 | This article needs to be updated.(May 2021) |
Project Birch is the British government's bailout plan to help save companies that are critical to the British economy during the COVID-19 pandemic. It was announced in May 2020. As of September 2020, only one company has qualified for help. [1]
The Treasury said that support would be given to "viable companies which have exhausted all options", whose failure would "disproportionately harm the economy". [2] It aims to step in to support sectors of the economy most affected by the pandemic and to reduce job losses, [3] but will only assist companies as a "last resort". [4] Whilst the scheme was more likely to involve loans, it was also discussed as including stakes being bought in companies, [5] though the Chancellor of the Exchequer, Rishi Sunak, was understood to be reticent about this. [3] He said instead that companies would be required to make formal pledges related to executive compensation, employment, greenhouse gases and tax. [6]
There were financial schemes and packages announced by the government to support companies, such as the Coronavirus Job Retention Scheme and the Bounce Back Loan Scheme, but concerns were raised that large businesses would remain in difficulty after using options already in place. [4]
Car manufacturers including Aston Martin and Jaguar Land Rover looked into government funding, with the latter in talks for a potential £1 billion loan. [7] Taxpayers may potentially have held stakes in the company as a result of the discussions, [8] before the Financial Times reported that the talks with the company had ended. [1] They also reported that talks with Tata Steel had ended; [1] the steelmaking company's UK business had asked for £500 million in government support. [3]
The airline Virgin Atlantic asked for the government to provide it with a £500 million emergency loan, saying it was planning to cut 3,000 jobs, and the Scottish-based regional airline Loganair also asked for help. [7]
The first, and so far only, [1] company to receive a loan through the scheme was Celsa Steel UK, which was provided with a £30 million bailout. The company, which is the UK's largest steel rebar manufacturer, was given a series of legally-binding conditions to adhere to, and told that the money was to be repaid in full. [9]
The Shadow Chancellor of the Exchequer, Anneliese Dodds, said that the support should focus on maintaining employment, and that companies receiving support should be "prevented from engaging in share buybacks and dividend payments". [2]
The importance of support for key businesses was commented on by the Institute of Directors' chief economist who warned of the knock-on effect that key business failures could have on the supply chain. [2]
Unite the Union welcomed the news of the scheme and said that it could prevent "a tsunami of job losses" from affecting communities. [7]
By September 2020, only one company had been helped by the scheme, which led the Shadow Secretary of State for Business, Energy and Industrial Strategy, Ed Miliband, to ask the government for clarifications about the scheme's progress. His colleague Dodds said of the companies seeking help, "The longer it takes to get it, the higher the risk to jobs and businesses that the government itself admits are too important to fail". [7]
Outside the United Kingdom, financial support schemes have been carried out by other governments. The largest German airline, Lufthansa, said on 29 June that it would receive a £8.1 billion bailout from the German government. As well as this, the French government presented loans and loan guarantees worth £6.31 billion to Air France–KLM. [7]
Beginning in the latter half of 2008, a global-scale recession adversely affected the economy of the United States. A combination of several years of declining automobile sales and scarce availability of credit led to a more widespread crisis in the United States auto industry in the years of 2008 and 2009.
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Rishi Sunak is a British politician who has served as Prime Minister of the United Kingdom and Leader of the Conservative Party since 2022. The first British Asian prime minister, he previously held two cabinet positions under Boris Johnson, latterly as Chancellor of the Exchequer from 2020 to 2022. Sunak has been Member of Parliament (MP) for Richmond (Yorks) since 2015.
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CELSA Group is a multinational group of steel companies headquartered in Spain, mainly in the industry of steel reinforcement or rebar.
Aviation taxation and subsidies includes taxes and subsidies related to aviation.
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The July 2020 United Kingdom summer statement was a statement from the British Government, or mini-budget statement, delivered on 8 July 2020 by Rishi Sunak, the Chancellor of the Exchequer. It followed the budget delivered earlier in the year, and preceded the Winter Economy Plan. The purpose of the statement was to announce measures aimed at helping to promote economic recovery following the impact of the COVID-19 pandemic. The statement was delivered to the House of Commons, where Sunak unveiled a spending package worth £30bn. Concerns were subsequently raised by organisations including HM Revenue and Customs and the Institute for Fiscal Studies about the statement's impact, as well as its cost-effectiveness, while at least one major retailer declined to take advantage of a financial bonus scheme intended for rehiring employees placed on furlough during the pandemic.
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The Winter Economy Plan was a statement from the British Government, or mini-budget statement, delivered on 24 September 2020 by Rishi Sunak, the Chancellor of the Exchequer. It succeeded the summer statement held earlier in the year, and was a partial replacement to the cancelled budget scheduled for the Autumn. The purpose of the statement was to announce measures aimed at further helping to promote economic recovery following the impact of the COVID-19 pandemic. The statement was delivered to the House of Commons. The plan aimed to further promote economic recovery while preserving jobs and businesses which were considered viable.
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Rishi Sunak served as Chancellor of the Exchequer of the United Kingdom from his appointment on 13 February 2020 to his resignation on 5 July 2022. His tenure was dominated by the COVID-19 pandemic in the United Kingdom, with Sunak becoming a prominent figure in the government's response to the pandemic, giving economic support to struggling businesses through various schemes. He was also involved in the government's response to the cost of living crisis, UK energy supply crisis, and global energy crisis.
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