Oral Answers to Questions

Pat McFadden Excerpts

Tuesday 9th March 2021 Commons Chamber

[Rishi Sunak]

My hon. Friend has been instrumental in providing on-the-ground information to me and my team about the particular situation facing hospitality businesses in coastal communities like his. He is an absolute champion for them and rightly so. They are an important part of his local economy and I am glad that this Budget supported them. He has my assurance that we will continue to work with him and them to get them the support that they deserve.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

The Office for Budget Responsibility estimates that £27 billion-worth of loans made under coronavirus loan schemes will never be repaid. Why is the Chancellor insisting that banks pursue that as conventional business debt, when the circumstances that gave rise to those loans are anything but conventional? Would lifting the debt burden on businesses and turning it into a contingent tax liability not help to fire up the economy, set business free and really get Britain moving again?

[Rishi Sunak]

What we have done is provide a scheme called Pay as You Grow to give businesses incredible flexibility and generosity in how they repay bounce back loans. Those loans at an instant can be turned automatically into 10-year loans, which reduces the monthly cash payment by almost 50%. Beyond that, there are opportunities for interest-only periods and payment holidays, all of which will support the cash flow of businesses. We also have to get a balance with the taxpayer in all of this, which is why we have taken the approach we have. I am sad that the right hon. Gentleman did not also welcome the £25 million of investment in his local community through a town deal in this Budget, which will help local businesses there as well.