Rishi Sunak’s new warning to every worker in the country as Boris Johnson refuses to lift lockdown

Chancellor Rishi Sunak said the "bounce back loans" would have the interest paid by the Government for the first 12 months.

Mr Sunak acknowledged that some small firms were struggling to access credit, and by guaranteeing the full value of the loan he hopes that lenders will allow companies to borrow the funds they need.

But he rejected calls for the Government to underwrite other coronavirus loan schemes with a 100% guarantee, insisting his new plan would "carefully target" the level of state support at those who need it most.

He told MPs: "I know that some small businesses are still struggling to access credit.

"They are in many ways the most exposed businesses to the impact of the coronavirus and often find it harder to access credit in the first place.

"If we want to benefit from their dynamism and entrepreneurial spirit as we recover our economy, they will need extra support to get through this crisis."

The new "microloan scheme" would provide a "simple, quick, easy" solution, he said.

Mr Sunak added: "Businesses will be able to apply for these new bounce back loans for 25% of their turnover up to a maximum of £50,000 with the Government paying the interest for the first 12 months."

“The loans will be available from 9am next Monday, with "no forward-looking test of business viability, no complex eligibility criteria, just a simple, quick standard form for businesses to fill in".

Mr Sunak warned that not every job and business can be saved.

He said: "While our interventions have saved millions of jobs and businesses, we can't save every job and every business.

"I understand and I share people's anxiety. But right now the most important thing we can do to protect our economy is to protect the health of our people.

"As my right honourable friend the Prime Minister said this morning, we are making progress, we are beginning to turn the tide.

"But if we lose control of the virus again, we risk seeing a second spike, which we all want to avoid.

"We should be in no doubt about the seriousness of the economic situation.

"The Office for Budget Responsibility have published a scenario showing that the coronavirus will have very significant impacts both at home and in the global economy.

"More than 1.5 million new claims have been made to Universal Credit, over four million jobs have now been furloughed and survey evidence suggests a quarter of businesses have stopped trading.

"These are already tough times and there will be more to come."