Coronavirus: Supporting Businesses and Individuals

Paul Scully Excerpts

Tuesday 23rd February 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)]

We have heard from the Labour party that, rather than look at the public finances as a whole, as the Chancellor is about to do in a week’s time in his considered response to the road map, they would act ad hoc. This Government believe that we should indeed look at the economy as a whole and at the businesses that need that support.

We resolved to protect people’s jobs and livelihoods, and to support businesses and public services across the UK through the challenge of covid-19, and that is what we have done, with immediate support on a scale unmatched in recent history. To date, the Government have spent £280 billion more than that, providing certainty over the course of this pandemic, even as measures to prevent further spread of the virus have changed.

Yesterday, the Prime Minister announced our road map out of the current lockdown in England. Businesses have called for clarity and a road map to lead the country out of restrictions, and the Government have responded. The design of the road map has been informed by the latest scientific evidence. It seeks a balance between our key social and economic priorities while preserving the health and safety of the country. Every step to ease restrictions will be taken at the same time across England, in a national approach. The road map is yet another example of the support that this Government have provided, giving businesses and individuals up and down the country the clarity to plan ahead and manage everything from staff to supplies. In next week’s Budget, the Chancellor will set out the next phase in our economic support package to reflect the steps set out in the Prime Minister’s road map, including further detail on economic support to protect jobs and livelihoods across the UK. As the Prime Minister and the Chancellor have said previously, this Government are committed to doing whatever it takes to support our country throughout the covid pandemic, and that support will continue.

We have introduced an unprecedented package of support for businesses that have been severely affected by restrictions. Businesses that are legally required to close may be eligible for grants of up to £4,500 per six weeks of closure. The closed business lockdown payment has provided critical support to closed businesses during this difficult spring period, with additional grants of up to £9,000. Just for the period of national lockdown, the support for closed businesses will amount to more than £6 billion. Discretionary support has been made available to support those businesses that have not been mandated to close, but that have had their trade adversely affected by the restrictions.

[Christian Wakeford (Bury South) (Con)]

The hon. Member for Houghton and Sunderland South (Bridget Phillipson) talked about the excluded. Does my hon. Friend agree that the discretionary grant is a fine example of how we can get funding to those who have fallen through the gaps? Does he also agree that councils should be urged to consider all businesses, including those that are home-based?

[Paul Scully]

The discretionary grant is there to show flexibility. Local authorities have been charged to come up with their own plans to reflect their own local economies and their own needs in order to capture as many people and businesses as possible.

In January, the Chancellor announced that a further £500 million of discretionary funding was being made available to local authorities. That is in addition to £1.1 billion already allocated back in November 2020. That business grant scheme has continued to provide business with vital funding during both the national and local restrictions.

[Jim Shannon]

One way the Government could help the self-employed is to provide some help with low tax returns for 2019-20 to be included in the SEISS claims. Would the Government, or the Minister, consider that as a possible option to help those self-employed people who are under real pressure?

[Paul Scully]

I have met representatives from ExcludedUK. We continue to talk to them, we continue to flex and we continue to work out what more we can do to help the economy and to help jobs and livelihoods. The Chancellor will set out his position next week.

In addition to the grant schemes, businesses have received £70 billion in loan guarantees as of 24 January. That has provided a lifeline to more than 1.5 million businesses across the nations and regions of the UK. We have extended the application deadline to apply for those loans to the end of March 2021.

Last year, we changed the bounce back loan scheme rules to allow those businesses that had originally borrowed less than their maximum to top up their existing loans. We also announced the pay as you grow measures, which give all businesses that borrowed under the bounce back loans the option to repay their loan over a period of up to 10 years and to access an additional six months repayment holiday as well as interest-only repayment periods.

On 8 February, we announced that these measures will be made more generous, removing the requirement to make six payments before accessing the six months repayment holiday. Businesses can use these options either individually or in combination with each other, and lenders have begun contacting borrowers to let them know how they can access the pay as you grow measures. These flexible repayment options will give businesses the time that they need to recover from the pandemic and the confidence to build back better.

The Chancellor has also announced our intention to allow lenders to extend the repayment for coronavirus business interruption loans where this is needed to a maximum of 10 years, and we have announced that more support will be available beyond March through a successor loan scheme, more details of which will be announced in due course.

