Income tax (charge)

Debate between Neil Parish and Kevin Hollinrake

Tuesday 17th March 2020 Commons Chamber

[Kevin Hollinrake]

My right hon. Friend makes a very good point. One of the difficulties with the announcement last night was that it was not brought forward with a package of remediation or mitigation. I think that has come today, and clarity of that is very welcome.

We are going to need to pump hundreds of billions of pounds—not the odd billion, £5 billion or £10 billion—into the economy. I think the Chancellor has announced today £330 billion-worth of loans for the business sector, which is absolutely right, with £25,000 for businesses that are not insured for losses from business interruption, plus business rates holidays and three-month mortgage holidays, which is also absolutely right. If we talk about this in terms of hundreds of billions of pounds, the natural question is: where are we going to get that money from? This is a time when we have to set aside the fiscal rules. We will be paying for this anyway, in lost jobs and businesses, redundancy payments and reductions in tax receipts, if we do not put a huge fiscal stimulus into the system right now, so I welcome the measures from the Chancellor.

We need a few things in addition. We saw in 2008 that banks did not support businesses through that financial crisis—there is no doubt about it; in fact, quite the opposite. We need a commitment from the banks, UK Finance and the Treasury that they will continue to cash-flow businesses for as much as they need until they get through this period. To make sure that they do that, we should introduce emergency legislation to bring SME loans and financing commercial loans within the regulatory perimeter. That would mean that banks would have to have the oversight of the Financial Conduct Authority, and indeed of Members in this place, if they did not do the right thing through that period.

[Neil Parish]

We need to urge the banks to make sure that they offer commercial loans at very competitive rates. We do not want to see the banks trying to profit from the misery for all the businesses out there.

[Kevin Hollinrake]

I absolutely agree with that, and we must have oversight of that. We also have to make sure that all banks are included in these emergency loan schemes, such as business interruption loans. At the moment, some of the major banks, such as OakNorth, are not in that scheme, because they are not overseen by the British Business Bank. We need to see a widening of the scope of the scheme. We need to do a lot more for micro-businesses, the self-employed and sole traders. I have not seen a lot of support for those people at the moment.

The big thing I want to say is about how the support is provided. The £330 billion of support is great, but businesses will never again see the income lost, so in my view support cannot purely be through loans. We have combine loans—soft loans, interest-free loans or whatever—with putting grants into these businesses, otherwise we are just kicking the can down the road. We cannot simply say that businesses will have to pay, which is what we are saying if they are loans. We are going to have to go further, and that will put up the national debt by a significant degree: £100 billion, £200 billion or probably £300 billion. I am sure we will get the Opposition’s support for that. We have to see businesses through this time, because we will pay for it whatever happens.

I really welcome the measures from the Chancellor so far, and there are great measures again today. We must get through this. We have to give businesses confidence and to say to consumers: “You won’t lose your job. You won’t lose your business. We will get you through this.” That is what we have to say, and that way we will avoid the worst possible side of recession, we will save jobs and we will save businesses. It is the right thing to say, and I am absolutely confident that the Chancellor will do it.