The UK government has been urged to go further in its support for struggling businesses as a result of the coronavirus pandemic, with calls for its Business Interruption Loan Scheme to be turned from a loan into a grant.
The move would remove the risk of debt and help companies stay in business, after a recent poll by the Scottish Chambers of Commerce found that without further support nearly half of Scottish firms surveyed will run out of cash within three months.
Sir George Mathewson, the former Royal Bank of Scotland boss, also argued that the UK government should write off government loans, warning that that “we need to ensure that all our businesses in Scotland survive this crisis, and that will not happen by giving them loans.”
Commenting after raising the issue with the UK government in the House of Commons this afternoon, the SNP’s Shadow BEIS spokesperson Drew Hendry MP (pictured) said:
“Our economy and businesses have been hit hard by this pandemic, and while the support brought forward by the UK government has been welcome, it’s vital that it goes further to address the gaps and prevent businesses from going under.
“A recent poll by the Scottish Chambers of Commerce (SCC) found 48% of Scottish firms will run out of cash within three months, with 64% identifying shortcoming in the UK government support schemes.
“Many businesses are struggling to stay afloat during these unprecedented and challenging times, and it’s clear that loans will not be the answer – with the risk of unmanageable debt down the line.
“With recent statistics revealing only a small fraction of loans for UK businesses who have formally applied for government-backed loans have been successful, it’s also clear that support is not reaching firms fast enough.
“I urge the UK government to explore measures to turn its Business Interruption Loan Scheme into grants – writing off debt for businesses facing increased hardship and to ensure their long-term survival and success.”