PARLIAMENTARY DEBATE
Support for SMEs: Covid-19 - 10 November 2020 (Commons/Westminster Hall)

I beg to move,

That this House has considered support for SMEs during the covid-19 pandemic.

It is a pleasure to serve under your chairmanship, Sir Edward. At the request of the Petitions Committee, I would like to mention e-petition 305024, entitled “Extend grants immediately to small businesses outside of SBRR”, and e-petition 307959, entitled “Business Rate Relief to be extended to all small businesses in healthcare”.

Small and medium-sized enterprises account for the overwhelming majority of businesses in the UK. In Carshalton and Wallington, for example, nearly 90% of businesses are microbusinesses, having only zero to nine employees, and SMEs make up 99.8% of all businesses in my constituency. According to the Federation of Small Businesses, at the start of 2020 there were 5.94 million small businesses with zero to 49 employees, making up 99.9% of the business population overall. They account for three fifths of employment, employing 16.8 million people and with an annual turnover of £2.3 trillion, which is 52% of the annual turnover of the UK private sector. SMEs are the lifeblood of our local communities and are at the very heart of those communities. Not only are our local retailers loved by the communities we represent, and not only do they provide jobs for local people, but they are active and engaging members of our local communities.

That, I think, is why the impact of coronavirus on our SMEs has been so tragic and upsetting in many cases. We have been unable to visit our favourite local retailers and have watched many of them wrestle with the agonising choice of whether or not they have a future in our local communities at all. I think it demonstrates the strength of feeling in those communities that while preparing for this afternoon’s debate, my inbox has been inundated—I am sure the same is true of the inboxes of many colleagues present—with briefings and requests for meetings.

I am incredibly grateful to industry representatives for their help in preparing for this debate, and am glad to see so many right hon. and hon. Members present to take part in it. It is fair to say that during the pandemic, the Government have stepped up to provide an extensive package of support to business, which is very welcome and has helped to save millions of jobs that would otherwise have been lost. However, there are still concerns, which I will address throughout my speech, and I am sure other hon. Members will have concerns as well.

I am not going to go on for very long, because I know that the speaking list is quite full, but I would first like to turn to the coronavirus job retention scheme. The news that the Government have extended that scheme to March is very welcome, and I extend my thanks to the Government for doing so. By midnight on 18 October, approximately £41.5 billion had been claimed under that scheme. There are 1.2 million employers who have taken part in it, and nearly 10 million jobs have been furloughed since the scheme began, including 5,200 in my own constituency. Again, that extension is welcome, but the key question from the CBI is about the exit strategy from 2 December. Most businesses are assuming that we are going to go back into the tiered system, but the CBI and the industry are looking for further clarity from Government regarding the road map out of this second national lockdown, so that businesses have ample opportunity to prepare financially for what lies ahead.

May I also raise the issue of the cut-off date for the furlough scheme? A local business in my constituency, Energie Fitness in Wallington, recently took on a new staff member. However, due to the cut-off date for the furlough scheme, that person is not eligible to be furloughed, and sadly it now looks as if their job may be in jeopardy, so I would be grateful if the Government could take another look at this issue.

The job retention scheme has been backed up by a series of loan schemes, with four in total. Overall, as of 18 October, £62.7 billion—worth of loans has been approved across those four schemes. In my own constituency, for example, £13.42 million—worth of loans has been approved under the business interruption loan scheme, and £65 million—worth has been approved under the bounce back loan scheme. Again, the top-up and extension of those schemes are very welcome, but the industry still has some concerns that I would like to put to Government.

Approximately 250,000 SMEs are believed to be locked out of the bounce back loan scheme simply because they do not bank with one of the 28 accredited lenders, according to estimates made by the all-party parliamentary group on fair business banking. The APPG chair, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), is here, so I will leave it to him to go into more detail later. I appreciate that the Treasury has been pushing back in recent weeks but, while stopping short of forcing banks to act differently, there really needs to be a greater focus on this issue, to ensure that businesses do not get locked out of that potential financial support.

The two key areas I want to focus on are the self-employed and grant funding. The first tranche of the self-employed income support scheme closed on 13 July. It received 2.7 million applications, and a total of £7.8 billion has been claimed, including £11.6 million in Carshalton and Wallington. The second tranche opened on 17 August and, as of 18 October, 2.3 million claims had been made, worth a total of £5.9 billion, £13 million of which was claimed in Carshalton and Wallington.

Once again, I welcome and greatly appreciate the Government extending that package, as well as the pledge of a £7.3 billion refresh package of support for the self-employed. However, there are still some real concerns. A study by the Centre for Economic Performance at the London School of Economics found that, in August—a month that saw the economy beginning to recover from the first lockdown—58% of the UK’s 5 million self-employed people had worked less than normal, and that one fifth of them anticipated quitting altogether, rising to 58% for those under the age of 25. Apparently, 1 million people in the UK are planning to give up being self-employed after seeing their earnings decimated by the covid-19 pandemic.

That situation was highlighted just this morning by the Federation of Small Businesses, which noted that 500,000 fewer people than last year—that figure was released today—are now registered as self-employed. I am sure that we will hear many examples of what has happened to the self-employed, especially freelancers and company directors, who have not been able to access financial support. I should declare an interest at this point as a participant in the all-party parliamentary group on ExcludedUK. The group emerged back in March, off the back of the first round of announcements of financial support, and it argues that much more needs to be done to help the recently self-employed, limited company directors and other groups that did not benefit from the self-employment income support scheme. That call was echoed by the FSB this morning, so I ask the Government to look at the eligibility criteria, to ensure that the self-employed can once again be the engine of economic recovery when we come out of lockdown.

I will also touch on business rates relief and grant funding. Again, I want to draw attention to the good work that has been done. Retail, hospitality and leisure businesses in England are receiving a 100% business rates holiday through the expanded retail relief. They will not pay business rates in 2021 and English local authorities estimate that just over 373,000 business premises were eligible for the expanded relief as of 5 July this year, and that those businesses will receive around £10.7 billion of relief. In my own constituency, 384 businesses have benefited from this support, at an estimated cost of £8.6 million.

However, there are still concerns. I will start with wholesalers, such as Bestway Wholesale in my constituency. Wholesalers play a really vital role in the supply chain, especially in the hospitality sector, but they have lost between 80% and 90% of their trade with the closure of the hospitality industry, and several are on the verge of collapse. These SMEs provide employment and skills, and are often the lifeblood of the local communities that they are part of. However, they are worried that without urgent financial support in the form of business rate relief, there will be significant job losses up and down the country.

I welcome the Government’s commitment to the small business grants fund, the retail, hospitality and leisure grant fund, and the local authority discretionary grants fund. In total, the first two of those funds were worth more than £12 billion, which was obviously expected to be distributed. As of 16 August, £11 billion had been paid out to nearly 900,000 business properties. I particularly thank the Government for the local authority discretionary grants fund. So far, grants of more than £239 million have been paid out to over 37,500 businesses. In Carshalton and Wallington, £6.6 million has been paid in small business grants, £4.4 million in retail, hospitality and leisure grants, and £510,000 in local authority discretionary grants.

