Coronavirus Large Business Interruption Loan Scheme

Lord Sharma Excerpts

Monday 15th June 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the details of changes we have made to the coronavirus large business interruption loan scheme (CLBILS).

CLBILS is facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Lenders have until now offered loans from £30,000 up to £50 million to support viable businesses with a turnover of £45 million and above that are affected by the coronavirus outbreak. It is designed to ensure businesses that have been adversely impacted by the coronavirus outbreak can access the finance they need, even if they are too large to access CBILS but unable to access the Bank of England’s covid corporate financing facility. There is no limit on the number and aggregate value of loans that can be made under the scheme.

Despite this, some businesses have not been able to address cashflow issues due to caps on maximum loan sizes permissible under the scheme. Businesses with turnover up to £250 million have been unable to borrow more than £25 million, and no business, regardless of turnover, has been permitted to borrow more than £50 million. On 26 May, we therefore made the following changes to the scheme:

an increase in the maximum loan size available under CLBILS: loans are now available from £50,000 to £200 million;

the replacement of the £25 million loan size cap for firms with a turnover of up to £250 million with a new cap on maximum loan size at 25% of turnover for all borrowers through CLBILS; and

tighter restrictions on company activities for the duration of the facility for loans above £50 million: borrowers cannot make any dividend payments other than those that have already been declared, may not make any share buybacks on dividend payments, may not pay any cash bonuses, or award any pay rises to senior management (including the board) except where they were declared before the CLBILS loan was taken out, are in keeping with similar payments made in the preceding 12 months, and do not have a material negative impact on the borrower’s ability to repay the loan.

for loans up to £50 million, the existing restrictions on dividends continue to apply: only dividends declared before the CLBILS loan was taken out, are in keeping with those made in the previous 12 months, and which would not have a material negative impact on the ability to repay the loan are permitted

Further detailed technical changes to the scheme, including the approach to restructuring events and new provisions on seniority of CLBILS facilities, are detailed on the British Business Bank’s website.

There remains no limit on the number or aggregate value of loans issued under CLBILS. The Government remain subject to a statutory contingent liability arising from CLBILS, and I will be laying a revised departmental minute today containing a description of the liability undertaken.

[HCWS292]

COP26: New Date Announcement

Lord Sharma Excerpts

Tuesday 9th June 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I am tabling this statement for the benefit of honourable and right honourable Members to bring to their attention the new date that has been announced for COP26 United Nations climate change conference.

The COP bureau of the UNFCCC (United Nations framework convention on climate change), with the UK and its Italian partners have agreed new dates for the COP26 UN climate conference, which will now take place between 1 and 12 November 2021 in Glasgow.

The agreement followed consultation with UNFCCC members, delivery partners and other stakeholders. The conference was originally set to take place in November 2020, but had been postponed due to covid-19.

In the run up to November 2021, the UK Government as hosts will continue to work with all involved to increase climate action, build resilience and lower emissions. The new date will also allow the UK and our Italian partners to harness our incoming G7 and G20 presidencies in driving climate ambition.

For more information on this please go to https://www.gov. uk/government/news/new-dates-agreed-for-cop26-united-nations-climate-change-conference.

[HCWS279]

Business Update

Lord Sharma Excerpts

Monday 8th June 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I hereby give notice of the Department for Business, Energy and Industrial Strategy’s intention to seek an advance from the contingencies fund totalling £5,673,000 to enable expenditure on Covid-19 vaccines programme to be spent ahead of the passage of the Supply and Appropriation Act.

The funding is urgently required for HM Government to secure inventory which can be utilised for a number of vaccine, antibody and therapeutic candidates.

Parliamentary approval for additional resources of £5,673,000 for this new expenditure will be sought in a Main Estimate for the Department for Business, Energy and Industrial Strategy. Pending that approval, urgent expenditure estimated at £5,673,000 will be met by repayable cash advances from the Contingencies Fund.

The cash advances will be repaid upon receiving Royal Assent on the Supply and Appropriation Bill.

[HCWS274]

Trade Credit Reinsurance Scheme: Contingent Liability

Lord Sharma Excerpts

Thursday 4th June 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention details of the support provided to businesses and supply chains through the trade credit reinsurance scheme.

Trade credit insurance provides cover to hundreds of thousands of business-to-business transactions, particularly in non-service sectors, such as manufacturing and construction. It insures suppliers selling goods against the company they are selling to defaulting on payment, giving businesses the confidence to trade with one another. Due to coronavirus and businesses struggling to pay bills, they risk having credit insurance withdrawn, or premiums increasing to unaffordable levels.

The trade credit reinsurance scheme, led by the Department for Business, Energy and Industrial Strategy, will temporarily reinsure the credit risks of business-to-business transactions covered by trade credit insurance in the UK. This will ensure that the vast majority of insurance coverage is maintained across the market. This will support supply chains and help businesses to trade with confidence as they can trust that they will be protected if a customer defaults or delays on payment.



The scheme is available on a temporary basis for nine months backdated to 1 April 2020 and running until 31 December 2020 with the potential for extension if required. The key parameters of the scheme are:

The scheme is delivered through a temporary reinsurance agreement with insurers currently operating in the UK market, covering both domestic and overseas trade with payment terms of up to two years.

The Government will reinsure 90% of insurance claims up to a cap of £3 billion and 100% of claims between £3 billion and £10 billion.

The Government will receive 90% of gross policy premiums and return 35% of these premiums to insurers to cover their costs.

The scheme rules will require participating insurers to comply with certain undertakings regarding the conduct of their business during the period of the scheme. This includes conditions that they will forgo profits and not pay dividends or bonuses for senior staff for their guaranteed trade credit insurance business.

The scheme will be followed by a joint BEIS and HMT-led review of the trade credit insurance market to ensure it can continue to support businesses in future.

Implementation of the scheme is subject to state aid approval, agreement of full form documentation with insurers and acceptance of applications from insurers for participation.

The new scheme is launched today, 4 June. The Government will be subject to a new contingent liability, and I will be laying a departmental minute containing a description of the liability undertaken.

For more information on this and other support for business, please go to https://www.businesssupport.gov.uk/.

[HCWS268]

Corporate Insolvency and Governance Bill

Lord Sharma Excerpts

2nd reading & 2nd reading: House of Commons
Wednesday 3rd June 2020 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I beg to move, That the Bill be now read a Second time.

On 23 March, the Government requested many businesses to close their doors to safeguard the nation’s health. We absolutely recognise the huge sacrifices that this entailed. My right hon. Friend the Chancellor, who has been at the Dispatch Box on a number of occasions, has outlined the unprecedented economic support for businesses and workers across the country.

Like the shadow Secretary of State, the right hon. Member for Doncaster North (Edward Miliband), I have regular conversations with businesses, business representative organisations and trade unions, and I know that the scale of what the Government have done has been appreciated across the board. We have supported millions of businesses and individuals through a range of support schemes. These have included grants to small businesses—over £10 billion out of the door now —loans, through the coronavirus business interruption loan scheme and coronavirus large business interruption loan scheme, and bounce-back loans, with more than £14 billion now paid out, as well as business rate holidays, tax deferrals, the job retention scheme and, of course, the self-employed scheme. By any international comparison, the effort that has been put into supporting businesses and individuals to safeguard lives and livelihoods is incredibly favourable.

Alongside those fiscal measures to support businesses and individuals and protect livelihoods, in this Bill we want to provide further support: non-fiscal measures to ensure that we can help businesses at a time of difficulty.

[Ian Paisley (North Antrim) (DUP)]

Is the Minister satisfied that the measures being proposed today could expire within 27 days? Is that sufficient time to address the problems that might be coming down the track?

[Alok Sharma]

As ever, the hon. Gentleman raises an incredibly important point. I will talk further about this, but that is precisely why we have ensured an opportunity to extend the temporary measures in the Bill, but by regulation, so statutory instruments will have to be laid before the House. However, I am sure that the sentiments he expresses are felt across the House. If we need to, I am sure that we will collectively look to extend some of the temporary measures to continue to help businesses.

The Bill will allow business owners time and space to explore rescue options. It will allow directors of companies that are technically insolvent, but simply because of a temporary drop in demand caused by the covid-19 crisis, to proceed with the business without the threat of personal liability. That has been incredibly warmly welcomed by businesses and business representative organisations.

[Jacob Young (Redcar) (Con)]

Does my right hon. Friend agree that this Bill will give businesses in Redcar and Cleveland and across the country the much needed breathing space to get through this crisis?

[Alok Sharma]

My hon. Friend is already making a huge impact in supporting businesses in his constituency, and he is absolutely right. The whole point of these measures, both permanent and temporary, is precisely as he says: to give businesses the breathing space to allow them to see whether they can recover and ultimately bounce back. That is what we all want to see.

[Gary Sambrook (Birmingham, Northfield) (Con)]

Unfortunately, some businesses fail. In my constituency, MG Rover collapsed 15 years ago, ripping a huge hole in the community in Northfield and Longbridge. Fifteen years on, over 6,000 people are owed money from the liquidation of MG Rover. Will my right hon. Friend look into ways in which we can speed up the process—15 years is too long and causes a lot of problems and anxiety for people—so that they can get closure and the money that they are owed.

