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Rishi Sunak will expand the Treasury’s business support loan program across the UK as ministers compete to cushion the economy from what England’s chief medical officer will call “a very challenging winter” on Monday.
Sunak is expected to present plans this week to extend its four loan schemes, which have already backed £ 53bn in business loans through government guarantees, in a sign that new national support measures are needed to avoid trade collapses. widespread and massive job losses.
The move to boost businesses comes as the government weighs whether it should do more to counter the spread of Covid-19, including new national restrictions in England. London Mayor Sadiq Khan held talks with ministers on Sunday about possible new restrictions in the capital.
A spokesman for Mr. Khan said the situation was “clearly getting worse”, hinting at imminent action: “The mayor wants quick action as we cannot risk a delay.”
Khan is considering urging workers to stay home, reversing recent government efforts to convince people to return to their offices.
The pace of tighter restrictions will intensify on Monday when Chris Whitty, England’s chief medical officer, and Patrick Vallance, chief scientific adviser, give a public briefing on the latest Covid-19 data.
“The trend in the UK is going in the wrong direction,” Professor Whitty will say. “We are at a critical point in the pandemic. We are analyzing the data to see how to manage the spread of the virus before a very challenging winter period. “
Hospitalizations in England are doubling every eight days and the R-number, or reproduction rate, of the virus was between 1.1 and 1.4 on Friday. Scientists fear Britain is tracking France and Spain, where the virus has spread rapidly in recent weeks.
Boris Johnson, the prime minister, says he wants to avoid a national lockdown and has agreed with Sunak that, for now at least, the restrictions should focus on slowing down social interaction rather than business closures.
But Health Secretary Matt Hancock said “we are looking at all the options” and Professor Whitty is pushing for strict new national restrictions, a “circuit breaker” strategy lasting perhaps two weeks, to delay the spread of the disease. virus.
Mr. Sunak has vowed to be “creative” in finding ways to support jobs this fall and is under pressure from Labor and some Tory MPs to extend the leave scheme – or put in a replacement – when it ends on October 31.
Under plans being drawn up by the Treasury, all commercial loan schemes will be extended for applications until the end of November, and banks will be able to process loans until the end of the year. The Treasury declined to comment.
Three of the programs were due to end this month for applications. The fourth, the “payback” loan scheme, was scheduled to close in early November.
According to two people familiar with the talks, the extension will include the Future Fund, the innovative support program that could get the government involved in dozens of fast-growing startups forced to take out state-backed convertible loans.
The Treasury has previously resisted calls from business leaders for an extension of the scheme, said a person close to the discussions, and officials said they are willing to cut costly support packages as soon as possible.
The decision is designed to help companies once again affected by more closures, whether at the regional or national level, or forced to close their doors again under new curfews.
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Restaurants and bars have already seen more than half of their businesses disappear this weekend in northern areas that have been forced to implement new restrictions, according to UKHospitality, which represents the sector.
Most of the state-backed loans have been made through the ‘payback’ scheme, offering loans of up to £ 50,000 interest free, which has been used by more than 1.1 million businesses so far, borrowing more than £ 35 billion. .
More than 60,000 companies have borrowed £ 13.7 billion using the coronavirus business interruption loan scheme, which supports loans of up to £ 5 million. The coronavirus big business disruption scheme, which guarantees loans of up to £ 200 million, has helped lend £ 3.5 billion.
The extension will rekindle concerns about the extent of the losses the government could face, with estimates from the Office of Budget Responsibility that up to 40 percent of “recovered” borrowers could default as companies struggle to pay their debts.