I pay particular tribute to the Government for introducing the local authority discretionary grants. There were real concerns earlier this year from businesses that fell outside the original grant scheme, particularly those that did not pay business rates, predominantly due to a rental agreement—if they were a council tenant, for example—or because they were in shared offices. Park cafes are an example, including the Pavilion Café at Beddington park, Mellows Pavilion Café at Mellows park, Sassis in the Grove, Cheam Park Café, as well as the Sutton business park in Hackbridge. They are all, by every stretch of the imagination, a small business and would fit that description if they had a property of their own, but they were not eligible for the grants simply because of their rental agreements. I therefore thank the Government for making the move on that.

There are lingering concerns, however, when it comes to grants. This morning, the Federation of Small Businesses expressed concerns that the grants were not at the same level as grants in March 2020. It has asked what the difference is this time. Grants need to be greater than the £3,000 put forward, because SMEs are struggling with cashflow and that would really help. In addition, some businesses still fall outside the scope of the grants. An example from my own constituency is the Windsor Castle pub, which is having difficult conversations about the possibility of closing altogether. Its rateable value means that it is not eligible for financial support, and it has real concerns about coming out on the other side of the crisis.

One of the e-petitions I mentioned focuses on the grants, and its prayer states that cash grants are

“only for businesses in receipt of the Small Business Rates Relief or Rural Relief, or for particular sectors.”

It continues:

“Small businesses are dying by the day and jobs are being lost. We need fast, easy access to cash grants for small businesses enabling them to survive COVID-19.”

I hope, therefore, that the Government will review the scope and reach of each of these grants.

Given the time constraints, I will not go on to list everything the Government have provided or the sector’s concerns. I am sure we will hear a lot about those from other hon. Members present. I will just pick up on one anomaly and ask the Minister to take a look at it—namely, the 5% VAT cut on admissions. I hope the Minister will take a look at what seems to be a problem in the system: bowling alleys are not eligible for the 5% cut, even though trampolining and mini-golf businesses are eligible, as are cinemas. That seems to be a strange anomaly in the system. I would be grateful if the Minister could take a look at that.

I shall bring my remarks to a close and allow other Members to get in. I am grateful to the Government for the support they have provided to SMEs so far, but what businesses—and, indeed, all of us—need is a clear road map to reopening. The Government have been clear, and I agree, that repeated lockdowns are not the answer. We had some good news about a potential vaccine yesterday, but we know that the roll-out will not happen overnight and that going back to some semblance of normality is not going to happen any time soon. That is why, essentially, we need a plan for living with the virus in the longer term—one that does not shut down huge swathes of our economy and put jobs at further risk. On top of the financial support that I have already outlined and the need to address the sector’s concerns, I hope that we can get that road map and plan for what operating a business will look like after we get out of this second lockdown. Uncertainty is one of the worst things for a business, and it can be just as damaging to SMEs as poor cashflow. I hope that we can look at the SME support that the sector is calling for, get that road map to reopening, and give SMEs the confidence to start planning for the future.

We have quite a few speakers, but if everybody keeps to under five minutes, everybody can get in. Before speaking, can you look at the clock and make sure that you sit down within five minutes, however interesting your comments may be? Thank you.

It is a pleasure to serve under your chairmanship, Sir Edward. I start by paying tribute to the hon. Member for Carshalton and Wallington (Elliot Colburn) and thank him for securing this important debate. He made a series of important and detailed points that will certainly be welcome in Westminster Hall.

As the hon. Gentleman has said, SMEs come in all sorts of shapes and sizes. As we have already heard, they really are the powerhouses of industry in our regional economies. Prior to becoming an MP, I worked for an SME in export, trade and marketing, and it was seeing things like Business Link—for anyone who remembers that—axed in the so-called bonfire of the quangos back in 2011 that made me feel that, for all the talk of trading our way out of the recession, the Government at the time did not really understand the type of support that SMEs truly valued. I was keen to bring those experiences with me to Parliament. We will need to trade our way out of this again, so what do we need to do to lay the groundwork to build back better?

I want to focus my remarks on those businesses in my constituency that have faced particular hardships over the course of the crisis. Halifax has been in the equivalent of tier 2 restrictions since July. We entered restrictions over three months ago, when our infection rate was in the 30s per 100,000. At one stage, we got it down to around 14 or 15 per 100,000, but the restrictions were not lifted before the second wave we are currently seeing sweep across the country brought about another spike. My SMEs have been living with restrictions far longer than most, and it is really starting to take a toll.

Children’s soft play centres have been among those hardest hit, and I commend places such as the Mill Playcafé and Play Palace in Halifax for doing all they can to diversify and keep their doors open. However, they are the types of leisure facilities, much like bowling alleys, which were the last to be able to reopen under the national restrictions. They then faced further tier 2 delays. When they finally got the go-ahead, they had additional restrictions on how many children could use the play areas safely, meaning that takings have been down by around 80%, completely undermining their viability and business models.

The packages of support for SMEs do not reflect those differences and the fact that some businesses have inevitably faced more hardship than others under the restrictions. I am not here to suggest that it would be easy to tailor the support to the exact requirements, but I say to the Minister that it is necessary to take that approach. My colleagues on the Labour Front Bench have been asking for sector-specific support, so I hope the Minister can reflect on soft play centres specifically in his response.

One recurring message from local businesses is that November and December are usually their best months. Whether it is Saks salon or Carter’s market stall selling nightwear for the winter months, turnover across the year factors in an expectation that the business will do well in the run-up to Christmas, especially given the year that these businesses have had. The hope that the best months of the year were still to come was keeping lots of businesses going, but it will take a great deal to recover from the reality of missing out on trade at this key time.

I have spoken to lots of the market stall traders at the impressive Halifax borough market, one of the last indoor Victorian markets, and which first opened in 1896. The council is staring into a massive black hole in its finances for this year and did what it could to give stallholders a rent break at the start of the crisis, but its position is such that it needs to continue to charge rent, even when the footfall has been so low that takings for traders have been a fraction of what they would normally be.

Due to a variety of different business models and employment practices within the market, not all of those working in it have been able to access the various different schemes. With this in mind, I wrote to the Government to ask the Secretary of State for Digital, Culture, Media and Sport if the money already announced for the recovery of culture and heritage could be used to support the borough market as a cultural destination and heritage building, as a means of supporting the businesses in it. I received a response on 1 October from the Minister, saying that it could not but that he urges market business owners to continue exploring all options and monitor any existing funding streams for further development. I would be grateful if the Minister could update us if there are any further funds my market stallholders could apply for, or, alternatively, what else we can do to support councils and the traders in our historic markets.

