Money

'No limits'… support pledge to business as PM shuts pubs and restaurants



Pubs, clubs, restaurants, theatres, gyms and leisure centres were ordered to close today as the UK Government announced unprecedented measures to support businesses through the coronavirus.

Chancellor Rishi Sunak promised there would be “no limit” to his efforts to support the economy. He pledged to pay 80% of the wages of staff of companies unable to operate during the crisis, up to £2500 a month and backdated to March 1.

VAT payments for businesses will be deferred until the end of June – providing a direct cash injection of more than £30 billion.

The Universal Credit standard allowance for the next 12 months will increase by £1,000 a year, and the working tax credit basic element will rise by the same amount, at a cost of almost £7 billion.

The Chancellor also extended the interest-free period from six months to 12 for the Coronavirus Business Interruption Loan Scheme.

Johnson asked pubs and clubs to close tonight and remain closed indefinitely from tomorrow.

The new funding package was welcomed by Scottish business leaders.

Dr Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “For the Scottish Chamber Network the prioritisation of jobs and business protection is utmost and we are pleased the Chancellor has responded to this.

“The Chancellor’s proposals including the coronavirus jobs retention scheme and support for the self-employed which lightens the burden of those who will have to shut up shop tonight for an indefinite period or for those businesses who are seeing orders dry up.

“We also welcome the Chancellor’s pledge to move at speed – with details of how to access the Coronavirus Business Interruption Loan Scheme becoming available on Monday and the extension of the interest free period is good news for many companies.

“The urgency of the need for businesses to access the support offered by the UK and Scottish Governments cannot be understated.”

SCDI chief executive Sara Thiam said: “SCDI welcomes the unprecedented moves made this evening to support employees and there will continue to be a need for action to be taken as we deal with the impact of what unfolds.

“The pace of action to support businesses and their staff needs to keep up with developments but the steps taken now recognise the urgency of the situation to protect our economy and all the people to play such a vital role in it.”

First Minister Nicola Sturgeon urged people to obey the UK Government’s instructions on social distancing.

She said: “I know how difficult this is. But it is vital to reduce our risk of getting the virus. And to reduce the risk of infecting those who are most vulnerable of becoming seriously ill or dying. In short, it will save lives.

The new measures will be funded through more Government borrowing and the Bank of England has already said it will buy £200 billion of bonds.

Measures announced at last week’s Budget had already added £12 billion to an existing annual deficit of £60 billion.

Paul Johnson, director of think tank the Institute for Fiscal Studies, said the cost of footing the wage bill for 10% of UK employees could cost the Government £10 billion over three months.

Kallum Pickering, senior economist at Berenberg, said if that if the package had to used for more than six months, it would cost the Treasury more than 10% of GDP to fund.



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