The Economy

Alison Thewliss Excerpts

Monday 27th April 2020 Commons Chamber

[Rishi Sunak]

I agree with my right hon. Friend that, of course, the economic damage that is happening at the moment is severe, which is why we have taken the unprecedented measures that we have to try to mitigate as much of that as we can. Of course, I share with her—and indeed, the Prime Minister shares with her, as he said this morning—a sense of urgency to want to restart our economy, not least so that we can get people back into work and start creating the tax revenues that we need to pay for our public services, but we are not there yet. That is why we must remain disciplined and united around our aims and meet the tests that we have set to emerge from this phase of the crisis, but the Prime Minister also said this morning that we are making considerable preparations, and have been for a while, for phase two. In phase two, as he said, we will be able to gradually “refine” our

“economic and social restrictions and one by one…fire up the engines of”

our “vast UK economy”. I can assure my right hon. Friend that that work is ongoing. I remain committed to it and, as the Prime Minister said, the Government will be saying much more about this in the coming days.

[Alison Thewliss (Glasgow Central) (SNP) [V]]

I thank the Chancellor for advance sight of his statement. The SNP welcomes the money that he has committed, but we acknowledge the gaps and the limitations, and we constructively ask for actions in a number of areas: assistance for those waiting for confirmation of a universal credit claim; the ending of the five-week wait and the two-child limit; additional support for carers who may be forced to stop work; support for those caught in the new starter furlough gap; support, as the Scottish Government have already put in place, for the newly self-employed; support for limited company directors, who particularly feel as though they have been left out; removing the “no recourse to public funds” conditions, which leave people without support in many cases; helping asylum seekers whose support networks may have fallen apart; and ensuring that pregnant women who were wrongly sent home on statutory sick pay and unpaid leave in March get access to the furlough scheme.

The Chancellor talks about supporting viable businesses to stay afloat, but that viability is very much in the hands of the banks, who are making decisions on tight criteria. What is he doing to ensure fairness in that assessment? The bounce-back loan scheme that he announces is good and deferring can be useful, but many small businesses feel that it will just mean storing up more debt for the future. It is understandable that they may not want to take on more debt. Will he look at more grants, CBILS overdrafts and revolving credit to help those businesses through the current difficulties?

Will the Chancellor also look at assistance for food wholesalers who are keeping care homes and small shops supplied, and who are suffering because of the downturn in hospitality? He made no mention in his statement of the many businesses that shut their doors on public health advice and now find that their insurers refuse to pay out on business interruption claims. Will the Government step in to cover disputed claims? Businesses just do not have the time or the money to go through the Financial Ombudsman Service or the courts.

[Rishi Sunak]

I thank the hon. Lady for her constructive engagement with me and others as we go through this difficult time. With regard to helping the most vulnerable, we have put several measures in place that will help many of the people she mentioned—not least strengthening universal credit, as we have done by £1,000 over this year, and associated changes and tax cuts, as well as providing local authorities with discretionary funds to help those in their communities who, as they know better than any of us sitting here, are in most need of support. That will cover many of the groups that she talked about.

With regard to the banks and viability tests, the new bounce-back loan scheme will not ask for any forward-looking information from companies. There will be a very simple form for companies to fill in. It will be done on the basis of self-certification, and the banks will be doing customary fraud, money laundering and identity checks rather than any credit checks, given our 100% guarantee. That problem should, therefore, be solved.

I have also spent time talking to the banks, as has the Economic Secretary, tirelessly on a daily basis about the other forms of credit that they are extending to small businesses. The hon. Lady is right to point out that some businesses would prefer to have things such as overdrafts. In that vein, I am pleased to tell her that according to the last numbers I had, about 20,000 new overdrafts have been extended, together with about 60,000 capital repayment holidays. Of course, general SME lending happens outside CBILS or, indeed, our new bounce-back scheme. I can assure her that the Economic Secretary and I remain alive to that and will keep up all necessary pressure on banks to make sure that credit flows to where it needs to get to. Today, I am happy to put on record my thanks to them and their teams for helping us to work at pace to get the bounce-back loan scheme up and running for next Monday morning.

Lastly, the hon. Lady asked about insurance companies, and I think she is right to highlight this. I would point insurance companies and their policyholders to the very strong guidance set out in a letter by the FCA, which urged insurance companies to behave responsibly and flexibly in the interpretation of their policies. We have previously made it very clear: where there was a question about whether a policy should pay out, depending on whether we had closed the business as result of Government action, that was cleared up. Of course, very few people have policies that would cover them for this, but where it is clear that they should have a reasonable expectation of coverage, it is right that the insurance companies pay out. We will keep a close eye on the situation.