Asked by: Barry Sheerman (Labour (Co-op) - Huddersfield)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what steps is he taking to ensure that customers of all banks are able to access loans from the Coronavirus Bounce Back Loan scheme.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government’s Bounce Back Loan Scheme (BBLS), launched 4 May, was designed to help the smallest businesses access loans up to £50,000.
As of June 7, over 782,000 loan facilities have been approved with a value of over £23.7bn. There are so far 21 accredited lenders offering finance under the scheme, and this number continues to grow. The British Business Bank who are responsible for administrating the scheme, have put substantial resources into onboarding new lenders as quickly as possible.
If an SME’s main lender does not offer Bounce Back Loans, businesses can go to another accredited lender. Several accredited lenders are accepting applications from new customers.
Asked by: Andrew Rosindell (Conservative - Romford)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to tackle potential fraud in relation to (a) the Coronavirus Business Interruption Scheme and (b) Bounce Back Loan Scheme.
Answered by Paul Scully
It is important that thorough due diligence is conducted by lenders as part of the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS).
Individual lending decisions are fully delegated to the accredited lenders. As such, fraud checks are subject to each lender’s internal policy. The robustness of these policies is thoroughly tested before a lender can become accredited to the CBILS or the BBLS.
The banks and other financial institutions which have been accredited to lend under the CBILS or the BBLS are regulated by the Financial Conduct Authority and are required to comply with a number of regulations, including anti-money laundering and ‘know your customer’ rules, designed to combat fraud and other forms of financial crime. The majority of lenders also subscribe to the voluntary Standards of Lending Practice overseen by the independent Lending Standards Board.
Asked by: Andrew Percy (Conservative - Brigg and Goole)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, whether additional support will be provided to farmers and agricultural businesses impacted by the covid-19 outbreak.
Answered by Victoria Prentis - Attorney General
Coronavirus continues to represent a significant challenge to daily life and every part of the economy. The agricultural sector plays a vital role in maintaining the UK’s food security and has done a fantastic job of feeding the nation during this challenging period.
The Government took a number of early emergency steps to support farmers and the wider sector. These included designating employees in the food sector as key workers and temporarily relaxing the normal rules on drivers’ hours, enabling the sector to keep supply chains running, including deliveries from farm gate to processors. The department worked closely with banks to ensure farmers have access to financial support, including the Government-backed Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan scheme. We have also worked closely with the dairy and horticulture sectors to address supply chain and labour issues.
On 6 May, Defra announced a new fund to support English dairy farmers who have seen decreased demand because of the loss of the food service sector. Dairy farmers access this funding for those qualifying months, with no cap set on the number of farmers who can receive this support or on the total funding available. Eligible dairy farmers who have lost more than 25% of their income over April and May because of coronavirus disruptions will be eligible for funding of up to £10,000 each, to cover around 70% of their lost income during the qualifying months to ensure they can continue to operate and sustain production capacity without impacts on animal welfare. The Welsh Government announced the opening of a similar scheme on 12 May.
The availability of this funding followed the launch on 5 May of a joint Government and Devolved Administrations backed £1 million campaign aiming to boost milk consumption and help producers use their surplus stock. This 12-week campaign is being led by the Agriculture and Horticulture Development Board (AHDB) and Dairy UK. This follows a similar ongoing campaign led by AHDB and retailers to promote the consumption of beef products.
We remain in regular contact with representatives of our food and farming sector and will continue to monitor the situation to assess and respond to emerging issues as they arise.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of the financial challenges facing ornamental horticulture commercial growers.
Answered by Victoria Prentis - Attorney General
Coronavirus represents a very significant challenge, affecting daily life and every part of the economy, including the ornamental horticulture sector. A vibrant and successful ornamental horticulture sector brings significant benefits. The Government continues to work closely with representatives from the horticulture supply chain including the Horticultural Trades Association to understand the short-term and long-term impacts on the UK sector.
Defra has already been in close discussion with banks to ensure the ornamental horticulture sector has access to financial support. This will ease cashflow problems during this period, including through the Government-backed Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan scheme, which was announced on 27 April and is the latest step in a package of support measures announced by the Chancellor. The Government will provide lenders with a 100% guarantee on each loan, to give lenders the confidence they need to support small businesses. These loans will be from £2,000 up to £50,000, capped at 25% of firms' turnover, and the Government will cover the first 12 months of interest payments and fees charged to the business by the lender. Almost all UK businesses will be eligible to apply for a loan under the scheme.
On 13 May, the Government announced that all garden centres in England which are able to adhere to social distancing measures were legally able to reopen. This measure has been widely welcomed by growers, garden centre owners, and consumers.
While the Government has made a wide-ranging package of measures available to ornamental horticulture businesses to support them through this difficult period, we continue to keep the situation under review. Legal powers were included in the Coronavirus Act 2020 enabling us to offer further financial support if we believe it is necessary.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, whether the Government plans to provide a specific stock grant aid fund for commercial ornamental horticulture growers.
