Support for SMEs: Covid-19

Rachael Maskell Excerpts

Tuesday 10th November 2020 Westminster Hall

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on opening the debate so well. I echo all the concerns hon. Members have brought forward, particularly about those excluded from the self-employed income support scheme.

I had a discussion with a Treasury Minister about the exclusion of people who are sole directors of companies. My understanding from his comments was that there is a shortage of staff at HMRC to process information at Companies House, together with returns that can be produced to demonstrate that they are the sole shareholder. That case was brought back in the spring and several months have gone by, so I do not understand why the Government have not put more staff into HMRC to address that problem. It would be transformative for all those people who have yet to receive support. I ask the Minister to look at that.

I also echo the concerns raised around bounce back loans and the fact that the underwriting is by the Government, not the supply of resources for that. That is one reason why there are such challenges. I also want to raise a concern about the additional restriction grants. City of York Council is looking at £25,000 a month. That will not address the demand and we want to know how that gap will be closed. Although York is doing incredibly well at addressing the pandemic and getting on top of the virus, our economy is seriously struggling and we urgently need help. The claimant count has more than doubled in the city, the high street has been highlighted as having had the most closures anywhere in the country—55 retail outlets to date—and economically the future is looking even bleaker, so we need urgent support.

One concern my constituents have is about the behaviour of leaseholders, particularly during the pandemic. For them, the property they hold is a capital investment and a secure asset, and their interest is clearly in their wider financial investment portfolios born of high rental payments. The rentals are not necessarily the issue, but continuing to demand high rental payments from small businesses is having a huge effect, not least because, as other hon. Members have mentioned, the high rateable value of property in York means that many businesses cannot keep pace with average payments of £6,000 a month—some reach £1350,00 a year—despite Government support, so there is a significant shortfall in that provision.

Leaseholders are collecting their money, which in a sense goes directly into their pockets from the Government in the form of grants. The support that those large leasehold companies are getting almost seems like a way of getting around the state aid issue. Many of those properties are held in offshore portfolios, so this is not about reinvesting in the local economy; the money goes from the Government into offshore bank accounts, and no benefit is brought to small businesses. Will the Minister look at that, because we see it not only in retail and small businesses, but in the pub sector? A lot of pubs are failing, yet the pub companies are drawing on that money. An inequality is being built into the system and taxpayers’ money is supporting it, so it is really important that the issue is addressed.

Needless to say, another big issue in York—again, driven by leaseholders—is high rateable value: many businesses missed out on support because their rateable value was above £51,000. A false economy is being built up because leaseholders are pushing up their prices. We need to get on top of that issue as we come out of the lockdown, to help secure those businesses after the pandemic.

Finally, another subject that is important to us in York is that although a lot of work has gone into supporting the future growth of businesses, particularly for the green new deal and the BioYorkshire project, that work is currently being held up by the devolution deal. The Government support the deal, but it means waiting two and a half years before we can crack on with upskilling 25,000 people and creating 4,000 new jobs in our city. In the light of our economic circumstances, and because of the support that the Government are giving to that project, will the Minister look at bringing it forward so that we can get on with rebuilding our economy while we are in crisis as opposed to waiting another two and a half years, which really does not make sense for the people of my city, or for the economy and the economic benefit that that the project will bring.