This is not just a health emergency, this is also an economic emergency. So said the Chancellor of the Exchequer, Rishi Sunak, in announcing Britain is to expect a government intervention in the economy on a scale unimaginable a few weeks ago.
This is not a time for ideology, he said, the UK government will do “whatever it takes.”
There will be a coordinated response with the Bank of England and regulators domestically, and G7 as well as G20 internationally.
The Chancellor has announced an “unprecedented package” of government backed guaranteed loans of £330 billion for businesses.
That’s 15% of the GDP of guaranteed loans on attractive terms and if the demand is greater, the government will provide “as much capacity as required.”
For businesses in the retail, hospitality or the leisure sectors, any business with a ratable value of less than £50,000 is to be provided a cash grant of up to £25k per business, the Chancellor said.
Ratable value is a specific land based business tax measure derived from an estimate of how much the premises can be rented out for, similar to a council or house tax, but here for businesses.
Thus businesses with premisses that can be rented out for £50,000, meaning pubs, probably clubs, small hotels, and so on, are to receive £25,000 no strings attached.
All other businesses in these sectors are to receive an extended business rate holiday.
Smaller businesses in all sectors who are eligible for business relief, are to receive £10,000.
The £330 billion scheme is available to the self-employed too, with mortgage payers to receive a three months holiday.
For renters the House Secretary is to make announcements soon, with the Chancellor stating this is only the first step in the government’s response to this economic emergency, the next stage of response is coming in a few days, he said.
Britain, like much of America and Europe too, is largely to follow the Wuhan approach of dealing with Corona with the British medical advice changing yesterday to recommend Brits, especially in London, stay at home unless necessary for work and the like.
The Chancellor said he is focused on helping businesses for now as they are the ones that provide jobs, but this is the first stage response with people still going to work in UK.
In Italy, it appears they are near a total shut down, with UK estimated to be four weeks behind.