Labour today sets out new plans to back British businesses, as it calls on the Government to help ease the Covid-debt burden faced by firms across the country.
Calling for the establishment of a British Business Recovery Agency, Shadow Chancellor Anneliese Dodds says Labour’s priority is to “help businesses get back on their feet, secure our economy and get Britain on the road to recovery.”
British business is currently weighed down by £71 billion of Covid debt through Government-backed loans during the crisis – with the Chancellor encouraging banks to begin asking for repayments in March. New analysis by Labour reveals that 850,000 business are at risk of closure in the next three months, putting 2.4 million jobs at risk.
Labour’s plan would ease the debt burden on business, secure the economy and help British business to rebuild by:
- Converting the Bounce Back Loans (BBLs) scheme into a ‘student-loan style’ arrangement, so that businesses only have to start repayments when they are making money.
- Creating a new British Business Recovery Agency that would manage the Coronavirus Business Interruption Loans Scheme (CBILs) and Coronavirus Large Business Interruption Loan Scheme (CBILs) in order to create terms that secure the future of businesses, including employee ownership, preference shares and subordinated debt
Announcing the plans, Shadow Chancellor Anneliese Dodds MP warns that Chancellor Rishi Sunak’s approach risks “crushing British business and the recovery” under billions of pounds of unsustainable debt, leaving many cash-strapped and pushing others towards bankruptcy.
The Federation of Small Businesses (FSB) warned in December that the debt overhang could lead to tens if not hundreds of thousands of corporate failures in the first quarter of this year, with 40 per cent of businesses reporting their debt as unmanageable.
The Office for Budget Responsibility (OBR) has also said that as much as £30 billion of public money will have to be written off if the Chancellor presses ahead with his current plans.
Dodds contrasts Labour’s approach with the Government’s sticking-plaster solutions. Her business-backing plan comes after a week in which Labour has called for business rate holidays and VAT cuts to be extended and for a smarter furlough scheme to last until necessary health restrictions are lifted. At Prime Minister’s Questions, Labour leader Keir Starmer MP pushed the Prime Minister repeatedly on support for business ahead of the Budget.
Anneliese Dodds MP, Labour’s Shadow Chancellor, said: “Labour would rebuild Britain by backing businesses and supporting families through the crisis and then putting Britain on the path to growth.
“The Chancellor simply offers a return to the same, old policies that left the foundations of Britain’s economy weakened before the crisis. His economically illiterate plans to demand repayments next month risk crushing British business and our recovery under a mountain of debt. He would leave taxpayers on the hook for billions and other firms cash-strapped for years – leading to less investment and fewer jobs.
“Instead of pushing business to the brink, Labour’s plans would protect small firms and give larger ones flexible options to manage debt. We would help businesses get back on their feet, secure our economy and get Britain on the road to recovery.”