Covid-19: Business

Lord Callanan Excerpts

Wednesday 13th May 2020 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

I thank both noble Lords for their questions, of which there were a number. I will endeavour to answer as many as possible.

On return to work, reducing pressure on the transport system is one reason we are encouraging everyone to work from home if they can. Where this is not possible, we are encouraging people to avoid rush hour to help maintain social distancing. We are also encouraging people to walk and cycle where they can and have recently announced a £250 million emergency active travel fund, the first stage of a £2 billion investment.

The noble Lord, Lord Stevenson, asked about the new legislation. I can confirm that the guidance is non-statutory and does not change the obligations relating to health and safety, employment or equalities. Currently, employers have a duty under UK law to protect the health and safety of their workers and other people who might be affected by their business. This includes considering the risks that Covid-19 represents. Currently open businesses should review their risk assessments in line with the new guidance and introduce any additional measures they consider reasonably practicable to mitigate the identified effects of the new virus.

On non-compliance, where the HSE identifies employers who are not taking action to comply with the relevant legislation and guidance that control public health risks, it can consider a range of enforcement actions. Health and safety legislation is enforced by the Health and Safety Executive, the Health and Safety Executive for Northern Ireland and local authorities. If the enforcing authority finds that an employer is not taking action to properly manage workplace risks, a range of actions are open to it, including offering specific advice and issuing enforcement notices. An enforcement notice is a legal document that requires an employer to take action as required, creates a legally binding requirement and can ultimately lead to prosecution.

The noble Lord, Lord Stevenson, asked about the R-number. I will give him a scientific answer: if R is below one, on average each infected person will infect fewer than one other person. The number of new infections will fall over time. The lower the number, the faster new infections will fall. Where R is above one, the number of new infections is accelerating; the higher the number, the faster the virus spreads through the population. SAGE assessed that at the beginning of the epidemic R was between 2.7 and 3. Currently, it says that it is between 0.5 and 0.9, meaning that the number of infected people is falling. As our priority is to protect the public and save lives, we will ensure that any adjustments are compatible with the five tests. The information on R is published twice weekly on the website of the Medical Research Council Biostatistics Unit.

I think it was the noble Lord, Lord Fox, who asked me whether we are confident that the HSE and local authorities have enough resources to enforce this. Yes, we are. As I said in the Statement, we have announced an additional £14 million for the HSE for extra call centre staff, inspectors and equipment. Government will resource local authorities as necessary, as we understand more about the workload that Covid-19 entails for them.

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[Baroness Verma (Con)]

Can my noble friend confirm that businesses in multioccupancy properties where business rates are shared among the businesses and added to the rental agreement are able to access business grants through local authorities? Many businesses I have spoken to have said that they have not been able to do that so far. If not, what is available and how quickly can they access it? Like all businesses, they are having to make adjustments for safe working, and this all comes at a cost.

[Lord Callanan]

I thank my noble friend for her question. We have announced a package of support to help businesses with their ongoing business costs in recognition of the disruption caused. This package includes the small business grant fund, specifically for hereditaments in England that were eligible for relief on 11 March under the small business rates relief fund. The funding is to support small and rural businesses which are ratepayers on a property, as these businesses are more likely to have ongoing fixed costs during this period. Unfortunately, businesses that were not eligible for percentage SBRR relief on 11 March are excluded.

Nevertheless, there are other new measures to provide support to those businesses, including CBILS, deferral of the next quarter of back-payments for firms until the end of June, representing a £30 billion injection into the economy, and a new fast-track finance scheme providing loans with a 100% government guarantee. In addition, there is also the bounce-back loan scheme, which will ensure that the smallest businesses can access loans in a matter of days. We are working currently with local authorities to try to make sure that this support is delivered as fast as possible.

[Baroness Drake (Lab)]

My Lords, the Government have to transition out of lockdown through a precarious route that protects people’s health, rebuilds the economy and phases down the exceptional measures. The manner of that journey and the impact on different communities is of huge national interest and requires consensus within Parliament and across the devolved and local governments, which in turn will drive greater public and business confidence. The transition out of the job retention scheme, for example, could, depending on how it is handled, trigger widespread redundancies and business closures. What further initiatives will the Government take to build and to hold a consensus with Parliament and the devolved and local governments on how these national interests can best be met? Because at points they are currently not. Can we have greater clarity on how and when they will share their plans going forward on the phasing down of current emergency financial measures and their replacement with the second-wave support package so that people can understand the consequences and plan?

