Rishi Sunak announced a range of measures to support the leisure, hospitality, and retail sectors, including a £330 billion government-backed loan scheme for businesses, as well as further business rate relief and additional measures to support individuals worth in excess of a further £20 billion.
Additional support for the aviation sector, specifically airlines and airports, is expected to be outlined in the coming days following talks with the Department for Transport.
However, Tuesday’s announcement offered little by way of respite from certain existing rules many throughout the travel sector feel are harming businesses chances of survival, such as some of the tenets of the Package Travel Regulations – with both Abta and Aito calling for respite, particularly for SMEs.
‘Positive statement of intent’
Abta chief executive Mark Tanzer said Sunak’s support package was a “positive statement of intent” building on measures outlined in the Budget last week which, while welcome, the government recognised were insufficient as its response to the coronavirus crises escalates.
Tanzer said it was now incumbent on the government to follow through on its commitment to do “whatever it takes” to support the UK’s travel businesses hit hardest by the ongoing Covid-19 coronavirus outbreak.
“We also need to see some of the measures announced today [Tuesday], such as the government-backed loan scheme, made immediately available to travel businesses, and further clarity on how businesses will be able to access these loans,” said Tanzer.
“It is also essential the government acts immediately by making temporary changes to existing package travel regulations. The existing financial protection structures and processes designed to protect UK consumers were not designed to cope with the demands that are currently being placed on them.”
What were the key measures announced?
- Liquidity support for large firms, including a new £330 billion government-backed loan scheme supported by the Bank of England to help businesses “bridge” any disruption to cash flow
- An increase in the amount smaller businesses can borrow through the Coronavirus Business Interruption Loan Scheme from £1.2 million to £5 million; business can access the first six months interest free, with the government picking up the interest tab
In addition, a further £20+ billion is being made available through a range of supporting measures, including business rate relief and grant funding, to support “the most-affected firms”, other small businesses and individuals with cash flow.
- All retail, hospitality and leisure businesses in England have been granted a 100% business rates "holiday" for the next 12 months
- An increase in grants available to businesses that can access Small Business Rate Relief from £3,000 to £10,000
- Further grants of up to £25,000 made available to retail, hospitality and leisure businesses operating from smaller premises with a rateable value over £15,000 and below £51,000
- An agreement with mortgage lenders to support people and businesses experiencing financial hardship as a result of the coronavirus outbreak, including payment holidays of up to three months
- Sunak also confirmed the government’s advice to avoid pubs, clubs, restaurants, theatres and other leisure venues was sufficient for businesses to be able to trigger any insurance coverage they have, with a guarantee that government would ensure payouts are forthcoming
