Increased borrowing is not the best response to the current crisis
Loans increase costs at a time when reduced demand requires lower costs, says MPA.
The Mineral Products Association yesterday wrote to the Chancellor of the Exchequer setting out the support businesses need, based on discussions with our member companies, during the Covid-19 crisis. The letter can be found here.
Businesses do not see increased borrowing as the best response to the current crisis. Loans increase costs at a time when reduced demand requires lower costs. Loans are slow to obtain and bureaucratic.
What business needs now are fast and simple solutions by enabling them to keep cash in their businesses and their employees in their jobs. Not having to pay NI, VAT, Corporation tax and business rates over the next 3 months is the best way to retain jobs and sustain companies in these exceptional times whilst we evaluate the potential impact of the virus on enterprise. Direct Government support for site-based employees unable to work from home should be increased as in other countries.
Other measures to boost demand should be accelerated to build confidence to maintain investment not least accelerating planned infrastructure projects and as the economy recovers supporting new homebuilding.