There is a great deal more I could add, but I will say in closing that Halifax had been punching well above its weight as a northern Pennine town before the virus, and I know that we will get there again. We have a real strength in depth across our SMEs, but we have faced a perfect storm of restrictions. I also add that we were recovering from the devastating floods of February before we almost immediately had to turn to face the virus, so we need to know that the Government are responsive to and understanding of our almost unique circumstances in Halifax.

It is a great pleasure, as always, to serve under your delightful chairmanship, Sir Edward. I thank my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) for securing this important debate at a critical moment in our national story. It is also a great pleasure to follow my near neighbour, the hon. Member for Halifax (Holly Lynch). Her concern about having had to deal with Storm Ciara immediately prior to the pandemic is shared across west Yorkshire.

In the 2019 general election campaign, the Conservative party pledged to support SMEs across the country, whether that be seizing the opportunities that Brexit brings or helping support those who want to start their own company and realise their ambitions. Our manifesto pledge could not have foreseen the pandemic we presently endure. However, the support that Her Majesty’s Government continue to provide to SMEs is a continuation of the policies and values Conservatives stand for. The numerous support schemes, whether the coronavirus business interruption loan scheme, the coronavirus bounce back loan, retail hospitality and leisure grants or the furlough scheme, illustrate how great a priority the protection of SMEs and the livelihoods of all those who depend on their success is to this Government.

Through these interventions, businesses and livelihoods have been shielded as much as possible from the economic fallout of covid-19. Between the announcement of the schemes in March and August, 5,640 businesses in the Wakefield district eligible for the business grant received funds to support them—92% of all eligible businesses.

As we entered the second set of national restrictions, Her Majesty’s Government once again introduced support measures for businesses to shield them as best as possible. These measures cannot protect every business, or every job, but they are the right measures. The support that SMEs have received during this national emergency has been unprecedented, yet necessary to protect our economy.

A thriving economy requires a diverse private sector that is not shackled by regulation or high taxes. The Conservative party recognises the vitality of a dynamic free market, as well as a free economy, as the only route to economic growth and prosperity for all who live within it. While these measures intervene in the economy in a manner never seen before, and freedoms we cherish are curtailed to help to slow the spread of the virus, all these actions are temporary. Even so, I know the Prime Minister and the Chancellor did not take any of these decisions lightly or easily. Once we emerge from this crisis, as we shall, it is vital that we shift our approach from not only supporting SMEs where necessary, but unshackling them from the burdens of excessive regulations that limit their ability to operate effectively in the market.

It is a pleasure to serve under your chairmanship, Sir Edward, and I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing this important debate. I want to focus my remarks on the coach industry, because its members feel badly let down. They tell me that that is partly because politicians do not understand their industry.

I will start by quoting Kevin Mayne, from Maynes Coaches, a family firm in Scotland, who says:

“We take children to school, grieving individuals to funerals, vulnerable people to disabled care facilities and turn up in high risk situations with shiny shoes to keep the nation moving. We are waiting at the station when the train stops and a rail replacement is called upon, we are behind the NHS when the country stops moving and we are truly at the heart of national transport.

The Coach Industry has always been there for the nation. When the train stops, you get a coach to take you where you need to go—whether it be a job interview, school play or a hospital appointment. When planes are grounded, it’s a coach and a driver who are sent out to keep the people moving forward to their next destination. If everything in the city grinds to a halt and there needs to be an evacuation—we help. Trust me, I have been there personally.”

The situation for coach companies is deeply worrying. They are all SMEs, the majority family-run businesses. Last week, I met Alan Acklam from Acklams Coaches, who spelt out the crisis the industry faces. These were all viable businesses, and they will be again, because after this pandemic people will want to go to concerts and on holiday and start enjoying life again. But right now, tens of thousands of jobs are at stake as a result of coach operators struggling to secure business as the coronavirus pandemic goes on. They have seen a 90% drop in income for 2020. In 2019, there were 23 million visits made by coach, but that number has fallen to virtually nothing.

There has been no sector-specific support for coach companies, unlike bus, rail and light rail operators. For some companies, the furlough scheme has been the only source of support until this point. The industry experts estimate that four companies in 10 could go bust and 27,000 jobs could be lost if no support is made available. Furlough has helped, but many coaches have fixed costs. One owner told me that

“fixed costs will kill the industry prior to the furlough ending”.

That is partly because coach companies have tried to do the right thing. Many have upgraded their fleets to improve air quality and reduce emissions, and have taken out finance agreements to do that. Now the coaches sit idle and the repayments are due.

One coach operator told me that the cost per day for his coaches was £220. The coaches are now in negative equity because the market is flooded as businesses try to sell them. Some firms have been able to negotiate finance payment holidays, but those are coming to an end and there is no sign of them being renewed. Only 20% of companies have been able to access coronavirus business interruption loans, and only 15% have been able to access small business support.

I was contacted by the owner of a family company in Dorset, who sent me a heartbreaking email about the problems he faces. I will quote from that, because it is better than anything I could say to the Minister. It says that the company was

“told yesterday that we’ve been refused a CBIL loan from our own business bank (Lloyds Bank). We have a BBL and it was going to be paid as part of the CBIL funds. We weren’t refused due to bad credit or not being a profitable company. It was because the banks don’t know when our industry will return to any form of normality, they’re classing us as maximum risk for any form of lending. They can’t see the industry recovering over the next 12 months, so won’t lend us any money. This is what I was told by them over the phone, and to be honest, I can’t believe it, I really can’t!

I felt very ill last night when my bank said they can’t see us returning soon. I didn’t realise they were experts in when things will return to some form of normality. Lloyds have also put a 5-year payment plan on the application. Rishi Sunak MP said he was extending payments up to 10 years to help us out. Lloyds said they hadn’t had that information and have to base it on 5 years. If it was for 10 years, the application may have gone through?

The coach operators appreciate the furlough, but as I said before that is for the employees’ benefit, not for the business itself. Furlough till March is great but the finance houses will not extend holidays for the coach payments. Once January comes I will need to find over £12,000 a month for coach finance payments with an income of absolutely nothing. My staff will be made redundant just after Christmas if funding does not arrive soon. Coach operators are completely left on their own at the moment and have been for 8 months.

I have £26,700 left to get me through to March. I’m applying to Iwoca loans, but the rates are higher than Lloyds and they are saying it is only over 5 years and not 10 years. I have a wife, a 5-year-old and a 9-year-old to support. Come early next year, we will be forced out of our home as the money will run out and the coach finance, like others, is secured against our family home. I haven’t been scared up until now, but I’m scared now.”

The only business that coaches have is school transport, but most companies subsidise that with other jobs. At the moment, that service is being operated at a loss. The industry needs help. I am grateful that the Chancellor told me that the relevant Minister will meet me and representatives from the industry, but I will be even more grateful when the relevant Minister actually puts a date in the diary for that meeting.

