My Lords, the Government have introduced an unprecedented and comprehensive package of financial support, with a total fiscal response of close to £200 billion. The measures introduced, including government-backed loan guarantee schemes, grant funding and the Coronavirus Job Retention Scheme have been designed to be accessible to most businesses and sectors across the UK. We continue to keep this support under review, with further measures announced by the Chancellor that build on the significant support already available.
I totally agree with the noble Lord’s sentiments. As he is probably aware, we have launched a fundamental review of business rates, which will build on the changes that we are making to the system, worth more than £23 billion to businesses over the next five years.
My Lords, I welcome the job support schemes mentioned by the Minister but they are short-term solutions. They load many companies with debt, which limits their ability to invest in the skills, digitalisation, resilience and restructuring essential for our longer-term recovery. Will the Government set up a system that allows debt for equity, perhaps with progressive undertakings regarding corporate governance? Several schemes to do that have been put forward. Will the Government run with one?
The noble Lord is right to say that these schemes are essentially short-term but we are doing an awful lot to kick-start the economy. The Prime Minister has referred to the need to build back better and we are investing substantial sums. However, we of course keep these matters under constant review.
Lord Flight (Con)
What support are the Government considering providing to businesses set to face lower demand during the winter because of Covid-19 restrictions?
Our winter economy plan builds on the significant support available, with the extension of the coronavirus loan guarantee scheme until 30 November, the introduction of the Job Support Scheme from November and the extension of the Self-employment Income Support Scheme.
One-third of the self-employed, including sole directors of limited companies and the newly self-employed, are still completely excluded from the Self-employment Income Support Scheme. Why can the Government not devise help for them, especially the smallest, who are not in the tax-dodging territory of payment by dividends?
The noble Baroness makes an important point, but we have paid out more than £11 billion to more than 900,000 small businesses, and some small businesses that are ineligible for the SEISS grant extension may still be eligible for other elements of the scheme.
My Lords, will my noble friend look at councils that rent their properties out to small businesses, so that those businesses do not receive demands to pay their rent at this very difficult time? Leicester has been in a second lockdown since June, and small businesses are struggling. Will my noble friend also look at not re-adding VAT to PPE? I refer noble Lords to my interests as set out in the register.
My noble friend makes an important point, and I hope that councils, in particular, being part of the public sector, will be sympathetic to the plight of many small businesses at this time. I am sure that my noble friend will understand, however, that I cannot predict what the Chancellor might have to say, on VAT or any other matters, in his future Budgets.
My Lords, I declare my interests as set out in the register. I am the recipient of a very generous bounce-back loan: thank you very much indeed. It is very useful for a social business in difficult times, and I would like to see more of that coming down the line. But what concerns me is that the only way to help small businessmen is to get control of Covid—and what alarms me, and a lot of people in the country, is that there does not seem to be unity in Parliament. Is it too early or too late—or too wrong—to call for some kind of national Government to bring us together, so that we can dismantle the biggest crisis we have ever faced in the history of our country?
I am pleased that the noble Lord has been able to take advantage of one of our loan schemes. He made an interesting suggestion about a national Government—but I hope he will accept that that is way above my pay grade.
My Lords, in the time of Covid, small businesses are having to rely increasingly on internet platforms such as Amazon and Google to market their products. The digital services tax, which was supposed to ensure that these platforms pay their fair share, is being passed on to those small businesses, which cannot afford to pay the extra 2% they are being asked for. So will the Minister revisit the digital services tax, which is clearly not working as it was supposed to?
Again, the noble Baroness is tempting me to enter the territory of the Chancellor. We have been clear that the digital services tax is temporary, and businesses are liable to it only when they have worldwide revenues of more than £500 million, and more than £25 million of those revenues is derived from UK users. So it applies only to the very largest businesses.
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Covid-19: Small Businesses · Order Paper · Order Paper