Covid-19: Government Support for Business

Pat McFadden Excerpts

Thursday 16th December 2021 Commons Chamber

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

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement on economic support for business.

I want to begin by extending my best wishes to my hon. Friend—

[Mr Speaker]

The Minister will answer the question, and then you can say your piece.

[The Economic Secretary to the Treasury (John Glen)]

It is clear that omicron is much more transmissible than other coronavirus variants, which is why, as the Prime Minister announced on Sunday, we are offering every eligible adult a booster dose before the end of the year. To get more jabs in arms, we have taken the proportionate and responsible step of moving to plan B in England to slow the spread of covid-19.

The rapid spread of omicron means this is a challenging time for a number of sectors, including hospitality. The Chancellor will be speaking to UK hospitality representatives this afternoon to understand their concerns. The Government continue to offer considerable support to businesses that might require extra assistance into next spring, as part of the £400 billion of direct economic help that we have provided during the pandemic.

For instance, we have reduced the VAT rate for hospitality and tourism businesses to 12.5% until March. Eligible retail, hospitality and leisure businesses in England are also benefiting from 66% business rates relief until March. And at the recent autumn Budget the Chancellor introduced a further 50% business rates relief for eligible businesses into the 2022-23 tax year.

Businesses can continue to apply for the additional restrictions grant until March 2022, as part of more than £2 billion of discretionary business grant funding during the pandemic. Businesses can benefit from our extension to the recovery loan scheme, which helps small and medium-sized enterprises to build back from the crisis by providing guarantees to lenders on finance of up to £10 million. Firms are also protected from eviction until March 2022 if they fall behind on their rent.

Firms in the arts and culture sector, meanwhile, can access the £2 billion culture recovery fund, the sports recovery package and the film and television production restart scheme until the end of April 2022. And our £800 million live events reinsurance scheme is giving event organisers confidence to plan ahead. Furthermore, the devolved Administrations have received an extra £12.6 billion this year, including an additional £1.3 billion in the autumn Budget.

This Government are helping businesses in every region and nation of the UK during these difficult times. We are speaking to the most affected sectors, and we will continue to respond proportionately to the virus’s changing path to support jobs, businesses and individuals, just as we have since the start of this pandemic.

[Mr McFadden]

Forgive me for my Christmas eagerness, Mr Speaker.

I extend my best wishes to my hon. Friend the Member for Leeds West (Rachel Reeves), the shadow Chancellor, as she recovers from covid at home. We know where she is, but where is the Chancellor? Why did he decide to proceed with a trip to California on Tuesday, when it was already clear that UK businesses were struggling to cope with what the Prime Minister himself has called a “tidal wave” of omicron?

Even if the Chancellor is abroad, California is not exactly a communications desert. They have television, and I have even heard that they have the internet, but it is still radio silence from the Chancellor. There is tumbleweed rolling through the Treasury, which says he is in communication with officials, but what about some communication with businesses that are losing bookings by the hour and watching their December profits vanish into thin air? Last night the chief medical officer advised the public to deprioritise social contact. Adherence to that advice will have a clear and direct impact on the hospitality industry, live music, theatre and other public events across the country.

The Government documents for plan B say that the decision on economic support will be made

“based on the data at the time.”

That time is now, so let me ask the Minister this: what measures will the Government take to ensure that those who have to isolate at home have proper sick pay that enables them to follow the rules? What will the Government do to help hospitality businesses affected by the chief medical officer’s advice to deprioritise social contact? Will any support also apply to live music, theatre and other events?

What are the Government doing to maintain supply chains, should they be affected by staff absences in the coming weeks? What is the Government’s response to the hospitality industry’s call to maintain the value added tax rates for that sector at 12.5%? Will the Government also allow local authorities to release any unused funds they may have from previous covid aid packages to support businesses right now?

The principle here should be that the level of support should match the economic restrictions in place. It is not about a blank cheque; there has already been enough wasteful spending from the Government in the past two years. Any package should be timely, proportionate and properly targeted and must guard against fraud. That is why it needs the full and focused application of Treasury Ministers and officials.

We are not in lockdown, but it would be totally disingenuous to pretend that businesses can trade normally when the Prime Minister has used a special national broadcast to warn the nation of a “tidal wave” of covid infections and the chief medical officer has told us to cut back on social contact. The Government cannot pretend that nothing has changed. This is not the time to abandon businesses, so will the Minister commit to announcing a package of support by the end of today—I mean UK time, not California time—that matches the situation that British businesses and workers now face?

[John Glen]

I thank the right hon. Gentleman for his questions. The Chancellor has been deeply engaged with business representatives throughout this pandemic and he will continue to be so. He was on a long-planned business trip to the United States, conducting Government business, and he will continue to engage today with other Ministers, with representatives of the hospitality sector and others, to hear their concerns about what further support should be required.

However, I will not be taking lessons from the right hon. Gentleman on some of these measures. Last year, when we put in place the bounce back loans, it was the shadow Chancellor at the time, the hon. Member for Oxford East (Anneliese Dodds), who specifically engaged constructively with the Chancellor to agree the basis for those loans. We have continued to work constructively throughout on a range of interventions for multiple sectors. We put in a package of measures at the Budget offering additional support and as of yesterday the covid additional relief fund will provide £1.5 billion for those in the supply chain to deal with some of the additional challenges. Of course the Government recognise the additional pressures that these measures and this strain of the virus bring, and of course we will engage carefully and listen carefully to those business representatives this afternoon.