Chancellor announces £330 billion to support business

Last night, the Chancellor, Rishi Sunak MP, announced the latest package of measures to support business and individuals during the coronavirus pandemic. The measures are detailed below:

  • At the Budget last week, the Chancellor set out the first stage of our response to tackle coronavirus with a £30 billion package of support for people and businesses. The government promised to do whatever it takes to support our economy through this crisis – and will do whatever it takes to deliver.  
  • The Government will make available an initial £330 billion of guarantees – equivalent to 15 per cent of our GDP – so any businesses who needs access to cash to pay their rent, the salaries of employees, pay suppliers or purchase stock, will be able to access a government-backed loan. The Chancellor will also provide tax cuts for British businesses worth nearly £20 billion.  
  • The measures announced provide a comprehensive, coordinated and coherent response to what is a serious and evolving economic situation. 

The Chancellor announced that he is doing this by a series of measures: 

  • If demand is greater than the initial £330 billion the Chancellor is making available, the government has said it will go further and provide as much capacity as required. That means any good business in financial difficulty who needs access to cash to pay their rent, the salaries of their employees, pay suppliers, or purchase stock, will be able to access a government-backed loan, on attractive terms.
  • The Government will support liquidity amongst large companies, with a major new scheme being launched by the Bank of England. The Chancellor has committed to support lending to small and medium-sized businesses by extending the Business Interruption Loan Scheme announced in the Budget. This means that, rather than providing loans of £1.2 million, it will provide loans of up to £5 million, with no interest for the first six months.
  • Both of these schemes will be up and running by the start of next week – and the Chancellor is also taking a new legal power in the Covid Bill to offer whatever further financial support is necessary. 
  • Helping all businesses in the retail, hospitality and leisure sectors – meaning that none of these companies will have to pay business rates. Last week, the Government said that any business in this sector with a rateable value of less than £51,000 can have a 100 per cent discount on their business rates. Today, the Chancellor is going further – so all businesses in this sector, irrespective of their rateable value, are exempt from business rates for 12 months – that’s every single shop, pub, theatre, music venue, restaurant, and any other business in the retail, hospitality or leisure sectors. In addition, the Government will provide small businesses in these sectors with an additional grant scheme of up to £25,000. Any business with a rateable value of less than £51,000 can now get access to a government grant.  
  • Increasing grants for the smallest businesses from £3,000 to £5,000. In the Budget last week, the Government announced that it would be providing £3,000 grants to the 700,000 of our smallest businesses. To support their cash flow, the Chancellor is increasing those grants to £10,000. 

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