place, saying it would be months rather than weeks.

 

This article was first published on Professional Adviser