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[Lord Callanan]

The noble Baroness makes a number of good points. We are endeavouring to work with other political parties. The Opposition have been consulted on many measures; of course, the devolved Administrations are present in many of the meetings at which these decisions are taken; similarly, we regularly host conference calls with local authorities to try to communicate information as much as possible. Ultimately, she makes a very good point, and we will endeavour to proceed with the maximum consensus possible.

[Lord Clement-Jones (LD)]

My Lords, I cannot see any reference in the guidance on working safely, or the FAQs, to the arts and entertainment sector. This is a really badly hit but massive contributor to our culture and economy. Surely, if house viewings can restart, musicians and other creative artists, many of whom are suffering real financial hardship, can be given a clear indication about when they will be able to return safely to work, rehearsal, performing and recording. If estate agencies can open for business, why not museums and galleries and certain other arts and entertainment facilities? What guidance do the Government have on this? Can the Minister pledge that creative workers, along with live performance venues, will be financially supported for as long as necessary?

[Lord Callanan]

The noble Lord makes a very good point. I can tell him that earlier today we announced five new ministerial-led task forces that have been set up to develop plans for how and when currently closed sectors can reopen safely following the publication of the UK’s road map. This includes a DCMS-led task force considering some of the sectors he refers to: recreation and leisure, including tourism; culture; heritage; libraries and entertainment. As part of this scientific-led approach, each task force will work across government and engage with key stakeholders to ensure that the guidelines are developed and that those sectors can reopen as quickly as possible.

[Baroness Falkner of Margravine (Non-Afl)]

Does the Minister accept that, in the social distancing measures they have given for business, the 2-metres distance is not necessarily a measure that is recommended by the World Health Organization? The WHO recommends only 1 metre, and other countries have differing metrics—1 metre, 1.5 metres and so on. Does he accept that it is fairly onerous for businesses, some of which just do not have the capacity to keep that kind of distance? Will the Government review it as practice evolves and as the rate of R starts coming down?

[Lord Callanan]

Of course, we are always reviewing these measures and acting on scientific advice. I think we all have to accept that that scientific advice will evolve as the knowledge of the virus increases. The noble Baroness, as she usually does, makes an important point: these are things that we keep under constant review, so that we can get the country back to work as quickly as possible.

[Lord Balfe (Con)]

My Lords, one of the good things that has come out of this crisis has been the way in which people work together and in particular the contribution of the trade union movement to working with the Government. I know that the unions welcome the positive attitude of the Government. I would like a reassurance, which I am sure that the Minister will be happy to give, that they will continue to work with the unions. As these measures wind down, of course there will be a lot of detailed points, but where responsible trade unionism and a listening Government come together, I hope that we can continue to have the good relations that we have had up until now. I welcome the Minister being able to confirm that the good relations with the trade union movement will continue.

[Lord Callanan]

I am indeed happy to confirm to my noble friend that we are very happy to work with all responsible trade unions, and we included them in developing this guidance and we are happy with the many constructive contributions that we receive. We continue to work with them on developing sensible guidance for business that gives UK workers the utmost confidence that they can return to work safely. Of course, we will always consider any new, sensible suggestions.

[The Deputy Speaker]

Lord Hendy. Lord Hendy? We do not have Lord Hendy, so I call Lord Bilimoria.

[Lord Bilimoria (CB)]

My Lords, we are grateful to the Government and the Chancellor for all the help for business, including the extension of the job retention scheme until October. However, the Statement on workplace guidance makes no mention of testing at all, and today it is almost two months since the director-general of the WHO said, “Test, test, test”, and the Prime Minister has said that there is now a target of reaching 200,000 tests a day by the end of this month. Will the Minister tell us whether companies and businesses have access to testing for their workforces so that employees can be tested when they go to work? They can then have the confidence if they have a negative test that they can work knowing that they are healthy, and their colleagues and consumers can also have that confidence. Is testing available widely to employers and businesses now?

[Lord Callanan]

The noble Lord makes a very valid point. Our priority remains that testing patients to inform their clinical diagnosis is extremely important. We are also offering tests to all essential workers, including NHS and social care workers with symptoms, anyone over 65 with symptoms, anyone with symptoms whose work cannot be done from home and anyone who has symptoms of coronavirus and lives with any of those identified above. Yes, testing is extremely important. The Prime Minister has addressed that we have a strategy that we are working towards.

