Covid-19: Businesses and the Private Sector

Lord Callanan Excerpts

Thursday 21st May 2020 Lords Chamber

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

My apologies; I thought the muting was done centrally. I thank my noble friend Lord Dobbs for securing this important debate. The excellent, well-informed contributions from many noble Lords demonstrated the excellent range of expertise across our House.

It goes without saying that these are extremely difficult times, and there is no question but that they would be a lot more difficult were it not for the role of the private sector. This is of course a national effort, as the noble Lord, Lord Wallace, reminded us, involving community, democracy and the voluntary and public sectors all working together. Business and the wider private sector have played a critical role too, as many other noble Lords pointed out. Its generosity and ingenuity have helped us to protect the NHS, save lives and shield the economy from the worst of this virus. I put my gratitude on the record. It is of course impossible to name all the companies that have played a part, or even all the ways in which they have helped, but I would like to echo many noble Lords and give the House just a small flavour. Since the crisis began, we have witnessed businesses adapting with impressive speed to operate safely and safeguard jobs, not least in the food sector, as my noble friend Lord Caine reminded us. I include in that smaller shops such as corner shops, which the noble Baroness, Lady Kennedy, spoke about.

Companies such as Interserve and KPMG have played an integral role in building our Nightingale hospitals, as many noble Lords observed. Without the prompt response from construction companies and the efforts of builders and engineers, we would not have been able to bring those hospitals online with such speed. We have seen many firms supporting the vulnerable alongside the voluntary sector, with energy suppliers agreeing to assist customers facing difficulties, and companies such as Brakes, Bidfood and Holiday Inn getting food to the vulnerable and providing rooms for the homeless. Across the country we have watched private companies turn their manufacturing might towards meeting the demands of the pandemic and supplying medical equipment to our vital NHS front line.

In the north-east alone—my home region, if the House will forgive me—we have seen the Barbour factory in South Shields shift from producing wax jackets for the world to making gowns and scrubs for local hospitals. Rolls-Royce in Tyne and Wear, and indeed elsewhere, played its part in the ventilator challenge, producing medical ventilators for the UK. The same is happening up and down our nation. As mentioned by the noble Lord, Lord Dobbs, our leading world fashion houses have gone from luxury fashion to protective kit, delivered to the front line by eBay, Amazon and many others. I am sure my noble friend Lord Lang will be delighted to hear that.

The need for hand sanitiser has mobilised cosmetics and drinks companies large and small, with companies such as Chivas Brothers in Scotland sending tankers of Strathclyde grain spirit rattling down the motorway to make gel for our front-line NHS staff. Meanwhile, pharmaceutical companies are collaborating with our universities to support the Government’s plans to boost testing. As the noble Lords, Lord Blunkett and Lord Bilimoria, pointed out, such private-public collaboration is absolutely critical to the effort. I recognise the point made by the noble Lord, Lord Liddle, on public-private partnerships as well; it was important to make that observation. Our outstanding life sciences sector will help us to produce the vaccines that we need once one has been found. As the noble Baroness, Lady Northover, pointed out, we have considerable expertise in the UK in this area.

All in all, there has been overwhelming support from business and the wider private sector. We are grateful for every offer of help that we have received, just as we are grateful to the business leaders, trade associations and representative bodies that have given up their time to help shape the Government’s response to this crisis. My noble friend Lord Bourne spoke about the support that the private sector has offered to the public sector, and so it is with central government. I should point out that these organisations, alongside others such as Be the Business, are providing critical support, guidance and information to businesses as well as regularly meeting my colleagues and me in BEIS to tell us about the situation on the ground. We all listen carefully to everything that they have to say to us. It was their feedback that helped us to make changes to the Coronavirus Business Interruption Loan Scheme in April, which has now loaned over £7 billion—banning personal guarantees for smaller loans, for example, and extending the scheme to small businesses.

It was in response to their concerns that we introduced the bounce-back loans scheme at the end of last month to make sure that the smallest businesses can access the credit that they need within days. I am pleased to tell the House that this scheme has now issued loans worth £14 billion. It is because we have listened that we will soon be introducing the Corporate Insolvency and Governance Bill, which was introduced in the other place yesterday. This will help to support businesses through these very difficult times, with new options for company rescues and corporate governance measures, giving directors more flexibility to focus on what matters most during the pandemic.

As of yesterday, we have launched the Future Fund, issuing convertible loans to innovative companies facing financing difficulties due to the virus, helping them to weather the crisis. We have also worked closely with business, industry bodies and trade unions as we have developed the safer workplace guidance for firms. As the noble Lords, Lord Liddle and Lord Hendy, said, the input from trade unions was vital here. This guidance is helping businesses to reopen safely and get our economy going again—and we will continue to work with trade associations, responsible trade unions and other representative bodies to do so. We know that business is the engine that will drive our economic renewal, and rebuilding our economy is now critical, as my noble friend Lady Noakes said. We recognise the difficulties that businesses face, as many other noble Lords have mentioned. The noble Baroness, Lady Uddin, for instance, mentioned caterers. I would indeed like to congratulate the Bangladesh Caterers Association, as well as the Muslim community, on their efforts, as mentioned by the noble Lord, Lord Sheikh.

As we rebuild the economy, the green sector will play an important role: driving growth, positioning the UK at the forefront of clean technologies and helping us to meet our net-zero target by 2050.

Many excellent points were made during the debate and a number of questions posed. Noble Lords will understand that it is impossible for me to respond to them all, from 50 speakers, but I will go through as many as possible in the available time and hope that noble Lords will accept my apologies if I do not get around to their point.

