Development Chairman Welcomes Chancellor's Scaled Up Bailout Package
March 21, 2020
Alderman Allan Ewart MBE, Chairman of the council's Development Committee welcomes the latest announcements by the Chancellor to support businesses during the coronavirus pandemic. He said: "During this time of uncertainty as we all play our part in keeping our families safe the latest announcement that the Government will cover 80% of wages (up to £2,500 per month) to secure jobs offers peace of mind to employees. There will be challenging times ahead for everyone but there is support out there and the council will keep its ratepayers updated on all new schemes and initiatives."
What the Chancellor announced last night:
- The government will cover 80 per cent of wages for companies to keep workers on.
- It will pay up to £2,500 a month - equivalent to the UK average wage of £30,000 a year.
- The Chancellor said there was no limit to how much the government will spend.
- VAT bills worth £30billion for the next quarter will be deferred.
- A £7billion boost to welfare to 'strengthen the safety net' will be made.
- A £1billion boost to housing benefit to help renters.
- Rescue package will last an initial three months and be financed by borrowing.
- If the government pays out the maximum rate to five million people it would cost £12.5billion a month.
- If the situation continues for a year that could cost £150billion - roughly equivalent to the annual NHS budget.
What had already been announced:
- A £30billion fiscal stimulus in the Budget last week, including £12billion directly for the fight against coronavirus, with more money for NHS;
- Government-backed loan guarantees worth £330billion - equivalent to 15 per cent of GDP. The Treasury will increase this with 'as much capacity as required'
- A £20billion package for business including a 12-month rate holiday for all firms in retail, leisure and hospitality sectors, and cash grants of up to £25,000 for smaller companies;
- A three-month mortgage holiday for homeowners;
- A three-month ban on evictions of renters, and mortgage holiday extended to buy-to-let;
- The Bank of England has cut rates twice to a record low of 0.1 per cent. Its quantitative easing scheme - effectively printing money to stimulate the economy - has been expanded to more than £600billion;
Chancellor Rishi Sunak effectively signed a blank cheque last night as he unveiled a huge new coronavirus bailout to cover the wages of millions of people and stop firms going bankrupt. He said the government will cover 80 per cent of salaries up to a ceiling £2,500 a month - equivalent to the UK average wage of £30,000 a year - as long as employers keep workers on their books, and there will be no limit on the total cost.
The scheme will be up and running by the end of April and be backdated.