Banks must “play their part” to help businesses during coronavirus outbreak

Shadow Business Minister Bill Esterson has called for banks that were bailed out by the taxpayer to “play their part” in supporting businesses through the coronavirus pandemic.

At Prime Minister’s Questions in the House of Commons last Wednesday, the MP for Sefton Central said businesses were telling him that banks were shoring up their balance sheets ahead of an expected economic downturn, at the expense of the businesses who as customers the banks should be there to support.

Following the announcement in Parliament that statutory sick pay would be paid from day one to anyone diagnosed with the coronavirus, and that help would be available to the self-employed who self-isolate due to the virus but are not eligible for statutory sick pay, Mr Esterson told the Prime Minister Boris Johnson: “It is vital that the funds announced this morning are distributed effectively to the businesses and self-employed people affected by coronavirus, but the banks must fulfil their responsibilities as well. Businesses are telling me that some banks are shoring up their balance sheets at the expense of business customers and their workforce. Will the Prime Minister make sure that banks that were bailed out by the taxpayer now play their part in supporting businesses and their workers in their hour of need?”

The Prime Minster responded: “The honourable gentleman raises an important point. He will have seen what the Governor of the Bank of England has done today to the cost of borrowing overall. My right honourable Friend the Chancellor will be meeting the banks continually to ensure that they look after the interests of all our people.”

Following PMQs, Mr Esterson said: “The government must make sure that all businesses who need help to survive the economic impact of coronavirus receive that help as easily. Businesses and their staff will need help over the next few months to pay bills and put food on the table. The chancellor has announced a new fund for businesses to be administered by the banks. It is vital that as many businesses as possible and people who are self-employed find out how to apply for the loans and that the government guarantees the loans. I was concerned that the chancellor only committed to underwriting 80% of the loans. That suggests some will miss out, causing hardship. The details of this support must be cleared up and quickly.”