Emissions: Housing

Lord Palmer of Childs Hill Excerpts

Monday 22nd June 2020 Lords Chamber

[Lord Callanan [V]]

I can confirm that we will do that. The noble Lord makes a very good point. We noted with interest the analysis in the Smart Growth America report that a job in home insulation could be created for £59,000, which is less than for comparative jobs, such as road maintenance. The most recent release by the Office for National Statistics shows that in 2018 energy-efficiency products supported the largest number of full-time jobs—about 114,000—of any sector in the low-carbon and renewable energy economy.

[Lord Palmer of Childs Hill (LD) [V]]

My Lords, my noble friend Lord Teverson called for a plan of action and asked what the plan of action is. What we have heard from the Minister is an ambition. Will he say what action the Government are going to take? For instance, will there be technical advice on older houses? Will there be different advice for those in older buildings and for buildings with cavity walls? Will there be help with double glazing? I have heard nothing about action; I have heard only about ambition.

Corporate Insolvency and Governance Bill

Lord Palmer of Childs Hill Excerpts

Committee stage & Committee: 1st sitting (Hansard) & Committee: 1st sitting (Hansard): House of Lords
Tuesday 16th June 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con) [V]]

My Lords, I will address Amendments 1, 2, 4, 8, 28 and 42, as they clarify the role of the monitor and include safeguards on that role while ensuring its independence, which was the theme that I spoke to at Second Reading. We are obliged to the Minister and the department for bringing forward the Bill and we do not seek to delay it, but to strengthen its provisions. The aim of the Bill is clearly to support a company rescue. These amendments would strengthen the role and independence of the monitor. I emphasise the gaps that were addressed at Second Reading.

Amendments 1 and 2 to Clause 1, in the name of the noble Lord, Lord Stevenson, go right to the heart of what the role of the monitor should be. Its role is not to displace the existing management but to monitor company affairs during the moratorium, with the purpose of ensuring that in the view of the monitor the moratorium would be likely to lead to a rescue of the company as a going concern. These amendments, and the others I have referred to, would help the monitor by putting him in a stronger position. We must not detract from the fact that if at any stage during the moratorium the monitor believes that the rescue of the company as a going concern is not likely, the monitor must bring that moratorium to an end. Amendments 1 and 2, along with Amendment 4, in the name of the noble and learned Lord, Lord Hope of Craighead, address these points. Providing this list would actually save time in the long term.

A noble Lord spoke to the amendment about extending the time of the moratorium. Will my noble friend the Minister consider, when he responds to these amendments, whether this would add to or reduce the overall cost of the moratorium?

Amendment 8, together with Amendments 28 and 42 in the names of my noble friend Lord Hodgson and the noble Lord, Lord Palmer, further strengthen the role of the monitor. They could help to facilitate the rescue of the company and reduce the period of the moratorium. What is of interest, and key to these amendments, is that they were identified at Second Reading. I hope that my noble friend might look with approval on these amendments, which seem to meet with the approval of industry and the Law Society for England. There does not seem to be any view within the industry that they would do anything other than enhance the Bill.

I have to confess to having some sympathy with the remarks of my noble friend Lord Hodgson about any referral to, and reliance upon, Henry VIII powers. In my view, it is always preferable to address these issues in the Bill rather than leaving too much leeway to regulations that may be interpreted rather loosely and put more onus on the monitor and the courts in the long term. With those few remarks, I hope that my noble friend the Minister will look favourably on all these amendments.

[Lord Palmer of Childs Hill (LD) [V]]

My Lords, my Amendment 28 is on the definition of the role of the monitor. It also ties in with Amendments 1 and 2, referred to by other noble Lords. I declare an interest as a fellow of the Institute of Chartered Accountants.

There is concern among many fellow noble Lords about the lack of supporting information about the monitor. The monitor is an individual, as is a liquidator; in other words, this is not an appointment of a partnership or a limited company. Can the Minister address what the situation could be in the real world outside your Lordships’ Chamber? It seems that a firm of accountants or one of its partners, referred to by the noble Lord, Lord Stevenson, in Amendment 1, could be consultants to a troubled company; at the same time, the firm could be auditors to the same troubled company; now, it can be appointed monitor to the same entity; and, ultimately, if matters go downhill, the same firm or a member of it can be appointed liquidator. Can the Minister reassure the Committee that these fears of cross-contamination are to be addressed? The noble Lord, Lord Hodgson, gave a graphic example, and there are many others which many of us have experienced in business.