Will the Minister please comment on what sector-specific support coaches will get? Will the Department look at classifying coach operators as either tourism or essential travel so that they can access some of the grants that are already available? What conversations are being had by the Department with the high street banks about their criteria for lending coronavirus interruption loans to the industry? What support can the Government give the industry in securing extended finance payment holidays? Have the Government considered retrospective low-emission-based grants for coach companies that have made a large investment in greener travel? Has any consideration been given to topping up the costs of school transport during this time?

Coaches are not just for displaying dubious political slogans during referendums and elections. Our country needs them, and now the industry needs us. I look forward to working with the Government to get it the support it needs.

It is a great pleasure to serve under your chairmanship, Sir Edward, and I congratulate my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn), who gave a fantastic opening speech and really set the scene. So many of us agree with him. I pay tribute to the three Members who spoke before me, all from various parts of Yorkshire—God’s own county. When we hear representatives from Yorkshire calling for more money to be spent, we know that we are indeed in unusual times.

I will focus on my concerns for small and medium-sized enterprises in my constituency, what we can do to urge our constituents and residents from across the country to support them before Christmas, and what the Government can do to support them. It is fantastic to see the Minister in his place. I worked with him before my political fortunes changed. It is great that he is in post, which means we have continuity for him to help in the Treasury.

My concerns with small business lie in the demographics of my constituency. We do not have large business in Bexhill and Battle. Small businesses, as my hon. Friend the Member for Carshalton and Wallington said, are the lifeblood at the heart of our local communities. They certainly are in my Bexhill and Battle constituency. I also have one of the highest proportions of workers on the living wage. Without the small businesses, we would not have the jobs that are there, but even the jobs that we do have are very low paid indeed. I am very concerned that those small businesses will not survive. That is why, with regret, I have been unable to support the Government’s November restrictions. Those businesses had done their best and survived during the first lockdown, but I was concerned they were going to really struggle to survive through the second. On a more optimistic note, it is fantastic news that it looks as though the vaccine is within reach. Ultimately, what our small businesses need is the consumers who will drive business, and I hope this will bring optimism back to them.

Despite the restrictions, the bigger operatives such as supermarkets are able to open up to all while smaller businesses complain that they are unable to open, which is regrettable. Having said that, we saw what happened in Wales when supermarkets tried to close certain aisles—it simply does not work. I want to focus instead on what we can all do before Christmas, because all retail businesses are able to open online. I would like to see a national campaign focused on November, a crucial month for many small and medium-sized enterprises, so that we buy local. Ultimately, we need to discourage people from doing their Christmas shopping on Amazon. A good example is a bookshop in Battle, Rother Books. We can buy its books through an online organisation called Bookshop.org, whereby the local bookstore gets the profits that it would receive if someone had purchased in the shop. I urge hon. Members to look at that for their constituents. I am also really encouraged by my Alliance of Chambers in East Sussex, the chambers of commerce, which is appealing for people to buy local, buy later and buy local online. I very much hope that constituents will do that. Again, it is important that we all take the lead and show our residents and constituents how they can find those businesses, and it is important that businesses innovate so that they are able to open during what will be a difficult month.

What more can the Government do before Christmas? I should align myself with some of the points made by my hon. Friend the Member for Carshalton and Wallington. When I visited businesses in my constituency over the summer, they could not have been clearer that without the Government’s furlough and the discretionary grant process, they would have gone under, so the Government really have stood by smaller businesses. I know that the Government’s target of 33% of total procurement spend each year by 2022 should be on SMEs. Given that we have nationalised large parts of the economy, I challenge the Minister to see whether we can make that target perhaps a little earlier.

In the remaining 30 seconds, I want to point out three areas to the Government. On house building, we have lost our small builders, but we will need them if we want to build back. We lost them during the recession of 2008, and it is vital that we let small builders start building so that we get the homes we need. Secondly, wearing my Transport Committee Chair hat, travel agents have been particularly impacted, and I would like to see a suspension of the package travel regulations so that insurers pay out for cancelled holidays, rather than the travel agent. We should better align our regulations so that when airlines are still flying but passengers cannot realistically go to destinations, it is not the travel agents that pay out, but the airlines.

Lastly, on aviation—the Treasury has an interest here—it is vital that we get people flying again. There are so many small and medium-sized enterprises that rely on aviation either indirectly or through the number of passengers who come through. Can we please find a way to reduce the number of quarantine days so that there is an incentive to pay to have the test? People will then end their quarantine early and start flying again. That is all I have to say, Sir Edward. I hope I have not gone too far beyond your limit. I warmly welcome the motion and hope that the Government will continue to support small and medium-sized enterprises.

It is a pleasure to serve under your chairmanship, Sir Edward, and I pay tribute to the hon. Member for Carshalton and Wallington (Elliot Colburn) for calling this debate.

My constituency is home to more than 6,000 small and medium-sized businesses, ranging from independent shops around the ever-busy Clapham Common, including Minnow, Charlotte Cave and Clapham Books, to the row of street stalls and quirky businesses along the Lower Marsh in Waterloo, including Greensmiths and River Remedies, the numerous small pubs, cafes and restaurants along what many people refer to as Little Portugal—South Lambeth Road—and our vibrant lesbian, gay, bisexual and transgender communities and venues, which draw so many people to Vauxhall from across the world, adding immeasurable culture to our part of south London.

The covid-19 pandemic has had a devastating impact on all those businesses, and I have personally visited them over the past few months to see at first hand the impact on the ground and how they have been adapting and coping with what we call the new normal.

I met one constituent in March who planned to open a new grocery store after three years of sheer dedication, hard work and money to get that off the ground. He was devastated just before the national lockdown not to be able to open as planned. He now faces unaffordable rents and his costs have to be paid even though he is not receiving any income.

Another small business owner I met told me about her 13-year-old daughter. She is worried about how the business will be kept running. If she is forced to self-isolate because one of her children catches the virus, the business will struggle and that will be the end of the business for her and her husband.

My constituent who runs the Prince of Wales in Clapham Old Town highlighted the dire consequences for the hospitality sector, with many landlords continuing to demand rent for closed premises. He also highlighted the fact that a number of his staff come from EU nations—I am proud to boast that I represent the top-voting Remain constituency in the country—but there are real consequences here for small and medium-sized businesses. It is important that we get a firm deal so that these businesses can continue to thrive.

At the beginning of the lockdown in March, the Government provided the coronavirus hospitality and leisure grant for properties with a rateable value of £51,000, but Vauxhall is a central London constituency with higher than average rateable values, so many of the businesses that I represent did not qualify for any support, yet saw an immediate drop in footfall.

As the lockdown lifted over the summer, many of the small and medium-sized businesses that support the vibrant cultural sector that I represent along the South Bank were not able to open their doors again. Those businesses rely on tourism, but—guess what—the tourists have not come back, and they will not be coming back for a while.