Answered by Victoria Prentis - Attorney General
Coronavirus represents a very significant challenge, affecting daily life and every part of the economy, including the ornamental horticulture sector. A vibrant and successful ornamental horticulture sector brings significant benefits. The Government continues to work closely with representatives from the horticulture supply chain including the Horticultural Trades Association to understand the short-term and long-term impacts on the UK sector.
Defra has already been in close discussion with banks to ensure the ornamental horticulture sector has access to financial support. This will ease cashflow problems during this period, including through the Government-backed Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan scheme, which was announced on 27 April and is the latest step in a package of support measures announced by the Chancellor. The Government will provide lenders with a 100% guarantee on each loan, to give lenders the confidence they need to support small businesses. These loans will be from £2,000 up to £50,000, capped at 25% of firms' turnover, and the Government will cover the first 12 months of interest payments and fees charged to the business by the lender. Almost all UK businesses will be eligible to apply for a loan under the scheme.
On 13 May, the Government announced that all garden centres in England which are able to adhere to social distancing measures were legally able to reopen. This measure has been widely welcomed by growers, garden centre owners, and consumers.
While the Government has made a wide-ranging package of measures available to ornamental horticulture businesses to support them through this difficult period, we continue to keep the situation under review. Legal powers were included in the Coronavirus Act 2020 enabling us to offer further financial support if we believe it is necessary.
Asked by: John Hayes (Conservative - South Holland and The Deepings)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment his Department has made of the potential merits of introducing a scheme similar to the ornamental horticulture grant aid scheme provided for growers in the Netherlands by the Dutch Government.
Answered by Victoria Prentis - Attorney General
Coronavirus represents a very significant challenge, affecting daily life and every part of the economy, including the ornamental horticulture sector. A vibrant and successful ornamental horticulture sector brings significant benefits. The Government continues to work closely with representatives from the horticulture supply chain including the Horticultural Trades Association to understand the short-term and long-term impacts on the UK sector.
Defra has already been in close discussion with banks to ensure the ornamental horticulture sector has access to financial support. This will ease cashflow problems during this period, including through the Government-backed Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan scheme, which was announced on 27 April and is the latest step in a package of support measures announced by the Chancellor. The Government will provide lenders with a 100% guarantee on each loan, to give lenders the confidence they need to support small businesses. These loans will be from £2,000 up to £50,000, capped at 25% of firms' turnover, and the Government will cover the first 12 months of interest payments and fees charged to the business by the lender. Almost all UK businesses will be eligible to apply for a loan under the scheme.
On 13 May, the Government announced that all garden centres in England which are able to adhere to social distancing measures were legally able to reopen. This measure has been widely welcomed by growers, garden centre owners, and consumers.
While the Government has made a wide-ranging package of measures available to ornamental horticulture businesses to support them through this difficult period, we continue to keep the situation under review. Legal powers were included in the Coronavirus Act 2020 enabling us to offer further financial support if we believe it is necessary.
Asked by: Damien Moore (Conservative - Southport)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions he has had with representatives of (a) banks and (b) other lenders on extending payment holidays for loans in line with the term of the Coronavirus Job Retention Scheme during the covid-19 outbreak.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
In April, the Financial Conduct Authority (FCA) announced a series of measures intended to provide temporary support to consumers that have been affected by the coronavirus outbreak, including a three-month payment holiday on personal loans. Ministers recognise the important role payment holidays play in supporting people through this period and have engaged with lenders throughout. The government will continue to work closely with the FCA and industry on the next steps for payment holidays.
Asked by: Matt Western (Labour - Warwick and Leamington)
Question to the Department for Environment, Food and Rural Affairs:
To ask the Secretary of State for Environment, Food and Rural Affairs, what assessment he has made of the adequacy of Government support for the dairy industry during the covid-19 lockdown.
Answered by Victoria Prentis - Attorney General
The Government has continued to engage closely with representatives from all parts of the dairy supply chain throughout this difficult period to assess the challenges facing the industry and to ensure that appropriate financial support is provided. The vast majority of Britain’s dairy farmers continue to supply their contracts at or around the usual price. Approximately 5% of total milk production, however, goes to the service trade. A small proportion of farmers supplying milk to processors that sell into the food service sector have seen a reduction in demand with the closure of food service. A small proportion of suppliers have therefore seen a reduction in demand. We have provided a range of support to help these affected farmers.
At the outset of the pandemic, the Government announced a number of emergency measures to support farmers, processors and retailers. These include designating the food sector as critical to the response, with people working in the production, processing, sale, distribution or delivery of food categorised as key workers, and granting derogations on drivers’ hours limitations.
In addition, to support milk producers, the Government announced on 17 April a temporary easing of some elements of competition law to make it easier for the dairy industry to come together to maximise production, processing and storage efficiency and to ensure that as much product as possible can be processed into high quality dairy products. This Statutory Instrument was laid on 1 May and applies retrospectively from 1 April.
On 6 May we announced a new scheme specifically to provide support to eligible dairy farmers in England who have lost more than 25% of their income over April and May because of coronavirus disruptions. This will provide farmers with funding of up to £10,000 each to cover 70% of their lost income during the qualifying period, enabling them to continue to operate and to sustain production capacity without impacts on animal welfare.
