Covid-19: Small Businesses

Lord Allen of Kensington Excerpts

Wednesday 13th January 2021 Lords Chamber

[Lord Callanan (Con)]

As I said earlier, we keep all these matters under review. We are conscious that our scheme is one of the most generous in Europe, with £280 billion-worth of support. Of course, we are always willing to learn lessons from the devolved Administrations or other countries.

[Lord Allen of Kensington (Lab) [V]]

My Lords, the FSB say that around 70% of small businesses are carrying some form of debt. Almost half of them—some 47%—are using personal loans, family loans, overdrafts, their own credit cards and personal mortgages on their properties to support their businesses. Many, including 710,000 company directors who pay themselves through dividends only when their business is in profit, have been excluded from any form of personal support. This is because the Treasury seems to have put this into the “Too difficult” box. At some point, many of these entrepreneurs will lose not only their businesses but their homes and possessions too—notwithstanding the stress, anxiety and mental health issues. What will the Government do now to stop this happening?

[Lord Callanan (Con)]

We are aware of the issue of dividends highlighted by the noble Lord. We have looked at that, but it has proved very difficult to separate different kinds of dividends. However, we have amended some of the terms of the bounce-back loans—for example, no repayments are due during the first 12 months of the loan term. This gives businesses the space they need to get through the difficult period without the worry of directly repaying in the immediately following months.