[Baroness Pidding (Con)]

At the beginning of the coronavirus crisis and the introduction of lockdown, in many communities throughout the country, especially in our villages, it is our small local businesses such as independent bakers, greengrocers and butchers who provide essential services. They have really stepped up to the challenge, often working extraordinarily long hours and having to make significant adaptations to their working practices to ensure a safe environment for both staff and customers. In the coming weeks, we hope to see people attracted back to our towns and high streets as we move towards the gradual reopening of retail outlets. That is of course hugely welcome. However, will my noble friend join me in urging the public not to forget those small community businesses that were such a lifeline, and still are, and repay them with their continued patronage?

[Lord Callanan]

My Lords, as always, I am very happy to join my noble friend in paying tribute to the many small community businesses up and down the country that play such an important part in our community life, and our message to them is a simple one. We will stand by them. We have announced an unprecedented range of measures to help them get through this extremely difficult and challenging period. The bounce-back loans scheme, which I am sure my noble friend is aware of, is a 100% government-backed loan scheme for small businesses. Any business will be able to borrow between £2,000 and £25,000 and have access to that cash, literally, within days. Those loans will be interest-free for the first 12 months. Businesses can apply online in a short and simple form. I totally agree with my noble friend that we need to stand by these businesses.

[Lord Campbell of Pittenweem (LD)]

My Lords, in the present circumstances it is clear that many businesses —particularly small ones, as has been mentioned—are desperate to avoid liquidation or bankruptcy, with employees in turn equally desperate to keep their jobs. In those circumstances, how can we be confident that both will not be tempted to cut corners?

[Lord Callanan]

That is why we have put in place such a strong enforcement regime. We have given extra resources to the Health and Safety Executive and local authorities to help them enforce these demands. Ultimately, it is a matter of trusting in the many sensible, established companies up and down the country to do the right thing for their employees. Most companies are endeavouring to do that; it is in their interests, and that is why they are successful. We will not hesitate to take enforcement action against the small minority that do not.

[Lord Dobbs (Con)]

My Lords, the only way we will recover is to grow our way out of this mess and create new wealth. Does my noble friend accept that the Government’s overwhelming priority is to get business back to work? To do that, our firms will need as much certainty as we can possibly give them. Does he agree that the suggestions we heard in the debate yesterday that the trade deal with our friends in the EU should be delayed—perhaps by up to two years—is, frankly, delusional? How can we expect employers and employees to do their job if they do not know what the rules will be for years to come? There are no easy options, but does he not agree that endless delay is the daftest option of all?

[Lord Callanan]

My noble friend is tempting me to go back to my previous role on Brexit. Of course, we will approach the negotiations constructively. I am sure he will be delighted to know that our position has not changed. We will not agree to any of the EU’s demands to give up our rights as an independent state. We are committed to getting a deal by the end of the year and will not extend the transition period.

[Lord Wood of Anfield (Lab)]

My Lords, as the Government try to navigate a gradual return to work for millions, I am sure the Minister will agree with the central importance of the need to dovetail the financial ambition of winding down the furlough scheme with the public health ambition to protect workers going back to their workplaces. In particular, I know there are worries that the Government will with one hand reduce support for furloughed workers sometime after the end of June and, with the other, demand workplace health and safety conditions that make a return to normal work impossible. I am thinking of establishments such as smaller cafés and restaurants and small entertainment venues. Can the Minister assure those businesses that the end of furloughing will be conducted in a co-ordinated, sector-specific and company-specific way, to ensure that some firms do not have a situation in which the Treasury expects a return to work while BEIS and the Health and Safety Executive make such a return impossible?

[Lord Callanan]

We have extended the scheme significantly to support firms through the transition out of lockdown. We are doing right by them and expect those firms to do right by their staff. As the economy gradually reopens, it is fair that firms begin to pick up some of the cost of their workers’ salaries, but we will of course want to do this in a specific and phased way to make sure that these businesses can manage to survive and trade their way back to success.

[The Deputy Speaker]

After the noble Baroness, Lady Ritchie of Downpatrick, I will call the noble Lord, Lord Hendy. I call the noble Baroness, Lady Ritchie of Downpatrick.

