Small Business Support: Covid-19

Kemi Badenoch Excerpts

Wednesday 13th January 2021 Commons Chamber

[The Exchequer Secretary to the Treasury (Kemi Badenoch)]

I will just take my mask off—I am afraid that I am still not used to the mask compliance in the House.

I want to start by congratulating the hon. Member for Edinburgh West (Christine Jardine) on securing a debate on this important subject. Coronavirus has deeply affected the lives of millions of people throughout the country, including those whose livelihoods depend on the small and medium-sized businesses that are the backbone of our economy. I would like to assure the hon. Lady, who spoke passionately about what has been happening in our country, that this Government care deeply about the SME sector, and I know that this strength of feeling is shared by Members across the House.

The hon. Lady mentioned her pay for postage campaign, and I listened with interest. The Treasury is always very keen on new ideas on how to support businesses as we want to see them grow, thrive and compete. I understand that she has already been in conversation with the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend the Member for Sutton and Cheam (Paul Scully), on this issue, and I will leave it to BEIS to respond to her proposals in detail. More broadly, the Government have put in place a broad package of support to help as many small and medium-sized enterprises as possible.

I will now turn to some of the main elements of that support, which, at every stage of this crisis, we have really pushed to every part of the economy, targeting a significant proportion of our £280 billion economic support package. Almost 10 million jobs have been furloughed under the coronavirus job retention scheme. This has given business owners the certainty that they can pay their workers’ wages. The self-employment income support scheme has so far provided grants to almost 3 million people, including small business owners, while more than 1.4 million small and medium-sized businesses have received over £68 billion of loans. In addition, we have provided tens of millions of pounds of cash grants to businesses as well as tax cuts and deferrals.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for giving way and the hon. Member for Edinburgh West (Christine Jardine) for her contribution. I think that this is the first full virtual Adjournment debate that I can recall being a participant in.

I spoke to the Minister beforehand on this matter, but first I would like to put on record my thanks to her and to the Government for all that they have done—we could not have survived this without all their help. May I just make a small plea for egg producers? They continue to sell, but have lost their market in hospitality, and need support. Others such as artisan food producers, whose product is of such a high standard, no longer have footfall and their small business is on the brink of collapse without substantial help to pay off their equipment that cannot be used. What help can we give those people?

--- Later in debate ---

[Kemi Badenoch]

I thank the hon. Gentleman for his intervention. He asks a really good question. The Government recognise that businesses within the hospitality supply chain have been disrupted by the recent necessary restrictions to hospitality businesses since the start of the pandemic. The Government have acted to deliver support to those businesses and ease cash flow problems for them through business support schemes, but businesses that have not been eligible for grants may be able to benefit from the additional restrictions grants. We recently increased the funding available under that scheme to £1.6 billion across England, and I know that similar schemes will be happening across the various devolved Administrations. It is up to each local authority to determine eligibility for the scheme, based on its assessment of local economic need. However, we encourage local authorities to support businesses that have been impacted by covid-19 restrictions, but which are ineligible for those other grant schemes. So there will be support—that is the point that I want to make to the hon. Gentleman.

On the support that we have provided to small business owners, I believe that I said that we had provided 1.4 million SMEs with more than £68 billion of loans. We have also included a temporary reduction in the VAT rate and the business rates holiday, both of which will run until 31 March. Financially distressed businesses and individuals have also been able to benefit from more flexible deadlines through the Time to Pay scheme. Furthermore, we are providing extra help through our welfare system for those who need it most, as well as other support such as payments for those asked to self-isolate. Quite simply, this is a support package that is unprecedented in its scale, and we know that it is working. In fact, the International Monetary Fund describes our economic plan as one of the best examples of co-ordinated action globally and successful in holding down unemployment and business failures.

The hon. Member for Edinburgh West made a very good point about how private sector businesses have been able to adapt and we should be able to follow suit, and we are doing that. We have not stopped there with the things that we have done. We have faced the evolving nature of the crisis. We have redoubled our efforts to protect businesses, jobs and incomes in response to the huge challenge presented by the virus. As the situation changes, we assess and we adapt. As a result, we have extended the CJRS until April. We are supporting self-employed people with a fourth income grant, which, combined with the up to £14,070 of individual support from the first and second grants, places our scheme among the most generous for self-employed workers in the world.

Furthermore, last week we issued £4.6 billion of additional support that will protect jobs and benefit 600,000 businesses around the UK. Under this change, business premises in England that are required to close, including those in the retail, hospitality and leisure sectors, can now claim a one-off grant of up to £9,000, and that is on top of existing support of up to £3,000 a month. We have also made available £500 million in discretionary funding for local authorities in England to support local businesses in their areas—money that is in addition to the £1.1 billion we had earlier provided on this front. As I said to the hon. Member for Strangford (Jim Shannon), this extraordinary package of economic help extends to every region and nation of the United Kingdom. As hon. Members will recall, in December we further increased our up-front guarantee of funding for the devolved Administrations this year from £14 billion to over £16 billion. At every stage of this crisis, we have strived to help as many people and businesses as we can, and as rapidly as possible.

We acknowledge that we have not been able to support everyone in the way that they would want. However, individuals who find that they are ineligible for one support scheme may still be able to claim from one of the many other sources I mentioned earlier.

The Government are immensely grateful for the contribution of small business owners and their workers in every part of the UK throughout the crisis. As I hope I have illustrated, the Government have sought to protect and support this vital sector at every turn, and we will continue with this approach until the battle against coronavirus is won.

Question put and agreed to.