[Alok Sharma]

Again, the manner in which the debate has begun demonstrates the consensus on supporting businesses, not just in our individual constituencies but across the country. I can give my hon. Friend a commitment that I am happy to meet him to discuss the case and see what more can be done. He is absolutely right—where we are able to, we must seek to speed up and provide that support to individuals who need it.

The Bill will provide extra flexibilities to hold AGMs online during the covid-19 pandemic and will also provide more time to file accounts and other filings with Companies House.

[Paul Holmes (Eastleigh) (Con)]

May I ask the Secretary of State whether companies have to apply for those extensions on filing, or will there be an automated aspect whereby Companies House will approach the companies affected?

[Alok Sharma]

Once the filing requirements are enacted, as my hon. Friend says, companies can make filings up to the extension dates. As was mentioned earlier, if there is a need to extend temporary provisions, we will look to see if that is required. While we recognise that these and other support measures will not, sadly, be able to save every business and every job, the Bill delivers commitments that will give businesses in difficulty due to the pandemic a fighting chance of eventually bouncing back.

[Stephen Doughty (Cardiff South and Penarth) (Lab/Co-op)]

There are indeed some important measures in the Bill, and we will undoubtedly scrutinise them in more detail in due course. I thank the Secretary of State for the work of the officials in his Department to support a number of businesses in my constituency, and I thank the Welsh Government for the support that they have provided through the economic resilience fund.

We have not had enough support from the banks, some of which have not only struggled to make themselves available to businesses seeking support through the loan schemes that the Government have set up but seem to be trying to push off their books businesses that could make it through the crisis. What does the Secretary of State have to say to the banks?

[Alok Sharma]

When we first launched CBILS there were a lot of concerns about how quickly the process was moving. I have been talking to banks individually and to senior managers in the banks, and I think that we are beginning to see movement. CBILS has had over 40,000 loans out of the door, and over 450,000 bounce-back loans have been made. If there are specific banks about which the hon. Gentleman has concerns—he, like all colleagues, is concerned about retaining employment in his constituency—I would be happy to take up those issues with him individually.

[Kevin Hollinrake (Thirsk and Malton) (Con)]

Because of the success of bounce-back loans—it is a much easier process to get a bounce-back loan than a CBILS loan—lots of businesses that need more than £50,000 have gone for a bounce-back loan as an interim step, but are restricted from taking a CBILS loan, as they can only have one or the other. Would my right hon. Friend consider allowing businesses to apply for a CBILS loan for a larger amount, subject to necessary lending criteria, then paying off the bounce-back loan so that they can get access to the finance that they need?

[Alok Sharma]

My hon. Friend makes an incredibly important point. I am sure that the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), will correct me if I am wrong, but my understanding is that it is possible to transfer loans between the bounce-back scheme and CBILS. I am happy to discuss that with my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who is absolutely right—people cannot have one of each, so to speak, but I think that it is possible to make a transfer.

The measures set out in the Bill have been welcomed across the board by business representatives’ organisations such as the Federation of Small Businesses, the Institute of Directors, the CBI, the British Chambers of Commerce, R3—the insolvency and restructuring professionals trade association—and the Trades Union Congress. Some of the measures will take retrospective effect to provide as much relief to businesses as possible. To ensure that is the case, we have announced the dates from which the measures will begin.



Let me turn to corporate restructurings, and the package of permanent corporate restructuring measures, which have previously been consulted on. As colleagues know, they were consulted on in 2016, and then formed part of a wider consultation on corporate governance and insolvency published in 2018, so they have been consulted on in some detail. They will have immediate effect in helping companies get through the covid-19 emergency.

A number of time-limited provisions are there to cater for the immediate economic impact of the covid-19 pandemic. They have been added to the package and will be in place for a month after Royal Assent.

[Richard Fuller (North East Bedfordshire) (Con)]

Playing a fundamental part in the Bill, we have a number of measures that have been consulted on for a long period; people have thought about them and, as my right hon. Friend said, there has been a large degree of consensus around them. Then we have some other measures that have been brought forward in response to the immediate crisis; the Department has worked incredibly quickly to come up with them. Is the Department satisfied that it has got the balance right between the two? Is there anything that we should look out for in the next few months about the permanence of some of those measures?

--- Later in debate ---

[Alok Sharma]

My hon. Friend is of course right. By the way, I am delighted that he is back in the House, after a short absence. He brings a huge amount of experience in this area, as a result of his work in the private sector. The permanent measures have already been consulted upon, and they enjoy broad support. The temporary measures are of course temporary, and if we were to look to extend any of them, we would have to do so by way of regulation—we would have to come to the House with statutory instruments, and there would be an opportunity, if colleagues in the House felt it was not right to extend them, for them to voice their concerns. So I do think we have managed to get the balance right in this case. We want to ensure that the measures are put in place as quickly as possible, so that we are able to provide support to businesses in difficulty right now. In all the discussions that we have had with the right hon. Member for Doncaster North and his colleagues, we have always had a really constructive approach; I hope that is exactly what we will have today as well.

[Kevin Hollinrake]

I speak as a co-chair of the all-party group on fair business banking, has dealt with a lot of problems in how banks treat SMEs, facilitated by insolvency practitioners. To eliminate those conflicts of interest, the Secretary of State’s Department has committed to bringing forward measures to provide that the conduct of insolvency practitioners is overseen by a single regulator, rather than by recognised professional bodies. Can he commit to bringing forward those measures in the not-too-distant future, so that we can try to eliminate those conflicts of interest?

[Alok Sharma]

My hon. Friend the Under-Secretary of State will elaborate on some of the points that my hon. Friend raised. I would simply say that in July 2019, the Government issued a call for evidence on the insolvency regulatory framework, to determine whether any changes needed to be made. That included questions on whether there should be a single regulator. We expect to publish the Government response to the call for evidence later this year. Perhaps my hon. Friend the Under-Secretary will elaborate later.

Returning to the Bill, the package of measures has three elements. The first is a moratorium. That will give a company that is threatened with insolvency temporary respite from its creditors and a chance to arrange refinancing or a rescue. The moratorium will be for an initial period of 20 days, which can then be extended. There will be a time-limited easing of the eligibility criteria for a company to enter into a moratorium, to make it more accessible during the covid-19 response period.

[Mike Wood (Dudley South) (Con)]

The temporary measures that my right hon. Friend has included in the Bill will provide great respite for many businesses, particularly in the hospitality sector, where businesses have been unable to trade throughout this outbreak but rents have remained very high; the measures will protect them from aggressive landlords. Those pressures will continue well past the end of June, so will he consider extending the protection for tenants from winding-up petitions?

[Alok Sharma]

Of course, that is part of the measures that we will bring in. I recognise why my hon. Friend wants to ensure that tenants have protection, and that is why we will introduce the temporary measures around this issue, but of course we also need to think about landlords. I will address that point as I go through my speech.

Returning to the moratorium, the time-limited easing of the eligibility criteria for a company to enter a moratorium, to make that more accessible during the covid-19 response period, will be in place for a month after Royal Assent. Of course, that can be extended if it is deemed necessary.

The second part of the new permanent restructuring measures will allow companies in financial difficulty to propose a rescue plan to restructure complex debt arrangements, and to bind creditors to it, as long as certain thresholds are met. That means that viable companies struggling with debt obligations will be able to restructure under the new procedure.

There are, however, significant safeguards and protections for creditors, which is right and proper. The plan must be sanctioned by the court and, indeed, any dissenting creditor class bound to a plan must not be made worse off than it would have been in the next most likely outcome. I know that a number of colleagues, both in the House and outside, have raised this issue. That is why we have ensured that this measure is in place.

The third part of the restructuring package will prohibit termination clauses. That will prevent suppliers from terminating contracts or raising prices just because a company has entered an insolvency procedure or a moratorium. Of course, we recognise that requiring companies to supply under those circumstances may cause them financial difficulties, so we have built in a number of protections for suppliers too.

If continuing supply would cause a supplier hardship, it can apply to the court for permission to terminate the contract. In addition, if goods or services supplied after the insolvency begins are not paid for, the supplier can terminate the contract. Further, the Government will temporarily exempt small suppliers from this requirement altogether during the covid-19 crisis, recognising the particular challenges that those firms face.

[Mark Pawsey (Rugby) (Con)]

Small businesses often find themselves dictated to by larger organisations, and the last thing we want is for small businesses to be put at a disadvantage by being compelled to supply when they are not capable or it is not in their interest to do so. Will the Secretary State reassure us that small businesses in particular will be protected by these provisions?

[Alok Sharma]

My hon. Friend raises a really important point about protecting small suppliers. They will of course have this exemption. According to the definition in the Companies Act 2006, a small supplier is one that meets two of the following three criteria: having up to 50 employees, a turnover of up to £10.2 million, and gross assets of up to £5.1 million. I think that will cover a very large number of businesses in our country.

