Covid-19: British Business Bank

Lord Leigh of Hurley Excerpts

Thursday 30th April 2020 Lords Chamber

[Lord Callanan]

The new bounce-back loan scheme that the noble Lord referred to will ensure that the smallest businesses can access loans from £2,000 to up to £50,000 in a matter of just days, capped at 25% of the firm’s turnover. On his second point, we have also removed the portfolio cap for loans under the CBIL scheme, meaning that lenders can access the full 80% guarantee for each loan.

[Lord Leigh of Hurley (Con)]

My Lords, I too have spoken to a large number of businesses that are trying to get CBILS loans. The reality is that they are just not able to get them; they are being turned down. Will the Government consider two suggestions: first, that the government guarantee is for the first 80% of the loan, not pro-rata but for the initial amount; and, secondly, that the current restrictions on EIS and ECT investments in businesses are relaxed, despite EU restrictions, and the set-off rates against income tax are increased? I appreciate that to do this we would need urgent legislative change, but it is required.

[Lord Callanan]

I thank my noble friend for raising those points. The 80% guarantee on lending under the CBIL scheme is already extremely generous and we have not seen a lot of evidence to suggest that this is acting as a significant barrier for lenders. On his suggestions, we are of course subject to the EU state aid rules. Even though we have left the EU, under the terms of the withdrawal agreement we still have to apply those rules.