Coronavirus: Supporting Businesses and Individuals

Baroness Winterton of Doncaster Excerpts

Tuesday 23rd February 2021 Commons Chamber

[Peter Grant (Glenrothes) (SNP) [V]]

I am pleased to speak in this debate and to confirm that the Scottish National party will support the motion if it comes to a vote. I do not want to eat too much into the time available for the large number of Back Benchers who wish to speak, so I shall look in detail at only a small number of the items in the Labour motion. Given that so many of the main asks in the motion have been publicly supported by some highly influential Tory MPs, including a number of members of the Treasury Committee, I look forward to the Government’s supporting the motion if a vote is called later.

We support the call for business rates relief to be extended. Scotland’s Finance Secretary, Kate Forbes, made a similar request in a letter to the Chancellor on 27 January, ahead of the Scottish Budget. The SNP Scottish Government have led the way in reducing the rates bills of businesses in key sectors and of small businesses in particular. For example, the small business bonus scheme meant that last year 117,000 business properties in Scotland were paying no rates at all. Some 95% of all Scottish business properties have a lower rate poundage than they would have anywhere else in the United Kingdom. In addition, the businesses worst affected by covid restrictions—those in retail, tourism, hospitality and aviation—will pay no rates at all during the next financial year.

Given that the leader of the Tory party in Scotland and his colleagues demanded, ahead of the Scottish Budget, that

“retail, hospitality and leisure businesses”

be given

“certainty that they will not face full business rates in the next financial year”,

it is a wee bit disappointing that they do not seem so keen to speak up in this debate for hard-pressed businesses in other parts of this precious Union of theirs. I am sure they will do the decent thing and support the motion later.

We fully support the call to extend the 5% VAT rate, but I do not think it goes far enough, because if the sectors we are talking about currently have a 5% VAT rate, for all they know, their VAT bill could increase by 300% in just five weeks’ time. Nobody can run a business with that degree of uncertainty, so the Government need to make it clear tonight—not next week or in two or three weeks’ time—that that 5% VAT rate will be extended.

We need to start to take decisions now, based on the long-term interests of the economy, about the unprecedented levels of debt with which millions of businesses are saddled. They have had to borrow heavily, often through Government-backed schemes, to survive the first year of lockdown; they are not going to be in a position to repay those debts next year, or any time in the next two years.

In addition to supporting the call for small businesses to be allowed to defer the repayments on their loans, the SNP wants to go further. In the previous economic crisis, the Government spent huge amounts of our money on bailing out the self-same banks that were responsible for the problem; surely, it is not too much to ask that we should now give the same kind of support to the more than 5 million small businesses that have done nothing wrong and could play a vital part in our post-covid recovery. We therefore call on the Government to agree to write off the bounce back loan debts of small and medium-sized businesses and to look carefully at proposals from organisations such as TheCityUK that covid debts should be converted into equity or contingent tax liability, so that the public sector retains an interest in the business and the business is not forced to go to the wall because of a lack of cash.

My support, and that of my party, for the excluded 3 million is well documented, so I will not go into it in detail. All I will say is that, when I have raised the exclusion of those people with representatives of Her Majesty’s Revenue and Customs through the Public Accounts Committee, I have been given the excuse that it was not possible to set up a scheme quickly. It is now almost a year since the first lockdown was announced. The reason so many self-employed people and owners of small businesses are still excluded is nothing to do with the Government’s not being able to help them; it is to do with the Government’s not being prepared to help them. For the party that claims to be the party of small business, that is an absolute disgrace.

In the interests of brevity, I bring my remarks to a close with a final observation: the British Government are the only one of the four UK national Governments who have the full range of taxation and borrowing powers necessary to deliver on what the motion asks for. I cannot speak for the people of Wales or Northern Ireland, but I know that as far as my constituents and the people of Scotland are concerned, if the British Government are not prepared to use their powers to get Scotland’s businesses back on track and back into business, they should devolve those powers to a national Government who will.

[Madam Deputy Speaker (Dame Rosie Winterton)]

I remind hon. Members that there is now a three-minute time limit on Back-Bench speeches. When that limit is in effect, a countdown clock is visible on the screens of hon. Members participating virtually and on the screens in the Chamber. For those participating physically in the Chamber, the usual clock will operate.

--- Later in debate ---

[Mohammad Yasin (Bedford) (Lab) [V]]

The Government’s approach to business support through this latest lockdown does not match the scale of need. The hair and beauty industry has been severely impacted by the pandemic. Some parts of the industry were not able to open after the first lockdown, and businesses were operating at a significantly reduced capacity in order to adhere to covid-safe practices. Those that were eligible for grants and loans have found that they have not covered costs. Bills still need to be paid and, where rent is covered, energy bills, insurance, website costs, booking system costs, pay, national insurance and pension contributions are not.

The owner of Beauty of Bedford wrote to me, saying, “The hair and beauty industry contributes £9.2 billion annually to Britain’s economy, with a workforce of over 288,000. The beauty industry plays a big role in our high street.” To ensure the survival of SMEs, the Government must introduce targeted financial support packages for industries such as hair and beauty.

Business support should not be a postcode lottery, and the burden should not be placed on local authorities, whose pandemic costs have nowhere near been met by central Government. In Bedford and Kempston, for instance, businesses that do not have commercial premises have lost out on grants. That is hitting small businesses such as self-employed beauticians and others who have home offices or operate outside, such as self-employed taxi and private hire drivers. The self-employed—especially those who have yet to receive a penny of support from the Government—are facing ruin. Once upon a time, the Tories claimed to be the party of business, but they have left millions of self-employed people to rot. If these people are ignored again in the Budget, there is little hope left. Many of them cannot limp on until 12 April. Taxi drivers certainly cannot.

This week, taxi and private hire drivers in Bedford and Kempston had their licence fees waived by the council, but that is just a sticking plaster for most. It does not put money in their hands, which is what they need to look after their families. The additional restrictions grant system is just not working for them. Too many are falling through the gaps, and there is not a welfare safety net to catch them. What do the Government expect these people without income to do? They need help, and they need help now from this Government. The self-employed business owners I have spoken to are a resilient bunch. They have worked hard to get where they are. They really do not want to be reliant on the Government; they just need some support—

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. We have to move on because time is very tight.