A union has welcomed an indication from the Government that firms facing a failure during the coronavirus crisis that would “disproportionately harm the economy” could be given more support on a “last resort” basis.
The Treasury has said support might be considered in exceptional circumstances and where a company had exhausted all other options.
It comes after Transport Secretary Grant Shapps told Parliament last week that work alongside the Treasury on an additional support scheme for the aviation sector – which he called the Birch process – is “very much ongoing”.
A Treasury spokeswoman said on Monday: “We have put in place unprecedented levels of support to help businesses get through this crisis.
“Beyond that many firms are getting support from established market mechanisms, such as existing shareholders, bank lending and commercial finance.
“In exceptional circumstances, where a viable company has exhausted all options and its failure would disproportionately harm the economy, we may consider support on a ‘last resort’ basis.
“As the British public would expect, we are putting in place sensible contingency planning and any such support would be on terms that protect the taxpayer.”
It is understood the Treasury would notify Parliament of the spend incurred as a result of any deal.
The department has stressed the difference in being approached for support and agreeing to give it.
Steve Turner, the Unite union’s assistant general secretary for manufacturing, said the Government’s indication about a rescue plan was welcome but said the union will need to see details and emphasised that time is of the essence.
He said: “There is no more time to lose if we are to prevent a tsunami of job losses from sweeping through communities this summer.”
Mr Turner said it is important any proposed changes to the Government’s job retention scheme “do not undermine a plan to recover and rebuild and that workers continue to get their wages”.
He added: “But if these moves put a financial floor under major employers and their vast supply chains then we have the beginnings of a plan taking shape.”
