Finance Bill

Part of the debate – in the House of Commons at 8:05 pm on 27th April 2020.

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Photo of Chris Evans Chris Evans Labour/Co-operative, Islwyn 8:05 pm, 27th April 2020

Let me begin by thanking you Madam Deputy Speaker, Mr Speaker and all the staff for all the work you are doing, in difficult times, to keep our Parliament running. When the Chancellor stood before the House to make his Budget speech, no one would ever have thought that some two months later the entire country, and indeed our way of life, would come to a complete standstill. There is no historical precedent for the crisis we face. The works of Adam Smith, John Maynard Keynes or Milton Friedman make no reference to the crisis we face; we have lost not only supply, but demand. Therefore, this Government should look again at this Finance Bill, and once the lockdown is at an end they should present a new Budget, one that puts people, and small and medium-sized businesses, at its heart.

Through no one’s fault, the Bill before us is out of date and belongs to another age. Not since the financial crash has the local economy felt fear and panic like this; many look to the future with dread. As many Members will know, my constituency has a proud industrial past, but in the past few years we have seen a revolution; I have witnessed a burgeoning tourism industry, with many people coming to south Wales to enjoy the mountains, the greenery and the healthy lifestyle. We have seen eco pods, cider producers and biking all contributing to a growth in our tourism industry. However, many constituents have been in touch about issues relating to accessing the grant and loan schemes, especially the coronavirus business interruption loan scheme—CBILS. These businesses cover a wide range of sectors, including agriculture, dairy and food suppliers, pubs and clubs—even dental practices have got in touch with their concerns about the access to financial support. Recently, a rugby club has been in touch about the struggles it is having in accessing business rate grants. Many of these businesses are micro-businesses that cannot access anything at all. In addition, many still find themselves excluded from the Government’s self-employment and furlough schemes. For example, the dairy industry cannot furlough staff or switch off production.

In this new world, where the Government are getting it right the Opposition must be supportive. Therefore, today’s announcement of bounce-back loans with a 100% Government-backed guarantee for lenders is most welcome. Labour has been calling for that, and it is positive to see that, for once, the Government have listened and acted. However, applications for those loans will not open until next Monday, and for some companies these measures have already been introduced far too late. The main issue has been that money has been delayed in getting to them.

Under the bounce-back loan scheme, businesses will be able to apply for loans of between £2,000 and £50,000. However, we need to consider what this means for SMEs that require more than £50,000. The Chancellor has said that small businesses are the backbone of the economy and of communities, and that is very true in my constituency, but I have heard too many reports of businesses being denied financial support. The CBILS, which most businesses are relying on, is having enormous problems. The scheme is designed to help SMEs with an annual turnover of up to £45 million, and they can access up to £5 million. However, there have been countless complaints from constituents about the application process. The Government must simplify it if businesses are to be able to access support quickly. Switzerland introduced a straightforward one-page form for businesses to fill in, and it is encouraging to hear that the Government have adapted something similar for the bounce-back application scheme. However, the Government are still not approving enough loans and they are not being supplied quickly enough. As of 23 April, just over 16,000 had been approved, with only 9,000 being provided, whereas in France 170,000 loans have been provided and in Switzerland the figure is 100,000, and Germany has an approval rate of 98%, as we have heard. Although we have to factor in some risk——that is what business works on—those people were, only a few weeks ago, running perfectly viable businesses. Action has to be taken now. Small businesses need help, and it should not be found wanting.

Many of the Government measures are welcome, but the present situation is not sustainable. There is now a compelling case for an exit strategy. Business owners and companies need to be assured that business will continue to be financially supported during the pandemic and beyond. Nobody is expecting social distancing measures to be lifted, which is why there needs to be a roadmap out of the present lockdown. Business needs it but, most importantly as humans, families are desperate for it.