Coronavirus Business Interruption Loan Scheme

Jim Shannon Excerpts

Thursday 5th November 2020 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Member for Midlothian (Owen Thompson) for introducing the debate and all those who have contributed so far. I look forward to the Minister’s response—there is no pressure on him, but we need a lot of answers, and I am sure he will be able to come up with the answers we want.

During these challenging times, we must ensure that we do the right thing by our constituents, many of whom are facing the most difficult financial circumstances in their lives. Those I have spoken to have told me clearly that the Government’s support has been incredibly helpful to them, so that their businesses can continue. I want to put that on record, because if it had not been for that, many businesses would not be here today—that is a fact, and I thank the Government for that. Other Members have mentioned this, but I am going to give the bankers a bit of a spanking in this speech, so I am, because that is one group who have not been as good as they could have been. I will come to that in a wee minute.

I want to mark up the effect of SMEs and how much they mean in my constituency, because they are the backbone of the economy. They account for three fifths of employment and about half of turnover in the UK private sector. That, I believe, is why the Chancellor designed this scheme in itself, and why it needs to be right for the future of our nation. I loved what the Chancellor said today—it was music to my ears, but I suspect perhaps not to my nationalist colleagues—when he said, referring to the United Kingdom of Great Britain and Northern Ireland that, wherever it was, the money was available from Edinburgh to Cardiff and from London to Belfast. I loved that because that is just me: a person who believes that the Union is really important.

Right across all business sectors large and small, the effects of the pandemic have been fast changing, and the sudden economic impact has required an immediate response not only from business owners, but from banks and other financial institutions. The coronavirus business interruption loan scheme was established between March and May in response to the pandemic, with loans of which 80% would be backed by the Government. While the scheme was offered with attractive terms, those with high hopes of securing the funding did feel that it fell far short of expectations, with many business owners giving up during the application process when they discovered how the scheme works.

I am very fortunate to have an extremely good office. I am surrounded by good staff, and the fact is that they are five ladies. Behind every man there is a woman, and behind this man there are six women keeping him right, and I want to thank them for that. The manageress of my office was almost like a Jack Russell with a bone, because when she got that bone in her teeth, she kept on and on, and we were probably able to help many businesses because of her dogged determination. Even when the Government came back to say, “No, you can’t have that”, or “This doesn’t work because”, we would appeal everything. We appealed and appealed, and I have to say that, by and large, those appeals were successful. I think 99.9% of them were successful, but that is just by the way.

The 1,470 loans for my constituency were worth £50 million. That gives hon. Members an idea of what this meant. Those businesses needed this effective and efficient help not because they were not viable. Those businesses were viable, but they just needed that wee bit of time to get them over the line, and the Government did that because they are absolutely viable in normal times, as they would be.

I know of well-established local businesses that have struggled and fought to hold on to be able to continue trading. I have spoken to so many business owners who are frustrated by the process put in place of being subjected to standard commercial lending practices while in the middle of a public emergency. Because we are in these circumstances, the banks must fall more into line —this is the banks again—with the people who are depending on them to get them through the crisis. At a time when business owners are being asked to be resilient, it would do well for the lenders—the banks—to realise that attitudes and behaviours towards banking have changed, probably forever. I suspect that some people will probably never get over how they were treated. People are in crisis, and now require services in a matter of days or even hours. We are not out of the woods yet—I understand that—and a new normal means that lenders must adapt to these rapidly changing times, but the old rigid approach is now counterproductive.

I have to say that the Chancellor’s decision to extend CBILS to the end of January will be welcomed as England enters another phase of national restrictions. We do not know what lies ahead. It is my fervent desire that we do not enter another lockdown, but who knows what the future holds. However, we do need to be prepared. More than this, the banks must be prepared to put the good of this nation—the whole nation of the United Kingdom of Great Britain and Northern Ireland—against their quarterly reserve and implement the scheme envisioned by this House and the Chancellor. I do not want to have to fight for more of my businesses to have what the Chancellor has said is readily available. That is why the banks have to step up to their responsibilities, and they cannot deny that. Some Members have said it, and others probably will.

This is my last paragraph, Madam Deputy Speaker. The fight for survival for countless businesses is not over, and it is vital, as we enter 2021, that CBILS continues to meet the needs of those who will turn to it and that lenders adopt a more flexible and co-operative approach so that no businesses anywhere in the United Kingdom of Great Britain and Northern Ireland are left behind. I ask for a resounding message from the Minister to be sent to the banking industry that the availability of these loans is not a request. If they wish to operate in this nation, then the banks should do the honourable thing and in a mutually beneficial way.