City Am is not a source I regularly use, but two articles there have stood out for me today.
The first is a review of the continuing failure of the government's loans scheme for smaller businesses. As they note:
Just 2,022 loans have been made to the UK's small and medium-sized firms through the government's coronavirus business lending scheme.
There have been around 300,000 applications so far. That means a paltry 0.65 per cent of enquiries have resulted in coronavirus business loans.
The latest figures, which were compiled by industry body UK Finance but obtained independently by City A.M., showed £291.9m had been lent as of yesterday via the coronavirus business interruption loan scheme (CBILS).
I know the scheme is being revised, but City AM express their doubts about whether those revisions go nearly far enough, and those are doubts I share.
Then they have this offering:
The failure of the coronavirus loan programme to help struggling small and medium-sized businesses risks triggering a “wall of redundancies and defaults” say critics.
The coronavirus business interruption loan scheme was introduced by chancellor Rishi Sunak last month to help funnel money to businesses hit by the economic freeze that has followed the coronavirus lockdown.
However, City A.M. revealed today that UK Finance data showed banks had paid out just £291.9m to 2,022 businesses under the scheme, translating to an approval rate of just 0.65 per cent.
A report from economic consultancy Fideres Partners said the monthly pay roll of the UK's 6m small and medium-sized businesses amounted to £41bn.
Alberto Thomas of Fideres said the slow pace of lending and the paltry sums so far disbursed would lead to massive job losses in the immediate future.
“You have a wall of redundancies and defaults coming which is immense,” he said. “You can pretty much count the days.”
I agree: that's exactly what is happening now, as I reported from another source yesterday and as I predicted when these schemes were announced.
When British businesses are haemorrhaging their capital right now loans of the type being offered were always the wrong solution for them, and in the absence of 100% government guarantees were never going to work. In addition, the bureaucracy of these schemes is absurd.
We have spent a long time looking at the numbers of Covid infections and deaths of late, but the corporate casualty rate is now going to surpass that by a very long way.
Rushi Sunak will be the man whose inability to understand a crisis will have brought this country to its knees. He will not be forgiven. And because of the dither and delay there is now nothing he can do to stop this happening: the fate of hundreds of thousands of UK businesses is now sealed.
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Just listening to Sunak, and I’m banging my head against the wall; more dithering rubbish, constrained by ideological sacred cows. We’re going to come out of this with unemployed running 40%+, and the finances of the majority of households in ruins.
Here is a proposal: the Scottish Government should simply issue whatever cheques are needed for Scottish farming and SMEs and challenge London to order the BoE to bounce the cheques. I am sure they can still do a cheque and it works better than an online payment in terms of getting around any block in the system that prevents you initiating it if you exceed some sort of limit. With Boris convalescing probably for weeks and the rest a bunch of headless chickens then who would order the BoE to bounce the cheques? And if they did the recipients would all know exactly who was to blame for destroying their business since they would have had salvation in their hands literally only to have it snatched away by Westminster.
I promise you Tim, they would withhold the money
I’m not disagreeing but what plausible justification could they possibly give? This is a level of incompetence we haven’t seen for some time, if ever.
Worth trying because it is then explicit as to where the blame lies. You are much better at the politics than me but the blame needs to be absolutely nailed where it belongs. I do find it hard that everyone can be so blinded. As somebody said recently there is zero unemployment in nature. You have to introduce money to create it. Though I suspect that ignores natural unemployment as being dead. But it was a good line.
I have not the slightest doubt if Tory hatred of Scottish independence
Whatever happens, they would seek retribution
The people who appointed him should not be forgiven.
The people who are responsible for sending our medical staff, hospital cleaners, care home staff and others into work without proper protection, causing them to risk health and their lives, should not be forgiven, either.
That includes one of my family who has a young family.
There will have to be a reckoning.
So much for the pro-business party. As Brexit loomed we knew that their incompetence would make a frightening mess out of that transition. This episode has shown shown us how thoroughly useless they have become but few of us knew they were THAT bad.
Takes some doing to put a whole nation in remedial lockdown but it’s been brewing for decades!
It absolutely has. If the UK were a person, the poor thing has been dementing for years – increasing unable to accurately perceive its world, to care for itself or to keep itself safe.
Agreed 100% . I said it on here before Rushi Sunak is Goldman Sachs and a hedge-fund and that was what qualified him to become the Chancellor of the Exchequer . In this crisis those aren’t qualifications . That’s the micro-level. At the macro-level our delivery systems both in the public and the private sectors have been so emasculated that no immediate ground level connection with the self-employed and small business can be imagined let alone made. My business is due to receive a grant under the government’s Coronavirus support provisions. The government website tells me we will be given a grant based on the rateable value of our premises, but when ? So I go to my local authority’s website ( the government website informs me that I need do nothing as I will hear from my local authority ) and there it tells me to apply for the grant – in direct contradiction to what I am told on the the government’s own site . Added to which it tells me the software to apply the grant is still being developed. So maybe, just maybe we will receive this grant in a few weeks, a month , who knows when. Fortunately for us, ours is a niche business and we have been able to achieve direct financial support from our customers with whom we have developed close, personal relationships, and as a result we’ve been able to maintain a cashflow and pay our suppliers the majority of whom are small , local businesses like ourselves. Well all I can say is good luck everyone whoever you are we are going to need it, there are some rough times ahead ! Nothing is going to look the same on the other side of this crisis and there isn’t going to be a return to ‘ normal ‘ as in how things were on 1st January 2020.
So ,the ‘Finance Curse’ even extends to how we deal with emergencies.
As in ‘We don’t’.
Indeed
In the states Unemployment higher than 4% bear and recession occur, if it is under 2% bull market occurs, between 2 and 4% credit lending increasing, however I believe unproductive spending to earning growths ratio occurs within the whole spectrum, remember unemployment makes a labour bank which keeps labour costs increases at über zero levels hence inflation low and mortgage rates low, so unemployment is good for middle class run companies as a labour pool and if employment starts to decrease bring in boats of immigrants without an union or rights. Any president elec spendings the the first year or so undermining regulation and creates cheap jobs on the year before re-elect, so much so you can get third jobs and still not paid your scum landlords rent. The system is broke, one persons grow is another persons USary. New apolitical song It is the end of capitalism as we know it !