Rishi Sunak warns enterprise confronted ‘Armageddon’ with out Covid-era assist
The former Tory PM Rishi Sunak, who was Chancellor as the virus ripped through the country, said the country was ‘facing widespread business Armageddon’
Britain would have faced a business Armageddon if the government failed to introduce a Covid loan scheme, Rishi Sunak has warned.
The former Tory PM, who was Chancellor as the virus ripped through the country, insisted the risks of firms not paying back Covid-era loans was “unequivocally” worth it. Mr Sunak was responsible during the crisis for introducing a series of schemes, including furlough, to help companies and employees through the pandemic.
Mr Sunak, who was appearing for a second day at the Covid inquiry on the economic response to the crisis, said: “To go back to these couple of weeks… it felt existential. We were facing a situation where businesses, I think it actually came from the British Chambers of Commerce, I think something like half of all small and medium-sized businesses had less than a month’s cash in the bank.”
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He added: “You were facing widespread business Armageddon and that is why there was an imperative to act at scale and at pace to prevent what I think would have been catastrophic loss of businesses and jobs. The independent evaluation has suggested up to 3 million jobs and half a million businesses that were saved as a result of these interventions.”
“There was an imperative to get this right and to get it out, and get the money to the businesses as soon as humanly possible, and you just did not have the luxury of, quite frankly, didn’t have the luxury of weeks, let alone months. If a business [runs] out of cash, and it goes bankrupt, it goes bankrupt. That’s that.”
Mr Sunak also said he would make the exact same choices again in setting up a business loan scheme which has since been criticised for the fraud risks it presented.
He defended how the Bounce Back Loan Scheme was rolled out, telling the UK Covid-19 Inquiry: “I would make the same choice again in the same situation, I would do the same thing again. But at the time, I could tell you certainly nobody was waving their hands saying ‘no, no slow it down, more checks, more form-filling’.”
Mr Sunak earlier said the Government was “eyes wide open about” the risk of fraud, “and made the judgment that the risks were outweighed by the need”.