[Richard Fuller]

May I thank you, Madam Deputy Speaker, for permitting so many interventions? As we are rushing through the Bill relatively quickly, it is important that Members on both sides of the House have the opportunity to raise points directly with the Secretary of State, so thank you for permitting some latitude for interventions.

The small business commissioner appeared before the Business, Energy and Industrial Strategy Committee a few weeks ago, and I posed some questions about whether he had the powers he needed. As my right hon. Friend looks at this period, with the particular pressure caused by covid-19, is he assured that the small business commissioner’s powers are as will be needed, or does he envisage wanting to look again at this in the future?

[Alok Sharma]

My hon. Friend raises an incredibly important point. I championed this issue—support for small businesses—when I was on the Back Benches. As he will know, the Government’s payment terms are favourable in setting a very time-limited period within which payments must be made to Government suppliers, and of course the Government also require that if a large organisation is being paid by the Government under a contract, they need to pass on that speed of payment to smaller subcontractors. He will also know that in the manifesto on which he and I stood we committed to looking further at the role of the small business commissioner and how it might be strengthened. We will bring forward a consultation on that in due course.

I move now to the temporary measures in the Bill. The first set provides for a suspension of the serving of statutory demands and a restriction on winding-up petitions. These measures will be retrospective from 1 March and 27 April respectively and will last until one month after Royal Assent, although they can be extended if that is deemed necessary. The Coronavirus Act 2020 temporarily suspended the right of commercial landlords to forfeit the tenancies of retail businesses in order to protect tenants unable to trade because of covid-19. While this temporary suspension has been in place, the majority of landlords and tenants have been working well together to reach agreements on debt obligations, but a small number of landlords have been using aggressive debt recovery tactics to put pressure on tenants, including through the use of statutory demands and threats of winding up. For this reason, the measures in the Bill to limit the use of statutory demands and winding-up petitions have been welcomed by many, especially in the hospitality sector.

[Mr Jonathan Djanogly (Huntingdon) (Con)]

The Government have repeatedly spoken about this clause in the context of landlords, but can the Secretary of State confirm that it actually applies to all creditors?

[Alok Sharma]

It is intended to apply to all suppliers—I am sure I will be corrected if I am wrong on that. As my hon. Friend has also been keen to point out, although this measure is not restricted to commercial landlords, some landlords will have particular concerns, and I can reassure him that the Government will monitor the impact of the measure and are asking lenders and investors to consider how debt obligations can be met in a way that does not put unnecessary pressure on landlords.

[Kevin Hollinrake]

In respect of commercial loans, currently the banks, when showing forbearance, are providing capital repayment holidays but only on the capital element of the repayment. In respect of residential mortgages and loans, they are giving complete repayment holidays. The monthly capital repayment is a small element of the overall payment. The banks could be much more helpful to landlords by giving a complete holiday across the whole repayment for a period of time while showing forbearance to their tenants.

[Alok Sharma]

Colleagues in the banking sector will I am sure be watching this debate and listening in, and they will have heard what my hon. Friend has said. I would be happy to have a discussion with him after this debate if there are particular points that he wants to raise or if he wants to talk about particular organisations.

The second temporary measure is the suspension of the wrongful trading provisions. This will be retrospective to 1 March and will be in place until one month after Royal Assent, and again it can be extended if that is deemed necessary. Hon. Members will know that wrongful trading is an important deterrent against company directors continuing to trade when the company is insolvent and when doing so increases the losses to creditors. Directors can be made personally liable as a result. However, during this difficult period, many otherwise viable companies may become technically insolvent, particularly if they have been severely affected by a drop in demand caused by covid-19. This measure gives company directors the confidence to use their best efforts to continue trading without the threat of personal liability, should the company ultimately go into insolvency. Since the measure was announced in March, we have received much support for it from stakeholders. The Institute of Directors has welcomed it, saying that it

“will help to avert entirely preventable corporate collapses.”

The Bill also contains the necessary time-limited powers to extend these temporary provisions, should that prove necessary.

The Bill will also allow the Government to make other temporary amendments to insolvency law or the new restructuring plan to deal with the effects of covid-19, where needed. The power to amend corporate insolvency or governance legislation will allow the insolvency and business rescue regime to react quickly to the challenges we face as a result of the impact of covid-19, and that power will expire on 30 April 2021. However, due to the potential unforeseen circumstances relating to covid-19, the expiry date of this power can be extended if it is deemed necessary. If an extension is sought, the House will of course have an opportunity to scrutinise it.

The next group of temporary measures deals with meetings and company filings. These measures enable companies and other bodies, including mutual societies and charitable incorporated organisations, to hold AGMs and other meetings in a safe way, while respecting social distancing rules.

[Sarah Olney (Richmond Park) (LD)]

On the point about AGMs, it is obviously good that the legislation makes provision for AGMs to be held digitally, but is it necessary for the legislation to restrict the participation of shareholders quite as much as it does? Surely, if a digital method enables shareholders to question directors, that should be encouraged if it can be facilitated.

[Alok Sharma]

There are, of course, other methods for shareholders to question directors of a company. There will be shareholders’ days, for example. The reality is that businesses will be reacting and doing their best to try to get information to their shareholders. I am sure that the hon. Lady’s point will be noted, but the intention of this Bill—and, I think, of the business community—is not in any way to use these measures to restrict shareholders’ access to information. This is actually about making sure that we can get past the pandemic and be in a position to bounce back.

The flexibility in terms of these meetings and filings will apply from 26 March—retrospectively, obviously—until 30 September. The measures also enable AGMs to be postponed until 30 September this year, where necessary.

[Sara Britcliffe (Hyndburn) (Con)]

I am encouraged that the measures for AGMs and other meetings are temporary. Does my right hon. Friend share my belief that in-person AGMs provide the best opportunities for shareholders to hold their directors to account?

[Alok Sharma]

My hon. Friend makes an important point. We would all like to get back to those face-to-face discussions, just as we are doing in the House today. These are temporary measures, and I hope that when we get through to the other side there will again be that opportunity for shareholders to meet and ask questions face to face, because that is right and appropriate.

[Gareth Davies (Grantham and Stamford) (Con)]

Can my right hon. Friend confirm that the Government are not mandating how companies and organisations are to hold an AGM, but rather giving them flexibility at this incredibly difficult time as to how best to engage with shareholders?

[Alok Sharma]

My hon. Friend makes an incredibly important point. This is not about mandating; this is about giving choice. I expect that many companies will take up the temporary support that is being made available through these measures.

Expanding on the announcement I made on 25 March that companies would have an extended period for filing accounts, the Bill will also give businesses more time to meet a range of filing requirements. The extensions to the various filing requirements will be set out in regulations to be laid once the Bill receives Royal Assent. We will be giving businesses the maximum period allowable under the powers in the Bill for filing their accounts, confirmation statements and event-driven updates. We will also extend the period within which charges should be registered with Companies House to 31 days, which I believe strikes the right balance between providing businesses with breathing space and ensuring that lenders are protected.

In conclusion, the package of measures that the Bill introduces will give businesses the best opportunity to survive the effects of the covid-19 crisis and lay the foundations for a bounce-back in the UK economy. This Government are committed to supporting businesses. We are listening, and we are putting in place meaningful and common-sense measures to provide that support. Let me end by again paying tribute to the millions of business owners up and down our country who are doing their bit to keep Britain moving. In bringing these measures forward, we demonstrate again that we stand with them. I commend the Bill to the House.

Coronavirus Loan Schemes

Lord Sharma Excerpts

Wednesday 13th May 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the changes we have made to the Coronavirus Business Interruption Loan Scheme and the Coronavirus Large Business Interruption Loan Scheme so that more businesses can access the finance they need.

The Coronavirus Business Interruption Loan Scheme was launched on 23 March and is facilitated by the Government-owned British Business Bank and delivered through its delivery partners. Lenders offer loans of up to £5 million to support small and medium sized businesses with a turnover up to £45 million that are affected by the coronavirus outbreak.

The Coronavirus Large Business Interruption Loan Scheme was launched on 20 April. Lenders can offer loans of up to £50 million to support viable businesses with a turnover of £45 million and above that are affected by the coronavirus outbreak.

On 3 April we announced changes to the CBILS scheme. The first change was to the use of personal guarantees under the scheme. Since the launch of CBILS, lenders had been permitted, but not obliged, to require a personal guarantee from businesses for loans of any size provided through CBILS. Lenders were never and will never be permitted under any circumstances to use business directors’ or their families’ principal residence as security. We made changes to the use of personal guarantees through the scheme to provide further reassurance regarding personal assets during this difficult time.

The largest CBILS lenders had already confirmed, on a voluntary basis, that they would not require personal guarantees for CBILS loans under £250,000. The changes we made to the terms of the scheme mean that no lender will be permitted to require a personal guarantee for loans or other CBILS facilities under £250,000.

For CBILS loans over £250,000, lenders are still permitted to require a personal guarantee, although under no circumstances may they use primary personal residences for this. Upon launch, in the event of a default, lenders were previously expected to seek to recover the loss from business assets and then using any personal guarantees. Only when these had been exhausted were they permitted to claim the residual loss under the guarantee agreement. We made changes to these terms so that lenders may now only look to the personal guarantee for a maximum of 20% of the remaining debt before claiming 80% of the residual loss under the guarantee agreement.

