Following a new report, the SNP has renewed calls for the Treasury to protect thousands of jobs and businesses from going under by turning its Bounce Back Loan Scheme (BBLS) into grants or equity – as well as writing off repayments for struggling firms.
It comes after the National Audit Office (NAO) highlighted in its report that the scheme succeeded in initially supporting small businesses, but the Treasury faces a potential loss of £15 billion to £26 billion through businesses not being able to repay the loans and fraud.
Drew Hendry MP (pictured), the SNP’s business spokesperson, warned that the loan scheme in its current form could force thousands of small businesses to close their doors for good, due to taking on unmanageable debt and being unable to repay loans due to the economic cost of the coronavirus crisis.
CityUK, the financial services body, has said that £35 billion of the debt is unsustainable and posing “a real threat to UK jobs” – with around 750,000 small and medium-sized businesses and three million jobs at risk.
Commenting, Drew Hendry MP said:
“The Bounceback Loan Scheme was welcome and is necessary, however it’s clear that more needs to be done by the UK government to address the severe financial pressure burdening small and medium-sized businesses in the long run.
“With the growing threat of further hardship and unmanageable levels of debt facing hundreds of thousands of businesses – potentially costing around three million jobs – it’s vital that Rishi Sunak heeds our calls and takes urgent action to protect firms that are on the brink.
“Extending the repayment period is not enough.
“The Scottish Government recently announced it would allocate an extra £190 million for business and the arts, taking the total committed so far to dealing with the pandemic to 6.5 billion – but if the UK government don’t turn Bounce Back loans into grants or equity, the Scottish Government will essentially be trying to mitigate disaster with one hand tied behind its back.
“The SNP has repeatedly called on the Treasury to do this to protect small and medium-sized businesses and ensure their long-term survival – as well as extend the furlough scheme.
“If it does not, many businesses will be left with no choice but to pull down their shutters and lay people off.
“The SNP will continue to press for the powers and serious investment that other independent countries are already using to safeguard jobs, protect businesses and kickstart their economies.”