The government’s £330bn support package for UK companies during the coronavirus pandemic has been heralded as ‘the message businesses needed to hear’.
Chancellor Rishi Sunak yesterday unveiled a range of measures designed to keep businesses solvent during a period where consumer spending is expected to drop markedly in most sectors.
The British public has already been advised to avoid pubs, clubs, restaurants and theatres, while travel restrictions – including border closures and the grounding of many flights – has hit the aviation industry.
The government yesterday alleviated many concerns within the hospitality industry by confirming however its social distancing instructions would be enough for affected firms to claim on their insurance. Sunak also revealed he would be meeting leaders of badly affected industries to discuss support potential packages.
However, it is the support for individual companies of all sizes which has been particularly warmly welcomed.
That support includes a wide range of measures including extended rate holidays, ‘unlimited’ low-interest or interest-free borrowing options, and bridging grants to smaller firms – all tactics first announced in last week’s Budget, but now massively increased or extended.
Crucially, Sunak promised he ‘would go further’ in coming days and weeks if needed, insisting the government would do ‘whatever it takes’ to support jobs, incomes and businesses.
Jonathan Geldart, Director General of the Institute of Directors, said: “The Chancellor’s promise to do whatever it takes is the message business leaders needed to hear.
“It’s now vital to make sure businesses are able to take up the pledges that have been made before too much damage is done. Many have so far felt reluctant to take on loans with the road ahead uncertain.
“No matter the sheer size of today’s measures, the fight won’t be over. As the Chancellor said, this is only the latest step, and government must continue to listen to business leaders and be ready at hand to deliver further measures where needed.
“Support for employment and the self-employed will be essential as the economy experiences this historic disruption.
“Going forward, it’s crucial that the government’s economic policy ties up with its wider response to the pandemic.
“Directors are hanging on every announcement to see how it affects their business and their people. Support for businesses must match up to what is being asked of them, or firms could go under.”
Federation of Small Businesses (FSB) National Chairman Mike Cherry agreed the government’s action will be warmly received by a business community anticipating an unprecedented level of struggle.
He said: “The government has thankfully today made clear that it will step in and provide small firms with the cash flow they need – whatever it takes. This marks a hugely important intervention. And it’s good to hear the Chancellor pledging to do more in the days ahead.
“Small firms are having their futures threatened in the here and now. They need support in the here and now.
“This unprecedented package of loan guarantees, business rates breaks and cash grants marks a hugely welcome step forward. The key now is to deliver these measures within the coming days with no hold-ups at banks, local authorities or central government.
“Some small businesses are already on the brink – they need time and space from landlords, HMRC and lenders over the next few days before these interventions take effect.
“Clearly small employers will need a huge amount of support to keep staff on their books at this hugely difficult time, so it was good to hear the Chancellor pledging to develop an employment support package to help make that possible.
“In what will be difficult days ahead for the small firms that make up 99% of our business community, the Chancellor has today made it clear that the government will back them – we will continue to press for any and all measures needed. Support must be delivered in every nation and region of the UK.”
And Emma Jones, founder of small business support network Enterprise Nation, added: “Direct cash grants will provide a helpful amount of cover, helping small businesses to even out their budgeting and making room for them to continue to honour their payroll responsibilities to staff.
“It’s good news for the small retail and hospitality industries in particular with premises, which will get cash they don’t have to re-pay. It will delay at the very least, difficult decisions.
“What we don’t want to see is for businesses that would not otherwise survive being artificially propped up based on debt such as the new Business Interruption Loan. I wonder if this might have been better if we’d done what France announced around longer terms to pay tax and certain bills.
“It’s a shame there was nothing on insurance for the self-employed or sole traders that are losing contracts with no financial support whatsoever.”