WATCH: Labour calls for government to underwrite 100% of Covid-19 loans

Shadow Secretary for Business Ed Miliband has called for 100% government underwriting of the coronavirus business interruption loans.

In an interview with Sky News today, the former Labour leader acknowledged that it is an “extraordinary step”, but said that it is “necessary for these times”.

He argued that “the more businesses we keep afloat during this crisis, the more we will protect ourselves against the inevitable long term affects on the economy”.

The intervention by Miliband comes as figures show that fewer than a quarter of companies that have applied for support through the scheme have been able to secure a loan.

Miliband explained that because the banks are still required to underwrite 20% of the risk for the loans, they are still going through the normal commercial underwriting processes – which acts as a delay on companies received support.

The MP for Doncaster North said: “We have seen 6,00 loans go out. We’ve got 6,000,000 SMEs in this country. So that is one in every 1,000 businesses getting help. Not every business needs help, but if you look across the economy there are so many businesses adversely affected by the necessary public health measures.”

He stressed that the scheme needs to “change urgently”, and reminded viewers that the proposal to for the government to underwrite 100% of the loans has also been made by former Chancellors Sajid Javid and George Osborne.

Statistics show that 6,020 businesses received £1.1bn worth of loans in the first three weeks of the government’s scheme. This compares to other countries such as Switzerland, where 70,000 business have claimed £12bn in loans in one week.