Commons Sense

House of Commons · Ministers' Questions

Covid-19: Support for Business

Tuesday 9 March 2021 · 8 questions

Summarised by AI from the official record, so it can contain mistakes.

Read the full transcript on Parliament.uk

At a glance

Answered 4 Partly answered 4 Not answered 0

Key points

  • The Government are providing over 407 billion-worth of support for the UK economy over this year and next to help businesses affected by the covid-19 outbreak.
  • The Chancellor confirmed that guidance will be published by the end of the week for local authorities to begin distributing restart grants to businesses.
  • The Chancellor announced a scheme called Pay as You Grow, providing businesses with flexibility in repaying bounce back loans, including the option to convert loans into 10-year terms.

Topics (select to filter)

Questions & Answers

Q1 Mark Menzies Con
Economy
Context

The MP asked about fiscal measures to assist businesses during the pandemic.

Question

What fiscal steps his Department is taking to support businesses affected by the covid-19 outbreak?

Answer from Rishi Sunak

The Government are providing over £407 billion-worth of support for the UK economy over this year and next. Contained within that is considerable support for business, through discounted loans, cash grants, VAT reductions and tax deferrals, all designed to help business get through this crisis and protect as many jobs as possible.

Answered
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Q2 Tom Hunt
Economy Business & Trade Local Government
Context

The MP welcomed funding for Ipswich's town deal and Freeport East, highlighting job creation potential.

Question

Does the Chancellor agree that both the town deal money and the new freeport will be vital to the creation of new local skills in Ipswich and crucial to supporting local business at this difficult time?

Answer from Rishi Sunak

My hon. Friend is absolutely right, and I congratulate him; he has long campaigned on the importance of a town deal for his local community and, indeed, a freeport. I am delighted that this Budget could deliver both of those for his constituents and I agree with him that it will deliver growth, jobs and prosperity to his local area.

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Q3 Laura Trott Con Sevenoaks
Business & Trade Local Government
Context

The MP acknowledged the measures in the Budget and asked about when local authorities will be able to start distributing restart grants.

Question

Can the Chancellor confirm when local authorities will be able to begin distributing these vital restart grants?

Answer from Rishi Sunak

My hon. Friend is absolutely right that we must get support to businesses as quickly as possible. I am pleased to confirm to her that guidance will be published, hopefully by the end of this week, for local authorities, and that the restart grants, which are designed to take the place of our grant scheme that runs out at the end of April, will be distributed to local authorities in the first full week—the week commencing 5 April. I hope that is a reassurance to her and her businesses, and that local authorities can get the cash to them at this vital time.

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Q4 Greg Smith Con Mid Buckinghamshire
Transport Business & Trade
Context

The MP raised concerns about the financial situation of the coach industry, mentioning regulatory requirements that have contributed to its indebtedness.

Question

Will he look again at how the coach industry can be supported given the level of debt it is already in?

Answer from Rishi Sunak

I thank my hon. Friend for shining a spotlight on this important industry; he is right to do so. I know that he will be talking to the Department for Transport about regulations for the industry, but I can tell him that we will be providing local authorities with discretionary funding of around £425 million to sit alongside the restart grants. That money, at the discretion of local areas, can be used to support businesses such as coach businesses in their areas.

Partly answered

Not addressed: Reviewing measures specifically for the coach industry was not directly addressed.

How: Talking About General Discretionary Funding

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Q5 Mark Menzies Con
Business & Trade
Context

The MP thanked the Chancellor for his engagement and measures supporting coastal hospitality businesses, asking if he will continue to monitor their needs.

Question

Can my right hon. Friend assure me that he will continue to monitor and work with me to ensure that local businesses get all the support they need for their continued recovery?

Answer from Rishi Sunak

My hon. Friend has been instrumental in providing on-the-ground information to me and my team about the particular situation facing hospitality businesses in coastal communities like his. He is an absolute champion for them and rightly so. They are an important part of his local economy and I am glad that this Budget supported them. He has my assurance that we will continue to work with him and them to get them the support that they deserve.

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Q6 Pat McFadden Lab Wolverhampton South East
Economy Taxation Business & Trade
Context

The MP questioned the approach to handling non-repayment of coronavirus loans and suggested a tax relief proposal.

Question

Why is the Chancellor insisting that banks pursue £27 billion-worth of loans made under coronavirus loan schemes as conventional business debt, when the circumstances are not conventional? Would lifting the debt burden on businesses and turning it into a contingent tax liability help the economy?

Answer from Rishi Sunak

What we have done is provide a scheme called Pay as You Grow to give businesses incredible flexibility and generosity in how they repay bounce back loans. Those loans at an instant can be turned automatically into 10-year loans, which reduces the monthly cash payment by almost 50%. Beyond that, there are opportunities for interest-only periods and payment holidays, all of which will support the cash flow of businesses. We also have to get a balance with the taxpayer in all of this, which is why we have taken the approach we have.

Partly answered

Not addressed: Lifting debt burden on businesses into contingent tax liability was not directly addressed.

How: Talking About Current Schemes

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Q7 Alison Thewliss SNP
Taxation
Context

The MP raised concerns about the lack of sector-specific support for the hair, beauty and holistic service industry despite its economic contribution.

Question

Can the Chancellor explain why he has decided to ignore calls from this largely female industry to chop VAT to 5%?

Answer from Rishi Sunak

With regard to VAT, I am sure the hon. Lady knows that the majority of businesses in the personal care sector are below the VAT threshold, so they do not actually pay any VAT. What we did do is include that sector in the more generous restart grants, so, depending on their rateable value, businesses in that sector, like those in hospitality, will be able to receive grants of up to £18,000.

Partly answered

Not addressed: Explanation for VAT reduction was not provided directly.

How: Talking About Restart Grants

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Q8 Mel Stride Con Central Devon
Economy Science & Technology
Context

The question follows the announcement of the super deduction in the Budget, aimed at increasing corporate investment by incentivizing immediate investments rather than delaying them. The concern is about sustaining this increase in investment beyond the short term.

Question

I very much welcome my right hon. Friend's announcement in the Budget of the super deduction, which will definitely have a very positive impact on investment. Of course, it will primarily do that by pulling forward what would have been future investment into a more recent time period. What measures is my right hon. Friend looking to, to ensure that that increase in corporate investment in the shorter term is continued into the medium and longer term?

Answer from Rishi Sunak

I am glad my right hon. Friend recognises the importance of the super deduction. He is right that it will bring forward investment, but I believe it will also increase the amount of investment as well, given the attractiveness of doing so. What I would point him to are a couple of other announcements in the Budget. One is a consultation to reform our research and development tax credits regime, which we hope to conduct over the course of this year to make sure of support for investment in R&D in a way that reflects current R&D practices. Secondly, our freeports agenda contains enhanced capital allowances, and structures and building allowances, which last well beyond the period of the super deduction and will serve as an incentive for capital investment in those areas for years to come.

Partly answered

Not addressed: The question specifically asked about measures to sustain increased corporate investment after the short-term impact of the super deduction. While the answer mentioned additional incentives, it did not provide concrete commitments or specific details on how these will directly address sustaining post-short term investment.

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