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Small Businesses: Coronavirus

Question for Treasury

UIN HL903, tabled on 8 June 2021

To ask Her Majesty's Government what steps they are taking to reassure small businesses that financial support will be made available in the case of future COVID-19 restrictions being introduced.

Answered on

21 June 2021

Throughout this pandemic, our Plan For Jobs has supported jobs and businesses with over £400 billion of economic support – one of the most generous and comprehensive packages in the world.

At Budget the Government deliberately went long and erred on the side of generosity – specifically to accommodate short delays to the roadmap. Most of the Government’s Covid support schemes do not end until September or after, in order to provide continuity and certainty for businesses and families.

The Recovery Loan Scheme (RLS) announced at Budget 2021 ensures lenders continue to have the confidence to lend, ensuring viable businesses, including small businesses, continue to have access to Government-backed finance needed throughout 2021. The scheme launched on 6 April 2021, following the closure of the emergency schemes to new loan applications on 31 March 2021, and will run until 31 December 2021. The scheme operates UK-wide, providing an 80% guarantee to lenders for term loans, overdrafts, and invoice and asset finance.

The Coronavirus Job Retention Scheme (CJRS) was introduced to help employers whose operations have been severely affected by coronavirus to retain their employees and protect the UK economy. All businesses across the UK can access the scheme, with employees receiving 80% of their usual salary for hours not worked, up to a maximum of £2,500 per month. At Budget the government extended the CJRS until the end of September 2021, to support businesses and employees through the next stage of the pandemic. The economy now is in a stronger position than it was last autumn, when businesses also contributed up to 20 per cent of wage costs.

In line with the extension to the CJRS, the government announced at Budget 2021 that the SEISS will continue until September, with a fourth and a final fifth grant. This provides certainty to business as the economy reopens and means the SEISS will continue to be one of the most generous schemes for the self-employed in the world.

As restrictions have been lifted, it is right that we ask employers to contribute more to strike the balance between supporting the economy as it opens up, continuing to provide support and protect incomes, and ensuring incentives are in place to get people back to work.

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