Conservatives set to lose 2 million voters despite recovery loan scheme extension
The Government has extended a support scheme offering government-backed loans to small businesses for a further two years. Yet, the Tories are expected to still lose up to 2 million small business owner voters at the next general election because they were excluded from COVID financial support packages.
This growing number of once Tory supporters are now seriously considering turning their back on the political party they once believed to be pro-business, according to a poll by Forgotten Ltd., a non-political lobby group calling for fairness and equality for small limited companies excluded by the UK government’s Coronavirus financial support packages.
A support scheme offering Government-backed loans to small businesses will be extended for a further two years, Business Secretary Kwasi Kwarteng has announced.
- Scheme supporting access to finance for small businesses extended for two years
- The principle behind the extended Recovery Loan Scheme remains unchanged
- The government will underwrite 70% of lender liabilities, at the individual borrower level, in return for a lender fee
- Lenders may now require a personal guarantee from the borrower, in line with standard commercial practice
- Major backing for businesses facing increased pressures on company finances
- Nearly 19,000 businesses supported since the scheme launched in April 2021
- A poll of ForgottenLtd members showed that 63% had voted The Conservative Party in 2019, but only 3% would do so now.
The Recovery Loan Scheme, originally launched in April 2021 to help businesses recovering from the Covid-19 pandemic, has supported almost 19,000 businesses with an average of £202,000 in support.
The Recovery Loan Scheme (RLS) was a government scheme aimed at supporting access to finance for UK businesses. It gives lenders a government-backed guarantee against the outstanding balance of the facility.
The extension provides further government support for businesses grappling with cost pressures and adds to measures already announced by the Chancellor, such as increasing the Employment Allowance, slashing fuel duty, and introducing a 50% business rates relief for eligible high street businesses.
However, The Office of National Statistics estimated that there were 2.9 million people excluded from support by Rishi Sunak over the pandemic.
“Hidden behind the vast quantity of public money disbursed is this huge number of people who he chose not to help – even as the Government closed down their markets,” said Forgotten Ltd. a non-political lobby group calling for fairness and equality for small limited companies excluded by the UK Government’s Coronavirus financial support packages.
According to this audio clip below, Rishi Sunak has been under the impression that the majority of those excluded were not Tory voters anyway.
That could mean almost 2 million voters turning their back on that party. It’s also known that 102 Tory MPs have more of the excluded in their constituency than the size of their majority.Forgotten Ltd.
Forgotten Ltd. is running another vote currently to gauge the likelihood of these ‘lost’ voters returning to the Conservative Party if they are led by Rishi Sunak.
The lobby group said:
We also see on our Facebook Page those who have lost their businesses, homes and possessions because of Mr Sunak’s policy towards them gearing up for a major communication effort towards the Conservative Associations who, ultimately, make the decision.
We suspect that the message will revolve around their thoughts around Mr Sunak and his electability at a General Election in the event that he wins this current contest.
“Small businesses are the lifeblood of the British economy, which is why we are determined to support our traders and entrepreneurs in dealing with worldwide inflationary pressures,” said Business Secretary Kwasi Kwarteng at the announcement of the recovery loan scheme.
“The extension of the Recovery Loan Scheme will help ensure we continue to provide much-needed finance to thousands of small businesses across the country, while stimulating local communities, creating jobs and driving economic growth in the UK,” he said.
Chancellor of the Exchequer, Nadhim Zahawi, said small businesses are the “engines of economic growth”, supporting jobs and livelihoods in communities right across the UK.
The Recovery Loan Scheme has supported thousands of businesses over the past year,” said Zahawi, “and this extension will ensure they continue to access the finance they need to navigate the months ahead.Chancellor of the Exchequer, Nadhim Zahawi
The scheme has supported over 16,000 English businesses, as well as 1,000 businesses in Scotland, 600 Welsh businesses and 300 in Northern Ireland.
Yet as illustrated by Forgotten Ltd., many small business owners do not feel Tory Party policies are pro-small business and many ill-advised assumptions are made as to why they want to remain limited companies.
“As others have noted – statistically The Conservative Party cannot win an election if this huge tranche of currently former Tory voters are persuaded that someone understands whatRishi Sunak did, apologies and sets out a strategy that recognises that we are the job creators, the engine room of the economy. To be supported, not crushed,” said Forgotten Ltd.
Examples of companies that took part in the loan scheme
Examples of businesses which have benefited from the scheme include Leeds-based firm Wildfire Marketing, which used the loan to take on new employees to help the business grow, and White Light Ltd, a lighting firm which required finance to purchase new equipment for the latest West-End shows.
The principle behind the extended Recovery Loan Scheme remains unchanged: government will underwrite 70% of lender liabilities, at the individual borrower level, in return for a lender fee. Lenders must ensure that the benefits of the government guarantee are passed through to businesses.
Lenders may want personal guarantees
The government said in a statement that the maximum loan size remains at up to £2m.
“However, recognising that businesses and the UK more generally are now in a better position than they were during the pandemic, lenders may now require a personal guarantee from the borrower, in line with standard commercial practice,” said the government.
Chris Wilford, CBI Director of Financial Services Policy, said, “Amidst challenging economic headwinds and continued cost pressures, this remains a difficult time for business.
“With cashflow difficulties at the forefront of the minds of many business owners, continued access to Government-backed loans will bring great comfort.
“This next phase of the Recovery Loan Scheme will provide a critical lifeline for firms. The CBI will also continue to work with Government and lenders on ensuring businesses have access to the finance they need to go for growth.”
BCC’s Haviland calls for quick funding access
Shevaun Haviland, Director General of the British Chambers of Commerce, said after two years of pandemic disruption and with a faltering global economy, the BCC has been calling for this continued financial support for firms.
“The two-year extension to the Recovery Loan Scheme will be a lifeline for many businesses facing a rising tide of costs,” said Haviland.
“It is now essential that businesses in need of this extra support can access the scheme as quickly as possible to make sure they get help before it’s too late,” she said.