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Business Leaders Urge the UK Government to Help During Crisis

With stock markets tumbling and many businesses forced to close their doors temporarily, there have been calls for the British government to do more to help out firms that are struggling due to the coronavirus crisis. From airlines to pubs and from cinemas to fashion stores, there is a long list of businesses that simply can’t carry on with business as normal while travel restrictions and social distancing plans are in place.

Who Has Spoken Out?

Robert Chote is in charge of the UK’s Office for Budget Responsibility, which is the tax and spending watchdog. He pointed out that the country’s economy is “probably shrinking as wespeak”. Chote compared the current crisis to the wartime situation and urged the government to ramp up their spending plans.

He stated that companies need the support from them ramped up significantly now. Chote was addressing MPS on the Treasury committee during a discussion on the £12 billion emergency support package included in last weeks’ budget.

The head of the watchdog confirmed that the situation “has moved on” in the few days that had passed since the budget was unveiled by Rishi Sunak. He described the £12 billion injection of cash as being like a downpayment, pointing out that it is going to be expensive and the cost may change on a daily basis.

Chote stated that some business will inevitably go bust due to this health crisis. However, he insisted that a large, temporary increase in public spending is the right solution just now. He believes that now is the time to pump money into the economy, leaving us to deal with the consequences later on.

Who Else Was Involved?

Another person to speak out on the matter during this debate was Charlie Bean, who is a former deputy governor of the Bank of England. He is currently on the government’s budget responsibility committee. Bean said that it is “better to end up spending a little too much” than run the risk of not spending enough to deal with the crisis. He pointed out that damage to the economy results in damage to public finances later on.

The Business Insurance Blow

Another piece of news this week confirmed that very few British businesses will be able to claim insurance for losses due to the coronavirus outbreak. This is bad news for firms already struggling and perhaps looking at international debt collection for some relief.

The Association of British Insurers has pointed out that most insurance policies have no clause that covers Covid-19. It doesn’t even matter if they are forced to close by the government. There is no way that their insurance policy will help, in most cases.

Standard business interruption cover doesn’t include any protection in the case of forced closure by the authorities. Rather, it is designed to protect firms when they can’t trade due to the property suffering some sort of damage. Those who could be protected are those who have paid
for an extension that covers them for closure due to any infectious disease.