Rishi Sunak announces ‘pay as you grow’ plan to give businesses 10 years to repay loans
Rishi Sunak said the new loan will almost half the average monthly payment.
Chancellor Rishi Sunak has announced a new ‘pay as you grow’ loan, as part of a package of new measures to support the ‘fragile’ economy through the winter.
Speaking in the Commons on Thursday, he said ‘bounce back’ loans have given more than one million small businesses a £38 billion boost to survive the pandemic.
In a bid to give business owners more time to pay them back, he said the repayment time will be extended from six years to a decade – nearly halving the average monthly repayment.
Sunak added that businesses can now choose interest only loans and that those who take on the ‘pay as you grow’ initiative will not see their credit rating affected.
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As part of a series of new measures, the chancellor also announced a Jobs Support Scheme to top-up wages and replace the furlough scheme.
The new scheme will allow businesses to keep employees in a job on shorter hours rather than making them redundant, the chancellor said.
Defending his decision to end the Coronavirus Job Retention Scheme, Sunak said it would be ‘fundamentally wrong to hold people in jobs that only exist inside the furlough’.
He told the Commons: ‘As I have said throughout this crisis I cannot save every business. I cannot save every job, no chancellor could, but what we must do its deal with the real problems businesses are facing now.’
The chancellor also extended the self-employment income support scheme and announced a 15% VAT cut for the ‘most affected’ hospitality and tourism sectors until next year.
Sunak said: ‘To support more than 150,000 businesses and help protect 2.4 million jobs through the winter, I’m announcing today that we are cancelling the planned increase and will keep the lower 5% VAT rate until March 31 next year.’
However, Shadow Chancellor Anneliese Dodds grilled Sunak on his delay in announcing the new measures and said he has lost the confidence of business owners.
She said: ‘I’ve called for the introduction of a system of targeted wage support 40 times. That call has been rebuffed by this Government 20 times. It’s a relief this Government have U-turned now.
‘But we must be open and honest. That delay in introducing this new scheme will have impacted on businesses’ confidence.
‘I know that from talking to them, and I’m sure members on the opposite benches know that from talking to businesses in their constituencies.’
It comes as hospitality business owners told Metro.co.uk they feel they are being ‘blamed and punished’ for the surge in coronavirus cases, as the Government’s new curfew comes into effect today.
Pubs, restaurants and bars will be forced to close by 10pm for at least six months – a measure which comes just weeks after Sunak encouraged the public to Eat Out to Help Out.
Business owners called on the chancellor to provide financial backing, saying the curfew will end their businesses, cause job losses, and see hospitality workers losing hundreds in wages per month.
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