[Baroness Ritchie of Downpatrick (Non-Afl)]

My Lords, yesterday the Ulster Bank published a report showing that for the first three months of this year there was a contraction in business activity put down to coronavirus. Can the Minister describe the work that the Government, working with the Northern Ireland Executive, will now do to assist private sector businesses in Northern Ireland to survive the pandemic and to ensure that they can continue with some form of financial and economic activity?

[Lord Callanan]

My Lords, as the virus of course does not respect borders or boundaries, we will continue to work very closely with all the devolved Administrations, including the Northern Ireland Executive, to support consistency for employers and a four-nation approach to kick-starting the UK economy. As I set out in previous answers, we have announced a range of unprecedented measures to support the UK economy.

[Lord Hendy (Lab)]

My Lords, each of the eight guidance notes published on Monday advises:

“Workplaces should not encourage the precautionary use of … PPE to protect against COVID-19 outside clinical settings”.


That advice is surely contrary to the clear statutory duty set out in the Personal Protective Equipment at Work Regulations 1992 to provide PPE to any employee in respect of whom risk has not been eliminated by other measures. The importance of this duty is magnified in the light of the Office for National Statistics report to which my noble friend Lord Stevenson referred, which identifies various occupations at an increased risk of death from Covid-19. Will the Minister indicate whether the guidance might be reconsidered in each of these eight notes?

[Lord Callanan]

Where workers already wear PPE for protection against non-Covid risks such as dust, they should of course continue to wear this. In relation to Covid-19 specifically, we have worked very closely with the medical community to develop this guidance and we will of course be guided by the science so that we do not put lives at risk in future.

[Lord Leigh of Hurley (Con)]

My Lords, when I saw that there was to be a Statement on business, I hoped it would include further guidance on the financing of business. While I congratulate the Government on their immediate and world-beating assistance to companies through debt, it is not the long-term answer. Does the Minister agree that the next step in helping businesses will be to help them repay the debt and that, to do that, they will need equity funding? First, will he tell me what steps will be taken for modest amounts of equity to be invested in SMEs? Secondly—I draw your Lordships’ attention to my registered interests—can he tell me what the Government will do to help those companies that struggle not with raising money on public markets but with the costs of being on a public market, exacerbated by MiFID II and enormous regulation? This has meant that those markets are now shrinking, which will consequently make it difficult for UK plc to raise the equity it will need to flourish.

[Lord Callanan]

As usual, my noble friend raises very good points. I point him towards the future fund, which will be launched this month and will provide convertible loans ranging from £125,000 to £5 million to UK-based companies, subject to at least equal match funding from private investors. These convertible loans may be a suitable option for many businesses that rely on equity investment and are unable to access the CBILS. These companies will be vital in ensuring that the UK retains its world-leading position in science, innovation and technology.

[Lord Blunkett (Lab)]

I assure the Minister that I am very supportive of trying to overcome the challenge of persuading people to go back to work without ending up with gross pollution and congestion. However, in light of the interview that the Secretary of State for Transport undertook this morning on Radio 4, what advice are the Government giving to employers who find that their staff are refused access to public transport, whose consequent late or non-arrival at work puts their jobs in jeopardy?

[Lord Callanan]

Of course, we want employers to be as flexible as possible and to consider, for instance, staggering arrival and departure times from work to enable people to avoid peak times wherever possible. As I said, we are also encouraging people to walk and cycle wherever they can; we recently announced a £250 million emergency active travel fund to help with that. Ultimately, it will require both employees and employers to work together to take into account each other’s needs and to use common sense.

[Lord Bruce of Bennachie (LD)]

Given the decision of the devolved Administrations to maintain their guidance to stay at home and to limit the return to work, will the Government carefully monitor the path of the virus across the UK? If there is significant variation in the incidence of cases or deaths between England and the rest of the UK, will the Government revise the guidance in their documents? Can the Minister give an assurance that workers, companies and, indeed, Governments in the devolved Administration areas, or indeed anywhere in the United Kingdom, will not be penalised for maintaining a cautious approach which might prevent a second spike?

[Lord Callanan]

Of course, we keep these matters under constant review. It is not our intention to penalise anyone. We want to continue to work together with the devolved Administrations in all parts of our United Kingdom.

[Baroness Altmann (Con)]

Given the costs of the commendable measures taken by the Government to protect jobs, can my noble friend the Minister tell the House whether the Government will consider raising some of the funding for the job retention schemes by issuing specially targeted pension-fund gilts, for example, which pension schemes could use to better match their liabilities, and for which they have significant funding?