The second change concerned the requirements businesses had to meet to access CBILS. At launch, CBILS was designed to support SMEs unable to secure finance on commercial terms. Because CBILS was only available to companies that could not otherwise secure a debt facility, it meant that preferable terms, such as the Government’s coverage of initial interest payments, were unavailable to those businesses that were able to secure facilities on commercial terms.

We therefore removed this requirement, meaning CBILS can now support lending to smaller businesses even where they could have secured a loan on commercial terms. This means that in addition to meeting company size and sectoral restrictions, the only other requirement for businesses is to be able to demonstrate they have been adversely affected by Covid-19 and for lenders to judge that the business is viable. This means that more businesses affected by the outbreak will be able to benefit from a CBILS facility and the Government’s 12-month business interruption payment and resulting lower initial repayments.

On 27 April, we announced further changes to the scheme. The cap on gross Government liability at the level of the lenders whole CBILS portfolio has now been removed. Previously the Government’s gross liability was capped at 75% of losses across the lender’s whole CBILS portfolio. Removing the portfolio cap therefore gives lenders an 80% guarantee across all CBILS lending. This change should provide further confidence to lenders to support the timely supply of finance to businesses.

We are also removing the ‘forward looking’ element of the viability test. The current economic uncertainty means that many businesses are having difficulties providing cashflow forecasts, which is slowing down some lending decisions. Allowing lenders to base lending decisions purely on an assessment of business liability pre Covid-19 removes the requirement for lenders to ask for evidence of future cashflow, thereby speeding up lending decisions.

Finally, charities and further education colleges need no longer show that at least 50% of their income comes from trading to be eligible for both CBILS and CLBILS loans. In practice, this requirement precluded a large number of organisations in these sectors from accessing support through these schemes, and its removal will support these organisations to access both schemes.

The removal of the portfolio cap increases the statutory contingent liability of the CBILS scheme, and I will be laying an updated departmental minute today containing a description of that revised liability undertaken. The other changes do not impact the statutory contingent liability of the CBILS scheme.

The removal of the requirement for at least 50% of the income of charities and further education colleges to come from trading to be eligible for CLBILS also does not impact the statutory contingent liability of the CLBILS scheme.

For more information on this and other support for business, please go to: https://www.businesssupport.gov.uk/.

[HCWS232]

Covid-19: Business

Lord Sharma Excerpts

Tuesday 12th May 2020 Commons Chamber

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I would like to update the House on the Government’s new covid-19-secure workplace guidance. On 23 March, the Government announced lockdown measures and required certain businesses and venues to close. Our message to workers was that if you can work from home, you should work from home, and millions did. At the same time, the Government provided guidance on how those who could not do their work from home could continue to operate as safely as possible in workplaces that were not required to be closed. I want to thank the many workers in distribution centres, supermarkets, transport, construction and manufacturing across the country who have been playing their part in keeping Britain moving. I hope that the whole House recognises the constructive spirit in which employers have worked with their workers to follow this guidance.

The Prime Minister yesterday set out steps to beat the virus and restart the economy, so that we can protect jobs, restore people’s livelihoods and fund the country’s vital public services. To support this, we have published new covid-19-secure guidelines, available to UK employers across eight settings that are allowed to be open, from outdoor environments and construction sites to factories and takeaways. This also includes guidance for shops that we believe may be in a position to begin a phased reopening, at the earliest, from 1 June. The Government have consulted approximately 250 stakeholders in preparing the guidance. It has been developed with input from firms, unions, industry bodies and the devolved Administrations. We have worked with Public Health England and the Health and Safety Executive to develop best practice on the safest ways of working across the economy.

As we return to work, the Government want to give employers and workers confidence that their workplaces will be safe for them to return to, because we recognise that this is an anxious time for many. We recognise that workers want to know that their employer has taken every step to ensure a safe workplace, and we recognise that employers who take steps to keep workers safe want to know that they are doing the right thing. I believe that we have reached a consensus in doing that, and I am encouraged that businesses, representative groups, workers and trade unions can get behind this guidance.

The guidance has five key points at its heart. First, people should work from home if they can. Employers should continue to take all reasonable steps to help people work from home. For those who cannot work from home and whose workplace has not been told to close, our message is clear: they should go to work. Staff should speak to their employer about when their workplace will open.

Secondly, social distancing should be maintained in the workplace wherever possible. Employers should redesign workspaces to maintain 2-metre distances between people, stagger start times, create one-way walk-throughs, open more entrances and exits, or change seating layouts in break rooms. Thirdly, where people cannot be 2 metres apart, the transmission risk should be managed. Employers should ensure that every step is taken to reduce the risk when people cannot maintain 2-metre distancing. This can include putting up barriers or screens in shared spaces, creating fixed teams of partnering to minimise the number of people in contact with one another, or keeping the activity time involved as short as possible.

Fourthly, cleaning processes should be reinforced in line with the guidance. Employers should frequently clean work areas and equipment between uses to reduce transmission, provide hand sanitiser and washing stations, and pay attention to high-contact objects like workstations, door handles and keyboards.

Fifthly, a covid-19 risk assessment must be carried out, in consultation with workers or trade unions. In line with the current health and safety law, all employers must carry out a covid-19 risk assessment. They should identify risks that covid-19 creates and use the guidance published to take measures to mitigate these risks. Employers should share the results of their risk assessment with their workforce. A downloadable notice is included in the documents that employers should display in their workplaces to show their employees, customers and other visitors that they have followed the guidance. They should also consider publishing the results on their website, and we expect all employers with over 50 workers to do so.

The aim of this approach is for employers to create a collaborative working environment, building confidence and trust between employers and workers. I think the House will recognise that this is already the case across the UK, because the UK has a proud record as a leader in health and safety in the workplace. Our guidance operates within current health and safety, employment and equalities legislation, which is some of the strongest in the world, and we will continue with this approach. We will work closely with the Health and Safety Executive, which has the resources it needs to meet current demand, but of course we want to ensure that this remains the case during the covid-19 pandemic as people return to work. So the Government are making up to an extra £14 million available for the HSE, equivalent to a 10% increase in its budget. This extra money will provide resource for additional call centre staff, inspectors and equipment if needed. In many cases, this will meet the demands of employers and employees who would like further information on how to ensure that workplaces are safe. For the extremely small minority of businesses that do not follow the rules, the HSE and local authorities will not hesitate in using their powers, including enforcement notices, to secure improvements.

The measures I have set out in respect of social distancing and cleaning are the best ways to manage the risk of transmitting covid-19. Based on the scientific evidence, the use of PPE in the workplace is not recommended by the Government except in clinical settings and a handful of other roles stipulated by Public Health England. Of course, if a worker currently uses PPE to protect against other hazards, such a dust in an industrial setting, they must continue to use it. Workers have the option to use face coverings, which are simple cloth coverings. There are some circumstances in which wearing a face covering may be marginally beneficial as a precautionary measure. The evidence suggests that wearing a face covering does not protect you but may protect others if you are infected but have not developed symptoms. Wearing a face covering is not required by law in the workplace. If workers do choose to wear one, they should follow the workplace guidance on how to use it.

We have been guided by the scientific advice in establishing this position. Today, we provide a framework for how employers can keep workers safe in the workplace. This additional support and clarity, combined with more resource for the HSE, can give employers and workers the confidence they need to return to work safely. As we reopen new sectors of the economy, we will continue our collaborative approach when providing guidance for additional workplaces, meaning that we can provide a clear and safe route back to work for millions. I commend this statement to the House.

[Mr Deputy Speaker (Mr Nigel Evans)]

I call Edward Miliband, with a time limit of five minutes.

[Edward Miliband (Doncaster North) (Lab)]

Thank you, Mr Deputy Speaker. May I thank the Secretary of State for his statement, and add my thanks to all the workers and businesses that have kept our country going during these past few weeks? I say to him that we do not underestimate the challenges of lifting lockdown in certain parts of the economy. We agree that it is in all our interests for it to happen if it can be done safely, and that there are difficult decisions confronting Government, businesses and workers, who have to adapt to these unprecedented circumstances. I also want to welcome a number of steps forward in the guidance published last night, which he has talked about in his statement. They do represent progress from previous proposals, and I also welcome the tone of his statement.

However, I also say to the Secretary of State that what really matters to workers and businesses in these highly sensitive and difficult matters is proceeding in an orderly and judicious way. The confusion and mixed messages of the past 48 hours have been ill-advised and avoidable. Let me ask him six specific questions. First, on the impact of the Government’s change of emphasis on going back to work in phase 1, Ministers say that the reproduction rate of the disease—the R number—is currently between 0.5 and 0.9. How many extra people does he expect to go back to work as a result of the Government’s change of emphasis? What is the scientific advice about the impact on the R number?

