To ask Her Majesty's Government what assessment they have made of the recent report by Simply Business The impact of Covid-19 on UK small business, published on 9 June; and what assessment they have made of the finding that 81 per cent of small businesses do not feel they have received enough support from government.
28 June 2021
Throughout the pandemic, the Government has sought to protect people’s jobs and livelihoods while also supporting businesses and public services across the UK.
The Government put in place an economic package of support totalling £352 billion through the furlough and self-employed income support schemes, support for businesses through grants and loans, business rates and VAT relief.
At the Budget, the Chancellor announced a generous extension of economic support to reflect the easing of restrictions and enable the private sector to bounce back as quickly as possible. As the Chancellor put it in his Budget speech: “we’re going long, extending our support well beyond the end of the Roadmap to accommodate even the most cautious view about the time it might take to exit the restrictions”.
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.
At Budget, it was also announced that local authorities in England will receive a top-up worth a total of £425m to the Additional Restrictions Grant (ARG) fund. This, combined with the £1.6 billion previously allocated, means local authorities will have received over £2bn of discretionary grant funding to support businesses which are not eligible for Restart Grants but which are nonetheless experiencing a severe impact on their business due to public health restrictions. Nearly half of the £2bn is still with local authorities and yet to be allocated.
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 Self-Employment Income Support Scheme (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.
To further support small businesses to prosper after Covid, and improve their growth, productivity and resilience, the government is introducing the £520m Help to Grow programme. Announced at Spring Budget, Help to Grow will support over 100k SMEs to improve their management practices through world-class training delivering through UK’s leading business schools, and digital adoption through a new online platform and voucher. Eligible businesses will be able to get 50% off the costs of pre-approved software up to £5,000.
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.