The UK unveiled an unprecedented £350 billion (€400 billion) financial rescue package to “support jobs, incomes and businesses” on Tuesday (17 March), in a bid to offset the economic damage unleashed by the coronavirus crisis.
Boris Johnson’s government will “act like any wartime government” and do “whatever it takes”, Chancellor Rishi Sunak told reporters at a press conference on Tuesday as he launched the plans. He described them as “government intervention in the economy that would have been unimaginable just a few weeks ago.”
The stimulus package, which includes a massive new government loan guarantee scheme for businesses hit by COVID-19, a three month mortgage holiday, is worth around 15% of the UK’s total GDP and far exceeds the scale of the rescue measures taken in the wake of the 2008 financial crash.
Pubs and restaurants, the retail and tourist industries are among those set to suffer the heaviest losses from the recession that is likely to result from the lockdown.
On Monday, the government urged all Britons to work from home, avoid all non-essential travel and self-isolate for two weeks if there are any symptoms of the virus in their household, as part of a series of measures that will stay in place for at least two months as the UK prepares itself for a spike in confirmed cases of the virus.
At the heart of the package is a £330 billion loan programme guaranteed by the government. Any business who needs access to cash will be able to get a government-backed loan on attractive terms via a new lending facility channelled by the Bank of England.
Small businesses will be able to tap an expanded business interruption loan scheme offering up to £5 million with no interest due for the first six months. Both facilities are set to be up and running next week.
Meanwhile, all shops and pubs will be given a one-year exemption from paying business tax, while a three-month mortgage break will be offered to those in difficulty.
Sunak also insisted that further programmes and “potentially unlimited funding” could be offered in the coming weeks.
However, the programme was criticised as having ‘gaps’ by the independent Institute for Fiscal Studies think-tank, while the opposition Labour party complained that it did not include any provisions for people in rented accommodation or increases to statutory sick pay.
Meanwhile, all non-urgent surgery procedures in England will be postponed from 15 April to free up beds for virus patients.
There are likely to be further moves to support the National Health Service and curb the spread of the virus, said Prime Minister Johnson and warned that “we may well have to go further and faster in the coming days.”
The government’s chief scientific adviser Sir Patrick Vallance told reporters the UK was hoping to keep the number of deaths from the virus below 20,000, which he said would be a “good outcome”.
The death toll in the UK reached 71 on Tuesday.
The government again declined to close schools but hinted that this move was only days away. More than 20% of students have not been attending school in the past week amid rising concern among parents.
Earlier, the UK joined the EU in applying a 30-day ban on all non-essential travel to and from the country.
[Edited by Zoran Radosavljevic]