UK's Sunak warns of 'extraordinarily high bar' for bailouts

UK Finance Minister Rishi Sunak warned companies struggling from the impact of the coronavirus impact that any government-backed rescue would have to meet an "extraordinarily high" bar.

With taxpayer-funded salary and loan schemes winding down towards October, Sunak indicated that the fiscal taps would now be turned off. He is due to make an economic statement next month to parliament on measures to revive the economy.

"The bar for companies accessing taxpayers' support in a bespoke and significant way is extraordinarily high and should be extremely rare," he told Bloomberg, adding that any bailout would come with "significant strings attached".

"If we are in a situation like that, we would obviously expect financial investors and creditors to significantly share in the burden," Sunak said.

"This is not my money. It’s not government’s money. This is taxpayers’ money. I shouldn’t be sitting here trying to pick winners." Companies such as Richard Branson's Virgin Atlantic airline have begged the government for taxpayer cash in order to save jobs.

Employer groups fear massive job losses as support measures are stopped and businesses reopen after the lockdown imposed on March 23. Economists are wary that consumers will tighten discretionary spending to conserve cash in the expected downturn.

Non-essential shops opened their doors again on June 15, with pubs and restaurants set to resume on July 4.

"There are very tragic projections for what might happen to employment, there’s enormous dislocation in the labour market," he said. "My priority absolutely is to try and protect and preserve as many of those jobs as possible," Sunak said.