UK unveils $400 billion of loan guarantee plan as coronavirus bites

Britain on Tuesday unveiled 330 billion pounds ($399 billion) of loan guarantees, the biggest British rescue plan since the 2008 financial crisis, to give a lifeline to businesses constricted by the accelerating coronavirus outbreak.

Finance minister Rishi Sunak said the world was facing an emergency but the British government would do whatever it took to support the economy.

Following are the main measures announced by Sunak:

* Business support: An additional 330 billion pounds ($399 billion) of guarantees to business, worth 15 percent of GDP. If demand is greater than that the government will provide as much capacity as required. The scheme will be up and running by next week.

"I will go further and provide as much capacity as required, I said whatever it takes and I meant it," Sunak said.

* Companies: The support will be delivered by two main schemes. The first will be a new lending facility to purchase debt known as commercial paper issued by companies hit by the coronavirus.

The second for smaller and medium sized businesses will be an extension of the new business interruption scheme announced last week with loans up to 5 million pounds.

* Transport: Sunak said specific government help for airlines and airports would be discussed in the coming days.

"Some sectors are facing particularly acute challenges," he said. "In the coming days, my colleague the Secretary of State for Transport and I will discuss a potential support package specifically for airlines and airports."

* Hospitality and leisure: Sunak scrapped business rates for all companies in the hospitality sector and said for smaller businesses there would be cash grants of 25,000 pounds.

"I am also extending today the business rates holiday to all businesses in those sectors irrespective of their rateable value that means every single shop, pub, theatre, music venue, restaurant and other business in the retail, hospitality, sector," he said.

* Mortgage holiday: Britain's banks should show flexibility to borrowers affected by the coronavirus, Sunak said, adding that a three-month mortgage grace period for homeowners in difficulty was just a first step.

"We have had extensive discussions with the banks, who understand the situation that people are in and will, they have assured me, provide flexibility to those people in those circumstances, and understanding," Sunak said.

*Jobs: Sunak said the package of direct support to businesses through tax cuts and cash grants would be worth 20 billion pounds this financial year.

Sunak said he would go further to support jobs and incomes in the coming days.

"In particular, I will work with trade unions and business groups to urgently develop new forms of employment support to help protect people's jobs and incomes through this period," he said.