Small Business Support: Covid-19

– in the House of Commons at 7:58 pm on 13th January 2021.

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Motion made, and Question proposed, That this House do now adjourn.—(Eddie Hughes.)

Photo of Christine Jardine Christine Jardine Liberal Democrat Spokesperson (International Trade), Liberal Democrat Spokesperson (Exiting the European Union), Liberal Democrat Spokesperson (Treasury) 8:01 pm, 13th January 2021

It is unfortunate that I have to raise, and not for the first time with this Government, an issue that faces so many of our businesses, particularly small enterprises. There can surely be nobody in the House—or, indeed, the country—who is unaware of the impact of the pandemic on them, on their businesses, their employees and their families. Every business in every sector in this country is actually a group of people or often only an individual. My concern for their future is matched only by my admiration for how so many of them, working and using their ingenuity to stay within the rules and restrictions on covid-19, are staying afloat, too often without any support at all.

As with practically everything else in the past year, circumstances have dictated a different approach for us all, from how we go about our daily lives to how we shop to how we do business. We have watched as companies have skilfully adapted to ever-changing circumstances, but we have also seen the cost to our arts and entertainment sector, our hospitality sector and quite starkly to our retail sector, where even big names have been vulnerable. To be fair, the Arcadia Group was perhaps already vulnerable before covid-19, and likewise Debenhams, but that is no consolation to the thousands of people who spend their time worrying about whether their jobs can be saved from the rubble of what were once some of the proudest names on our high streets, or whether they might be next.

In the run-up to Christmas, small businesses had to face the reality that the usual festive volume of trade, which they need to enjoy a profitable or often even a survivable year, was gone. The two most recent former Conservative Prime Ministers made no secret of the fact that they believed that small business was the backbone of the British economy. Promises were made. I ask this Government to consider whether they have been fulfilled or whether, as I believe, more needs to be done. Yes, there are packages of support, loans and furlough, but they are all short term. They are patches—knee-jerk, bit-by-bit responses to a long-term problem with unprecedented implications. Surely it is long past time to bring those patches together and create a long-term strategy to support that backbone of the economy.

As a politician, one of the things I believe we should try to do is to get to the heart of what people actually need and find practical, workable solutions that can make a difference to people’s lives. In the past year, that has been a challenge. For example, the most recent forecast from the Office for Budget Responsibility suggests that the economy will have shrunk by a frightening 11.3%. At the end of September, GDP was already down 9.7%. We should remember exactly what it is we are talking about. Behind all the numbers and equations are people who feel the ramifications of the sums that we do.

Before Christmas, I wrote to the Chancellor urging him to support an idea that I believe would still have value in supporting small businesses, particularly those in retail: covering their postage fees, to help level the playing field with online giants. Freeing small shops of delivery costs for online purchases would go some way to help combat the decreased footfall over months of lockdown. As restrictions are tightened and our worlds become even smaller, the impact of such a move cannot be underestimated. Together with the suspension of business rates, it could support small businesses in much the same way as the Eat Out to Help Out scheme rightly pumped £800 million of Exchequer cash into hospitality. It would also give them something with which to fight back against the online giants, who have soaked up so much custom as we all seek ways of shopping during enforced home time. The Federation of Small Businesses welcomed the idea as providing its members with the boost they need to help level the playing field.

Too many people have been completely left out of support. We need to innovate our way out of this crisis, so where is the help for the self-employed and the entrepreneurs whose ingenuity and inventiveness we will rely on as we look for growth? We need them to survive along with those small businesses, until they are all able to thrive once again. In arts and entertainment, an industry in which there are so many small companies and self-employed people, there is a huge hole that we need to fill—a gap in the safety net that this Government promised when they said they would do whatever it took to get us through this.

I am a great believer in putting yourself in someone else’s shoes to look at an issue—the constituent with a problem, the business facing bankruptcy because it is following rules or the make-up artist, musician or freelance journalist who cannot work and whose pleas for support have fallen on deaf ears for 10 months. Perhaps it is easier for me to appreciate that last category. In a previous career, I was a freelance broadcaster for some years. I can see only too clearly what my life might have been in this time. I see it reflected in their campaign and in their hardship. I saw it every day in my constituency when I was still able to shop, socially distanced and wearing a face mask, in the many and varied independent outlets that are the lifeblood of my community.

A high street is not just a thoroughfare. It is where people come together and support their communities, whether or not they are making a conscious decision to do so. We might not have thought about it before as we nipped between the newsagent and the bakers. We would notice it now, however, if they were no longer there to nip to. We often speak about businesses as if they are just there to fill the coffers and there are no humans behind them at all. Behind every idea and every counter is someone with a family and a mortgage who has been brave enough to try. They need us to take on covid for them, because that is what they deserve. Just as they have adapted to serve our needs and bring us hope and joy, we have to adapt. We have to extend furlough, suspend business rates and admit that schemes in place for last summer will no longer be enough come the spring.

We need communication across all four nations, and we need every Government in this United Kingdom to put politics aside and do what is best and what is right for those who need it most. To that end, I ask the Government to put pressure on the Scottish National party at Holyrood to expedite the many applications from people who are still waiting for support, even though the money is there. Tonight I spoke to a constituent in precisely that position. As an MP, the health of my communities is always at the forefront of my mind, even in good times. I hope and ask that our small businesses are at the forefront of the Government’s.

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary, Minister for Equalities 8:08 pm, 13th January 2021

I will just take my mask off—I am afraid that I am still not used to the mask compliance in the House.