Secondly, we are being told that in our daily lives, outside our places of work, that we must not come within 2 metres of those from other households, for reasons I understand. I listened carefully to what the Secretary of State said, but for workplaces the overview document he has published asks for an observance of 2-metre distancing only “wherever possible”. If it is not possible, the only requirement is that employers should “look into” various mitigation measures. I understand that in some workplaces 2-metre distancing may not be possible, but can he explain why there is no requirement for mitigation if social distancing cannot be observed?

Thirdly, on enforcement, the challenge is, as the Secretary of State said, not the vast majority of employers, who want to do the right thing, but the small minority who do not. I welcome £14 million more for the HSE budget, but it is a drop in the ocean compared with the £100 million of cuts over the past decade. Given the challenges of enforcement, will he discuss with the trade unions how their tens of thousands of health and safety reps could player a bigger and, I believe, constructive role in ensuring covid-19 compliance, including in non-unionised work- places?

Fourthly, can the Business Secretary now provide an answer for parents who are being asked to go back to work tomorrow but are not deemed “essential” workers and therefore have nobody to look after their children, because they cannot send them to school or nursery? What are parents in those circumstances supposed to do?

Fifthly, can the Secretary of State clarify the position on the 2.5 million workers who are deemed clinically extremely vulnerable and are advised to shield at home until at least the end of June?

Currently, they have no automatic right to be furloughed and many have felt pressured to keep working. As workplaces reopen, the pressure will become greater. To protect their health and provide clarity, would it not make sense to place an obligation on employers to furlough these individuals if they cannot work from home?

The chief medical officer, Chris Whitty, said at the press conference last night that the reopening of workplaces was dependent on whether they can be made safe for work. Can the Secretary of State confirm that workplaces that are not safe should not reopen tomorrow and that, by law, workers who have a reasonable belief that they will be in danger do not have to be at work?

Finally, the Secretary of State will know that it is the highest paid workers who will generally carry on being able to work from home and lower paid workers who are being asked to go back to work. We also know from yesterday’s figures from the Office for National Statistics that, among men, construction workers have so far been more than twice as likely to die from covid-19 as the average member of the population. I know the Secretary of State will agree that working people are being asked to go back to work to help us all. Whatever the economic pressures, their health must be protected. They deserve to be safe. That is what the Government must take every action to ensure.

[Alok Sharma]

I thank the right hon. Gentleman for his comments. I also thank him for the very constructive discussions that we have had, particularly last Friday, on a range of issues. He wrote to me yesterday on the issue of safer working and I hope he has received my response. I also want to thank him for the acknowledgement that what we have put out represents progress. I think there is consensus across businesses and trade unions for what we have sought to provide.

The right hon. Gentleman raised a number of issues, which I will try to address. His first question was about the R number and the numbers of people potentially going back to work. We have been very clear that we want to ensure that people are safe in the workplace and, at the end of the day, that we are saving lives. That is why we produced the guidance, which has been put together with the HSE and Public Health England. We are also very clear that people who can work from home should continue to work from home.

The right hon. Gentleman talked about the fact that there was some confusion. The Prime Minister made reference to the manufacturing sector and the construction sector; those sectors are already open. Millions of people are already going to work and their employers are doing everything they can to keep them safe.

The right hon. Gentleman talked about how employees can feel safe in the workplace. We have had this discussion previously. We know for a fact that many employers are already open, and they are working incredibly constructively with their trade unions. When I held my stakeholder calls as part of preparing the guidance, that was abundantly clear.

He talked about enforcement. I am pleased that he welcomes the extra money for the HSE; we need to make sure that we provide support if it is needed. I want to be very clear that the HSE is able to do spot checks and to be proactive. We ultimately want to make sure that if employees feel unsafe in a work environment, they are able to get in touch with the HSE or with their local authority.

He asked about parents and made a very reasonable point about schools. The Prime Minister set out the timetable for that. Again, it is a question of employers and employees working flexibly together. That is already happening in the workplace. I would say to all employers that they should look to see what they can do to support their workers to continue to work from home if that is at all possible.

Finally, the right hon. Gentleman raised a point about reopening, whether it is safe to open workplaces, and what to do about workplaces that are not safe. He is absolutely right. People should not have to feel that they are going into an unsafe work environment; frankly, from my experience, that is not what employers want either. We absolutely need our workers to feel safe. If they feel unsafe, they can get in touch with the HSE and with local authorities. I would say to all employers to please do absolutely everything you can, because it is in all our interests that the economy gets going again.

[Robbie Moore (Keighley) (Con) [V]]

Across Keighley, we have some fantastic manufacturing, engineering and technology-based businesses, whose employees are doing their utmost to ensure that the new guidance is adhered to. Does my right hon. Friend agree that it is crucial, as we move to the next phase of tackling this virus, that the needs of businesses—especially small businesses, which are the beating heart of Keighley—are taken into account? Can he confirm that the recently issued guidance applies to them, so that they are best placed to kick-start productivity and reignite their service offering?

[Alok Sharma]

My hon. Friend is a strong voice for Keighley businesses. Of course this guidance applies to all businesses. The Federation of Small Businesses, which has been part of helping us to prepare the guidance, has welcomed it, particularly for small companies. My hon. Friend should continue the engagement he is doing with businesses, encourage them to look at the guidance and encourage them to get back to work.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

I thank the Secretary of State for advance sight of his statement. Given that the Prime Minister previously attacked what he called the “health and safety fetish” as “madness”, and in 2009 said public warnings were “for the extremely stupid”, the fact that this Government are stressing the need for health and safety must be welcomed. However, it is important to give the utmost clarity.

I know that is what the Secretary of State will like to think he has done, but his advice is addressed to UK employers. Will he acknowledge, in the spirit of clarity, that his advice is for England only? The advice in the other nations of the UK remains to stay at home, protect the NHS and save lives. Lives are at stake. We must have complete clarity. Shops in Scotland are not scheduled for phased reopening from 1 June. Will he make that clear? His five-point plan does not apply at this time in Scotland, Wales or Northern Ireland. Will he make that clear?

We welcome the measures announced today to transition the furlough scheme, because business and people would be harmed by a cold restart without protection. However, before any reductions in furlough or rates of support start, we first need to fill the gaps for those left behind: those who had a contract or letter of employment by 29 March but whose employers have not logged into Her Majesty’s Revenue and Customs, those agency workers who are not included, staff whose pay is combined with commission, and the forgotten but vital summer seasonal workers. Will the Secretary of State make the case for those workers, or are they still to be left behind?

Finally, the Secretary of State has made great play—I quote from his statement—of

“Building a consensus and confidence when moving forward”.

Will he take that message back to the Cabinet and the Prime Minister, and extend it to the leaders of the devolved nations? His Government have consistently updated Fleet Street before this House, and even before the First Ministers of the devolved nations.

[Alok Sharma]

I thank the hon. Gentleman for his questions and his remarks. First, he talked about the Health and Safety Executive. We are of course providing more support. It is able at this stage to progress with the funding and support it has from the Government, but we have provided an extra £14 million in case it needs it. The UK has a proud record as a world leader on health and safety in the workplace. If he compares our statistics with those in many other countries in Europe, for example, he will see that we have a very good record.

The hon. Gentleman asked who this guidance is for. This guidance is to help all employers in the United Kingdom—employers, employees and the self-employed. I also say to him—[Interruption.] He is shaking his head, but let me come to the point that he wants me to make. In terms of the 250 stakeholders we engaged with, 70% of those businesses operate across the UK. However, in the guidance, we make it very clear that public health is devolved in Northern Ireland, Scotland and Wales, and we talk about the guidance being considered alongside local public health and safety requirements and legislation.

My final point is about consensus. We have been driven, throughout this process, through consensus. I have had very good discussions with my counterparts in the devolved nations, and we will continue to do that. The Prime Minister has been doing that, and we will continue to do that as a Government. At the end of the day, we all have to come together to get out of this and get our economy to bounce back.

[Andrew Percy (Brigg and Goole) (Con) [V]]

As welcome as this advice is, many workers will not be able to return to work and will remain at home on 80% of their pay. In my right hon. Friend’s role as consumer rights Minister, can he say something about the financial burdens being put on my constituents and on workers across the country by rip-off travel companies that are refusing to refund constituents for their holidays or flights? Be it Hoseasons, Virgin, British Airways, Ryanair or Tui, my constituents are getting ripped off, so will he run a campaign publicly to inform consumers about their rights to refunds?

[Alok Sharma]

My hon. Friend raises an important point. May I first thank him for the great work he is doing in the ambulance service as a community first responder, which I know is making a real difference in his community? He talks about consumer rights. The law is very clear, and it is there to protect consumers. Refunds should be issued within 14 days. However, he also knows that the sectors he is talking about are facing their own challenges. I am continuing to have discussions on this issue with my counterparts in the Department for Digital, Culture, Media and Sport. He will also know that the Competition and Markets Authority has set up a covid-19 taskforce for consumers seeking refunds, and we continue to have a dialogue with it.

