“We’ll do whatever it takes” says Rishi Sunak
Britain has unveiled a 330 billion-pound lifeline of loan guarantees and will provide a further 20 billion pounds in tax cuts, grants and other help for businesses facing the risk of collapse from the spread of coronavirus.
Chancellor of the Exchequer Rishi Sunak told a press conference it was an “economic emergency. Never in peacetime have we faced an economic fight like this one.”
And he promised that if this package was not enough, he would go further, pledging to do “whatever it takes” to help retailers, bars and airports and other firms, many of which are reeling from a near-shutdown of business.
“This is not a time for ideology and orthodoxy,” Sunak said on Tuesday 17th March, speaking alongside Prime Minister Boris Johnson. “This is a time to be bold, a time for courage.”
Britain, criticised by some scientists for moving too slowly to check the spread of the virus, ramped up its response on Monday when it told people to avoid pubs, clubs, restaurants, cinemas and theatres.
On Tuesday, it announced plans to cancel routine surgery for three months to focus the health service on the coronavirus and courts in England and Wales dealing with serious crimes will not start trials likely to last for more than three days.
“We must act like any war-time government and do whatever it takes to support our economy,” said the PM.
Sunak described the package of measures as unprecedented, although Britain issued guarantees of around 1 trillion pounds during the global financial crisis.
“I want to reassure every British citizen this government will give you all the tools you need to get through this,” he 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 [for loans] 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,” he said.
The package would extend to all retail, hospitality and leisure businesses in the suspension of a property tax, alongside the new loan guarantee programme which was equivalent to 15% of British economic output.
Companies from those sectors would be offered cash grants and the government would discuss a support package for airlines and airports.
Banks and lenders would offer a three-month mortgage holiday for people in difficulty, Sunak said.
He later told lawmakers, some of whom criticised the business focus of the plan, that the government would soon make a statement about support for renters. He also said he would do more to support jobs and incomes.
The Bank of England said it would set up a new fund with the finance ministry to buy commercial debt with a term of up to one-year issued by investment-grade companies making a “material contribution” to Britain’s economy.
The fund would be financed by the creation of central bank reserves.
Britain’s budget forecasters said the scale of the borrowing needed might resemble the country’s immense debt splurge during World War Two.