Chancellor Rishi Sunak has announced emergency measures to protect businesses and workers, as government advice on social distancing worsens the economic impact of coronavirus.
The Chancellor abandoned “orthodoxy” and “ideology” as he announced £330 billion of support for businesses to tackle the unprecedented peacetime emergency.
There will be more announcements to come – Prime Minister Boris Johnson said Ministers will act “like any wartime Government” and “do whatever it takes to support our economy”.
And the Prime Minister admitted that while social distancing measures announced on Monday are “extreme” the country “may have to go further and faster in the coming days”.
Mr Johnson has said Londoners in particular should follow Government advice on social distancing, as Covid 19 is spreading faster in the capital than elsewhere.
As of yesterday, there were 621 confirmed cases in London, and 25 people had died.
But with businesses and workers feeling the strain, what does yesterday’s announcement mean for the capital. Here’s what you should know:
1. All businesses can get government loans to pay staff and cover bills
Any business in the capital – like elsewhere in the country – can now apply for an emergency loan from the Government to pay staff, buy stock, and settle bills.
The Chancellor has announced £330 billion funding today – equivalent to 15%of the UK economy – but has said more funds will be available if demand is higher.
London Mayor Sadiq Khan welcomed the cash injection, but said he is “concerned” that support “will not come fast enough for some businesses” and that loans will need to be repaid.
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2. London’s hospitality businesses will benefit from more tax cuts
The Chancellor also pledged further cuts to business rates – no businesses in the retail, hospitality or leisure sectors will pay the tax for 12 months.
This means pubs, clubs, theatres, restaurants, shops and gyms affected by the virus will get a tax break.
Mr Sunak previously promised to cancel payments for any business with a rateable value under £51,000 – but those with a higher value will now get the same benefits.
This is a major boost for London’s economy, because higher property value and rents in the capital mean more relatively small businesses sit above the £51,000 threshold.
3. But many London businesses will miss out on grants
The Chancellor also announced that all businesses already exempt from business rates would get a £25,000 grant.
Here, London will lose out for the reasons outlined above – because many businesses sit above the £51,000 threshold for support.
The Mayor said the announcement was “extremely disappointing” on this front.
4. There’s help with your mortgage
The Chancellor announced a three month “mortgage holiday” for anyone impacted by coronavirus.
He promised that “people will not have to pay a penny towards their mortgage while they get back on their feet”.
In London, 27% of residents have a mortgage – less than the rest of England, where 30% are putting down payments on a home.
