U.K. government promises to do ‘whatever it takes’ to protect economy from coronavirus as it pledges billions in loans

March 17, 2020, 7:45 PM UTC

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The British government became the latest European government to pledge billions of dollars on Tuesday to fight the economic fallout of the spread of coronavirus, as millions across the continent went into lockdown.

On Tuesday evening, Prime Minister Boris Johnson and Chancellor Rishi Sunak pledged 330 billion pounds ($400 billion) in government-backed loans and guarantees to shield businesses from the knock-on effects of attempting to manage the spread of the coronavirus, while promising to go “further and faster” in the coming days to provide support.

“We must act like a wartime government and do whatever it takes to support our economy,” Johnson said. “We must support millions of businesses and tens of millions of families and individuals through the coming months. And to do that the government machine must and will respond with a profound sense of urgency.”  

The pledges come alongside other measures including three-month mortgage holidays for homeowners; 10,000 pound ($12,000) grants for small businesses; and plans to specifically support the aviation industry.

The chancellor also said the government had told insurance companies to “step up to the plate” and provide insurance payouts to businesses that are forced to temporarily shut down, after pubs and restaurants complained that the government’s “advice” on Monday that people should not go out for a drink or a meal—rather than a legal order—were forcing them out of business without being able to claim insurance.

Tuesday’s pledge followed a 30 billion pound ($36 billion) package the government committed to just last week in its budget announcement, including refunding small businesses for the cost of paying sick pay to people with coronavirus, and helping small companies via tax breaks and loans. The package included an extra 5 billion pounds ($6 billion) for the state-run National Health Service and 18 billion pounds ($22 billion) in fiscal stimulus, alongside interest rate cuts by the Bank of England.

However, the latest wave of support largely comes in the form of loans—only smaller businesses so far were to be provided with grants—and stopped short of providing security for freelancers and those without permanent contracts.

The announcement makes the U.K. only the latest European nation to make vast economic pledges to manage the economic cost of subduing the virus. Italy, the European country hit hardest by the virus, last week committed 25 billion euros ($28 billion) to cushion the impact of the crisis.

The government of Germany, the continent’s largest economy, has pledged 550 billion euros ($603 billion) in government-backed loans and guarantees, while France on Tuesday added a further 47 billion euros ($52 billion) in support for small businesses, restaurants, and the tourism industry, alongside a 500 billion ($547 billion) economic package promised on Monday.

The pledges came as the virus’ spread accelerated across Europe. As of Tuesday, there were 61,098 cases and 2,740 deaths across the broader European economic zone, including the EU, Norway, Switzerland, and the U.K., according to the European Centre for Disease Prevention and Control. Nearly half of those cases were in Italy, which also had nearly 80% of the deaths.

In the U.K. alone, positive cases as of Tuesday morning had reached 1,950, according to the Department of Health and Social Care, with at least 55 deaths as of Monday. However, the U.K. has largely stopped testing for the virus outside of hospitals, so the true number of cases is believed to be much higher.

On Monday, the U.K. government announced extended social distancing guidance, advising companies to allow employees to work from home and avoid unnecessary contact with others. However the country had not yet taken the same measures as many of its neighbors, and as of Tuesday, schools remained open.

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