The impact of Coronavirus on businesses and workers: interim pre-Budget report: Government Response to the Committee’s Second Report of Session 2019–21

First Special Report

On 26 February 2021, the Business, Energy and Industrial Strategy Committee published its Second Report of Session 2019–21, The impact of Coronavirus on businesses and workers: interim pre-Budge report (HC 1264). The Government’s response was received via correspondence on 23 April 2021. The Government’s response is appended below. The Committee’s recommendations are in bold type, the Government response is in plain type.

Government Response

Letter from the Minister for Small Business, Consumers & Labour Markets, 23 April 2021

1.Thank you for advanced sight of the interim report linked to the Business, Energy and Industrial Strategy Committee’s inquiry on the Impact of Coronavirus on Business and Workers (the Inquiry).

2.We recognise the coronavirus pandemic has created extremely challenging circumstances for businesses and workers. Throughout this pandemic, my Department has worked in close collaboration with the rest of Government in the creation and maintenance of an unprecedented package of support measures for business. The Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), and Bounce Back Loan Scheme (BBLS) have provided vital support to businesses throughout the pandemic. As of 21 March, over 1.6 million facilities have been approved, totalling over £75 billion in loans.

3.We also recognise the continued and sustained impact felt by industries facing prolonged business closures and restrictions, and we have listened to calls for clarity. On 22 February, the Government published its roadmap, setting out a step-by-step plan to ease restrictions in England. Across four steps, the roadmap sets out the sequencing and indicative timings for easing restrictions. The roadmap offers a sustainable exit from lockdown restrictions, with clear tests and data-driven indicators to guide decisions at every stage. This phased approach, combined with our commitment to giving businesses a seven-day notice period, will provide the necessary clarity for businesses and enable them to plan ahead with certainty.

4.Since the publication of this report, the Chancellor of the Exchequer has presented the Spring Budget 2021 to Parliament on 3 March. The Budget sets out the next phase of the Government’s response, providing an additional £65 billion of support in 2020–21 and 2021–22 for people, public services, and businesses most affected by the pandemic. Taking into account previous support provided, this brings the total government support for the economy during the pandemic to £352bn (or around 17% of 2020 GDP).

5.The Chancellor also announced that from 1 April, one-off Restart Grants of up to £6,000 for non-essential retail and up £18,000 for hospitality, leisure, personal care and accommodation businesses would be available to help them to reopen as Covid-19 restrictions are relaxed. With the new Restart Grant scheme, the Government will have provided a total of £25bn on business grants.

6.Businesses that were required by law to close during the national lockdown, such as hospitality, personal care and non-essential retail, had access to grants of up to the equivalent of £4,500 per 6 week period of closure via the Local Restrictions Support Grant (Closed) which was available until 31 March 2021. Businesses that were required to close at the beginning of national restrictions on 5 January were also eligible for a one-off payment of up to £9,000 under the Closed Businesses Lockdown Payment.

7.The Additional Restrictions Grant (ARG) continues to enable local authorities to put in place discretionary business support, including businesses in supply chains impacted by restrictions but ineligible for other measures, and those businesses that fall outside the business rates system such as market traders. £425m will be made available via ARG, meaning that more than £2bn has been made available to local authorities to be distributed to businesses across England since November 2020.

8.On 12 April, significant parts of the indoor economy and further outdoor settings were able to reopen under Step 2 of the Government’s four-step roadmap following their closure under national lockdown. This included outdoor hospitality, outdoor attractions, non-essential retail, indoor leisure facilities and personal care premises. The reopening was based on an assessment of the four tests that were set out in the Roadmap:

i)The vaccine deployment continues successfully.

ii)Evidence shows vaccines are sufficiently effective in reducing hospitalisations and deaths in those vaccinated.

iii)Infection rates do not risk a surge in hospitalisations which would put unsustainable pressure on the NHS.

iv)Assessment of the risks is not fundamentally changed by new Variants of Concern.

9.Ahead of Step 3, we are working closely with the rest of the Government and continually monitoring the results of the four tests to ensure we can cautiously reopen more of the economy as soon as is safe to do so. As part of Step 3, most businesses will be able to reopen, including indoor hospitality and certain indoor venues, provided they adhere to Covid-Secure guidance.

10.Prior to Step 4, the Government will also complete a review of social distancing and other long-term measures that have been put in place to reduce transmission. This will inform decisions on the timing and circumstances under which the rules on 2 meter social distancing (or 1 metre plus mitigations where this is not possible), the wearing of face coverings and other protective measures may be lifted. This will also inform guidance on working from home, which should continue wherever possible until this review is complete.

11.The Government will continue to support individuals and businesses during the pandemic, and we are keen to build on our short-term recovery to support longer term economic growth. To this end, the Government will be transitioning to a new, more focused and ambitious plan for growth, drawing on the lessons learned from the 2017 Industrial Strategy, to build back better as we recover from the coronavirus pandemic.

12.The Prime Minister will also be chairing the new National Economy and Recovery Taskforce which will be a key vehicle to shape the Government’s approach to long-term economic recovery; focussing on catalysing growth, levelling-up across the UK and driving public service performance and delivery.

13.My Department will continue to work closely with the rest of the Government to review current measures, as we continue to support businesses and safely reopen the entire economy as soon as possible.

14.Please find attached a full response from Officials responding to specific points raised in the report.

Paul Scully MP

Published: 19 May 2021 Site information    Accessibility statement