Asked by: Julian Lewis (Conservative - New Forest East)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the risk to business owners' personal assets of banks, that supply loans as part of the Coronavirus Business Interruption Loan Scheme, requiring the owners of the applicant businesses to provide personal guarantees of the 20 per cent of the value of the loan which is not covered by the Government's guarantee on applicants' personal financial circumstances; and if he will make a statement.
Answered by Paul Scully
We have made no specific assessment.
We would expect a lender to follow its normal credit policy when assessing additional security generally. Personal guarantees of any form cannot be used in respect of any Coronavirus Large Business Interruption Loan Scheme (CLBILS) facilities up to £250,000. For facilities of £250,000 and over, claims on personal guarantees applied to the scheme facility cannot exceed 20% of losses on the scheme facility after all other recoveries have been applied. A Principal Private Residence cannot be taken as security to support a personal guarantee.
Asked by: Julian Lewis (Conservative - New Forest East)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will make it his policy that (a) businesses that have become profitable after recent restructuring should not be precluded from being granted emergency business loans on the basis of unprofitable trading figures prior to their restructuring and (b) those businesses should be assessed on their recent profitability on the same basis as start-up businesses of a similar size.
Answered by Paul Scully
The Coronavirus Business Interruption Loan Scheme (CBILS) provides support to small businesses which were viable before the Covid-19 outbreak but are experiencing temporary adverse impacts due to Coronavirus.
In order for a business to be eligible for the CBILs, it must be considered “viable” by the lender. The lender must consider that the applicant (or its business group) has a viable business proposition determined by the lender’s underwriting policies. Any concerns over its short-to-medium term business performance due to the uncertainty and impact of COVID-19 cannot be taken into account. The applicant must still satisfy the other eligibility criteria of the CBILS.
For smaller value facilities (e.g. those of £30,000 or below) in determining the eligibility of the applicant, lenders may decide to determine the applicant’s credit worthiness based on its internal credit scoring models.
Corresponding changes have been made to the eligibility criterion which previously required the applicant (or its business group) to have a business proposition that can reasonably be expected to enable it to meet its repayment obligations under a proposed facility.
The Coronavirus Business Interruption Loan Scheme cannot be used where an applicant was an “undertaking in difficulty” (UID) as at 31 December 2019. UID is defined to include businesses that have accumulated losses greater than half of their subscribed share capital as at 31 December 2019. In practice this means certain fast growth businesses may not be eligible for the CBILS (unless the business is less than three years old).
The requirement for an UID assessment is a requirement under the European Commission’s Temporary State Aid measures and a direct result of State Aid clearance. The need for UID checks to be carried out for CBILS facilities below £30k has already been removed by the British Business Bank on the basis that loans of this size are considered to involve a de minimis amount of State Aid. For facilities above £30k, lenders are required to gain comfort that an SME is not an UID, but this includes the option for lenders to rely on self-certification for facilities of any size (i.e. up to £5m).
Asked by: Julian Lewis (Conservative - New Forest East)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, if he will publish the Government's estimate of the cost to the UK economy of achieving the Government's target of net zero carbon emissions by 2050; whether the Government plans to maintain that target as Government policy (a) in the event that major greenhouse gas emitting countries also embark on large-scale carbon emission reductions and (b) irrespective of the steps to reduce carbon emissions other countries take; and what assessment he has made of the effect on climate change as a result of the UK achieving net zero carbon emissions under each of those two scenarios.
Answered by Kwasi Kwarteng
The UK has led the world as the first major economy to set a net zero 2050 target in law. Given the need for international action to address climate change, it is imperative that other countries similarly increase their ambition, and we are working to deliver that including through our hosting of COP26 this year. The UK will conduct a further assessment within 5 years to confirm that other countries are taking similarly ambitious action, multiplying the effect of the UK’s lead and ensuring that our industries do not face unfair competition.
As part of our commitment to net zero, and in line with the recommendation of the Committee on Climate Change, HM Treasury is carrying out a review of the costs of net zero. The Government will also publish full impact assessments as we legislate for future carbon budgets.
Asked by: Julian Lewis (Conservative - New Forest East)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what estimate he has made of the cost of phasing out the use of natural gas in domestic dwellings; what the planned timescale is for phasing out the use of natural gas in such dwellings; whether such phasing out will be carried out by the UK (a) only on a multilateral basis or (b) irrespective of what the governments of other countries plan to do; and what funding he plans for implementing that policy.
Answered by Kwasi Kwarteng
Meeting our net-zero target by 2050 will require virtually all heat in buildings to be decarbonised, and heat in industry to be reduced to close to zero carbon emissions. It will involve large-scale transformation and wide-ranging change to energy systems and markets. The way heating is supplied to over 28 million homes, businesses and industrial users will need to change. Given the diversity of heat demand in the United Kingdom, no one solution can provide the best option for everyone. We are currently exploring and testing the different approaches to heat decarbonisation, including heat networks, heat pumps, hydrogen and biogas and improving energy efficiency in new buildings. - a mix of technologies and customer options will need to be available to decarbonise heat at scale.
The Department is developing policies to deliver low carbon heating in the 2020s and meet our climate targets. We are planning to publish a Heat and Building Strategy later this year, which will set out the immediate actions we will take for reducing emissions from buildings. These include the deployment of energy efficiency measures and low carbon heating as part of an ambitious programme of work required to enable key strategic decisions on how we achieve the mass transition to low-carbon heat and set us on a path to decarbonising all homes and buildings.
Alongside the action we are taking at home, the UK remains committed to demonstrating global leadership in tackling climate change. The UK is already demonstrating practical leadership across all aspects of the fight to tackle climate change. We’ve decarbonised faster than any other G20 nation since 2000, and through our Clean Growth Strategy and annual reports have a comprehensive and publicly available strategy. The UK is among the largest contributors of climate finance, providing at least £5.8 billion between 2016 to 2020 to help developing countries mitigate and adapt to the impacts of climate change, reduce deforestation and support cleaner economic growth. At the UN Climate Action Summit in September 2019, the Prime Minister announced that the UK will double our International Climate Finance to at least £11.6 billion from 2021 to 2025 to drive clean and resilient growth in developing countries.