The noble Lord, Lord Balfe, raised an important point on small businesses. The Government are committed to a corporate tax system that is competitive but fair. We will not tolerate anyone, including large businesses, treating tax as an optional extra. Her Majesty’s Revenue and Customs subjects large businesses to an exceptional level of scrutiny and secured £10 billion in additional compliance revenue from the largest and most complex businesses in the UK in 2018-19.

The noble Lord, Lord Bilimoria, asked about the government-guaranteed loan scheme. Across the Government’s business interruption loan schemes, businesses can access loans of between £2,000 and £50 million. We have carefully considered what size of guarantee gives lenders confidence to provide finance to SMEs; an 80% government guarantee on lending is an important tool to ensure that lenders have sufficient skin in the game when lending large government and taxpayer-backed loans.

The noble Baroness, Lady Jones, asked a number of questions. I will take them in turn. First, all farms and food businesses are eligible for the various financial support packages provided by the Government, including the Coronavirus Business Interruption Loan Scheme and the bounce-back loan scheme. We will continue to monitor the situation and to work closely with all the food and farming sectors to assess and respond to emerging issues as they arise, working closely with our colleagues in Defra. The noble Baroness also asked about the school food voucher scheme. This is, of course, a matter for the Department for Education but I reassure the noble Baroness that the Government recognise that it may not be convenient or possible for some families to visit one of the supermarkets on the scheme. The DfE are working to see whether additional supermarkets can be added to the list. Schools are best placed to make the decisions for their children, families and communities. We encourage those schools to utilise a local solution supporting eligible pupils—for example, purchasing vouchers direct from a local provider.

My noble friend Lady Buscombe talked about the high street and asked about reducing social distancing measures. The science about Covid-19 transmission is of course complex. As a precaution, Public Health England recommends trying to keep two metres away from people as much as possible. The second step, set out in the Government’s road map from 1 June, covers non-essential retail. The timing of businesses’ reopening will depend on the latest assessment of the risk at that time because the risk of transmission is higher in environments that are indoors, require more physical contact or encourage crowds. We have set up task forces to work with these sectors to develop Covid-19-secure guidelines for them to follow when it is safe to do so. We have seen examples of how supermarkets and other essential shops have implemented the social distancing guidelines to operate safely. Further work will need to be done alongside sectors currently closed to ensure that they too can operate safely.

The noble Baroness, Lady Kennedy, asked for an update on the Government’s consultation on shop worker abuse. Any incident of violence or abusive behaviour towards retail workers is completely unacceptable and especially so in current circumstances. Retailers and staff are working hard to accommodate customers and implement social distancing measures to keep the public safe. We recognise that there is more to do. That is why the Government launched a call for evidence on violence and abuse towards shop staff to help strengthen our understanding of the scale and extent of the issue. During the Westminster Hall debate on protection of retail workers, the Minister for Crime and Policing committed to publishing the Government’s response in March. However, as the Government’s communications must focus on tackling Covid-19, publication of the response has been delayed; we will endeavour to publish the call for evidence as soon as practicable.

The noble Baroness also asked about ensuring food supplies. I assure her that retailers are continuing to monitor their supply chains and are taking all necessary steps to ensure that consumers have the food and supplies that they need.

The noble Lord, Lord Addington, asked what will happen to those with disabilities in new job markets. In their manifesto, the Government committed to reducing the disability employment gap. They are actively monitoring the impact of Covid-19 on the labour market, including on those with disabilities and on other groups. Of course, employers must comply with the requirements of the Equality Act 2010 and ensure that they do not unlawfully discriminate.

I thank the noble Lord, Lord Burnett, for his question about the liabilities of the chairmen and directors of multi-academy trusts, and I thank him, too, for giving me advance notice of his question. I assure him that I have raised this matter with colleagues in the Department for Education, and I will ensure that he gets a speedy reply on this important matter.

My noble friend Lord Moynihan raised an excellent point regarding the UK oil and gas industry, which is continuing to provide essential energy to our economy throughout the epidemic. The Prime Minister gave an update on the quarantine regulations last week, and further information on this will come shortly.

In response to the noble Lord, Lord Tyrie, my department and the CMA have been working together closely to develop the proposals made by his organisation in 2019. For example, following a commitment made in June 2019 by the previous Secretary of State, we are looking into the possibility of putting the CMA’s powers on an administrative basis. This will allow the CMA itself to decide whether there has been a breach of consumer law, rather than having to go to court.

The noble Lord, Lord Fox, asked about struggling farms. I assure him that all farms and food businesses are eligible for the various financial support packages provided by the Government, including the Coronavirus Business Interruption Loan Scheme—the bounce-back loan scheme. We will continue to monitor the situation and to work closely with all food and farming sectors.

The noble Lord, Lord Stevenson, asked about the green new deal for the economy. As we recover from the Covid-19 pandemic, the Government intend to deliver a UK economy that is stronger, cleaner, more sustainable and more resilient. Defra and BEIS are working closely together on this. I agree with the noble Lord that as we and other countries recover from Covid-19, the decisions that we make today will either lay the foundations for sound, sustainable and inclusive growth or they will lock in polluting emissions for decades and, in so doing, make our society and the planet more vulnerable to the interlinked challenges of public health, climate change and biodiversity.

This pandemic has, of course, had terrible consequences but it has also shown the best of us: the courage of our key workers, our community spirit and the resilience of our nation. Finally, I agree with my noble friend Lord Hunt of Wirral that it is indeed an inspiring tale of the ability and willingness of business to embrace its role in this great national effort, both to defeat the virus and to power our economic recovery. For that, I, and I am sure the whole House, is hugely grateful. I thank my noble friend Lord Dobbs for securing this important debate.