Amendment 2, also in the name of the noble Lord, Lord Stevenson, calls for the monitor’s independence from the company. I agree with that, but he or she surely needs also to be independent of the group of companies and the directors, not mentioned in the Bill.

I raised at Second Reading that the monitor—a newish concept—will, unlike a liquidator, not have control of the company’s assets. Can the Minister clarify what research has been done on what insurance cover is available to a monitor, who has no control of the assets?

Amendment 4, in the name of the noble and learned Lord, Lord Hope, calls for a list of creditors, which I heartily support, but this should also include potential debts hiding in the undergrowth, such as the cost of dilapidations. Is the Minister able to address the creditor who is the elephant in the room? I refer to the preferential status to be given under the Finance Act to HMRC for VAT. I understand that the argument is that the company has collected this and needs to hand it over, but is there not a similarity with the supplier of widgets essential to the business who is destined to be below the salt in the list of creditors requested in the amendment?

The noble Lord, Lord Leigh, raised much the same question as I raised at Second Reading, about the actual business as distinct from the company. There seems to be no recognition in the Bill that a business or the components of a business could be rescued. I am not sure that a monitor will help in that process. My noble friend Lady Bowles said that, in effect, the appointment may do more harm than good—it may do more good than harm; I do not know—but, as she so ably said, it is clearly a work in progress and not completely worked out. We look to the Minister and the Government to fill in the blanks before we feel easy about the Bill before us.

[Lord Hain (Lab) [V]]

My Lords, Amendments 83 to 86 are in my name and those of my noble friends Lord Hendy—who spoke so powerfully and compellingly earlier—and Lord Monks. Under them, companies would be excluded from moratoriums for not paying tax, for unpaid remuneration to employees and for breaching sex equality or equal pay.

The amendments are about setting standards with which firms in financial difficulty and seeking state support to stave off insolvency must comply. They aim to ensure that the interests of workers are not sacrificed in a blind rush to shore up businesses facing acute short-term financial pressures.

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[The Deputy Chairman of Committees]

The noble Lord, Lord Hain, has had to withdraw, so I call the noble Lord, Lord Palmer of Childs Hill.

[Lord Palmer of Childs Hill [V]]

I did not realise someone was withdrawing. I asked to speak mainly to support Amendment 60, but also to inquire whether this will achieve what the movers want to achieve. With sale to connected persons, there is always a worry in any liquidation or moratorium as to whether those connected persons are getting a benefit, to the detriment of other creditors. It is also a fact that very often a sale or arrangement with connected persons is a way of saving a company by connected persons taking some of the business out of the company. If there is a situation in which that company can survive enough to pay all its creditors, sales to connected persons could be a valuable tool. I just want to ensure that the Minister says this is an open book and can help in some ways and police in others.

[Lord Monks [V]]

I do not wish to speak at this stage.

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[Lord Cormack (Con) [V]]

My Lords, today’s proceedings have illustrated how impossible it is for a virtual or a hybrid House to hold the Government adequately to account. I ask those who arrange our proceedings to ensure that time is fairly and evenly distributed. We started with no time limits on speeches, and we are now having to gallop through a great many important issues.

I give my total support to what my noble friend Lady Anelay said on her Amendment 143. These charities include some of the most notable in the country, and many of them are connected with heritage and the arts, which is why I was anxious to give my support. It really is crucial, especially when the Bill has not had any real scrutiny in the other place, that adequate time is given to consider the vital points that have been made in this very wide-ranging group of amendments. I would like to go on at much greater length but, in deference to others, I will not. However, I repeat my strong support for my noble friend Lady Anelay.

