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£330 billion loans promised to support economy amid coronavirus pandemic

Chancellor Rishi Sunak has said government-backed loans worth £330 billion will be made available to support the economy amid the coronavirus pandemic.

Mr Sunak said the "unprecedented package" - equivalent to 15% of GDP - could go further if demand is greater, and vowed to do "whatever it takes" to help the economy.

The Chancellor confirmed during the second of the Government's daily briefings that he was extending the business rates holiday to all businesses in the hospitality sector and funding grants of up to £25,000 for smaller businesses with a rateable value less than £51,000.

Those in financial difficulty due to coronavirus will be offered a three-month mortgage holiday, he added.

Other measures announced by the Chancellor include:

  • Reimbursing small and medium-sized employers across the UK for up to two weeks’ statutory sick pay for each employee absent
  • Providing £2.2 billion funding for one-off grants of £3,000 to around 700,000 small businesses in England
  • A new temporary Coronavirus Business Interruption Loan Scheme to support businesses in all parts of the UK to access £1 billion of additional bank lending
  • A dedicated HMRC helpline to enable UK businesses in financial distress to discuss deferring tax bills where necessary.

He unveiled the measures after the Government's chief scientific adviser said around 55,000 people in the UK now have Covid-19.

  • ITV News Business and Economics Editor Joel Hills on the government's unprecedented package of support for the economy during the coronavirus crisis - and whether they go far enough

The chancellor added: "This is not a time for ideology and orthodoxy, this is a time to be bold, a time for courage.

"I want to reassure every British citizen this Government will give you all the tools you need to get through this."

Mr Sunak described the outbreak as an "emergency", adding: "Never in peacetime have we faced an economic fight like this one."

Covid-19 is so dangerous that without drastic action it will "overwhelm the NHS", Boris Johnson added, as he warned that more "extreme measures" may be needed to protect lives in the future.

In a bid to further support people, Mr Sunak elaborated on plans to provide homeowners with a "three-month mortgage holiday" if they are suffering difficulties due to the outbreak.

He said: "For those in difficulty due to coronavirus, mortgage lenders will now offer a three-month mortgage holiday so that people will not have to pay a penny towards their mortgage cost while they get back on their feet."

  • Video report by ITV News Business and Economics Editor Joel Hills

He said he will announce new measures to "support people's financial security" in the coming days.

"In the coming days I will go much further to support people's financial security," he told reporters.

"In particular, I will work with trade unions and business groups to urgently develop new forms of employment support to help protect people's jobs and their incomes through this period."

Rishi Sunak has pledged a 'bold' economic package.

Asked if the UK is heading for a recession, Mr Sunak said: "This will have a significant impact on our economy - that's what I said last week, I stand by that.

"But I also stand by what else I said is - you know, this will be temporary, we will get through this and we will get through it together, and the steps that we're taking mean that we will emerge together on the other side able to rebound back to confidence and economic activity.

"That's why all the interventions we're looking at are designed to provide that bridge through this - what will be a very difficult, challenging period - but get us through this period and so that we can be there on the other side to emerge stronger thereafter."

Boris Johnson meanwhile said "we only really have a few weeks" to build the ventilators it is expected the NHS will need.

He added: "What I want, what all business wants - to explain what I'm seeing - is an end to suffering.

"That is why they are working incredibly hard in the next few weeks, and we only really have a few weeks, to build literally thousands of ventilators that this country will need."

He added: "The British industry, manufacturers are responding to this challenge with incredible energy and determination."

Shadow chancellor John McDonnell has said the Government measures to support the economy through the coronavirus outbreak did not go far enough.

"People are being laid off today and losing their incomes. We are disappointed that this package does not address their concerns," he said.

"The further announcements laid out by the Chancellor lack the certainty required amidst growing public anxiety, and still do not go far enough in protecting workers, renters and those who are losing their jobs, or in fully supporting businesses at the scale necessary.

"In particular, the Chancellor's claim that new forms of employment support will be developed does not appreciate the urgency and gravity of the situation.

"Workers and businesses need to know now that they will be supported, not in a few days' time."

Robert Chote said this is not a time to be squeamish about spending. Credit: PA

Robert Chote, chairman of the OBR, told a Treasury Select Committee hearing earlier on Tuesday: "This is not the time to be squeamish about one-off additions to public sector debt.

"It's more like a wartime situation - that this is money well spent."

He added: "The priority is not to worry about dotting the Is and crossing the Ts of fiscal rules but to do what is necessary for the economy and the public."

The OBR cautioned there would "inevitably be some scarring" on the country's economy, with a number of firms expected to go bust amid the crisis.

But it said the hit was expected to be "large but temporary", both to Britain's growth as well as the public finances.

Boris Johnson said the NHS would be overwhelmed without drastic action.

Last week Chancellor Rishi Sunak announced £12 billion of emergency funding in his first budget since taking office.

The new package of finance will help struggling businesses through the pandemic.

Businesses have warned the government allowing them to stay open, whilst telling people to stay away, leaves them vulnerable to financial damage.

Some have claimed, should they be forced to shut they would be exempt from paying rent on premises which are empty of customers.

Boris Johnson and Rishi Sunak revealed measures designed to help businesses. Credit: PA

Coronavirus: Everything you need to know