I want to start by congratulating Christine Jardine on securing a debate on this important subject. Coronavirus has deeply affected the lives of millions of people throughout the country, including those whose livelihoods depend on the small and medium-sized businesses that are the backbone of our economy. I would like to assure the hon. Lady, who spoke passionately about what has been happening in our country, that this Government care deeply about the SME sector, and I know that this strength of feeling is shared by Members across the House.

The hon. Lady mentioned her pay for postage campaign, and I listened with interest. The Treasury is always very keen on new ideas on how to support businesses as we want to see them grow, thrive and compete. I understand that she has already been in conversation with the Under-Secretary of State for Business, Energy and Industrial Strategy, my hon. Friend Paul Scully, on this issue, and I will leave it to BEIS to respond to her proposals in detail. More broadly, the Government have put in place a broad package of support to help as many small and medium-sized enterprises as possible.

I will now turn to some of the main elements of that support, which, at every stage of this crisis, we have really pushed to every part of the economy, targeting a significant proportion of our £280 billion economic support package. Almost 10 million jobs have been furloughed under the coronavirus job retention scheme. This has given business owners the certainty that they can pay their workers’ wages. The self-employment income support scheme has so far provided grants to almost 3 million people, including small business owners, while more than 1.4 million small and medium-sized businesses have received over £68 billion of loans. In addition, we have provided tens of millions of pounds of cash grants to businesses as well as tax cuts and deferrals.

Photo of Jim Shannon Jim Shannon Shadow DUP Spokesperson (Human Rights), Shadow DUP Spokesperson (Health)

I thank the Minister for giving way and Christine Jardine for her contribution. I think that this is the first full virtual Adjournment debate that I can recall being a participant in.

I spoke to the Minister beforehand on this matter, but first I would like to put on record my thanks to her and to the Government for all that they have done—we could not have survived this without all their help. May I just make a small plea for egg producers? They continue to sell, but have lost their market in hospitality, and need support. Others such as artisan food producers, whose product is of such a high standard, no longer have footfall and their small business is on the brink of collapse without substantial help to pay off their equipment that cannot be used. What help can we give those people?

Photo of Kemi Badenoch Kemi Badenoch The Exchequer Secretary, Minister for Equalities

I thank the hon. Gentleman for his intervention. He asks a really good question. The Government recognise that businesses within the hospitality supply chain have been disrupted by the recent necessary restrictions to hospitality businesses since the start of the pandemic. The Government have acted to deliver support to those businesses and ease cash flow problems for them through business support schemes, but businesses that have not been eligible for grants may be able to benefit from the additional restrictions grants. We recently increased the funding available under that scheme to £1.6 billion across England, and I know that similar schemes will be happening across the various devolved Administrations. It is up to each local authority to determine eligibility for the scheme, based on its assessment of local economic need. However, we encourage local authorities to support businesses that have been impacted by covid-19 restrictions, but which are ineligible for those other grant schemes. So there will be support—that is the point that I want to make to the hon. Gentleman.

On the support that we have provided to small business owners, I believe that I said that we had provided 1.4 million SMEs with more than £68 billion of loans. We have also included a temporary reduction in the VAT rate and the business rates holiday, both of which will run until 31 March. Financially distressed businesses and individuals have also been able to benefit from more flexible deadlines through the Time to Pay scheme. Furthermore, we are providing extra help through our welfare system for those who need it most, as well as other support such as payments for those asked to self-isolate. Quite simply, this is a support package that is unprecedented in its scale, and we know that it is working. In fact, the International Monetary Fund describes our economic plan as one of the best examples of co-ordinated action globally and successful in holding down unemployment and business failures.

The hon. Member for Edinburgh West made a very good point about how private sector businesses have been able to adapt and we should be able to follow suit, and we are doing that. We have not stopped there with the things that we have done. We have faced the evolving nature of the crisis. We have redoubled our efforts to protect businesses, jobs and incomes in response to the huge challenge presented by the virus. As the situation changes, we assess and we adapt. As a result, we have extended the CJRS until April. We are supporting self-employed people with a fourth income grant, which, combined with the up to £14,070 of individual support from the first and second grants, places our scheme among the most generous for self-employed workers in the world.

Furthermore, last week we issued £4.6 billion of additional support that will protect jobs and benefit 600,000 businesses around the UK. Under this change, business premises in England that are required to close, including those in the retail, hospitality and leisure sectors, can now claim a one-off grant of up to £9,000, and that is on top of existing support of up to £3,000 a month. We have also made available £500 million in discretionary funding for local authorities in England to support local businesses in their areas—money that is in addition to the £1.1 billion we had earlier provided on this front. As I said to the hon. Member for Strangford (Jim Shannon), this extraordinary package of economic help extends to every region and nation of the United Kingdom. As hon. Members will recall, in December we further increased our up-front guarantee of funding for the devolved Administrations this year from £14 billion to over £16 billion. At every stage of this crisis, we have strived to help as many people and businesses as we can, and as rapidly as possible.

We acknowledge that we have not been able to support everyone in the way that they would want. However, individuals who find that they are ineligible for one support scheme may still be able to claim from one of the many other sources I mentioned earlier.

The Government are immensely grateful for the contribution of small business owners and their workers in every part of the UK throughout the crisis. As I hope I have illustrated, the Government have sought to protect and support this vital sector at every turn, and we will continue with this approach until the battle against coronavirus is won.

Question put and agreed to.

House adjourned.