Part of the debate – in the House of Commons at 6:01 pm on 18th November 2020.

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Photo of Nicholas Fletcher Nicholas Fletcher Conservative, Don Valley 6:01 pm, 18th November 2020

I have made no secret of the fact that throughout this pandemic, I have been repeatedly impressed by the Government’s response to this monumental crisis. This is a good Government doing good things, yet be in no doubt, Madam Deputy Speaker, that what we are experiencing is the greatest challenge this country has faced since 1945. Since March of this year, little over two months after we had all first heard of covid-19, the Government responded at breakneck speed to ensure that we would both cope economically and save as many lives as possible. From the establishment of the furlough scheme and the Nightingale hospitals to the self-employed income support scheme and the rapid testing, this Government’s swift action has enabled us to weather the worst of the storm presented by this virus.

However, there is one issue that I believe urgently needs addressing by the Government as we manage this second lockdown and deal with the economic pain it is causing. That issue is that of sole directors of limited companies. Initially, I understood why it was difficult for the Government to offer such individuals support, as they had done for employees at the start of the pandemic. Having been in business myself, I am also far too aware that many directors of this kind pay themselves through dividends, and consequently have saved money by not making national insurance contributions. This, I initially reasoned, was one of the reasons why the Government could justify not offering the same level of support as they did for the self-employed back in March this year, yet now the situation is very different. We have entered the second lockdown, which has hurt many of the smallest businesses which are operated by self-employed directors.

This cannot only be looked at as unfortunate, because the other fact is that while these individuals have not been offered any support, supermarkets have been provided with up to £1.9 billion in support as a result of their business rate relief. On Monday, the Financial Times reported that £1 in every £6 of rate relief went to the big four supermarkets, which have reported nothing but strong sales throughout this pandemic as pubs, restaurants and cafes have been shut.

Madam Deputy Speaker, we are a nation that is known to keep calm and carry on during times of crisis. We have undoubtedly seen that fighting spirit throughout this terrible pandemic, yet we are also known to be a nation that has a strong sense of fairness. Put simply, it is not fair that while directors of limited companies have received little support from the state, huge companies such as Tesco and Asda are benefiting from rate relief despite having seen good sales. We need this money back. Of course, I understand that redistributing these funds to such individuals may be administratively difficult, so I believe the Government should evaluate how this can be done based on a company’s turnover. It is a blunt instrument, but it is one way of doing it. In my view as both a Member of Parliament and a businessman, directors of limited companies with a turnover of £1 million or less should be provided adequate support by the Government through the use of the money we will take back from the supermarkets. I firmly believe that the vast majority of the public would be happy with this arrangement, seeing it as just and fair.

Undoubtedly, as we look back in years to come, individuals will criticise the mistakes the Government have made in the chaos of this pandemic, yet if the Government follow through with this policy, no one can say they did not act in a fair way. If this cannot be done, we should also remember that we cannot tax these people heavily on their way out of the pandemic when they have received little support from the Government.