[Darren Jones (Bristol North West) (Lab) [V]]

I thank the Secretary of State for the advance copy of his statement. The whole House will know that businesses will want to do the right thing in implementing the covid-19-secure guidelines, but we also know that many businesses, especially SMEs, have struggled to buy the required kit on the open market and that many workers feel under pressure to go to work when they do not feel safe to do so. Can the Secretary of State confirm what support the Government will give to businesses to ensure that they have access to the covid-19-secure codes they need for their workplaces and set out how workers will be supported, perhaps by ACAS, in dealing with potential workplace disputes linked to this issue?

[Alok Sharma]

I congratulate the hon. Gentleman on his election as Chair of the Business, Energy and Industrial Strategy Committee, and I look forward to further interactions in the future. He raises a point about the support available for businesses. The Chancellor spoke earlier, and he set out an extension to the job retention scheme. He has also made available loans and grants, so there is a lot of support out there. On the point about ACAS, the hon. Gentleman is absolutely right. Where employees feel that they have an issue they are not able to resolve, they absolutely should go to ACAS.

[Stephen Metcalfe (South Basildon and East Thurrock) (Con) [V]]

I am sure we all welcome the reduction in the prevalence of the virus in the general population, but we also know that we are not going to beat this thing in weeks; it will take us months. Therefore, will my right hon. Friend join me in calling on everyone—individuals and businesses alike—to stay alert and to follow the rules, so that we can keep the very important R rate down?

[Alok Sharma]

My hon. Friend is absolutely right. The message is very clear on staying alert. It is about keeping the R rate down. That is the only way in which we can proceed—with baby steps, rather than giant strides—and make sure that we are keeping safe and preserving lives, but at the same time doing all we can to open up the economy further.

[Catherine McKinnell (Newcastle upon Tyne North) (Lab) [V]]

Aviation is one of the industries worst hit by this crisis, and it will be some time still before those affected are able to return to work. The Government have also announced new quarantine measures, but with no detail about how they are going to work. In the north-east, we rely on Newcastle International airport as key to our regional economic growth, and we need certainty from Government on the way forward. The extension of the job retention scheme to October is welcome, but will the Government work urgently with aviation to plan a way through the quarantine measures and provide further support, such as business rates relief, for this crucial sector?

[Alok Sharma]

The hon. Lady of course raises an important point. First, may I thank her for acknowledging the welcome extension that the Chancellor has set out for the job retention scheme? She will also know that the Government have put in place a range of other measures to support businesses large and small. There is a corporate finance facility and the coronavirus large business interruption loan scheme run through the British Business Bank. When it comes to the aviation sector, we are of course continuing to have discussions with it, as we do with other sectors, but I would say to her that the primary intention is to provide a broad set of support that everyone across the economy can get access to.

[Steve Brine (Winchester) (Con)]

As the Business Secretary will be aware, these are challenging times for commercial landlords, a group that includes many charities. They have increased costs at the moment, which have been compounded by a fall in their fundraising, and at the same time are facing increased challenges with the collection of rent from their commercial tenants. I am not asking my right hon. Friend about the package of support for charities, but what is the Government’s message to commercial landlords who have tenants in receipt of rate relief and various linked grants as a result but who cannot collect rent or even a contribution of the rent due?

[Alok Sharma]

My hon. Friend makes a good point about the challenges facing commercial and other landlords. I recognise that many landlords are working closely with their tenants and following best practice, and we are closely monitoring the three-month moratorium on rents. As I said, the CLBIL and CBIL schemes are available for landlords, and people are taking advantage of them in some numbers.

[Rosie Cooper (West Lancashire) (Lab) [V]]

How do the Government intend to ensure that the shielded group of people and their household members do not face an impossible choice between returning to work and breaching public health advice? Will the Secretary of State advise employers to use the job retention scheme for this group when needed?

[Alok Sharma]

Our guidance makes reference to employers having to consider those who are particularly vulnerable and in those sorts of categories—expectant mothers and so on—and we want them to make sure those people are being taken care of and catered for. None of the equalities legislation has changed; at the end of the day, this is guidance, but overlaid by the current regulatory regime in place across the country.

[Edward Timpson (Eddisbury) (Con) [V]]

Businesses in Eddisbury planning on reopening will want to get covid-secure as soon as possible but also as safely as possible, too, especially where, as we just heard, they might interact with the most vulnerable. Can my right hon. Friend confirm that when developing this guidance the vulnerable customers and staff who might come into contact with those businesses are fully taken into account?

[Alok Sharma]

My hon. Friend makes an important point. Yes, the guidance has been prepared with those individuals in mind. As I have said, we obviously require employers to adhere to existing equalities legislation and are also asking in the guidance for employers to monitor the wellbeing of their employees, particularly those who may be working from home, and to take into account the protection of those who may be at higher risk.

[Daniel Zeichner (Cambridge) (Lab)]

The discussion around return to work is very welcome, but in areas such as Cambridge with above-average rateable values, many quite small but vital businesses, such as pubs and restaurants, are really struggling just above the £50k threshold. Much loved cafés such as The Copper Kettle and Benets in King’s Parade and businesses such as the innovative Rainbow Rocket climbing centre all face that problem, so could the Secretary of State remind us how that £50k threshold was arrived at and what would have been the costs and benefits of a different threshold? Would he now consider a higher threshold, particularly for areas with above-average rateable values?

[Alok Sharma]

I understand that the hospitality, leisure and retail sectors face a particular challenge right now. The Prime Minister has set out a road map for how we might get to opening them, but we have to keep a tight grip on the R factor. The hon. Gentleman will know that there is a one-year rates holiday for businesses of all sizes in the sectors he is talking about. I hope that businesses will also take advantage of the loan schemes, particularly the Bounce Back scheme.

[Dr Luke Evans (Bosworth) (Con) [V]]

Coming out of lockdown, it will be critical to encourage the public to support local small and medium-sized businesses, to help to revitalise the economy not only here in Bosworth but across the country. Will the Secretary of State consider a positive advertising campaign to get the public to back their local businesses?

[Alok Sharma]

My hon. Friend raises an incredibly important point. As he knows, we are already running digital campaigns across Government at this particularly vital time. Of course I agree that this is an opportunity for us to back local businesses in the heart of our communities.

[Patricia Gibson (North Ayrshire and Arran) (SNP) [V]]

Protecting jobs and businesses is important, but the Chancellor’s announcement on the covid job retention scheme—[Inaudible.]

--- Later in debate ---

[Mrs Maria Miller (Basingstoke) (Con) [V]]

I thank my right hon. Friend the Secretary of State for all he has done to help to safeguard jobs during the pandemic. May I ask him to look particularly at the problems still facing some pregnant women who have been contacting organisations such as Working Families and Maternity Action? Will he confirm to businesses that all pregnant women are currently classed as vulnerable, and that if they are unable to work as a result they should be suspended on paid leave or furloughed? Will he consider clarifying the guidance, to help those employers who want to do the right thing?

[Alok Sharma]

My right hon. Friend is a champion for the rights of women—indeed, of all individuals—and she raises an important point about pregnant women. The Government guidance is clear that pregnant women can be furloughed, provided that they meet normal eligibility requirements. I would go further and say, as it does in the guidance, that expectant mothers are, as always, entitled to suspension on full pay if a suitable rule cannot be found within the workplace.

[Jim Shannon (Strangford) (DUP) [V]]

The 14-day quarantine will have a real impact on aviation and tourism. It seems that it will be possible for people to fly into the Republic of Ireland, then cross into Northern Ireland and then to the UK mainland. Indeed, they will also be able to fly into France and take the ferry across to the mainland. This underlines the problems that we have. What impact assessment has been carried out in reference to the connectivity between Northern Ireland and the UK mainland in terms of business and tourism and the impact on airports and airlines? Will the 14-day quarantine be temporary?

[Alok Sharma]

The hon. Gentleman, who speaks with huge passion for his community and his area, raises an important issue about quarantine. He will understand the reason that we are looking to do this, and more details will be set out in due course, but I would say to him that businesses that previously felt that people had to be physically in the same place for meetings are now finding new ways of conducting business. Indeed, there are millions of people who are continuing to work from home, even during the pandemic.

[Jerome Mayhew (Broadland) (Con) [V]]

Small and medium-sized enterprises working within the construction and home improvement sectors—plumbers, electricians, window fitters—will welcome the guidance that they can undertake work in customers’ houses subject to sensible precautions. Is it my right hon. Friend’s advice that now is the time for our trades to get back to work, to help the economy to bounce back?

[Alok Sharma]

My hon. Friend has made his point crystal clear. He has talked about a set of workers who are the very backbone of the small business community across all our constituencies. He will also know that the Federation of Master Builders has warmly welcomed the guidance. Yes, absolutely, we want people to get back to work, but to get back to work safely.

[Mr Deputy Speaker (Mr Nigel Evans)]

We are going to try Patricia Gibson one more time.

--- Later in debate ---

[Mr Deputy Speaker]

Secretary of State, were you able to get anything that you could give a response to?

[Alok Sharma]

I was not able to catch much of what the hon. Lady said, but she will know that the Chancellor just set out his statement. I will commit that if she writes to me or the Chancellor we will, I am sure, provide her with some answers.

