Treasury mulls plan to set up coronavirus toxic debt body to save UK small businesses

City calls for state-owned recovery corporation to handle 35bn of unsustainable government-backed debt

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The Treasury is reviewing a radical" proposal for a new state-owned body that would manage 35bn of toxic coronavirus debt and help save up to 780,000 British businesses.

A City taskforce, the Recapitalisation Group, led by EY and the lobby group TheCityUK, is recommending that a government-owned UK Recovery Corporation be established to handle a growing pile of unsustainable government-backed debt that could otherwise wipe out thousands of businesses and lead to 3 million job losses.