Financial Guidance and Claims Bill [ Lords ] (First sitting)

Lord Mackinlay of Richborough Excerpts

Committee Debate: 1st sitting: House of Commons
Thursday 1st February 2018 Public Bill Committees

I take entirely the legitimate point about the grey area that Citizens Advice and others see on a regular basis—we all see it, too, when a gentleman comes into a surgery with a sheaf of papers, plonks them on our desk and says, “Please solve that”—but I do not believe it is appropriate for the Government to shape the body in that way at this moment. I will discuss the issue further with the Money Advice Service, but for present purposes, I oppose the amendment.

[Craig Mackinlay (South Thanet) (Con)]

On the question of what is a personal debt and what is a self-employment or business-type debt, if a self-employed person who is a sole trader—that is, unincorporated—takes on a loan for a van or something else, that by its very nature becomes a personal debt. That is the nature of being a sole trader. Complications may arise where that person, who to all other intents is self-employed, trades as a micro limited company. If, because of difficulties accessing credit through the limited company, that person decided to take a personal loan and then provide it as a director’s loan account to his or her own limited company, what status would that loan have? I imagine in law—

[The Chair]

Order. I remind the hon. Gentleman that interventions should be brief and to the point. I am happy to call him if he wants to make a speech, but he must keep his interventions a good deal shorter than that.

[Craig Mackinlay]

Thank you for that advice, Mr Stringer. This is of course a complicated area, which requires a little extra explanation. In that instance, the bank or credit provider would recognise that as a personal loan. I wonder whether that would be covered by the advice that may be available.

[Guy Opperman]

I recognise my hon. Friend’s expertise in such matters, and I thank him for his intervention. Support for self-employed people is covered by the Bill, because the self-employed are members of the public, in the way he outlined. Any personal business debt of a self-employed person is covered in respect of them being an individual member of the public.

I take my hon. Friend’s point about loans. I am delighted to say that I am not able to answer it right now, but I will definitely get back to him. In seriousness, we need to consider that point and work out whether there is any way of changing it and taking on board the views of the organisations that have practised in this area for some considerable time. I will certainly write to him with a specific answer and circulate that answer to all Committee members.