Billionaire businessman John Caudwell has called on the government to ramp up its coronavirus support scheme, including underwriting 100 per cent of business loans and extending the job retention scheme.
Caudwell, who co-founded Phones4u, said the government must provide 100 per cent loan guarantees to encourage banks to lend to struggling businesses.
The government is currently underwriting 80 per cent of loans granted under the coronavirus scheme.
He also said the government should pay 100 per cent of salary for the lowest earners. The government’s job retention scheme covers 80 per cent of wages for furloughed workers.
“Jobs are being decimated by the minute,” Caudwell told Reuters. “It desperately, desperately needs re-addressing now, today, before it’s too late.”
Lobbying groups and Labour shadow business secretary Ed Miliband have urged the government to underwrite 100 per cent of loans.
However, chancellor Rishi Sunak yesterday said he was “not persuaded” that the government should underwrite 100 per cent of loans offered under the coronavirus business loans scheme.
“I’m not persuaded moving to a 100 per cent guarantee is the right thing to do,” Sunak said at the government’s daily coronavirus briefing.
Meanwhile, concerns have been raised that the UK is falling behind internationally in the provision of coronavirus business loans. So far t£7.6bn of loans have been secured for big businesses with investment-grade credit ratings, but many small firms are still waiting.
In Switzerland, an emergency state-backed loan scheme delivered 14.3 billion francs of loans in the first few days.
In the US a $350bn emergency loan programme to help small businesses keep workers on their payrolls has already run out of funds.
Shalini Khemka, the founder of entrepreneur network E2E, said she had received messages from members who are facing collapse.
“I’m receiving email after email after email,” she told Reuters. “Slowly we will see a domino effect of companies running out of cash.”