In the final days of April 2020, bankers and Treasury officials were huddled over laptops in makeshift home offices across the country, negotiating the terms of what is fast becoming the most controversial of the government’s pandemic rescue schemes.
The country was in its sixth week of national lockdown after the Covid outbreak, and the Treasury’s head of banking and credit, David Raw, was leading video calls with more than 20 senior staff from across government and the City – including the big banks HSBC, NatWest, Barclays and Lloyds, Santander, Virgin Money and AIB – to try to push through the chancellor Rishi Sunak’s ambitious plan for a more accessible, 100% government-backed small business loan scheme.
After ordering the closure of all offices and non-essential shops and services, Sunak had promised financial aid. But the first scheme to launch, which offered loans of up to £5m and was known as the coronavirus business interruption loan scheme (CBILS), had been criticised by business lobby groups and MPs as too costly, too slow and too risky – borrowers were…
