UK Politics

Coronavirus: Mortgage holiday and £330bn of govt-backed loans announced

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Government-backed loans worth £330bn and a three-month mortgage holiday have been announced by the chancellor as part of "unprecedented" measures to help businesses and families.

Rishi Sunak unveiled the package of support at a Downing Street news conference as he said the UK faced an "economic emergency" in the face of the coronavirus pandemic.

"We have never, in peacetime, faced an economic fight like this one," he added.

"I know that people are deeply worried. I know that people's anxiety about the disease itself is matched only by their anxiety about their livelihoods."

Sunak sets out huge economic measures

Describing the coronavirus crisis as "not a time for ideology and orthodoxy" but "a time to be bold, a time for courage", the chancellor told businesses and households: "This government will give you all the tools you need to get through this."

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Mr Sunak announced:

  • A package of £330bn of loan guarantees to businesses, with more to be made available if needed
  • Interest-free business interruption loans will be increased to £5m, up from £1.2m announced at last week's budget. No interest will be due for the first six months
  • A 12-month business rates holiday for all shops, pubs, theatres, music venues, restaurants and any other hospitality or leisure business
  • A cash grant of up to £25,000 for those businesses with a rateable value of less than £51,000
  • A three-month mortgage holiday for those in difficulty because of coronavirus
  • Cash grants of £10,000 to 700,000 of the smallest businesses
  • Local authorities will be fully compensated for the cost of these measures, with at least £3.5bn going to devolved administrations in Scotland, Wales and Northern Ireland
  • A potential support package for airlines and airports in the face of worldwide travel bans

The chancellor also reassured businesses that the government's action in advising people to avoid pubs, clubs, theatres and restaurants was sufficient for them to make insurance claims.

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He promised further measures to "support people's financial security" in the coming days, vowing to 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".

Speaking before Mr Sunak, Prime Minister Boris Johnson said his government "must act like any wartime government and do whatever it takes to support our economy".

The UK may have to "go further and faster in the coming days" to try and prevent the spread of COVID-19, he added.

This is despite the already stringent measures Mr Johnson announced on Monday, which he described as "unprecedented since World War Two".

Mr Johnson added: "This enemy can be deadly, but it is also beatable – and we know how to beat it and we know that if as a country we follow the scientific advice that is now being given we know that we will beat it.

"And however tough the months ahead we have the resolve and the resources to win the fight."

Housing, Communities and Local Government Secretary Robert Jenrick later announced he was relaxing planning rules to allow all pubs, restaurants and cafes the ability to offer takeaway and delivery services if they wish.

Prime Minister Boris Johnson speaking at a media briefing in Downing Street, London, on Coronavirus (COVID-19). Picture date: Tuesday March 17, 2020. See PA story HEALTH Coronavirus. Photo credit should read: Matt Dunham/PA Wire
PM: We must stop NHS from getting overwhelmed

Labour shadow chancellor John McDonnell claimed Mr Sunak's new measures "still do not go far enough".

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

"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.

Small and large business groups welcomed Mr Sunak's action. But the Resolution Foundation think tank called for "much bolder steps to support family incomes" and said further measures "cannot come quickly enough".

Boss of easyJet, Johan Lundgren, said the chancellor's suggestion of a support package was "very welcome" in the face of the "significant pressure" airlines are facing.

Virgin Atlantic, which has asked staff to take eight weeks unpaid leave, also welcomed the action as the aviation sector faces "the biggest crisis in its history".

As of 9am on Tuesday, there were 1,950 confirmed cases of coronavirus in the UK – up 407 in the past 24 hours and a rise of 26%.

A further 14 people have died after being diagnosed with coronavirus in England, bringing the UK's total to 71.

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