Covid-19: Small Businesses in Streatham

Debate between Florence Eshalomi and Bell Ribeiro-Addy

Tuesday 18th January 2022 Westminster Hall

[Bell Ribeiro-Addy]

The hon. Member is absolutely right. I will make that point later. We have to do everything we can to support our small businesses.

Examples of business closures in Streatham include acclaimed live music and hospitality venue the Hideaway, where I and others across the city have spent many a good night out. This has been a major loss for the area—an independent venue at the heart of the community that for many years has been growing local and international music and comedy. Due to the number of lockdowns, the slow response for those in the night-time economy, and social distancing requirements, its business model was untenable. We also saw the closure of Fal Patel’s local convenience shop in Clapham Park and E & A Wates furniture shop on Mitcham Lane, which once undertook restoration work for the parliamentary estate during its 120-year history.

Many start-ups that would have grown to become high street businesses were unable to access any grants due to not having a high street premises, which has impacted the long-term economic growth of the area as our cafés, co-working spaces and performance spaces, and the buoyancy of our local business hubs, rely on the small enterprises of the daytime economy.

These are only some of the publicised closures within the constituency. It is fair to say that the demise of small businesses is so vast that we all personally know of someone in our local community who has lost out on their business during the pandemic; maybe it was a local restaurant, an appliance shop, a corner shop, a pub, a bar, a butcher, a baker, a greengrocer, a hairdresser—the list goes on.

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

It is a pleasure to serve under your chairmanship, Ms McVey. My hon. Friend is making a really good speech, outlining the many issues faced by businesses in Streatham. In my neighbouring constituency in Lambeth, we face a number of similar issues. She outlined that many businesses missed out. A number of those businesses also missed out on loans offered by the Government. To see the Government want to wipe away £4.3 billion of loans given to fraudsters is another kick in the teeth to those businesses that folded because they were not eligible for any support. Does my hon. Friend think that the Government should rethink that proposal?

[Bell Ribeiro-Addy]

I thank my hon. Friend for her intervention. She is absolutely right. The Government need to rethink that proposal because it is leading to the closure of high street businesses and small businesses. Let us not forget that, when these 50 businesses a day shut up shop across the country, that is 50 people a day, along with their families, who depend on their business as a primary source of income, now out of work. It is not only the economic value that is disappearing from our high streets; the wider cultural contributions that these businesses make to the community disappear too, all because Government support was inadequate.

Supporting business in my constituency and my hon. Friend’s constituency are Brixton business improvement district, This is Clapham BID and the mighty InStreatham BID headed by Louise Abbotts. Our BIDs have worked tirelessly over the past few years against a tide of transport issues and the growth of online sales to keep people going out and shopping locally. We cannot forget the impact this has had on their budgets and capability to continue sustaining our local businesses in the long term. Even before the pandemic began, small businesses found themselves on an uneven playing field, and the original form of Government relief saddled small businesses with further debt, offering them loans at high interest rates through commercial and retail lenders or effectively deferring their rent payments. At the start of the pandemic, these no-strings-attached loans were offered to companies registered in tax havens, yet uptake on small business loans remained low. The 2017 business rates revaluation meant that the average small shop would see a £3,663 hike over the next five years while supermarket chains would see 6% reductions. It cannot be fair that some independent businesses, such as small cafés, contribute to the taxman at a higher effective rate than big corporations and high street names. Business rates are a 20th-century system of taxation, yet we are already over a fifth of the way into this century. Four out of five retailers say they may have to close some locations without an urgent easing of the burden of business rates. Retail pays over the odds at the moment; it accounts for a quarter of the business rates bill while representing a mere 10% of economic output. The current system does not work for our local public services, as the funding of local councils is linked to rates revenue in an area, rather than local needs. We need a system that is fit for the 21st century.

There is an emerging economic consensus that the state has a role to play in helping the economy to function properly, although it is a role that the party of government seem reluctant to accept. In the early days of the pandemic I called on the Treasury to impose financial conditions on loans for big companies asking for state support. It is galling that it ignored this call, and instead gave no-strings support to companies that were registered in tax havens, paid out huge dividends to shareholders and paid CEOs and senior executives ridiculous compensation packages, in some cases while laying off their rank and file workforce—all while small businesses have languished.

While businesses were grateful for the little support they received during the covid-19 pandemic, it simply was not enough. More substantial support is desperately needed to fight the onslaught of rising costs in food, inflation, energy and the major recruitment crisis that Brexit and covid have created for business communities. The Government’s own figures suggest that we will see our household economy shrink by £1,250 per year because of their trade deal with the EU. It will not be the Amazons of the world or big Government contractors that feel this loss—it will be ordinary people and small independent businesses.

Figures that we have seen show that smaller businesses lack the infrastructure to respond to the challenges that Brexit has presented compared with larger companies. A recent survey by the British Chambers of Commerce found that half of small businesses are finding it harder to export to the EU. Due to the new complexities of the trading relationship, the Government set up a small and medium-enterprise fund offering grants to help our businesses overcome those challenges. However, this fund has rightfully been criticised for being too complex. At the end of last year, we saw a report from City A.M. on information from the cloud accounting provider FreeAgent that found over half of businesses experienced shrinking customer bases, while 43% were impacted by supply chain issues. Meanwhile, two in five SMEs said that their costs had increased since Brexit, particularly to import goods, while 16% suffered a shortage of talent as they are finding it harder to recruit staff. Nearly one in five SMEs have considered closing their business during Brexit and one in five did not think their business would survive Brexit.

