Small Business Index

Baroness Burt of Solihull Excerpts

Monday 18th February 2019 Lords Chamber

[Baroness Vere of Norbiton]

My noble friend refers to the Making Tax Digital initiative, which was announced in 2015, and he is right that it is due to become mandatory in April of this year. Ninety-eight per cent of businesses already file their VAT returns online; I certainly used to do so and it is by far the easiest way. We are working closely with software industry suppliers to develop sector-specific software to ensure that all businesses can comply. More than 100 products are now available, some of which are free, but I reassure noble Lords that nobody who is unable to go digital will be forced to do so.

[Baroness Burt of Solihull (LD)]

My Lords, I have to agree with the noble Lord, Lord Harrison. The Small Business Index paints a dismal picture and late payment is a very big issue for the FSB, which is launching a campaign on it today. But even on government-procured projects, small businesses are still being let down. This could be addressed through project bank accounts, which stop tier 1 suppliers such as the Carillions of this world using smaller suppliers as a piggy bank to assist their own cash flow. The Chancellor promised action in the last Spring Statement. Will the Minister ask him whether this simple step could be implemented in the coming Spring Statement?

[Baroness Vere of Norbiton]

The noble Baroness raises a very important point and I will certainly write to her with any further information I have about whether we will set up project bank accounts. Working capital does indeed sometimes get sucked out of small businesses and into large companies, and it is unacceptable. She referred to the report as “dismal” and I have to disagree. I agree with her that it is mixed; however, the annual change in confidence is minus 7.4, compared with an average annual change of minus 8 over the last four years, so we are nowhere near the dreadful situation we were in a few years ago.