How do we help those small businesses? The Government’s one-size-fits-all approach is not helping small and medium-sized businesses, which in places such as Vauxhall are struggling. When we come out of lockdown, it is important that we do not look at any more business closures, because without those businesses our communities will not thrive. Will the Minister therefore reassure my constituents that the Government will not try to implement their one-size-fits-all approach, but will listen to small and medium-sized businesses and provide tailored support so that all of them can get back on their feet post-covid 19?

Order. I call another Yorkshire Member, Mr Hollinrake.

And proudly so, Sir Edward.

I am delighted to follow the hon. Member for Vauxhall (Florence Eshalomi). My hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) made a great speech and set the scene well for subsequent speeches.

I draw the attention of Members to my entry in the Register of Members’ Financial Interests. This is my third recession as a businessman—once under a Conservative Government in 1992 and once under a Labour Government in 2008—but I have never seen the amount of support that we have received through this recession. That support has been on a different scale altogether. Having said that, the recession has been on a different scale altogether too. Previously, there was no job retention scheme, no business rate grant and no VAT discount. There were no free school meals in 2008, when millions of people lost their jobs. My business alone had to make two thirds of our workforce redundant. It is among the hardest moments of your life when you have to do that to 130 people you worked with for a long time. I had very little support during that time, but the Government are now doing a tremendous job in providing support for many SMEs.

The No.1 support that can be given to any business is to allow it to trade. The Government have tried to do that throughout, despite the calls—on many occasions from the Opposition—to close the economy, which would have meant more businesses destroyed or a greater burden on the taxpayer. I think the Government have done all they can to spread the benefits they have provided evenly, but that is almost impossible—in fact, it is impossible. If the economy is closed down, whatever the Government throw at it, some businesses will lose out, and some will be hit harder than others. The hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) was absolutely right in her plea for the coach sector, but it is so difficult for the Government to design a scheme that will suit all people equally. That is why we must try to keep the economy open at all costs; that is what we should be doing.

As my hon. Friend the Member for Bexhill and Battle (Huw Merriman) said, when large swathes of the economy are shut down but some parts are left open, existing trends are accelerated. Amazon, of course, is doing very well through this recession and has eaten further into the market share of SMEs. The fact that supermarkets are allowed to open again chips away at the market share of SMEs and accelerates long-term trends. As a result, some businesses that might have got through this had it been done in a more progressive and gradual way will be destroyed forever.

Although we have done a lot already, the Minister will be familiar with the kind of asks I will make for the future. There has been a fair bit of support—a lot, in fact—in the form of business rates grants, the job retention scheme and the VAT discount. The hon. Member for Vauxhall said that her businesses have seen no support, but it is very rare that hospitality sector businesses have got no support.

There has been a lot of grant support, but inevitably the Government have also had to say to businesses that they have to take some of it as a loan. Bounce back loans have been a huge success, and what the Minister has done now in terms of top-ups to those loans is absolutely right, but he knows one of the problems we have is with non-bank lenders and their customers. We have persuaded businesses to try new competition, new fintechs, for their bank accounts, but, having done that, those businesses are now locked out of the Bank of England’s term funding scheme, which provides the funding for bounce back loans. Customers of non-bank lenders such as Tide are locked out of the bounce back loan scheme.

There is a number of ways to solve this: give non-bank lenders access to the term funding scheme—I know the Minister cannot do that himself—ask banks to lend to non-bank lenders, or ask banks to lend to the customers of non-bank lenders. The difficulty with the latter is that customers then migrate back to the big banks; also, they have a finite amount of money to lend, so it is flawed. We need a solution to this problem. What the Treasury could do is provide funding directly to non-bank lenders through the ENABLE guarantee scheme. That would solve the problem pretty much overnight, if the Government were willing to do that.

I have used up the time allocated to me, so although I have a few more things to say I will leave it there. I hope the Minister will respond to some of these points in his reply to the debate.

It is a pleasure to serve under your chairmanship, Sir Edward. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on opening the debate so well. I echo all the concerns hon. Members have brought forward, particularly about those excluded from the self-employed income support scheme.

I had a discussion with a Treasury Minister about the exclusion of people who are sole directors of companies. My understanding from his comments was that there is a shortage of staff at HMRC to process information at Companies House, together with returns that can be produced to demonstrate that they are the sole shareholder. That case was brought back in the spring and several months have gone by, so I do not understand why the Government have not put more staff into HMRC to address that problem. It would be transformative for all those people who have yet to receive support. I ask the Minister to look at that.

I also echo the concerns raised around bounce back loans and the fact that the underwriting is by the Government, not the supply of resources for that. That is one reason why there are such challenges. I also want to raise a concern about the additional restriction grants. City of York Council is looking at £25,000 a month. That will not address the demand and we want to know how that gap will be closed. Although York is doing incredibly well at addressing the pandemic and getting on top of the virus, our economy is seriously struggling and we urgently need help. The claimant count has more than doubled in the city, the high street has been highlighted as having had the most closures anywhere in the country—55 retail outlets to date—and economically the future is looking even bleaker, so we need urgent support.

One concern my constituents have is about the behaviour of leaseholders, particularly during the pandemic. For them, the property they hold is a capital investment and a secure asset, and their interest is clearly in their wider financial investment portfolios born of high rental payments. The rentals are not necessarily the issue, but continuing to demand high rental payments from small businesses is having a huge effect, not least because, as other hon. Members have mentioned, the high rateable value of property in York means that many businesses cannot keep pace with average payments of £6,000 a month—some reach £1350,00 a year—despite Government support, so there is a significant shortfall in that provision.

Leaseholders are collecting their money, which in a sense goes directly into their pockets from the Government in the form of grants. The support that those large leasehold companies are getting almost seems like a way of getting around the state aid issue. Many of those properties are held in offshore portfolios, so this is not about reinvesting in the local economy; the money goes from the Government into offshore bank accounts, and no benefit is brought to small businesses. Will the Minister look at that, because we see it not only in retail and small businesses, but in the pub sector? A lot of pubs are failing, yet the pub companies are drawing on that money. An inequality is being built into the system and taxpayers’ money is supporting it, so it is really important that the issue is addressed.

Needless to say, another big issue in York—again, driven by leaseholders—is high rateable value: many businesses missed out on support because their rateable value was above £51,000. A false economy is being built up because leaseholders are pushing up their prices. We need to get on top of that issue as we come out of the lockdown, to help secure those businesses after the pandemic.

Finally, another subject that is important to us in York is that although a lot of work has gone into supporting the future growth of businesses, particularly for the green new deal and the BioYorkshire project, that work is currently being held up by the devolution deal. The Government support the deal, but it means waiting two and a half years before we can crack on with upskilling 25,000 people and creating 4,000 new jobs in our city. In the light of our economic circumstances, and because of the support that the Government are giving to that project, will the Minister look at bringing it forward so that we can get on with rebuilding our economy while we are in crisis as opposed to waiting another two and a half years, which really does not make sense for the people of my city, or for the economy and the economic benefit that that the project will bring.

