Spending Review 2020

Lord Haskel Excerpts

Thursday 3rd December 2020 Grand Committee

[Lord Haskel (Lab) [V]]

My Lords, I would like to speak up for the one group largely excluded from government support in this Statement: the 3 million to 4 million self-employed and the many directors of small, limited companies who failed to qualify because of their accounting structure. Let me declare an interest: this was me many years ago, when I started in business. Then, it was prudent to become a limited company because this was the way to manage the risk and the inevitably unpredictable cash flow of a new business. It is not a tax dodge. By not paying income tax and national insurance, you hardly save after paying corporation tax, VAT, dividend tax and other taxes—and you are supporting other jobs.

The lack of assistance to these small companies means that they are massively overborrowed, which puts at risk the many millions of jobs that they are creating and supporting. Such businesses create the competition that keeps prices low. On Monday, the Competition and Markets Authority reported that the most profitable tenth of our companies enjoyed the least competitive pressure over the last 20 years. This, of course, is yet another contributor to the growing inequality that this Government say they are trying to tackle.

Fortunately, I am not alone in speaking up for these businesses. Others have done so in this debate, and the Mayors of Manchester, Liverpool and London have also spoken out, criticising the Government for sending a message that they are not with you if you start up on your own.

So I ask the Minister: is this a message the Statement is intended to give? Do the Government really want to limit competition and encourage inequality? Or is this yet another example of the Government’s incompetence and poor management, which has put us among the worst-off for economic damage caused by the pandemic?