[Mr Deputy Speaker]

I am sorry, Patricia, but we did have real audio and video problems there.

[Sarah Olney (Richmond Park) (LD) [V]]

Many businesses in my constituency offering health services, such as dentists and physiotherapists, have been excluded from other forms of Government support yet are offering absolutely vital services that we will need when the shut- down ends. Does the Minister have any specific guidance for businesses such as these?

[Alok Sharma]

I would not say that businesses have been excluded. Indeed, if we look at the range of what is available in terms of loan schemes it covers the smallest businesses right to the very largest. We are seeing significant take-up particularly of the Bounce Back loan scheme. I made an announcement about the top-up to the local business grant fund scheme that we already have—almost £9 billion has gone out. This is a discretionary fund that is being set up to support businesses as well.

[Dr James Davies (Vale of Clwyd) (Con) [V]]

Will my right hon. Friend confirm that he is looking at how certain tourism and leisure facilities might open safely as and when the covid alert level is low in all parts of the UK?

[Alok Sharma]

I know that my hon. Friend is a champion for businesses in his constituency and he will be concerned for them. The Prime Minister has set out a timeline, but, as he has said, we also have to be cautious about how we proceed. We are currently looking at hospitality opening at some point in July, but that is entirely dependent on making sure that we keep the R factor down. In the meantime, as my hon. Friend knows and has heard from the Chancellor, additional support is being provided.

[Mohammad Yasin (Bedford) (Lab) [V]]

The future of many small businesses in my constituency of Bedford and Kempston hangs in the balance because owners have been unable to access the Government grants as their business rate classification does not qualify them for it. Local authorities have some discretion, but will the Government issue clearer guidance and have a speedier declassification process to ensure that legitimate businesses do not fall through the net and go to the wall?

--- Later in debate ---

[Alok Sharma]

We have put in place the sort of measures that we have precisely because we want to support as many businesses as possible. We want people to be ready, and to be retained in the workplace so that when we get past this pandemic we can bounce back. In an earlier answer, I talked about a discretionary fund to support businesses that local authorities will administer. If the hon. Gentleman writes to me, I will be happy to provide further details.

[Sara Britcliffe (Hyndburn) (Con) [V]]

I know that my right hon. Friend will join me in thanking all businesses in Hyndburn and Haslingden for their work in responding swiftly and efficiently to the lockdown. Many of them have adapted their services to support those who need it. Can he assure me that the businesses and workers in Hyndburn and Haslingden will be both supported and utilised in the recovery process and that their safety will be paramount in the decisions made?

[Alok Sharma]

I thank my hon. Friend for everything she is doing to support businesses in her own constituency of Hyndburn and Haslingden. I have already set out a whole range of measures of support that the Government are providing, and I know that she will welcome what the Chancellor said at the Dispatch Box earlier about further support for the furlough scheme.

[Kim Johnson (Liverpool, Riverside) (Lab) [V]]

On Sunday, the Prime Minister announced plans for workers to return to work if they were not able to work from home, giving businesses less than 12 hours to put any plans in place. The guidance issued by the Government on Monday places all the obligations on employers—for example, for social distancing and cleaning. Will the Secretary of State check to see whether these guidelines are being followed by employers? The £14 million uplift to the HSE is welcome, but this does not compensate for the £100 million budget cut and the two thirds reduction in staffing over the past decade. Will the Secretary of State commit to put the needs of working people first, properly resource the HSE to increase the number of inspectors, work with unions and not allow businesses to reopen until their safety measures have been approved and verified?

[Alok Sharma]

The hon. Lady raised a number of points. Let me address two of them. She asked about the HSE funding. I am pleased that she welcomes the extra £14 million. Over the years, the HSE has absolutely maintained its regulatory activities. It has invested in updating IT systems and other infrastructure, and has reduced reliance on taxpayer funding through growth in its commercial activities. Absolutely everyone in this House and across the country wants us to keep people safe in the workplace, and every employer I have spoken to wants that to happen. That is why we have produced guidance through a process of consensus, and we will continue to monitor that.

[Dean Russell (Watford) (Con) [V]]

Across my constituency, we have an incredible business community that is supported by groups such as the Watford chamber of commerce. Does my right hon. Friend agree that it is important that employers build confidence with their workers and customers, and that all businesses should aim to publish their risk assessments online wherever possible to reduce concerns, showcase their transparency and keep workers safe?

[Alok Sharma]

I thank my hon. Friend and the Watford chamber of commerce for everything they are doing to support local businesses. He will know that the British Chambers of Commerce has worked with us and welcomed the guidance. I agree that we should be encouraging all employers to make available the results of their risk assessment, and we have made it very clear that we expect all employers with more than 50 workers to publish the results of their risk assessment on their website.

[Mr Deputy Speaker (Mr Nigel Evans)]

We are going to do the last two questions and then we have to move on to the next statement. I apologise to Members who were unable to get in.

[Nick Smith (Blaenau Gwent) (Lab)]

As secretary to the all-party parliamentary group on beauty, aesthetics and wellbeing, I know that this £6 billion sector is crucial to our economy, with many businesses on our UK high streets. By nature, it is a very hands-on industry, so can the Secretary of State assure me that clear guidelines on PPE will be issued well ahead of these businesses reopening, so as to protect both staff and consumers?

[Alok Sharma]

The hon. Gentleman raises an important point on behalf of a sector that he is working to represent. We will continue to work collaboratively to come up with further guidance on sectors and industries that are not currently open.

[Harriett Baldwin (West Worcestershire) (Con)]

I thank the Secretary of State for allowing garden centres to reopen from tomorrow; that is very welcome in West Worcestershire. As he thinks about allowing more of the retail sector to open, is he considering relaxing the rules to allow a levelling up of our high street to the same sort of opening hours as we have on the internet?

[Alok Sharma]

I, too, welcome the fact that garden centres will be open from tomorrow. It will be an opportunity for us to continue to restart our economy. My hon. Friend makes an important point. I will continue to keep the situation under review.

Businesses: Safe Working Guidance

Lord Sharma Excerpts

Monday 11th May 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

The Government today published new guidance to help UK employers get their businesses back up and running and workplaces operating as safely as possible.

The new guidance covers eight workplace settings from outdoor environments and construction sites to factories and takeaways and sets out practical steps for businesses.

The Government have consulted approximately 250 stake- holders in preparing the guidance. It has been developed with input from firms, unions, industry bodies and the devolved Administrations in Northern Ireland, Scotland and Wales and in consultation with Public Health England (PHE) and the Health and Safety Executive (HSE), to develop best practice on the safest ways of working across the economy, providing people with the confidence they need to return to work.

The guidance applies to businesses currently open. This also includes guidance for shops which we believe may be in a position to begin a phased re-opening at the earliest from the 1 June. Guidance for other sectors that are not currently open will be developed and published ahead of those establishments opening to give those businesses time to plan. The Government will also shortly set up taskforces to work with these sectors to develop safe ways for them to open at the earliest point at which it is safe to do so, as well as pilot re-openings to test businesses’ ability to adopt the guidelines.

As part of today’s announcement, the Government have made available up to an extra £14 million for the HSE, equivalent to an increase of 10% of their budget, for extra call centre employees, inspectors and equipment if needed.

The guidance is available at https://www.gov.uk/guidance/ working-safely-during-coronavirus-covid-19

[HCWS225]

Bounce-back Loans Scheme

Lord Sharma Excerpts

Monday 11th May 2020 Written Statements

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I am tabling this statement for the benefit of hon. and right hon. Members to bring to their attention the details of the new bounce-back loans scheme (BBLS).

The bounce-back loans scheme was launched on 4 May, and is facilitated by the Government owned British Business Bank and delivered through its delivery partners. Lenders offer term loans of between £2,000 and £50,000 to support small businesses that are affected by the coronavirus outbreak.

The scheme is available on a temporary basis for an initial period of six months and can be extended as required. The key parameters of the scheme are as follows:

BBLS will provide term loans only for a term of six years, with businesses able to access loans equivalent to 25 per cent of their turnover from £2,000 up to a maximum loan size of £50,000. The interest rate will be standardised across all lenders and fixed at 2.5 per cent. There will be no fees for borrowers to access the scheme.

The percentage of net (post-recovery) losses for each loan that is guaranteed by the Government will be 100 per cent, with no cap on gross Government liability at the level of the lender’s whole BBLS portfolio. Personal guarantees are not permitted, although some personal assets could be claimed as part of recovery from sole traders. Sole traders’ principal private residence and vehicle may never be claimed as part of recovery.

A Government grant, “the business interruption payment”, will be provided for the benefit of businesses, equal to the interest incurred on the facility for the first twelve months. Businesses will not be required to make any repayments on capital during the first twelve months of the facility.

The Government will be subject to a new contingent liability as a result of the bounce back loans scheme, and I will be laying a Departmental minute today containing a description of the liability undertaken.

