Government cash offers a lifeline for businesses impacted by COVID-19

Ian Mean
Director of Business West Gloucestershire | Business West
17th March 2020

Business can breathe something of a sigh of relief tonight as Chancellor Rishi Sunak announced a financial package which will undoubtedly help many of them to survive for the time being.

At the centre of the rescue package is £330bn in guaranteed loans to business - a whacking 15% of GDP.

This help will be a lifesaver for many businesses but most of the money is still a loan to be paid back fairly quickly.

As Heathrow announced redundancies and airlines talked of jobs being lost very quickly, the Chancellor did say that the airline sector and airports were now being considered for special help.

“We will do whatever it takes”, said Rishi Sunak consistently during his speech.

And as restaurants, clubs and theatres started closing, there was a little financial comfort for them in up to £25,000 cash to tide them over.

But with little or no trade, will this money really go very far to keep a restaurant with staff running?

The Chancellor extended the business rates holiday, announced in last week’s Budget, to larger businesses for 12 months.

Important but quite small beer.

For employees, the three months mortgage holiday will be a welcome bonus.

But here again, it seems to me that this will probably need to be extended as the virus takes hold.

Before Rishi Sunak spoke, I listened to Donald Trump’s announcement.

Treasury Secretary Steve Minuchin announced what was something like an $850bn rescue package for business.

It seemed far more comprehensive to me without too many payback strings.

And the big bonus in the States for workers who find themselves redundant because of the virus are $1000 cheques being posted immediately.

Now, that is a big idea that really will help people struggling after losing their jobs.

Here in the UK, workers need this sort of bonus - especially those on low wages in the retail and leisure sectors where redundancies will now be happening very quickly.

My feeling is that this unprecedented package of £330bn sounds big.

It is big, but this is a war, not a big battle, and I think that the government and the banks must be prepared to put a lot more money into the pot on an ongoing basis if many of our businesses are to rise again from the virus ashes.

Do you want to join the conversation?

Sign up here
  • Trading Through Coronavirus

    We provide guidance & support on Coronavirus (COVID-19) for businesses, employers and employees in the region.