The Chancellor has agreed that small business owners, self employed need more support. He has announced that the Government will underwrite 100% of loans to a limit of £50,000. There are conditions of how much your company or you earnt in the recent past.
Why was this needed? Firstly, this will affect British Indians disproportionately because so many of us run businesses which did not fit the aid from Government up till now. We do not have private investment of £250k, or adequate security and cannot get matched funding for funding from Government.
So this new loan was essential for us. But there is another reason. Banks are shrewd. They knew an 80% Government guarantee meant they could be held holding the can for defaults and after 2008 they know the Government will come after them.
So a 100% government back loan was needed. But what of the tax-payer. Well, it is a loan, not a grant. And the law of fraud is not suspended. Not everyone eligible will want the debt. And although interest free – that’s for only 12 months. So you don’t want to hold it too long either as a business owner.
The balance between the needs of the taxpayer and the business owner has been well held. In fact the Chancellor when asked why he has not 100% underwritten all loans of all sizes explained there may well be businesses regardless of covid who are not worthy of such loans.
So he has been reassuring and empathetic. He even popped up on the BBC’s Big Night In and agreed to match the funds raised on the night to help charities in the UK.
As my English friends would say – “he’s playing a blinder’. That issue of empathy has come up time and again on social media. People have spoken of the New Zeland PM and contrasted that with male figures like PM Modi and President Trump. The latter a fool and the former possibly too aloof at this time? But in India the PM not giving daily briefings has helped – the numbers are extraordinarily low – credit to the PM and the police and medical people.
Lord O’Neill mocked on Radio a few weeks ago that ‘thank god the virus didn’t start in India’. Well, it didn’t. That’s the point that China-philes won’t get. And it didn’t spread like it did in China either. Or in the UK.
So there are political leaders who have shone. Another being Andrew Cuomo the Govermor of New York. Some ask why he is not standing for President. Others are awol – Biden for one – he has to isolate.
The crisis brings out character
