The Chancellor gave no new policy announcements in his appearance but did clarify several measures that had already been announced. He explained that the provision of loans rather than grants would allow the Government greater control on how businesses spend taxpayers’ money. He also sought to reassure the Committee that measures were being considered to protect individuals and families.

Loans and grants

The Government’s measures were made up of loans worth £330bn and grants worth £20bn. Mr Sunak said the focus was to preserve employment and that there was more control in providing a loan than in providing a grant. The Chancellor said these were long-term loans but would keep the situation under review. Mr Sunak said the scarring effect on the economy came from employment loss, not through debt. 

The Chancellor said the loans would be quickly and readily accessible through the banks and that schemes would be up running from the beginning of next week (23 May). Mr Sunak said the banking system is resilient, but that the Government was able to provide loan guarantees. He said he was also mindful that payments should be in the taxpayers’ interest.

Measures for Individuals

The Chancellor said that the Government had opened up the benefits system and that the Government was helping businesses to support individuals, though he admitted there was more to do around employment support. 

Under criticism about the speed and scale of Government action, Mr Sunak insisted that the security net had already been strengthened and that he would consult with unions.
Mr Sunak said the situation would create “pent-up demand” which would be released at the end of the crisis. He said grants were being provided through local authorities, who would be obliged to write to smaller businesses, gathering financial data to provide grants. He said that the UK’s total financial intervention was greater than in France and that further measures would be coming for individuals and families.

Mr Sunak said the Government said that they had initiated Time to Pay to address deadlines and bills and that HMRC will be flexible. The Time to Pay Scheme was open to businesses to discuss various tax concerns.

Insurance

The chancellor said that retrospectively altering insurance policies to ensure they paid to venues would cause significant issues and that the Government would prefer to pay directly to the business rather than placing obligations on the insurer.

Agents miss out on business rate relief 

Property agents are missing out on proposed measures for relief on business rates. The Chancellor announced a twelve-month business rates ‘holiday’ for some high street businesses, but property agencies do not fall into the business categories protected. 

Propertymark has campaigned since January for reforms to Business Rates, and it formed a key part of our submission to the Budget.   

Propertymark continues to pursue the matter with Senior Civil Servants at the Ministry for Housing, Communities and Local Government, writing to the Chancellor, Housing Secretary, and Business Minister to ensure estate agents receive the exemption. Several MPs have also raised the issue and Propertymark is engaging with them to urge immediate action.

Bank of England (BoE)

Andrew Bailey announced that the Bank was willing to pump unlimited quantities of money into the economy via a new commercial paper facility. He urged firms not to fire staff before looking at the support available.

Mr Bailey did not rule out creating money to finance government projects – possible because the BoE is the government’s banker— but said the situation did not yet warrant such a move.

The Governor also said that the Bank was looking to create more tools, of which the commercial paper facility was an example, to increase the capacity of the central bank to act. The Bank is likely to restart quantitative easing at its regular meeting.