Britain’s treasury chief has announced a plan to give small businesses greater flexibility to repay loans, as the government races to prevent widespread layoffs when earlier employer subsidies end next month.
Chancellor Rishi Sunak unveiled the plans as part of a package of economic measures, including a programme that subsidizes the wages of workers whose hours are cut due to the pandemic, during a speech to lawmakers.
The facility dubbed ‘Pay as You Grow’ allows companies to extend loans from 6 to 10 years, nearly halving the average monthly repayment.
“Businesses who are struggling can now choose to make interest only payments, and anyone in real trouble can apply to suspend repayments altogether for up to six months,” Sunak said. “No business taking up pay as you grow or see their credit rating affected as a result.”
The government reported 6,178 new confirmed COVID-19 cases Wednesday, a 25% increase from the previous day and the UK’s highest daily total since May 1.
To control the spike in COVID-19 infections, the British government on Tuesday introduced new restrictions, including a 10 pm curfew for bars and restaurants that goes into effect Thursday.
In measures targeted for the tourism and hospitality sector, Sunak said he was putting the brakes on a planned January VAT increase.
“To support more than 150,000 businesses and help protect 2.4 million jobs through the winter. He said he is cancelling I’m announcing today that we are canceling the planned increase and will keep the lower 5% VAT rate until March the 31st next year,” the Chancellor said.