What is the Government doing for businesses during the coronavirus pandemic?

18 March 2020, 05:39

Many businesses have been forced to close down
Many businesses have been forced to close down. Picture: PA
EJ Ward

By EJ Ward

As the Covid-19 pandemic sees businesses closing down in an attempt to halt the spread of the virus, what are the Government doing to help support workers?

With the news the Government urged the public to avoid all "unnecessary contact with others" and "avoid pubs, clubs and other venues" to prevent the spread of coronavirus many businesses were concerned due to falling numbers of customers.

A pub industry spokesperson told LBC: "Thousands of pubs and hundreds of thousands of jobs will be lost in the short term unless we get a really proactive package that creates cash liquidly providing to the industry to keep those pubs open."

Many business sectors called on the Government to cancel all business rates payments for six months, as well as all tax payments including PAYE, VAT and corporation tax for pubs and hospitality businesses.

On Wednesday Chancellor Rishi Sunak announced a multibillion-pound package of measures to help businesses through the coronavirus crisis.

Read more: Coronavirus - Who should self-isolate and for how long?

But what has he announced and how can businesses claim that support?

What has the Chancellor announced?

Chancellor Rishi Sunak pledged Government-backed loans worth £330 billion to help businesses through the coronavirus crisis.

He also announced a three-month mortgage holiday for homeowners if they are suffering difficulties due to the outbreak so they will not have to pay anything "while they get back on their feet".

Cash grants of up to £25,000 to be available to smaller businesses in the retail, hospitality and leisure sectors with a rateable value of less than £51,000.

Mr Sunak also announced a business rates holiday for all businesses in those sectors irrespective of their rateable value while the new business interruption loan scheme will provide loans of up to £5 million.

Read more: Coronavirus symptoms - What are they and what is the risk of Covid-19 in the UK?

How is this different to what was in the Budget?

At last week's Budget, the Chancellor announced £30 billion of support to the economy to deal with the crisis by investing in public services, increasing support for vulnerable people and providing business with tax reliefs and loans.

In the Budget, he outlined a £12 billion set of measures targeted specifically at the impact of the virus - along with £18 billion of wider spending plans to stimulate the economy.

He also said he would increase the £3,000 cash grants to 700,000 of the country's smallest businesses - announced in the Budget - to £10,000.

The new business interruption loan scheme announced at the Budget is being extended to small and medium-sized businesses, providing loans of up to £5 million with no interest due for the first six months, up from £1.2 million, he added.

How can businesses access business interruption loans of up to £5 million?

On the delivery of the business loan scheme, Mr Sunak told MPs that they would be delivered not by the "British business bank" but by individual retail banks on high streets.

He told the House of Commons that businesses will be able to "walk into their local branches" by early next week and request a business interruption loan that has been backed by the Government.

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How do homeowners claim their three-month mortgage holiday?

Mortgage broker SPF Private Clients said that homeowners should get in touch with their lenders as soon as possible and preferably before missing a mortgage payment.

It said that while lenders may ask for evidence that you are unwell they are usually "sympathetic" to illnesses that affect a borrower's ability to pay their mortgage.

Tenants may be able to speak to their landlords who can speak to their own buy-to-let provider for their own payment holiday, it added.

Read more: Coronavirus UK: Do surgical face masks work to avoid virus symptoms?

How can smaller business in the retail, hospitality and leisure sectors claim cash grants of up to £25,000?

The Treasury has not said how business will be able to claim these grants yet.

But the Federation of Small Businesses (FSB) said it was "key" to deliver these measures within the coming days with no hold-ups at banks, local authorities or central government.

Read more: Coronavirus and pregnant women - What is the official government advice?

What happens next? What about renters?

Boris Johnson announced that emergency legislation is being brought forward to protect private renters from eviction.

The Government was urged to do more for families, workers and tenants affected by coronavirus, with Jeremy Corbyn saying renters were "worried sick".

Mr Johnson said legislation to protect private renters from eviction will be brought forward but will avoid "passing on the problem" by "taking steps to protect other actors in the economy".

Housing associations will not evict tenants who are affected by the virus and fall behind on rent payments, according to Kate Henderson of the National Housing Federation, which represents housing associations in England.