Government to provide guarantees behind loans to firms while mortgage lenders will offer payment holiday
Rishi Sunak has pledged to make 拢330bn of loans available to businesses to support them through the coronavirus pandemic.
In the second of the government鈥檚 daily press conferences, the chancellor said the government would offer guarantees to stand behind commercial loans to businesses to ensure that firms can get access to the funding they need.
Sunak said the government will make more funding available should demand for the loans outpace supply.
He also said the government will offer additional cash support for businesses in vulnerable industries, and had secured an agreement from mortgage lenders to waive payments for a three-month period for individuals in difficulty.
He said: 鈥淭his national effort will be underpinned by government interventions in the economy on a scale unimaginable only a few weeks ago. This is not a time for ideology or orthodoxy.
鈥淲e will support jobs, support incomes, support business, and help you protect incomes.
鈥淲e will do whatever it takes.鈥�
The move follows similar measures by European leaders to combat the pandemic, including 鈧�300 billion pledged by French president Emmanuel Macron yesterday.
But Civil Engineering Contractors鈥� Association chief executive Alasdair Reisner said there were 鈥渜uestions over the long-term consequences鈥�.
He said in a tweet: 鈥淭his looks like [the] UK鈥檚 equivalent of Macron鈥檚 鈥榳on鈥檛 let any business fail鈥�. Loans hopefully help firms avoid short-term failure. [But] questions re long term consequences. Also help for immediately affected sectors makes case for construction to get act together to identify key asks for government.鈥�
Meanwhile, Noble Francis, economics director at the Construction Products Association, said the measures risked being a 鈥渟ticking plaster.鈥�
He tweeted: 鈥淚f firms get loans (to be paid back) backed by government but they face sharp falls in revenue then it is a sticking plaster and they still need to cut costs, the key one being labour and there鈥檚 no provision to stop them shedding people. A key failing and needs addressing.鈥�
And Phil Campbell, head of policy and public affairs at the Federation of Master Builders, tweeted: 鈥淗opefully we鈥檒l see more on some of the things industry is calling for in the next couple of days. We just need to continue to keep making noise so construction isn鈥檛 left behind.鈥�
No comments yet