Government ‘draws up plans to buy SHARES In British Airways and other airlines to keep them afloat through coronavirus crisis’
- The UK Government is drawing plans to renationalise BA and other airlines
- Officials say the State could hold equity stakes in companies about to go bust
- Billions of pounds would be injected by the Government into the hard-hit airliners, after Transport Secretary Grant Shapps vowed to step in last week
- The Government is under pressure to intervene after it was warned that Chancellor Rishi Sunak’s £350billion package is ‘not enough’
- Britain’s economy has been hit badly by the escalating Pandemic Crisis, caused by the outbreak of the Wuhan coronavirus and the spread of Covid-19
- Coronavirus symptoms: what are they and should you see a doctor?
The UK Government is drawing up plans to buy shares in British Airways and other airlines hit by the Pandemic Crisis to keep them afloat, insiders confirmed.
Talks are in place which could see the State holding equity stakes in companies on the brink of collapse as coronavirus panic damages the UK economy.
Billions of pounds would be injected into the likes of BA, whose boss Alex Cruz told his 45,000 staff that the viral outbreak is threatening the company’s survival.
Mr Cruz warned that the escalating crisis is ‘of global proportions like no other we have known’ – including the 2008 Financial Crisis and 9/11.
The Government is understood to be under pressure to intervene after it was warned that Chancellor Rishi Sunak’s £350billion bailout is ‘not enough’.
Last week, Transport Secretary Grant Shapps hinted that emergency measures could see airlines, rail operators and bus firms ‘run by the public sector’.
Secretary of State for Transport Grant Shapps arrives in Downing Street on March 17
He promised that ‘world-leading, well-run, profitable’ airlines like BA, EasyJet, Jet2, and other air travel providers would not be allowed to collapse.
One unnamed source told the FT that ‘at some point the Government will need to think about all the industries and businesses that might be severely impaired’.
This development comes as the spread of Covid-19 – the illness caused by the novel Wuhan coronavirus – continues to spook international stock markets.
One of the hardest hit sectors throughout the Crisis has been travel, as airlines have grounded an unprecedented number of planes and airports have all but closed.
Meanwhile, Britons trying to get back home have been stranded overseas.
British Airways plane taxis past parked aircraft near Terminal 5 at Heathrow Airport in London
British Airways CEO Alex Cruz, who pleaded with staff to take the Pandemic Crisis seriously
Britain’s volatile FTSE 100, the index of the country’s biggest 100 companies, was aggravated after Boris Johnson instructed people to follow Social Distancing Orders.
The PM told pubs, cafes, bars, restaurants, cinemas, theatres, gyms, and leisure centres to shut yesterday for at least 14 days as the UK goes into lockdown.
Widespread concerns that the Government’s coronavirus policy may be doing more harm than good forced the Chancellor to unveil a huge virus package.
Mr Sunak unveiled £350billion that would be injected into the economy. The bailout was criticised by trade union, though, for not helping workers.
In response to these complaints, the Chancellor has vowed to pay 80 percent of workers’ salaries up to £2,500 per month.
Around £30billion of VAT payments have been deferred, and the Treasury will increase benefits by £7billion as people suspect potential mass layoffs.
Rishi Sunak’s blank cheque to save jobs: Chancellor pledges to cover 80 percent of laid-off workers’ salaries up to £2,500 a month, defer VAT bills and increase welfare payments by £7billion in extraordinary package to fight coronavirus crisis
Chancellor Rishi Sunak effectively signed a blank cheque as he unveiled a huge new coronavirus bailout to cover the wages of millions and stop firms going bankrupt.
He said the Government will cover 80 percent of salaries up to a ceiling £2,500 a month – equivalent to the UK average wage of £30,000 a year – as long as employers keep workers on their books, and there will be no limit on the total cost.
The scheme will be up and running by the end of April and be backdated.
Some £30billion of VAT bills for the next quarter will be deferred, and there will be a £7billion boost to welfare to ‘strengthen the safety net’.
Renters will also get a £1billion fillip with housing benefit rising.
Mr Sunak proclaimed dramatically: ‘For the first time in our history the government is going to step in and help pay people’s wages.’
Chancellor Rishi Sunak told worried Britons they will not face the Pandemic Crisis ‘alone’ as he unveiled another huge new coronavirus bailout last night
Experts forecast that Mr Sunak’s intervention could save 800,000 jobs in Britain’s workforce for when the country eventually emerges through the emergency.
Standing alongside Boris Johnson at a press conference in Downing Street, Mr Sunak made a direct appeal to businesses not to sack people.
‘The Government is doing its best to stand behind you and I am asking you to do your best to stand behind our workers,’ he said.
The staggering rescue package, which will last an initial three months and be financed by borrowing, was on an even bigger scale than many had expected – and the true costs might not be known for months.
It was hailed by unions and business groups – although Shadow Chancellor John McDonnell griped that it should have gone even further.
The wage subsidy is expected to apply to firms where people have already been laid off – as long they are brought back into the workforce and instead granted a leave of absence. There are thought to be more than eight million workers in sectors that are directly affected, such as hospitality, retail and leisure.
If the government pays out the maximum rate to five million, it would cost £12.5billion a month. If the situation continues for a year, as Government experts say is possible, that could cost £150billion – equivalent to the annual NHS budget.
The figures could end up being lower depending on the detail of the scheme, with the Resolution suggesting that a million workers could be covered. The bill will be offset by not having to pay jobless benefits, but they are far smaller.
It comes on top of a £350billion package announced just earlier this week, including £330billion of loan guarantees and £20billion of rate reliefs and grants. And at the Budget last week Mr Sunak pumped £30billion into stimulating the economy.
Meanwhile, the Bank of England has slashed rates twice to a record low of 0.1 percent and announced that its quantitative easing scheme – effectively printing money – is being ramped up to over £600billion.
There have been warnings that without action GDP could be slashed by a fifth and a million could lose their jobs within months – with many more to follow – after Social Distancing Orders brought the economy to a halt.
Boris Johnson has ordered for pubs, restaurants, gyms, cinemas, and theatres to shut down
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