May I say what a pleasure it is to follow the hon. Member for York Central (Rachael Maskell)? She is a friend and we have been involved in many debates similar to this one. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on securing the debate, and I thank the Backbench Business Committee for selecting it.

As we have heard, SMEs are truly the backbone of our economy. During the initial lockdown, my office was inundated with more than 1,000 emails from SMEs that were at a loss as to how to deal with that dreadful scenario. It was an incredibly difficult times to be an elected representative: I had never felt so much pressure as I did at that time, with the number of people who came to see me and the real tragedies that they faced. The burden became quite onerous, but we were able to help those people, and I thank goodness for that. My promise to them then—as it is now—was that I would do all that I could to get them information and press for the help that they needed.

I could not attend Westminster Hall yesterday, when the hon. Member for Carshalton and Wallington led another debate—he is here almost as much as I am! I just want to let him know that I read Hansard—maybe it is just me—and I read what he says. The hon. Gentleman referred yesterday to the UK and that

“Northern Ireland operated socially distanced weddings since June”.—[Official Report, Westminster Hall, 9 November 2020; Vol. 683, c. 272WH.]

I have that marked in Hansard. However, I want to refer to one wedding venue in the short time I have, as one industry I feel needs to be focused on is that of a wedding.

Within a wedding are so many SMEs. The industry mirrors exactly what is happening across the whole of the United Kingdom of Great Britain and Northern Ireland. Venues for weddings, entertainment providers, the photographers, the make-up artists, the hairdressers, horse-drawn carriage providers, bridal boutiques and evening-entertainment providers, from florists to the small online businesses that make party favours—all have been precluded from working. Many are self-employed and none is looking optimistically at the future without massive changes and help.

As the Member for Strangford, I make this statement, which I know to be true although other Members may disagree. I represent Strangford, probably one of the most beautiful areas in the whole of the UK. I shall outline why shortly. I know that you, Sir Edward, might have a different opinion and others might as well, but that is just by the way. The wedding industry and the demand are strong in my constituency, and so too has been the adverse impact on the industry.

Just a mile or two from my home—I live on the edge of Strangford Lough on a farm—is one of the most beautiful venues you can imagine: the Orange Tree House. Since it opened, it has been a virtual hub for events, from weddings to birthdays to celebrations and business events. It is owned by Jan Hollinger and Simon Shaw—I name them because I am going to send them a copy of Hansard—and they have built that place up. I remember when it was just an old, abandoned building, and I have followed the whole process all the way. With just one look at this beautiful wee gem, we can see what the appeal is. Rain or shine, the views of the lough are incredible. However, one look today will show closed gates, closed doors and uncertainty.

As an SME, at one stage the owner had 37 staff on retention. When news of the new furlough scheme was released, she contacted me to say she was unable to pay the amounts that were the responsibility of the employer and was having to let 31 staff go—crippling news. I have watched this small business go from strength to strength, becoming not simply a viable but a thriving business. To put that into perspective, let me highlight the cancellations. I have the permission of the owner to say this, Sir Edward, because I asked her beforehand whether it would be okay. I want to give hon. Members the opportunity to hear what this means to one venue. There were 130 bookings 115 of them in the diary already by March: 75 of them were cancelled. The owner has kindly worked out the net loss to the local economy. The bed nights for the weddings, which are the main staple of local Airbnbs, have disappeared. The restaurants are not getting the usual visitors the days before and after the weddings. The suppliers of flowers and food and so on are getting no business. The effect of those cancellations from one business is £753,900 removed from the economy.

I know that every Member here could do the same thing for their businesses and the cost of the bed nights and food tabs. That is just one wedding venue and the owners need help. They need assurance they can take bookings, and the fact that there is so much uncertainty has led to people not feeling confident to rebook this year or in the year ahead. Venues and the local economy are losing income from that intricate web of service provision. I have wedding photographers whose business has been decimated, who cannot even do baby photos or other staples such as school photos. They need to get people in, but no one is allowed in at present. They need help and they need it now. Those who provide evening entertainment at weddings, whose job is their music and their art, are also finding that they have no hope for the future. To lose a sector of those artists is worrying for our future as a nation. We have asked the question many times, and we ask the Minister again to look at that.

Time has beaten me, but worse still, time is beating the wedding industry. We need to think out a better way of keeping people safe; this perpetual lockdown is not sustainable. I hope, as others have said, that when we look to the potential vaccine that the Health Minister referred to this morning on the news—I watched it in the hotel before I left this morning and it is good although it is early days—we can look at safety measures that allow people to celebrate a wedding and even safely allow people to gather after a funeral, which is another issue. I attended a personal funeral this last week and I understand what it means for the family not to be able to get together after a funeral, never mind a funeral service when we can only have 35 people there as well.

We have to offer support in the interim, but more than that, we have to futureproof the industry. Part of our task, as Members and Ministers, is to learn from what has happened and then look forward to the future, where we can make it better, and allow it to continue in any circumstance, in a safe and meaningful way. I am sorry if I have gone over my time, Sir Edward.

Sir Edward, it is a pleasure to serve under your chairmanship. I echo the congratulations to the hon. Member for Carshalton and Wallington (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 have 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 the hon. Member for Strangford (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.

We agree on a lot, but we differ on this point. How would it be fair to write off that kind of debt and make grants when some businesses have not taken a loan and other businesses will pay back those loans? How fair would it be to those businesses and to the taxpayers who have funded those loans?

I hear the point that the hon. Gentleman makes. We had an exchange on this on Thursday. We are in a situation where the current system is not fair for millions of people who get no support whatever. We need to do whatever we can to make sure that our high streets are not utterly decimated when we get to the end of this pandemic. I suggest that is one measure that could be taken that would absolutely guarantee the future of those businesses.

I turn to consider those running small businesses from their homes—swimming instructors or travel agents whose activities are not currently available to the extent that they were before, or those who rely on large gatherings. Here, I draw attention to the Showmen’s Guild, which has effectively been closed down for a year, but because their members operate from home, they have not qualified for any support so far. Vast numbers of individuals in households and businesses have seen their income falling perhaps by 100% in some situations. They are at risk of losing their homes and cannot get the support they need. Why are the Government not wrapping their arms around them? Why is their plight still ignored? It is an unedifying consequence of this virus that the privileged members of our Government can determine which businesses are viable, what cultural events are important to save, and who gets support through a crisis or who should simply retrain in cyber.

This is an emergency, and we need to make sure that a lifeline is available to all those who need it, not just those who fit the mould of support schemes that were created hastily. I look forward to the day when SMEs can just get on with it again and think of their business, rather than what support is available, but that is a long way off. As we focus our collective efforts on following guidance to drive down the virus, the Government must make sure the measures are in place to protect jobs and businesses while we all seek to save lives.

