Recommendation 19

HM Government Acknowledged

61. As more of the population is vaccinated, the Government must shift its policy- making approach from reacting to rapidly changing circumstances towards long-term considerations. In his Budget, the Chancellor must give businesses and workers the security and certainty they need by extending the existing package of measures and committing to phasing them out only when the easing of health restrictions allows. To address the issue of debt affordability for businesses, the Government should also consider whether converting certain existing businesses’ COVID loan debt into grants, could provide an appropriate long-term solution. We also recommend that the Government sets out a clear strategy for business recovery, which addresses the challenges faced by many sectors which will not be able to re-open as early as others. (Paragraph 64) 62. As the Prime Minister and the Chancellor of the Exchequer have said previously, the Government is committed to do whatever it takes to support our country through the Covid-19 pandemic. The Government’s package of support in response to coronavirus has evolved with the path of the virus, and will continue to do so. 63. However, to ensure that people and businesses have time to plan as the economy reopens in line with the easing of restrictions, schemes such as CJRS and SEISS, support for businesses through grants and loans, business rates and VAT relief are continuing beyond the end of the Roadmap. 64. The UK’s vaccination programme has been incredibly successful to date. The UK was the first country in the world to procure, authorise and start a vaccination programme using the Pfizer/BioNTech vaccine, and shortly followed with the Oxford/AstraZeneca vaccine. Due to our swift and decisive action, there has been a regular and steady supply of vaccine doses arriving into the UK since early December, which has allowed us to successfully meet our target of offering a first vaccine dose to every person within priority groups 1–9, 3 days before our 15 April target. The continued vaccination of the most vulnerable groups will allow for life and work to start returning to normal. 65. The Government has always been clear that the Covid loans are to be repaid, and that debt would not be the right answer for all businesses. That is why our varied package of support also includes grants, furlough and job support schemes, deferring tax bills and business rates holiday. We have already taken substantial action to provide businesses in receipt of a Bounce Back Loan more time and greater flexibility for their repayments through “Pay As You Grow”, giving them the option to: • Extend the length of the loan from six years to ten—reducing their monthly repayments by almost half. • Make interest-only payments for six months, with the option to use this up to three times throughout the loan. • Enjoy a further six-month repayment holiday—businesses who take up this option will therefore not make any repayments for 18 months after they took out the loan. 66. For the Coronavirus Business Interruption Loan Scheme (CBILS), we have amended the rules to allow lenders to extend loan terms from six to a maximum of ten years at their discretion and where they judge that this will help borrowers repay their loan, helping businesses to reduce monthly repayments. Extensions will be limited to those borrowers that lenders assess are in difficulty and will benefit from the extension, and only for the duration required, meaning that lenders may offer an extension to 7 years, for example, rather than the maximum 10 years allowed. 67. For any business looking to refinance or restructure their debt, the Government’s position remains that the private sector should be the first port of call. Furthermore, accredited lenders, not the Government, are best placed to support borrowers to repay government-guaranteed loans, utilising the wide range of tools at their disposal described above. Any businesses that are concerned about their ability to repay their loans should discuss their options with their lender. 68. Given the current climate, it is right that we focus on supporting individuals and businesses through the pandemic and ensure we deliver our ambitious vaccination programme. However, alongside our focus on the immediate Covid-19 challenge, we must also consider how we build on our short-term recovery work to support businesses in the longer-term. 69. The coming decade poses new challenges for us as a country. We have committed to the transition to net zero, left the European Union, and redoubled our commitment to levelling up—all against a backdrop of the Covid-19 pandemic, which has caused the biggest economic decline in our history. It is therefore right that we think about how we address these challenges as we build back better towards an even more prosperous future. That is why Government published ‘Build Back Better: our plan for growth’ alongside the Spring Budget 2021 to detail our plan for longer term eco