The Government have been found wanting yet again; instead of looking forward and trying to alleviate these situations we are instead told to keep calm and carry on, as if Brexit has not impacted us. We can clearly see that it has. The Chancellor’s £1-billion hospitality support package has come too late. It is woefully short of what is needed to ensure the survival of our small businesses and was woefully slow to start, coming in on 22 December when plan B restrictions had already been in place for 19 days. It is estimated that during this period of no support, £4 billion in revenue was lost from the hospitality and leisure sector. When cases rose and the demand on our high streets slumped, small businesses were not getting the support they needed, and workers were being sent home without pay and their shifts cancelled.

During the festive period, local authorities stated that the detailed guidance for the grants was only issued on 30 December and updated on 12 January, when businesses were desperate for support to meet various costs at the end of last year. Both the Federation of Small Businesses and UK Hospitality criticised the Chancellor’s support package for being far too slow to help the most vulnerable hospitality businesses during the omicron surge. It is ridiculous for the Government to put March as the timeframe for the grants to be paid when businesses needed this support months ago.

My local business non-profit organisation, InStreatham BID, has stated:

“The grants are valued but won’t cover the cost of wage bills and food waste for that period of November and December which is usually what covers the costs for hospitality in the new year when things are naturally quieter.”

We should not have to drag the Government into supporting workers and businesses because Ministers are too preoccupied with who gets the top job to focus on the crisis at hand. Proper support packages should be announced alongside public health measures as and when they are needed. Streatham BID said:

“A £6,000 grant in no way compensates for the dramatic loss in trading hospitality businesses in particular are facing, and more important they can’t wait weeks for financial aid.”

This incoherence is exactly why small businesses are increasingly frustrated and want clearer and quicker decision making from this Government. Because the new omicron variant has hindered growth in retail, hospitality and leisure, a reduction in VAT or retaining the 5% VAT rate for hospitality is seriously needed. A business rates holiday applied until December 2022 and a reform of business taxation to level the playing field would be most helpful to businesses over the next 12 months.

We could also put in place flexible and targeted furlough throughout the ongoing pandemic—not just until the end of September—to help businesses to retain their staff. It would also be incredibly helpful during this period when many businesses have just recruited full staffing levels to sustain a busy Christmas period, only to be hit with cancellations in the region of 40% to 50% because restrictions were reintroduced. The TUC has stated that furlough needs to cover at least 80% of workers’ wages and that the Government must guarantee that no one who is furloughed is paid less than the minimum wage. That is exactly the type of furlough we need.

We also need decent sick pay that is paid at the real living wage and is available to everyone so that workers can afford to self-isolate when they need to. It has been insisted on by many hon. Members across the House over the past couple of years, but it is still being played around with by the Government as a short-term concession during a crisis, not a long-term employment right available in law.

The Government need to do more to step up and deliver the necessary support measures to the businesses of Streatham and those across the country and ensure the democratic, cultural and economic benefits of our small businesses. If the Government claim to be the party of business, why they are presiding over the decimation of our small businesses, which make up 99% of the total UK business population? It seems the unfortunate truth about coronavirus business measures is that the smaller the business, the smaller the Government’s concern for its survival.

The economic case for stronger Government intervention could not be clearer and the stakes could not be higher. The cost of bankrupt businesses, unemployed workers and lost tax revenue far outweighs the cost of acting now. Allowing small businesses to go bust is not only bad policy—risking a deeper recession and job losses—but deeply damaging to our local communities, which makes it all the more important for the Government to learn from mistakes so far and prioritise the survival of our small businesses.

LGBTQ+ Afghan Refugees

Debate between Florence Eshalomi and Bell Ribeiro-Addy

Tuesday 21st September 2021 Westminster Hall

[Bell Ribeiro-Addy]

Absolutely. I am hoping for that explanation at the end of the debate, because it is a disgrace that the Government, having said that, would give themselves credit for the inadequate support they continue to give to LGBTQ+ Afghans.

To make matters worse, the Government’s Nationality and Borders Bill will drastically limit the ability of those facing persecution to apply for asylum in the UK. It will only guarantee temporary protection for refugees travelling via a third country. Inhumane offshore accommodation conditions; raising the standard required for someone to prove they are LGBTQ+; not allowing adequate time for vulnerable LGBTQ+ applicants to present themselves to immigration officials: all of that is in this damning Bill, which is another indictment of the Government’s cruel and inhumane immigration system.

I want to highlight a letter to the Prime Minister from my local borough of Lambeth which states that

“the environment for LGBTQ+ people in Afghanistan is harsher at present than almost anywhere else in the world.”

It goes on to say:

“The actions you take to secure the human rights—and indeed the lives—of LGBTQ+ Afghans will speak volumes…I call on your Government to act quickly to protect the lives of all LGBTQ+ people in—and displaced from—Afghanistan.”

[Florence Eshalomi (Vauxhall) (Lab/Co-op)]

I thank my hon. Friend for highlighting the work that is taking place in Lambeth. I am her constituency neighbour, and only yesterday we opened the first LGBT+ retirement home in my Lambeth constituency. Can the Minister explain how we will continue to support LGBT people in this country and people who want to seek safe haven here?

[Bell Ribeiro-Addy]

I thank my constituency neighbour for her intervention, and I am sure she joins me in fully supporting the calls of the local council in our neighbouring constituencies to secure the protection of LGBTQ+ Afghans. What is left for this Government to do is heed that message of compassionate leadership and act quickly, act responsibly, and above all honour this country’s moral and legal obligations to some of the most vulnerable people in the world.