Following the news that “fixed” a tax issue for James Dyson after being
texted directly and news that “pushed” his officials to try secure a loan for
Greensill following texts from , Labour is calling on the Government to stop giving
friends a priority pass – and instead address the £62 billion
debt burden facing businesses.
Labour has proposed that businesses be given more flexible
options to repay debt taken on to stay afloat during the Covid
crisis, including through student loan style arrangements linked
to profitability - that will see businesses only begin to repay
once they are out of the red and back on their feet.
The hospitality industry alone is still facing around £6 billion
in debt and one in 10 hospitality businesses has low or no
confidence it will be able to meet its current debt obligations.
The latest ‘Business Impact of Covid Survey’ revealed that 16 per
cent of hospitality businesses have low or no confidence they
will survive the next three months, and one in ten businesses of
all kinds across the UK is at moderate risk of insolvency.
The latest figures reveal the shadow of debt hanging over
businesses which Labour is calling on Government to ease through
flexible repayment options:
- Businesses across all sectors face a huge £62 billion debt
mountain.
- Accommodation and food service businesses, including pubs and
restaurants trying to get back on their feet after opening for
outdoor service, will face an uphill battle to return to
profitability without government action as they are in more than
£6 billion of debt.
- Arts, entertainment and recreation businesses are almost £1.5
billion in debt. While outdoor recreation businesses like zoos
and theme parks recently reopened, many more arts and
entertainment businesses are still legally closed.
- Retail is one of the most indebted sectors with around £11
billion in debt, threatening the future of our high streets.
MP, Labour’s Shadow Business Secretary
said:
“It’s time Ministers stood up for businesses in this country,
even if they don’t have the Prime Minister's mobile number. The
path to recovery will be long and difficult for many businesses,
and a big challenge facing these firms is the debt overhang built
up to keep themselves afloat in the crisis.
“The Government has refused to introduce the kind of flexibility
these businesses need, yet Ministers have acted quickly and
flexibly to address issues raised by their personal connections.
Rather than fast-tracking the concerns of their friends,
Ministers should be listening to businesses of all sizes across
the country struggling to deal with debt.
“Forcing businesses to repay debt while they are still in the red
makes no economic sense. The Government must give our businesses
the time to get back on their feet by linking repayments to
profits, or risk businesses going to the wall and taking their
debt with them – threatening many good businesses and inflicting
further damage on our high streets.”
Ends
Notes to editors
- Latest figures for Coronavirus Business Interruption Loans
(CBILs) and Bounce Back Loans (BBLs) show that businesses are
still £62,163,233,196 in debt. Source: British
Business Bank
- 15.8% of hospitality businesses surveyed have low or no
confidence they will survive the next three months.
- 12.2% of businesses of all kinds believe they are at moderate
risk of insolvency.