From the outset of this pandemic, we have acted decisively to protect jobs and people’s livelihoods. The coronavirus job retention scheme, the first intervention of its kind in UK history, delivers country-wide support to protect millions of British workers. It has already helped 1.2 million employers across the UK furlough 9.9 million jobs. That scheme has been extended until the end of April 2021 for all parts of the UK, but the Chancellor has always been clear that the Government will keep the situation under review, adapting their approach as the context evolves. The Government will set out the next phase of the plan to tackle the virus and to protect jobs at the Budget next week.

A healthy hospitality sector is critical for the UK economy. It not only accounts for 2.4 million jobs and generates more than £59 billion of economic benefit, but underpins other economic sectors, including tourism and, indeed, our high streets. It is also an important part of our society, supporting social cohesion, cultural integration and mental health. It is a gathering place for communities, and we must continue to support it. The pandemic has hit the hospitality sector hard. I have worked extremely closely with the sector since March 2020 to understand the issues as far as possible so that we can strike the right balance between restrictions and business support.

Not only have the Government provided over £280 billion to support businesses, including hospitality, but we have provided support for commercial rents and deregulated to allow the better use of public spaces for outdoor hospitality. We will continue to keep all that support under review. I want the sector to open up. I want businesses to start to recover and thrive, but it must be done safely, led by the data, as the Prime Minister outlined yesterday.

The retail sector is vital not only to the UK economy, but to the communities that it serves, and I am grateful for the continued efforts of those retail staff who have kept this crucial service going throughout. I recognise that the pandemic has impacted on the sector in different ways and brought significant challenges, but while we have seen a welcome boost in the food sector and online sales, we have also witnessed a more challenging outlook for those not permitted to open, and I appreciate that it has been a really uncertain time for many retail staff. Regrettably, we have seen the closure of some well-known household retail brands, with resulting job losses, impacting on young people and women in particular.

The Government have acted to support as many businesses and employees as possible with that economic package worth over £280 billion, and those measures are carefully designed to complement one another to ensure that we protect jobs and livelihoods. However, as I said, we cannot save every business or job and the support can in no way fully compensate businesses for the loss of trade as a result of the restrictions. Retailers, pubs and hotels have been able to benefit from 100% business rates relief, worth about £10 billion in total, and we have frozen the business rates multiplier for 2021-22, saving businesses in England £575 million over the next five years.

I know that many businesses are eager for an extension to the rates relief beyond the current financial year. The next round of covid-19 support measures will be set out in the Budget next week, but the Prime Minister has written to local authorities in the meantime advising them to delay issuing business rates bills until after the Budget, which, hopefully is good news for businesses.

I know that businesses may be disappointed by the decision to delay publication of the final report into the fundamental review of business rates until the autumn, but an interim report will be published on 23 March, and the final report will be published once there is more clarity on the long-term state of the economy and public finances. I encourage the sector to continue engaging with Government on these important issues.

Supporting people back into employment is also a key priority. Our plan for jobs includes a series of measures to protect, support and create jobs, and we are helping those who have lost jobs in the pandemic back into employment through our job entry targeted support programme. A £2 billion kickstart scheme has also been launched to create opportunities for young people, and we are taking action to help the high street to evolve. In September 2020, we brought forward over £80 million-worth of investment to support immediate improvements in 101 towns selected for deals to build back better in the wake of covid-19.

On 26 December 2020, the Secretary of State for Housing, Communities and Local Government confirmed £255 million for 15 areas for the future high streets fund, with a further 57 areas receiving provisional funding offers totalling up to £576 million. We are also launching a £4 billion levelling-up fund, investing in local infrastructure that has a visible impact on people and their communities and supporting economic recovery. We will publish a prospectus for that fund soon.

To date, we have provided the largest package of emergency support in post-war history. As highlighted by the Office for Budget Responsibility and the Bank of England, without the action taken by the Government, the outlook could be so much worse. The co-ordinated approach of the UK’s authorities has also been praised internationally by the International Monetary Fund as one of the best examples of co-ordinated action globally that has helped to mitigate the damage, holding down unemployment and insolvencies. Given the current climate, it is right that we focus on supporting individuals and businesses through the pandemic. In the past, the Government have ensured that businesses and people have that certainty by extending the furlough and business grants. The announcements at the Budget will reflect the steps set out in the Prime Minister’s road map, ensuring that the next phase of our economic support package continues to deliver tailored support for individuals and businesses.

What businesses want now is that road map. They want to able to give a safe and warm welcome back to their customers, clients and people using their services, but in the meantime, as the Chancellor will set out next week, we will continue to work with businesses and individuals to protect jobs and livelihoods as we see the light at the end of the tunnel in this pandemic.