UK promises extra help for business

Bloomberg

UK businesses struggling to avoid collapse will be promised extra help by Boris Johnson’s government as the coronavirus inflicts further damage on the global economy.
Airlines, tourist attractions, restaurants and theaters are among organisations facing a bleak outlook after the prime minister announced curbs on public events, travel and social gatherings.
On Tuesday, Chancellor of the Exchequer Rishi Sunak will seek to deliver on his promise in last week’s budget to help companies and individuals pushed to the brink by the virus emergency. He will set out his plans to help industry at a news conference in London.
The offer of aid for companies comes as the virus outbreak spreads across the UK. On Monday Boris Johnson announced what he called “draconian” new steps to fight Covid-19, including demands for citizens to avoid all “non-essential” contact with other people.
As the UK death toll rose to 55, experts warned the country could see hundreds of thousands more fall victim to the virus. The government said “drastic action” potentially lasting for months or longer is necessary to slow the rate of infections, which are on course to double every five or six days.
At a news conference in London, Johnson said mass gatherings should not take place and called on everyone to work from home if they can.
“Now is the time for everyone to stop non-essential contact with others and to stop all unnecessary travel,” the prime minister said. “We need people to start working from home where they possibly can. And you should avoid pubs, clubs, theaters and other such social venues.”
Johnson’s dramatic statement followed criticism that he has been too slow to take aggressive action to tackle the virus.
Specialists at Imperial College, London, who are advising the government on its response, presented a model suggesting 250,000 people would die from the new coronavirus in the UK unless ministers introduced radical new steps to limit public activities.
Such action could reduce the overall death toll until a vaccine is developed, the study found. The “only viable strategy at the current time” is “suppression” of the epidemic, a move that carries “profound” social and economic implications, the researchers said.
Johnson and his ministers insist they have been guided by the best advice of scientists, but some experts and politicians had demanded firmer action sooner, and accused the government of gambling with people’s lives. Despite calls to close schools, Johnson said classes will remain open.
Officials accepted the package of so-called social-distancing measures will be very difficult for the public, but stressed the plan will reduce deaths during the peak of the outbreak. The government is trying to protect the National Health Service from being overwhelmed by the scale of the pandemic as official estimates suggested as many as 8 million people in England could be hospitalized in a “reasonable” worst-case scenario.
The prime minister accepted the measures will be “a very considerable challenge for businesses big and small” and promised the government is doing all it can to ensure companies have the liquidity they need, including through relaxing the tax system.
Johnson said it is “perfectly obvious” the virus will deliver a “potentially severe blow” to the British economy, but “if we work together, we can ensure it is a short term problem.”
Group of Seven leaders agree markets should have access to liquidity, Johnson said, in answer to a question on the need for a global fiscal stimulus. “If we do things jointly, I think the global markets will understand we are all operating on the same fiscal framework,” he said.