As COVID-19 restrictions are eased in England, and some semblance of normal life returns to the nation, the financial cost of the pandemic is now coming into focus.
With national lockdowns forcing businesses to close their doors and millions of people put on furlough, throughout the pandemic the UK Government had looked to lift some of the financial burden from those affected.
Throughout the pandemic, the government handed out nearly £80 billion in emergency loans, according to the latest figures from HMRC.
Here, Stephanie Hammond, Director at Beatons Group, explores how the nation’s coronavirus bill could eventually be settled.
The impact
Almost all businesses have suffered as a result of the pandemic – either from having to furlough staff and lockdown offices or simply due to a dip in customers and trade.
The first lockdown came as a shock to most, with businesses having to quickly adapt to the worldwide crisis with little time to prepare.
Further lockdowns brought more challenges, with more than eight million people opting to work from home, according to the Office of National Statistics.
And despite ‘Freedom Day’ arriving on July 19, thousands of people across the country are being ‘pinged’ and made to self-isolate.
Financial support
Throughout the pandemic, the UK Government has sought to help businesses weather the storm through a range of financial support packages.
More than 1.6 million government-backed loans have been issued during the crisis, according to HM Treasury.
Latest figures show the government has handed out more than £80million in emergency loans since the virus struck.
This includes £47.4bn in Bounce Back Loans, £26.4bn in Coronavirus Business Interruption Loans, £5.6bn in Coronavirus Large Business Interruption Loans and £1.1bn for the Future Fund.
However, the figure is set to be even higher as the government’s Recovery Loan Scheme is set to continue until December 31.
How will the debt be paid?
As the pandemic struck Britain and the full magnitude of the crisis was laid bare, the government had to step in to help.
Whatever you view on how the pandemic has been handled, there is no doubt the financial assistance given has at least limited the economic damage and saved many businesses from closing for good.
However, with figures revealing the government borrowed £229bn from April 2020 to April 2021 - the highest sum in a single year since records began – the national bill will one day need to be settled.
How the government propose to do that, we will have to see. Will it raise taxes to pay the bill, or cut spending on services?
Although the government has been able to borrow this money at very low interest rates, the payments will no doubt weight on future generations until the debt is paid.