Up to £330bn in government-backed loans have been pledged to support UK businesses through the coronavirus crisis as part of a huge economic stimulus package announced by the Chancellor.
Massively escalating emergency financial measures revealed in last week’s Budget – where £30bn in stimulus was pledged to help tackle the economic impact of Covid-19 – Chancellor Rishi Sunak vowed the Treasury would do “whatever it takes” to support individuals and firms.
Sunak also revealed homeowners in financial difficulty due to the coronavirus will be able to take a three-month holiday from mortgage payments.
For businesses, he said the “unprecedented package” of loan guarantees – equivalent to 15% of GDP – could go further if demand is greater.
Sunak added: “That means any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms.
“And if demand is greater than the initial £330bn I’m making available today, I will go further and provide as much capacity as required.
“I said whatever it takes, and I meant it.”
The Chancellor, speaking at the daily coronavirus press conference alongside Prime Minister Boris Johnson, also said he was extending the business rates holiday to all English businesses in the hospitality sector and funding grants of up to £25,000 for smaller businesses.
Business rates and business support in general are devolved in Scotland but finance secretary Kate Forbes pledged similar levels of relief in the wake of the Budget last week.
Nicola Sturgeon confirmed that the Scottish Government would “pass every penny of consequential funding” from the Chancellor’s measures onto businesses in Scotland.
And responding to Sunak’s latest measures, Forbes said: “A welcome announcement by the Chancellor.
“I am committed to ensuring that funding allocated to Scotland is used to support people and businesses facing the financial and economic impact of Covid-19.”
The Chancellor indicated the latest injection of investment would see an extra £3.5bn go to the devolved nations for business support.
Speaking in Downing Street, the Chancellor said: “Every single shop, pub, theatre, music venue, restaurant … will pay no business rates for 12 months,” he said.
Sunak continued: “To support liquidity amongst larger firms I have today agreed a new lending facility with the governor of the Bank of England to provide low cost, easily accessible commercial paper.
“To support lending to small and medium sized businesses, I am extending the new business interruption loan scheme I announced at Budget last week so that rather than loans of £1.2m it will now provide loans of up to £5m with no interest due for the first six months.
“Both of these schemes will be up and running by the start of next week.”
Sunak added that further measures to support the financial security of families and individuals would be announced “in the coming days”.
He said: “In particular, I will work with trade unions and business groups to urgently develop new forms of employment support to help protect people’s jobs and their incomes through this period.”
Speaking before the Chancellor, the PM said his government was working to tackle the crisis at a public health level and an economic level with a “profound sense of urgency”.
He added: “We must act like a wartime government and do whatever it takes to support our economy.
“We support millions of businesses and tens of millions families and individuals through coming months.”