For more information on this and other support for business, please go to https://www.businesssupport.gov.uk/

[HCWS224]

Oral Answers to Questions

Lord Sharma Excerpts

Monday 4th May 2020 Commons Chamber

[Andrew Gwynne (Denton and Reddish) (Lab)]

What discussions he has had with small businesses on the operation of the coronavirus business interruption loan scheme.

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

As of 1 May, over £4.7 billion-worth of loans have been issued under the coronavirus business interruption loan scheme to 29,496 businesses. From today, businesses will be able to access our new bounce-back loans of up to £50,000 by filling in a simple, quick application. Those will be backed by a 100% Government guarantee.

[Stephanie Peacock [V]]

Since I tabled this question, the Government have taken action in this area, which I welcome, but can the Secretary of State respond to my constituents’ concerns that the application for the business interruption loan scheme is too complicated? Will he develop a simple, standardised application process for businesses looking to access loans above £50,000?

[Alok Sharma]

I welcome the hon. Lady’s acknowledgement that things are starting to work in terms of the CBIL scheme. I have personally had conversations with individual banks, and I will continue to do that. We have also made the scheme more accessible—for instance, extending it to all viable small businesses and removing the forward viability test.

[Miss Dines [V]]

Businesses such as RG Millward Ltd in my constituency of Derbyshire Dales have been applying for the coronavirus business interruption loan. I welcome my right hon. Friend’s commitment that those loans will be interest-free for 12 months. What is he doing to ensure that businesses such as those in my rural constituency can access these loans from the banks on the most favourable and reasonable terms at this difficult time?

[Alok Sharma]

I thank my hon. Friend for that question. I can tell her that my Department is working very closely with the financial sector to ensure that businesses across the whole UK, including in Derbyshire Dales, are getting the support they need. As a result of the schemes we have announced, through the British Business Bank, businesses can now access Government-backed loans worth anywhere from £2,000 up to £50 million.

[Seema Malhotra [V]]

It is estimated that 50% of social enterprises could run out of cash by June without further support, raising concerns that the CBIL scheme is not working for social enterprises. Some of those will be in aviation, which is coming under huge strain. The UK aviation industry could lose around £21 billion-worth of revenue, putting at risk over 600,000 jobs, with 12,000 job cuts likely at British Airways alone, which will hit Feltham and Heston and the surrounding constituencies very hard. When will the Secretary of State bring forward specific support packages for the sectors that are worst hit by covid-19, such as aviation?

[Alok Sharma]

The hon. Lady’s question was in two parts. The first related to social enterprises. CBILS is open to all social enterprises, so long as they make at least 50% of their income from trading, which we believe covers the majority of social enterprises. She raised a wider question about larger companies. As she knows, we have a range of schemes in place, with the bounce-back loan scheme at one end and the corporate finance facility at the other. Where an individual business is not able to access any of those particular schemes, they can come to us, and we will consider the case that they make.

[Simon Jupp [V]]

Many established and previously profitable businesses in East Devon are desperate to access financial support, but they have found the major banks unwilling to lend. I joined many MPs from across Devon in writing to chief executives of major banks, because I feel that they are not living up to the expectations required during this emergency. Does the Secretary of State agree that banks need to step up and put in place enough resources to process these requests urgently, so that businesses in East Devon can get the support they need?

[Alok Sharma]

My hon. Friend raises an important point. As I said in answer to an earlier question, I have been talking to the largest lenders. I spoke to them particularly over the bank holiday weekend, to ensure that they were putting in place sufficient measures and more people to process loan requests quickly. I believe that they have recognised the challenge and are stepping up to it. He will know that we have made changes to the CBIL scheme to make it more accessible, extending it to all viable small businesses, removing the forward viability test, encouraging automated credit checks and, of course, banning all personal guarantees for loans under £250,000.

[Andrew Gwynne [V]]

I welcome what the Secretary of State just said, but in my area, businesses are still reporting complications with the scheme, which is hampering their speed and eligibility to access the loans. No cap has been placed on the interest rates that can be charged, and some banks in Greater Manchester are offering interest rates of up to 20%. There are also difficulties in getting through to banks to apply. Can the Secretary of State tell me what he is doing to sort this urgently, so that small businesses can access this vital support?

[Alok Sharma]

We are all aligned in our wish to make sure that these loans are getting out to businesses, and I believe that is starting to happen. On interest rates, of course, I have had those discussions on a very granular basis with banks, and they have recognised, on the CBIL scheme, where we are providing an 80% guarantee, that there is a requirement to reflect that in the interest rate. Furthermore, as the hon. Gentleman will know, the interest rate on the bounce-back loans, which have just been announced, is set at 2.5%, and of course the Government have taken care of the first year of interest.

[Mr Speaker]

I welcome Ed Miliband back to the Front Bench.

[Edward Miliband (Doncaster North) (Lab)]

Thank you very much, Mr Speaker.

I can tell the Secretary of State that we are committed to working constructively with the Government on all issues, and we welcome the recent changes to the loans system. I have two specific questions about his draft guidelines on workplace safety. We share the desire for a return to work as soon as it is safe, but he will know that firms with more than five employees are obliged by law to carry out risk assessments on safety. First, does he plan to ensure the publication of these risk assessments to give confidence to workers? Secondly, on enforcement of safe working, the Health and Safety Executive is operating on substantially reduced resources. What will he do to ensure that the guidelines are enforced so that all workers can feel safe?

[Alok Sharma]

I also take this opportunity to welcome the right hon. Gentleman to his new role. We have already had two very constructive discussions. I hope that will be the tone of our future interactions. He raises an important point. We both want workers in our country to feel safe and confident that they are returning to a safe workplace. Work on the consultation is ongoing, and obviously I do not want to pre-empt it, but he makes some very important points, and of course he is always welcome to write to me. I will look at what he says very carefully.

[Edward Miliband]

I thank the Secretary of State for that answer, and I hope that he will come to the House to make a fuller statement on these matters at the earliest opportunity.

I want to ask about another aspect of the lifting of the lockdown, which is financial support for businesses and workers. Does he recognise that there will need to be a second phase of financial support for those businesses that will have to stay closed for longer, including an extension of the furlough scheme, with more flexibility for part-time working? Secondly, on the hospitality sector, which he knows is facing very challenging times, can I urge him to look favourably at the proposal, which has the support of over 80 of his own Back Benchers, to extend business support grants to businesses with rateable values of up to £150,000? It would make a difference to tens of thousands of pubs, restaurants and other businesses that are the lifeblood of our communities.

[Alok Sharma]

As the right hon. Gentleman knows, we have provided support for the hospitality, leisure and retail sector. There is a 100% rates holiday for all businesses in that sector, and we are also making £25,000 grants available to them. Under the grant scheme—the £25,000 and £10,000 grants—as of last Monday, £7.5 billion had been paid out. I hope he will welcome that. On the wider measures he talks about, we keep everything under review, and I will look at anything that comes forward.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP) [V]]

I also welcome the right hon. Member for Doncaster North (Edward Miliband) to his new position on the Labour Front Bench.

A recent poll by the Scottish Chambers of Commerce has found that 48% of Scottish companies will run out of cash within three months, with 64% identifying shortcomings in Government support schemes. Does the Minister agree with Sir George Mathewson that, far from helping them to bounce back, these loan schemes will not even allow businesses to survive, and that the only option is to write off the debt and convert these loans urgently into more accessible grants?

[Alok Sharma]

I say to the hon. Gentleman, for whom I have enormous respect, that one has to look at the sum total of what the Government are putting forward. He will know that about 4 million people are being furloughed under the job retention scheme and that support is available through grant schemes, which I talked about in my response to the right hon. Member for Doncaster North (Edward Miliband). Of course it is important that we support businesses, and we will continue to do that.

[Chris Green (Bolton West) (Con)]

What steps his Department is taking to support (a) vaccine manufacturing and (b) the UK life sciences sector.

[The Secretary of State for Business, Energy and Industrial Strategy (Alok Sharma)]

I announced the new vaccines taskforce on 17 April, which will expedite efforts to research and produce a coronavirus vaccine. Last week, thanks to UK Government financial support of £20 million, the Oxford vaccine entered clinical trials in humans. I can update the House that as of today 601 people have taken part in that trial. We continue to talk to Oxford to understand its manufacturing needs, and colleagues will be aware it has announced a collaboration with AstraZeneca to ensure manufacturing capacity in the UK.

[Chris Green [V]]

British scientists are working with partners around the world to develop treatments and vaccines for covid-19. Does my right hon. Friend agree that it is just as important that we take the same collaborative approach to manufacturing to ensure that, wherever treatments are developed around the world, they are made available in Britain and to people right across the world as soon as possible?

[Alok Sharma]

My hon. Friend raises an incredibly important point. We are absolutely committed to working with international partners in tackling the pandemic, ensuring the UK is contributing to, and indeed benefiting from, efforts around the globe. At the global coronavirus response summit, which the UK is co-hosting, my right hon. Friend the Prime Minister has today confirmed the £388 million from the UK towards the global £8 billion target for research and development into covid-19.

[Craig Williams (Montgomeryshire) (Con)]

What support his Department is providing to businesses designing new ways of working to help safely mitigate the effects of the covid-19 outbreak.