A GROUP of MPs has said the £330 billion of liquidity announced by the Chancellor to mitigate the economic impact of the coronavirus pandemic should be in the form of a grant.
The All-Party Parliamentary Group (APPG) on Fair Business Banking said the Government will have to step in and cover the wages of employees and the self-employed who cannot work as a result of the crisis.
While the group welcomed the measures the Government had introduced to cope with what it called “this unprecedented crisis”, it said businesses could not shoulder the burden.
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“It is critical that the measures that are put in place are sustainable and do not delay the pain for firms,” said the APPG. 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.
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“This underlines the need to prevent the sale of loan books to vulture funds. The APPG calls for emergency legislation to extend the regulatory perimeter to ensure that the FCA [Financial Conduct Authority] has sufficient powers to ensure customers are treated fairly.”
Kevin Hollinrake, who chairs the APPG, and Seema Malhotra, co-chair of the APPG on Mortgage Prisoners, said it was clear that “huge scale state intervention” is needed to minimise the pandemic’s human and economic damage.
They called on the Government to provide a “comprehensive support package” for smaller firms, the self-employed and gig economy workers “unable to quickly and easily access finance”.
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