IRRV Alert - week ending 2nd October 2020
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Chair writes to Secretary of State on British Business Bank and Covid-19 loans (1 October 2020)
Chair writes to Secretary of State on British Business Bank and Covid-19 loans
1 October 2020
Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee, has written today to Alok Sharma, Secretary of State for Business, Energy and Industrial Strategy (DBEIS) raising a series of concerns regarding Bounce Back Business Loans (BBLS), the Future Fund, and the Coronavirus Business Interruption Loan Scheme (CBILS).
- Letter from Chair to the Secretary of State on the British Business Bank Reservation Notices
- Letter from the Chair to the Secretary of State on the extension of CBILS and CLBILS to companies owned by Private Equity Groups
- Business, Energy and Industrial Strategy Committee
The Chair’s letter on BBLS and the Future Fund follows the publication on Wednesday of two Reservation Notices, issued in May, by the British Business Bank (BBB) in relation to these loan schemes. The correspondence asks what action the Department has taken to address the concerns around fraud and the impact on competition which were raised in the BBB notices.
The second letter, on CBILS, asks the Secretary of State about what conditionalities are being sought from private equity firms for their receipt of these tax-payer backed loans. This follows an announcement on Friday from the BBB that their new guidance will allow more flexibility about whether a business is deemed an “undertaking in difficulty” in relation to CBILS and coronavirus large business interruption loan scheme (CLBILS).
Chair's comments
Darren Jones, Chair of the Business, Energy and Industrial Strategy Committee,
“The publication yesterday of the British Business Bank’s Reservation Notices shows a host of concerns about the BBLS and Future Fund were raised with the Secretary of State before they were launched. Every £1 of borrowing must be spent wisely and it’s crucial Ministers come forward and outline what steps they have taken to address the serious concerns about fraud, value for money, and the impact of BBLS on competition in the small business lending market.”
“The British Business Bank’s new guidance on CBILS and CLBILS raises questions about the tax-payer propping up companies owned by private equity firms and whether the Government is setting conditions for this support, in terms of commitments on jobs and long-term support. Supporting jobs is vital but if private equity firms are in receipt of these public funds then it’s important they play their part in helping the UK economy and businesses get through the pandemic”.