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Portsmouth MP gets behind new COVID debt plan to boost business recovery

Stephen Morgan MP has backed the Official Opposition’s 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

It comes following the Portsmouth representative’s warning last week that 15,000 jobs could be at risk in Portsmouth unless the Chancellor acts.

Stephen Morgan MP said:

Businesses across our city have worked incredibly hard to keep going during this crisis and I know how much many have sacrificed to just adapt.

“That’s why many businesses in Portsmouth will need the breathing room when we exit lockdown to be allowed to be able to grow again before they are asked to repay their debts.

“It is economically illiterate to demand Covid loan repayments next month when it would risk crushing businesses and our recovery, which is why I fully support these plans to allow businesses to start repayments when they are able to.”

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.

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.

“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.”