Great Britain

Business Secretary warns banks ‘its time to repay the favour’ & bail out taxpayers in their time of need

BUSINESS Secretary tonight warned banks it was their turn to repay the favour and bail out taxpayers - more than a decade on after they were saved during the financial crisis.

In a stern warning Alok Sharma said it would be "unacceptable" if they didn't come to rescue Brits in their "time of need".

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It was warned earlier than nearly a million businesses could go under as they are struggling to get the help they need now to pay workers.

Firms all over Britain have revealed their fury after being either refused emergency loans, or left unable to even speak to banks on the phone.

In tonight's Downing Street press conference he told the banks that the Government had bailed them out in the financial crash and it was now time for them to "repay the favour" to taxpayers.

Mr Sharma said: "Just as the taxpayer stepped in to help the banks in 2008, we will work with the banks to do all they can repay that favour in their time of need."

He thanked businesses for vowing to keep going so far - and assured them that help was available.

Today £22million on business rates relief and grants of up to 25,000 for small high street firms was freed up, he added.

And £12billion has also been pumped into local councils, and is being pushed to businesses who need it most.

What help is there for businesses?

Just two weeks ago Chancellor Rishi Sunak had promised businesses Coronavirus Business Interruption loans of up to £5m to help them survive.

With most branches closed, thousands of firms are now struggling to get the cash they were promised just a fortnight before.

Those that are open are then limiting the number of customers that can be in a branch at any one time, making it even harder for people to get the help promised.

Companies struggling to stay afloat have complained they couldn't get even get through on the phone, and those that did were told the money will take weeks they can't afford.

Mr Sunak had written to UK banks last week urging them to lend to customers as much as possible and be flexible about loans.

Sources said that cash had "very much gone out the door" and banks are understood to be being told they must not demand personal guarantees on loans for small businesses either - or use it as a reason not to lend them cash.

Despite this, companies are still being issued with demands they cannot meet.

Engineering group Belgrave & Powell revealed they had struggled to get the funds.

Boss Steve Lord said: "I was heartened and astonished to see the unprecedented help that was announced by the Government two weeks ago.

"But we put one of our most senior people on it and as each day passed it was disappointment after disappointment.

"It seems to be that if you are lucky you are banking with the right party, if you're not lucky you'll end up having to close your business."

Jewellery company boss Peter Jackson revealed his successful company was refused a loan because it made a loss last year despite being on course to make a profit in 2020.

He explained: "I thought the whole point of the loans was to help business like mine stay afloat. But they're not going to help."

Mark Fuller, who owns popular celebrity haunt Karma Sanctum in Soho explained he could not apply for funds as he was unable to guarantee he could pay it back in six months.

He said: “The loan is under normal business conditions, which is fine but then don't suggest otherwise.

“I have already been told by the Government and Barclays that the only way to receive a loan is by cutting my staff.”

Banks were inundated with complaints on Twitter from those trying to access the loans, only to be on hold for hours.

One user wrote to Barclays saying they "can’t apply for a loan online, it tells me to call a number, was on hold for 2 hours".

Another claimed after ringing RBS they were "cut off after holding for 2 hrs, for the 2nd day in a row."

If these businesses can't stay open with emergency loans they are going to have to let go thousands of members of staff.

The Government had promised to pay businesses up to 80% of their wages - but that support won't come until at least the end of the month.

The banks insist they're following rules set by the government, which mean firms can only get the emergency loans if they can't borrow in a normal commercial way, like borrowing against the value of their home.

This means businesses wanting to borrow more than £250,000 are being told to sign personal guarantees, meaning they could be forced to hand over their property.

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It comes as a further 563 patients with coronavirus died in the UK, taking the total number of deaths in hospitals to 2,352.

Yesterday a 13-year-old boy became the first known child in the UK to die with Covid-19. A 19-year-old with no existing medical issues also died.

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