It feels like we are having a weekly if not daily Budget at the moment!
Last night the Chancellor announced some very large sums to help the economy.
He announced 330 billion of loan guarantees given to the banks. That does not mean he has parted with 330 billion of course, these are just “guarantees” he is prepared to give to the banks to secure loans of that level which they in turn give to businesses. Large businesses will negotiate their loans directly with the Bank of England; everyone else needs to approach their usual bank. How much this costs the country will depend on how many of those loans go bad in due course. And how useful this might be to our clients depends on how willing the banks are to make these loans and how bureaucratic they are in giving them. Any bank that says they will fast track their loan granting procedure, might become very busy.
The other measures he announced mainly affected the hard hit retail hospitality and leisure areas and were very generous. Businesses in this sector can now pay no business rates for the next 12 months and also claim grants of up to £25,000. Now that is very useful, we will email our clients as soon as it becomes clear how to claim these sums.
He also announced that the £3,000 grants for smaller businesses would rise to £10,000 grants – we need to see some detail on this as the £3,000 grants announced in the Budget last week just appeared to be for businesses that had business premises. No help for the many businesses who operate from home.
In the next day or so he will be announcing further measures aimed at supporting employees and those who rent their homes. Help for airlines and airports is also being considered.
He also announced that the Government had been negotiating with the insurance industry to make sure that Ministers had taken all the necessary steps and made all the necessary announcements that would trigger possible claims on business interruption insurance policies. To date, the feedback we have had from clients suggests that insurers are being very negative about possible claims.
We will continue to keep you informed.
If you have any queries, please contact us.