Thank you for your chairmanship this afternoon, Sir Edward. I congratulate the hon. Member for Carshalton and Wallington (Elliot Colburn) on tabling this debate and thank all Members who have contributed to a thoughtful and varied debate. I will not mention everyone, but I was particularly struck by some of the points made, for example, by my hon. Friend the Member for Halifax (Holly Lynch), who raised the difficult issue of local markets; my hon. Friend the Member for Kingston upon Hull West and Hessle (Emma Hardy), who talked about family-owned coach companies; the hon. Member for Bexhill and Battle (Huw Merriman), who talked about local shops; and my hon. Friend the Member for Vauxhall (Florence Eshalomi) on the issue of high rateable value properties in central London. The indefatigable hon. Member for Thirsk and Malton (Kevin Hollinrake) quite rightly described this period as a great acceleration; we do not have time today to explore that idea fully, but it is a crucial feature of the experience that we are going through. My hon. Friend the Member for York Central (Rachael Maskell) talked about leaseholders and self-employed people. And of course our great friend the hon. Member for Strangford (Jim Shannon) talked about the crucial wedding industry. I can tell him that in my part of the country—the Black Country—we have an enormous wedding industry, including an Asian wedding industry that is a huge business, and it has suffered all the knock-on effects that he talked about.

The covid pandemic has forced Governments around the world to make major and unprecedented interventions in the economy. In this country, those interventions have included some of the measures that we have heard about this afternoon: the furlough scheme; the grants to small businesses; state-guaranteed lending schemes; tax deferrals; and a lot more. These interventions have been large-scale; indeed, they have been on a larger scale than in previous recessions, because the experience is different from that of a normal recession. They have been necessary, although some people have been missed out by them, as we have heard.

To have stood back and simply let business and workers take the full hit from this pandemic would have caused economic carnage and long-term damage on a scale unseen in living memory: it simply would not have been a feasible option for the Government to choose. In many cases, the grants and other support for small businesses that have been provided have been the difference between survival and going under—there is no doubt about that. They have provided vital revenue to businesses when there has been none from normal trading, because there has simply been no possibility of conducting business.

Of course the interventions are costly, but stepping up in a once-in-a-century situation such as this is what government is for. I am old enough to remember the last time that we had real mass unemployment in this country, when I was growing up in the 1980s, and the social and economic consequences of that were felt for many years afterwards, in terms of the impact both on individual families and on areas such as the Black Country, part of which I represent, and many other parts of the country, too.

A lot of the interventions this time have enjoyed cross-party support. We called for the furlough scheme and we supported it. That was particularly true in the early days of the pandemic. But after that period, things have become both more disjointed and more contested, and there is a reason for that.

I think that we have had four different versions of an economic plan in the last six weeks, with different levels of business support, various percentages of support for self-employed people, and at one point the withdrawal and then the reinstatement of furlough over one weekend. Trying to keep track of all those changes reminded me of what was said about the legendary Celtic winger, Jimmy Johnstone, and his effect on defenders; it was said that he gave them “twisted blood”. It would give any small business person twisted blood trying to follow all the twists and turns of what has been announced in recent weeks, only for us to end up pretty much back where we started in March.

I make that point not to engage in a bit of political knockabout or to take a partisan swing; it is to make a more serious and deeper point, because I think the story of recent weeks betrays a deeper problem within the Government. We are led to believe that there has been a debate or a disagreement in Government between those who have championed public health on the one hand and those who have championed the opening up of the economy on the other. We might say it is a debate between hawks and doves, with the Chancellor portrayed in this debate as a hawk.

Any Chancellor will rightly be concerned with the state of the economy—that is their job—but the mistake in this situation, and the real point that I want to make today, is to regard it as a choice between getting the virus under control and getting the economy moving again. We should have learned by now that any economic plan that does not have at its forefront getting the virus under control will not work, because when infections, hospitalisations and death rates are increasing, by definition the economy cannot be opened up and cannot operate properly. It cannot simply be decided that we open up the economy, because it would by definition mean—when people cannot see their relatives and weddings and all sorts of gatherings cannot take place without resulting in a new outbreak of the virus after a few weeks—going into a period of opening up and lockdown, and opening up and lockdown, particularly when the testing and tracking system is not working properly.

Will the hon. Gentleman give way?

With the time constraints, I apologise but I am going to keep going.

Yesterday’s announcement about a vaccine is potentially exciting news and an amazing triumph for science, if it works in the timescale, but of course we are not certain and we have to wait to see what happens. For the moment, we must manage the situation as it is. My point is that good virus control is good economics. They are not in competition with one another, and I believe that the view that they are has led to some of the missteps of recent weeks.

Now that we are many months in, questions have been raised about some of the schemes, in the light of experience. I will end by putting some of those questions to the Minister. The bounce back loans were meant for genuine small businesses—the people that we all want to help to stay on their feet. The issue of fraud in the process has been raised. What does the Minister estimate the degree of fraud in bounce back loans has been, and how will he work with lenders and regulators to combat that? Nothing will annoy genuine small business people more than people setting up fake companies, or whatever scams have been done to try to get the loans.

It is inevitable, even with the best efforts, that a proportion of the loans will falter, and it will not be possible to pay them back. I appreciate that the Government have extended the repayment period from six to 10 years, but that postpones the problem, it does not fully eliminate it. Of the various options that have been canvassed for dealing with the problem of default, what has been ruled in and what has been ruled out? Have the Government ruled out writing off a proportion of the loans? Have they ruled out turning any of that into longer-term tax liability for firms, or into equity stakes in firms, if it cannot be paid back?

As for payment or leasing holidays for coach companies and similar businesses that we heard about in the debate, can the Government do anything to extend the six-month grace period that, for many small businesses, has either been used up or is coming to an end soon?

I have talked about the light of experience, and my final question to the Minister is what the Government can do for those who have so far been excluded from any kind of support. A large number of people have for one reason or another fallen between the cracks of the different support schemes that have been announced. As the pandemic goes on—and, while we are hopeful about the vaccine, we know it will continue into next year—those people’s situation becomes ever more difficult. Is there anything that the Government can do at this stage to help them?

May I say what a pleasure it is to serve under your chairmanship, Sir Edward? I join the other Members who have congratulated my hon. Friend the Member for Carshalton and Wallington (Elliot Colburn) on securing this important debate. I have listened extremely carefully to every speech, and we have had a wide-ranging discussion of a range of industries that have, obviously, been adversely affected by the experience of covid up and down the country, including the wedding industry and the retail sector in particular, with the impact on the high street. I listened carefully to what the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy) said about the coach industry. I will seek to address as many points as I can. I thank colleagues for their insightful and constructive contributions.