[Lord Callanan]

My Lords, the Prime Minister has said that we will do whatever it takes to win the fight against the pandemic. My noble friend has made an interesting suggestion, which I will certainly pass on to the Treasury, but the PM has declared to businesses and workers that we will stand by them. As I have said in previous answers, we have announced an unprecedented range of support measures for businesses, such as CBILS and the bounce-back loan scheme.

[The Earl of Caithness (Con)]

My Lords, I declare my interests as in the register. I congratulate my noble friend the Minister and the Government on the clear, detailed advice that has come out in the last 48 hours.

I would like to ask my noble friend about estate agency. Given that this poses a considerable extra burden on people, with estate agents, surveyors et cetera coming to their houses, and given that we know there have been a number of rogue agents breaking the Government’s current laws, does he agree that there is an urgency to appoint a regulator of property agents with power to act against rogue agents? They now pose an extra threat to people who are in fear of this disease?

[Lord Callanan]

Since the lockdown restrictions were implemented in March, more than 450,000 people have been unable to progress their plans to move house. All buyers and renters will now be able to complete purchases and view properties in person, and estate agents, conveyancers and removal firms can return to work—while, of course, following the appropriate social distancing guidelines. If employees have concerns about their employers’ compliance they can raise them, ultimately, with the HSE or their local authority.

[Lord Dholakia (LD)]

My Lords, the country is well aware of the front-line contribution of our diverse communities during the present crisis. A disproportionate number have lost their lives. The Minister mentioned in the Statement that the Government consulted approximately 250 stakeholders in their preparation of the guidance notes. What consultations have taken place with key black and ethnic minority organisations? Has the Minister consulted catering organisations on their dietary requirements at the present time?

[Lord Callanan]

The noble Lord makes a good point. The number of ethnic minority communities that seem to be adversely affected by this virus is indeed very concerning. I can confirm that we have, of course, fulfilled our equality duties within the guidance. We have had this subject constantly at the forefront of our minds as we formulated this guidance. We have consulted widely across all business and industry.

[Lord Truscott (Ind Lab)]

My Lords, I declare an interest as set out in the register. Does the Minister recognise that many millions of the self-employed in SMEs will not benefit from the Government’s generous furlough scheme and, in many instances, cannot yet go back to work? Will the Minister at least commit the Government to extending the self-employed income support scheme until the end of October?

[Lord Callanan]

I thank the noble Lord for his question. As I have said in response to earlier questions, we keep these schemes under constant monitoring and assessment. We are always open to modifying or extending them if it proves necessary.

[Baroness Hooper (Con)]

My Lords, in the international context, can my noble friend tell us what consideration is being given to helping firms and businesses whose trade depends on imports and exports? For example, is there any special advice relating to transport, particularly given the crisis in air transport? Are British embassies overseas being fully kept up to speed on all developments and requirements in this area, because this is also important and relevant to small and medium-sized enterprises?

[Lord Callanan]

The noble Baroness makes some very good points. In my view, it is essential that all businesses experiencing increased costs and disrupted cash flow as a result of the virus are supported. The FCO is working to monitor closely coronavirus throughout the world and we are using our diplomatic network to do our utmost to help all British companies.

[Lord Flight (Con)]

It looks as though the most important long-term change resulting from the coronavirus crisis will be a huge increase in the number of people working from home, which will in turn have other big economic effects. The Government’s five key pieces of guidance refer to working from home as only a good thing; the main territory not so far addressed is the personal tax implications of millions of people working from home. Will the Government stick with the existing tax laws or introduce a simplified standard tax deal relating to their premises for those who work from home?

[Lord Callanan]

My noble friend makes a very good point. I agree that this crisis will result in a long-term increase in the number of people working from home. When an employee must work from home, for example because of the crisis, the employer can pay them a small amount per week, free from income tax and national insurance contributions, to cover additional costs such as heating and power. Alternatively, of course, they can reimburse their actual expenditure. I will certainly ensure that my noble friend’s comments are passed on to the Treasury for consideration for any future tax changes.

[The Deputy Speaker]

My Lords, that concludes the questions on the Statement. I thank all noble Lords for their concise questions and the Minister for his concise answers. The Virtual Proceedings will now adjourn until a convenient point after 8 pm for the Urgent Question repeat.