[Sir Edward Leigh in the Chair]

Part of the debate – in Westminster Hall at 3:30 pm on 10th November 2020.

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Photo of Owen Thompson Owen Thompson SNP Whip 3:30 pm, 10th November 2020

Sir Edward, it is a pleasure to serve under your chairmanship. I echo the congratulations to Elliot Colburn for securing this debate, and also pay tribute to those petitioners who have contributed towards the petitions included in this.

After enduring so many months of hardship, it is good to be able to rise having heard some positive news yesterday about the possibility of a breakthrough in finding a vaccine. It is very early days, of course. If it meets its promises, it will still be a long time before the impact gives a much-needed shot in the arm to the beleaguered high streets around the country; to the shops, hotels, pubs, restaurants, warehouses, theatres, stadiums, offices and businesses of all shapes and sizes across the UK. The crisis drags on,and battle-weary SMEs that would normally be driving our economy have been almost driven into the ground, but at least we have this glimmer of light in the winter gloom; that there may be a solution on the horizon that will keep many of them from giving up the ghost altogether.

There are plenty of reasons for the Government not to give up on those businesses: the skilled and dedicated SMEs will turbocharge the UK’s recovery if we can get them through to the other side of the crisis. The first, crucial step was in extending the furlough scheme and the self-employment income support scheme for five months—albeit belatedly. That was certainly welcome. It would have been helpful if that announcement had not been made so late in the day, as it might have prevented some of the job losses that we have seen but, as with the Brexit negotiations, we have seen that the Government has a habit of sometimes leaving these things to last-minute chaos.

Prior to the announcement, the devolved Governments, and the local administrations in the north of England, had been crying out for the expansion of the levels of support that were so desperately needed to protect jobs. I still cannot understand why those calls fell on deaf ears, yet, when a lockdown was announced for the south of England, a far more generous 80% furlough package was suddenly made available again. I am sure that that was just a coincidence—I am absolutely sure of that—but while it is definitely better late than never, the Scottish Government’s public health policies should not have to be hindered in this way. While furlough extension is essential, the second wave will hit far harder than the first, and it is only a part of the solution. Many SMEs are so heavily reliant on this golden quarter to balance the books that lockdown is crippling cash flow, and that will be felt well into next year.

The need for tough pandemic restrictions is particularly devastating to the hospitality sector and its employers, as was so well outlined by Jim Shannon. It is necessary, but that does not make it any easier for those businesses. Prior to the second lockdown, Q2 GDP data showed a 20% decline in the UK economy; for the hospitality sector, this was around 85%. In September, only 7% of businesses surveyed by UKHospitality were feeling in any way confident about the next 12 months.

Many SMEs have had very few good trading days over the last eight months. In events, some businesses are operating at only 5% of turnover or less. SMEs have already used up their rainy-day resources and have built up debt from the Government-backed loans, where they could get one—and we have already heard some of the issues around that this afternoon. They are now worried about how to pay non-staff costs, and how much of the big-ticket grants announcements will actually reach them once they are spread out across all other businesses.

It was good to see the live events sector get a specific mention in the £1.1 billion additional support package allocated to councils in England to support businesses, and the Barnett consequentials associated with that for devolved Governments. However, it is a widely-shared pot, allocated at £20 per head, and the devil will be in the detail of its distribution.

I also welcome the £2.38 billion provided by the Scottish Government to support businesses, including the £48 million fund for employers and businesses impacted by recent restrictions; a monthly grant support coming back, with the ongoing five-level tier framework; and the £11 million contingency fund recently announced for businesses, including nightclubs and soft play areas, which had missed out on other supports. I realise that this will not make up for lost revenue at this time, but the Scottish Government lack the big economic levers and borrowing powers that they need, and are making the best of the resources at their disposal.

I look forward to the day when we do not need to have this debate any more—when bad karaoke is back in the pubs and live gatherings can get going again with all the disparate jobs that they support, from lighting technicians, musicians and planners to caterers and technology manufacturers. Events support about 1 million jobs. When able to run, they contribute billions of pounds to the economy every year. Perhaps because those jobs do not fit neatly into the existing characterisations, the sector has missed out on so much targeted support so far.

The #WeMakeEvents campaign has very helpfully suggested sector-specific measures to help the industry survive, such as a government-backed insurance scheme to ensure organisers can recover costs if lockdowns happen. During a previous debate I led on this topic, the Minister agreed that the UK Government were willing to engage with the campaign, although no meeting has yet been arranged. I invite the Minister again today to see what can be done to move that forward.

We also need to look at the replacements for the coronavirus business interruption loan scheme. We had a lengthy debate on that in the main Chamber last week. To avoid going over old ground again, I will not repeat too many of those points, but I think it is very clear that Members from all sides of the Chamber recognise the need to look in a level of detail at a number of issues associated with those loans. From my point of view, we would far rather see these as grants. Again, I suggest it would be far more sensible to write off these debts for struggling SMEs and look at more innovative grant and equity-based solutions to stimulate the economy as we go forward.