The APPG on FBB welcomes the swift measures that the government has introduced in the wake of this unprecedented crisis. We also welcome the comments of Andrew Bailey, the Governor of the Bank of England, urging firms to pause and contact their bank or the government before laying off any staff. It is critical that the measures that are put in place are sustainable and do not delay the pain for firms. Businesses and the self-employed cannot shoulder this burden.
The package of £330bn of liquidity is welcome, but the APPG believes that this must be a grant, and that the government will need to step in and cover the wages of both employees and the self-employed who are unable to work as a result of this crisis. We must also ensure that the distribution of funds is done so in a streamlined and efficient way, and that new lenders are able to access the guarantee scheme as a matter of urgency.
No businesses should go into administration as a result of this, nor should anyone lose their home, particularly on the back of a personal guarantee. We recognise the incredible work that UK Finance is doing, and we have been impressed by the rapid response of the finance industry to mobilise funds and support business.
However, we are concerned that many businesses have had their loans sold to unregulated vulture funds, which means that they are unable to benefit from the relationship of a regulated lender and the measures that have been introduced. This underlines the need to prevent the sale of loan books to vulture funds, and the APPG calls for emergency legislation to extend the regulatory perimeter to ensure that the FCA has sufficient powers to ensure customers are treated fairly.
Further direct measures must be introduced to support the self-employed and workers in the gig economy who may not have a business banking relationship, and who will be unable to benefit from the current initiatives.