British government announces business aid package worth €360 billion

The British government has unveiled a package of loans and grants worth hundreds of billions of pounds to protect the economy from the impact of the coronavirus.

They include £330 billion (€360 billion)in government-backed loans to businesses and £20 billion in handouts and tax breaks to help firms stay afloat while much of the economy is shut down.

Chancellor of the exchequer Rishi Sunak said banks would offer customers a mortgage holiday of three months and he promised to take more action if necessary to help businesses and individuals survive the economic impact of the pandemic.

Echoing the words of former European Central Bank president Mario Draghi during the eurozone crisis, Mr Sunak said he would do "whatever it takes" to keep the British economy afloat.

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“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,” he said.

“That means any business who needs access to cash to pay their rent, their salaries, suppliers or purchase stock will be able to access a government-backed loan or credit on attractive terms. And if demand is greater than the initial £330billion I’m making available today, I will go further and provide as much capacity as required. I said whatever it takes, and I meant it.”

The measures announced on Tuesday come on top of billions of pounds in support for business announced in last week’s budget and put the British taxpayer on the hook for 15 per cent of the country’s gross domestic product (GDP).

Further measures are expected in the next few days to address the needs of people who rent their homes and to support workers facing layoffs. Planning restrictions have been lifted to allow all pubs and restaurants to offer takeaway and delivery services.

The chancellor's action follows a sharp pivot in Britain's approach to the coronavirus which saw Boris Johnson urging people to avoid bars and restaurants and to work from home if possible. The prime minister said that the state was asking citizens to take extraordinary steps to protect the broader community from the virus.

Behind people

“It is only right that the state should stand behind people as they make those changes. That’s what the state is there for. It is there to help people through thick and thin,” he said.

Labour’s shadow chancellor said the measures did not address the concerns of people who were being laid off and losing their incomes.

“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,” he said.

“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.”

Earlier, the foreign office advised against all non-essential international travel from Britain in response to the pace at which other countries are closing their borders or implementing restrictive measures. It said British people who decide that they still need to travel abroad should be fully aware of the increased risks of doing so, including the risk that they may not be able to get home.