Chancellor Rishi Sunak has now extended the scheme to the end of October as it becomes clear the impact of the Covid-19 lockdown will be far reaching, both economically and socially for the UK and other countries around the world.
This furlough scheme is just one of the ways the government is helping to support the economy.
Another key way was by providing loans to businesses that were viable before the crisis so they could continue to survive while it plays out. These loans, as would seem to make sense, were supposed to be passed out by the banks.
Now, this money – which is as near to interest-free as it gets because the Bank of England base rate is currently 0.1 per cent – was intended to be passed onto businesses at low rates so they were able to take the loans, get back on their feet and start trading again as soon as allowed.
Instead, the banks made it extraordinarily hard for businesses to access these loans in a time of crisis, and anecdotally rates being offered were as high as 30 per cent.
Business owners were also being asked to put their own properties up for collateral against the loans. If this is not a perfect example of a rule for one and one rule for another, then I do not know what is.
So, now the government has stepped in again, backing the Bounce Back Loan Scheme 100 per cent, so the banks are not taking any risks in lending to businesses.
Yes, you know, the banks that had no problem taking huge risks previously that resulted in us, the taxpayer, standing behind them before. Well, here we are doing it again.
I do not normally get so frustrated by the mechanisms of capitalism, I appreciate that there are difficulties on all sides and that the banks were asked to repay their own bailouts over time.
Many have done so and completed payments that gave the government – or taxpayer – interest on that money too. That is how the economy works.
But to have forgotten so quickly how they had to swallow their collective pride and ask for help, that they are unwilling to give other businesses finding themselves in a similar situation now – which has nothing whatsoever to do with their business practices – sticks in my throat.
I only hope that when the dust settles on all of this, there is an investigation into who did what at each bank in relation to these loans that should have helped businesses at the very beginning, and appropriate action is taken.
But I am not going to hold my breath.
