Nadhim Zahawi is an Under-Secretary of State at the Department of Business, Energy and Industrial Strategy, and is MP for Stratford-Upon-Avon.
We are entering tough times. While the Government and our great NHS will work as hard as they can to save lives and protect the vulnerable, it’s clear that the impacts of this terrible virus on families, society and our economy in the coming weeks and months are going to be huge. What is equally clear is that we all have responsibilities to help our country weather this storm, and lessen the impact wherever it is possible to do so.
One priority, for all of us, has to be ensuring that viable businesses don’t collapse under the weight of this immense disruption. This may be secondary to preserving the health of our friends and families, but it is so important to ensure our country is able to quickly get back to where we were, once the outbreak is under control.
We know that the health of our citizens is directly linked to unemployment, and the overall strength of our economy. If we don’t take steps to support our businesses, then the long-term impact of this virus, both in economic terms and long-term health outcomes will deliver a second blow, and a lasting one.
I’m delighted that the Government and the Bank of England have been able to work together to ensure that the funding environment is right so that businesses can be helped through this period. The reduction in high street banks’ capitalisation requirements alone has given them the regulatory room to lend an additional £200 billion to companies.
Coupled with the rate cuts and the Bank’s Term Funding Scheme for SMEs, real firepower has been provided to cushion the blow to our economy and help companies out. The early signs are that the banks will make use of these changes, but we need to make sure their full power is brought to bear.
I’m glad the Bank of England will be closely monitoring this, and I know the Government will be bringing pressure too. Our banks should recognise both that these businesses would otherwise be stable, meaning they will be able to pay loans back once this crisis passes, and that the banks have a moral responsibility to wider society to keep our economy going.
As Minister of Business and Industry, I will be working every day with those most at risk from this crisis – whether in hospitality, tourism or travel. This Government stands ready to help in every way we can, to make sure no viable business goes under.
The proof of our determination is shown in the Chancellor’s Budget. He didn’t just promise that the NHS will get all the money it needs to ensure that our population, and our workers, stay as safe as possible – but extended Statutory Sick Pay for those who self-isolate or are caring for others, and announced a hardship fund for those individuals affected, an expansion of Business Rates relief, a Coronavirus Business Interruption Loan Scheme, a £2.2 billion grant scheme for small businesses and a dedicated helpline for those who need to defer their tax liabilities.
The cross-Government coordination to achieve these goals in the midst of a crisis has been impressive, and it will continue to be. Every relevant department is on the same page, and we have coordinated well with the Bank of England too, to ensure the regulatory frameworks for our plans are in place.
We know however long this pandemic lasts, the disruption to staffing, supply chain and markets is temporary. This is not about a systemic problem with how our economy is configured, and no company is to blame for what they’re going through. That is why it is right for the Government to work closely with our businesses while they’re vulnerable, to ensure that UK plc is back on its feet as soon as possible. After all these businesses, the employment they provide, and the tax revenues they generate couldn’t be more important in times like these.