Like everyone in the Chamber this afternoon I share the concerns that hon. Members have expressed for the financial wellbeing of the UK’s SMEs. It is difficult to overstate their place in and contribution to the UK economy. In 2019, the number of SMEs in the UK reached 1.4 million—a 31% increase in five years. As constituency MPs, we all know the contribution that SMEs make to our communities, and they now employ over half of the UK workforce. Given that, it is no wonder that helping them endure and adapt to these trying times has been a cornerstone of the Government’s response to the pandemic. They are at the front and centre of our thinking and, as hon. Members know, our strategy has been to protect jobs, crucially including those in small and medium-sized businesses. Much of the support we have provided has been with them in mind, including our generous wage support schemes; access to finance through millions of Government-backed loans and billions of pounds of grant funding; and targeted measures to help with fixed costs, such as statutory sick pay rebates and tax deferrals.

We have already helped keep millions of people in employment through the coronavirus job retention scheme. As of 18 October, we had helped 1.2 million employers furlough 9.6 million jobs, and paid £41.4 billion in grants. However, importantly, we understand that the economic effects of restrictions to tackle the pandemic outlast the restrictions themselves. That is why, last week, the Chancellor announced that he was extending the coronavirus job retention scheme until the end of March 2021. I respect the point that some have made about the changing nature of the support, but I suggest that is because of the changing nature of covid, which has driven the response of this Government. The Chancellor has moved very quickly when new health interventions have been made. This scheme will help protect millions of jobs in the coming months, and will allow smaller businesses to get back on their feet quicker when the time comes.

We have also supported workers through the self-employment income support scheme, one of the most comprehensive and generous support packages for self-employed people anywhere in the world. On top of the £13.7 billion already claimed by 2.7 million self-employed people through that scheme, a third grant will be available until January, covering 80% of trading profits. A fourth grant will be available from February to April next year, with further details to be provided in due course.

However, the practical issues that prevented us from including company owner-managers—namely, not being able to verify the source of their dividend income—without introducing unacceptable fraud risks still remain. Further, the issues around the newly self-employed in 2019-20—namely, that HMRC will not have access to their self-assessment returns in time to verify their eligible income—also remain. The latest year for which HMRC has tax returns is 2018-19, and the 2019-20 returns are not due until 31 January 2021. Of course, Government and the Treasury continue to look carefully at all the representations made on these matters to seek a way forward, but we have to be cognisant of those facts and how we would meaningfully deal with them. However, we have pulled out the stops to provide businesses with the credit they need at this difficult time.

I will now address some of the points that have been made about the bounce back loans and the coronavirus business interruption loan scheme. As of 20 September, SMEs and other businesses had applied for and received over £50 billion worth of CBILs and bounce back loans. As ever, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake) is very well informed on these matters, and made a number of suggestions about the challenges that some businesses face when securing loans. We have 28 providers that are accredited for bounce back loans, and 100 that are accredited for CBILs, but in this situation, we have non-bank lenders who are seeking to be part of that scheme and are struggling to access the finance. As he well knows, access to the term funding from the Bank of England is a matter for the Bank of England, and we have tried to look at those matters and see if more can be done.

The bigger issue that we have to learn from during this experience is that we have differentiated regulation between different banks and different entities that are providing finance. It is a challenge both to provide consumer protection universally and to have the right level of capital requirements for different entities, and in extreme times, these are very challenging things to come up with a neat intervention on. However, I will continue to work with my hon. Friend and others across the House to seek ways forward.

The Opposition spokesman, the right hon. Member for Wolverhampton South East (Mr McFadden), asked about the fraud risk. There is a big distinction to be made between fraud in applications and default risk. When we designed those schemes, and the bounce back loans in particular, that self-certification form—where businesses were obliged to make estimates of their turnover and could access a percentage of that—was designed to be as accessible as possible. However, businesses also had to state clearly what the facts were around their situation. The Cabinet Office is leading a piece of work across Whitehall to look at fraud risk and even more collaboration between the banks, sharing data about duplicate applications, and we will continue to work very carefully on that. We are also allowing businesses who have borrowed less than their maximum to top up their bounce back loans and extend their repayment period.

I appreciate that it must sometimes feel as if Government statements in our response to the pandemic are just a long list of measures we have taken or are taking, but this is a consequence of the range of things we are doing. Forgive me, Sir Edward, but I will list a few more ways we are helping businesses, which my hon. Friend the Member for Carshalton and Wallington is right to be concerned about. They include £11.5 billion of grant funding to more than 900,000 business premises, with new grants to come through the winter months, and an additional £1.1 billion of discretionary grant funding for English councils—that is cash grants of up to £3,000 for every four weeks of closure for English businesses forced to close. Backdated grants provide up to £2,100 per month of support in arrears for eligible businesses that have suffered from reduced demand in recent months. Those schemes are available nationwide. As the Chancellor announced last week, the up-front guarantee of funding for the devolved Administrations is increasing from £14 billion to £16 billion.

Will the Minister give way?

In the interests of time, I will not. It is for the devolved Administrations to decide how to use that guaranteed funding, irrespective of how the UK Government provide support. However, this uplift will support businesses across the United Kingdom. We are also protecting businesses with extensive tax breaks, deferrals, and repayment flexibility through the time-to-pay scheme. Further Government support mechanisms enjoyed by SMEs include the statutory sick pay rebates and eviction protection for commercial tenants until the end of this year.

I hope I have illustrated that SMEs are at the forefront of our minds through this crisis. Support measures available to those businesses represent a significant part of the £200 billion package of support that the Government have put forward. The IMF recently described the UK’s economic plan as “aggressive”, successful in “holding down unemployment” and business failures, and

“one of the best examples of coordinated action globally”.

However, I accept that it is never going to save every business and every job, and we will continue to engage with colleagues across the House. To the hon. Member for Midlothian (Owen Thompson), I will look into the meeting that has not happened yet and ensure that it does. [Interruption.] I will also engage with the hon. Member for Kingston upon Hull West and Hessle, but I must give my hon. Friend the Member for Carshalton and Wallington a few minutes to respond.

We will continue to listen carefully and we will maintain a flexible approach. As the Chancellor said in the House last week, things need to change when circumstances change. What that means for SME business owners up and down the country is simply this: where and when necessary, we will take swift action to provide the support they need. We will continue to do so as we work through this awful crisis that has befallen our country.

In the interests of time, I sadly cannot go through every Member’s contribution. However, I thank all hon. Members and right hon. Members for attending this debate. We have done well to highlight the concerns of the sector and the two petitions that were brought forward to be debated today, so I reiterate my thanks to all colleagues. I also thank the SMEs and sectors that made representations to us all, which allowed us to come here and express their views. I thank the Minister for his reply. I absolutely welcome the Government’s support, and the extended Government support for SMEs through to the new year. I hope we can go away and look at the sector-specific support we have heard about because we need that road map to allow our SMEs not just to survive the pandemic, but to be the engine of our recovery as we come out the other side.

Question put and agreed to.

Resolved,

That this House has considered support for SMEs during the covid-19 pandemic.