UK Government Promises Economic Interventions During Coronavirus Crisis, Offers Relief For Leisure Businesses & $400M In State-Guaranteed Loans

As the UK grapples with the coronavirus outbreak, Chancellor of the Exchequer Rishi Sunak today promised relief for the leisure sector, covering businesses including cinemas, theaters and restaurants.

Companies in the sector will receive a “holiday” from paying business rates tax for 12 months, and those that are valued at less than £51,000 ($62,000) will also be able to apply for a cash grant of up to £25,000 ($30,000) to help with cashflow and cover immediate costs such as wages, if they are uninsured against pandemics.

Sunak also sought to clarify confusion over whether the government’s actions to date, which have included advising against public gatherings but not putting in place strict social distancing measures, would trigger insurance policies for businesses with policies covering the outbreak.

“The government’s action is sufficient and will allow business to make an insurance claim against their policy,” he stated.

Speaking in a wider economic context, Sunak outlined a package of £330BN ($400BN) in government-guaranteed loans, an amount that is equivalent to 15% of the UK’s GDP. “That means any business small and large that needs access to cash will be able to access a government-backed loan on attractive terms,” he claimed. “If demand is greater [than £330BN] I will go further.”

At today’s press conference, where he was speaking alongside PM Boris Johnson (which will be a daily event broadcast from 10 Downing Street during the Covid-19 crisis) the chancellor was quizzed by ITV’s Rupert Peston about whether loans were an attractive or even viable option for low-margin businesses in the leisure sector. “Many businesses may decide to cease trading rather than take on more debt,” Peston posited.

Sunak responded by suggesting the cash grants will help in the short term, and added that he will consult with businesses and unions this week to look into further solutions to help with “the cost of people”, i.e. wages.

“Hopefully this will provide reassurance to businesses that help is on its way,” Sunak added, addressing the prospect of layoffs. “In the coming days I will go much further to support people’s financial security.”

The PM called the package an “extraordinary effort” and added that he was confident Brit companies and the economy “will bounce back”.

Leisure businesses may take some positives from today’s presser, though freelance workers, of which there are many in the UK’s film and TV industries, didn’t receive much of a mention and will no doubt remain concerned about how their careers will be affected as the vast majority of productions shut up shop without a firm timeframe for recommencing.

“There was no specific mention of freelancers and it is hugely unclear how any of the measures he did announce will benefit them,” said creative workers’ union Bectu in an immediate statement response to today’s presser. “Bectu research shows that 97% of freelancers are dissatisfied with the government’s response to the crisis. Nothing that has been announced so far will change that. We need urgent and specific action from the government in the coming days or it may already be too late for many freelancers to avoid financial ruin.”