Defra and the devolved administrations are also jointly contributing towards financing the new £1 million campaign by the Agriculture and Horticulture Development Board and Dairy UK to drive an increase in the consumption of milk. Running over 12 weeks, the campaign is highlighting the role that milk plays in supporting moments of personal connection during times of crisis.
Our Coronavirus Business Interruption Loans Scheme is available to farmers, milk buyers and processors. Responding to industry feedback on this scheme, Defra held urgent discussions with the major banks to ensure they understand that farmers, milk buyers and milk processors are eligible. In addition, the new Bounce Back Loan scheme, which applies to businesses operating in agriculture, ensures that the smallest businesses can access loans up to £50,000. To give lenders the confidence they need, we have provided them with a 100% guarantee on each loan and will cover the first 12 months of interest payments and fees.
Public intervention for skimmed milk powder (SMP) and butter continues to be available in the UK. Alongside this we have also ensured the availability to UK dairy processors of private storage aid for cheese, butter and SMP. These measures will help to underpin prices, providing a floor in the market by reducing the volume of product coming on to the market.
We will continue to engage with the dairy industry throughout this period of disruption to monitor the impact of the range of financial and other measures we have implemented, ensuring that the sector continues to have the support that it needs.
Asked by: Desmond Swayne (Conservative - New Forest West)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make it his policy to limit the interest rates charged by financial institutions; and if he will make a statement.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
HM Treasury has worked closely with the financial regulators and the major banks and building societies to provide relief to customers and businesses impacted by COVID-19.
In March, a three-month mortgage holiday was made available to customers, and 1.8 million mortgage payment holidays have been granted by lenders to date. The period in which borrowers can apply for a payment holiday has been extended, in line with the Coronavirus Job Retention Scheme, to 31 October 2020.
In April, the FCA also announced a series of temporary measures intended to provide emergency support for consumers who are facing temporary cash flow problems as a result of the COVID-19 outbreak. These measures included three-month payment freezes to credit cards and certain personal loans. On overdrafts, firms are required to provide a £500 interest-free buffer on main personal accounts and also to ensure that no customer is paying more than they were prior to the other recent overdraft pricing changes that came into force in April following an earlier FCA review.
For the Bounce Back Loan Scheme, an affordable flat interest rate after the first 12-month period has been agreed between the Government and lenders at 2.5%. This reflects the Government’s desire to balance a low price point for businesses with providing sufficient access to businesses through a range of banks. This will help ensure that UK businesses can access and benefit from these loans quickly and effectively.
All providers should stand ready and able to offer support to customers who are impacted directly or indirectly by COVID-19. We advise any customer who is concerned about their finances to contact their provider.
Asked by: Lord Browne of Ladyton (Labour - Life peer)
Question to the HM Treasury:
To ask Her Majesty's Government what discussions they are having with businesses, including banks and risk insurance companies, about business disruption insurance.
Answered by Lord Agnew of Oulton
The Government is in continual dialogue with the insurance sector to understand and influence its response to this unprecedented situation and is encouraging insurers to do all they can to support customers during this difficult period.
The Government is working closely with the Financial Conduct Authority (FCA) to ensure that the rules are being upheld during this crisis and fully supports the regulator in its role. The FCA rules require insurers to handle claims fairly and promptly; provide reasonable guidance to help a policyholder make a claim; not reject a claim unreasonably; and settle claims promptly once settlement terms are agreed. In addition, the FCA has said that, in light of COVID-19, insurers must consider very carefully the needs of their customers and show flexibility in their treatment of them.
On 1 May the FCA outlined its intention to seek a court declaration, on an agreed and urgent basis, and for a selected number of key issues, to resolve uncertainty for many customers making business interruption claims. Additionally, the FCA stated its expectation for insurers to assess the value of their insurance products to customers during this period and to consider appropriate action. This might include changing how benefits are delivered, refunding some premiums or suspending monthly payments for a certain period of time.
Subsequently on 1 June, the FCA announced the policy wordings that would be tested in the court action and insurers it had invited to participate directly, along with an initial list of policy wordings and insurers that will potentially be impacted by the Court’s decision on the representative sample. The FCA expects to publish a final list of all the relevant insurers and policies that may have impacted wordings in early July, and expects a court hearing to take place in late July.
However, it is important to note that most businesses have not purchased insurance that covers losses from non-property damage. Additionally, while some policies cover losses arising from any disease classed as notifiable by the government, or a denial of access to a building, most of these policies only cover a specific list of notifiable diseases or an incident specifically on the premises of the business. Insurance policies differ significantly, so businesses are encouraged to check the terms and conditions of their specific policy and contact their providers. The terms of a policy cannot be changed retrospectively.
The Government encourages businesses to seek assistance through the wider support package if they are in financial difficulty. Businesses should explore the full package of support set out by the Chancellor in the Budget, on 17 March, and on 20 March, which includes measures such as business rates holidays, the Coronavirus Business Interruption Loan Scheme, and wage support.