COVID-19 UK Government’s Latest Measures To Support UK Businesses
May 28, 2020
On March 17 and March 20, 2020, the UK Chancellor of the Exchequer announced a set of “unprecedented” economic measures to further support UK businesses and mitigate the economic disruption caused by the coronavirus pandemic (“COVID-19”).
Subsequently, a number of complementary measures have also been announced and the official guidance has evolved.
As part of these measures, the UK government will make available to UK businesses an initial £330 billion of government-backed and guaranteed loans, make a material contribution to the salary and wage bills of those who are furloughed in connection with the pandemic, and financially support the self-employed. HM Treasury and the Bank of England (the “Bank”) have also launched major financing schemes to help UK businesses bridge COVID-19 related disruption to their cash flows.
These measures are in addition to those initially announced by the Chancellor in his March 11, 2020 Budget presentation and by the three policy committees of the Bank on the same day, and updated on March 19, 2020. The two authorities hope that their concerted action will have maximum impact in reducing the economic shock.
The UK government has also obtained new legal powers via the Coronavirus Act 2020 (the “Act”), which received royal assent on March 25, 2020 after a rapid passage through parliament. The Act enables the UK government to offer any further financial support that is required in order to prevent, mitigate or compensate for the impact of COVID-19 on UK businesses.
This memorandum outlines the recent economic and fiscal measures proposed by the UK government and certain other developments likely to be relevant to UK businesses.