The Economy

Andrea Leadsom Excerpts

Monday 27th April 2020 Commons Chamber

[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.

[Andrea Leadsom (South Northamptonshire) (Con) [V]]

I congratulate my right hon. Friend very sincerely on the bounce-back loans, which I think will make a huge difference to small businesses. I must also say how great it was to see the Prime Minister back on good form today.

Of course we need to keep the lockdown in place until it can be safely lifted, but will the Chancellor today give employers and entrepreneurs, who are the lifeblood of our economy, reassurance that when restrictions can be lifted, they will be given some notice and some clear guidelines so that they can restart their supply chains with confidence?

[Rishi Sunak]

I thank my right hon. Friend for her comments; having held the positions that she has had in government, she knows better than most the importance of business to our economy and to driving our economy. She is absolutely right that businesses will need time to prepare. As I have alluded to, work is already under way in government, through engaging with businesses, unions and others, to ensure that when we are in a position to get to phase 2 and refine the social and economic restrictions, work has already taken place to prepare everyone and give them suitable notice, so that they can kick-start the engines of our economy.