[Lord Palmer of Childs Hill [V]]

I will not speak for long, bearing in mind the time constraints. I am concerned by Amendment 75 and the mention of the Small Business Commissioner. I wonder whether, perhaps separate from this debate, the Minister could say what successes the Small Business Commissioner has had. I have made previous speeches in your Lordships’ House on his ineffectiveness.

The amendment before us now sounds sensible but it does not use the normal term “small and medium-sized enterprises”; it mentions “small business” and “larger businesses”. From my professional life, I know that many firms that consider themselves small I would consider large, and that many firms that are large would consider themselves small. The vagueness that this amendment would introduce to the legislation, if it ever got in, would not be useful.

The Small Business Commissioner was really set up to deal with late payments, which of course affect small companies. Here, the amendment is trying to give the Small Business Commissioner a much wider remit, but I have never seen great success in the small remit it has.

While I am on my feet—in a theoretical sense— I want to mention that another Minister speaking from the Front Bench took issue with my comment on HMRC and VAT. She said that VAT was not being given special priority in the Finance Bill 2019-21. I advise her to look at Clause 95. Perhaps the noble Lord the Minister will write to me on this matter.

[Baroness Bowles of Berkhamsted [V]]

My Lords, this group deals with a range of issues which I broadly support, but I shall keep to those amendments with my name on.

I am not quite sure what my Amendment 73 is doing in this group, but its purpose was to ensure that the interests of SMEs are specifically taken into account when reviewing amendments to legislation made under Clause 18, the Henry VIII clause. Clause 21, governing the time-limited effect of Clause 18 amendments, states that regulations made under Clause 18 must be held under review, and revoked or amended if they are no longer expedient or proportionate. My amendment adds a third option if they cause harm to SMEs, as I fear that SMEs could fall between the two stools of expedience and proportionality.

I signed Amendment 78, concerning the FRC, because its replacement is long overdue and it is hard to understand why this top recommendation from the Kingman report has not yet come about. I know that there has already been one consultation on it because I replied to it over a year ago, so what happened to that and why is there prevarication? There is still so much more about the unsatisfactory past of the FRC that could come out—it is constantly dribbling out. It will taint ARGA if it is perceived as just the FRC by a new name, which is what the delay is doing.

Corporate Insolvency and Governance Bill

Lord Palmer of Childs Hill Excerpts

2nd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords
Tuesday 9th June 2020 Lords Chamber

[Lord Palmer of Childs Hill (LD) [V]]

My Lords, a Bill to seek to deal with temporary conditions, at the same time as permanent reforms, could be a case of “legislate in haste, repent at leisure”. Is it prudent to mix permanent and temporary measures? What plans are in place for the Insolvency Service to monitor the effectiveness of this legislation?

In the current situation, the underlying problem to be prevented is a tsunami of liquidations. In the 1990s, there was such a situation. Banks realised the need to ensure that, in a liquidation, there was a co-ordinated sale of assets. Is such collaboration in place, to forestall fire-sale discounts or the mass selling of assets?

Under the Bill, an insolvency practitioner would oversee the moratorium, acting as a monitor, leaving the directors to run the business for a while. If this is not successful, a liquidator is then appointed. I would welcome details on the connection, if any, between the monitor and the liquidator, and some expansion on the questions of the noble Lord, Lord Mendelsohn, with regard to conflict.

I am concerned that, as I perceive it, the prime concern of an insolvency practitioner is his or her own fees, which are still at the top of the preferred creditors list. I also have concerns about the liability of the monitor during proceedings, as it appears to be a high-risk role. In the event that insurance becomes disproportionately expensive, or difficult to obtain, the Government should consider whether to include some limitations of liability. There are further concerns over the requirement for a monitor to obtain bonding, similar to other insolvency appointments, even though, as noble Lords will appreciate, the monitor does not control the assets of the company.

I am concerned at the changes to priority status for certain creditors, and in particular the reintroduction of HMRC’s priority status. This matter has been raised by others, including my noble friends Lady Burt and Lady Kramer. Parts of the Finance Bill 2020 undermine efforts to support businesses in the Bill before us. The proposals make HMRC a secondary preferential creditor, thus Clauses 95 and 96 of the Finance Bill should, in the light of the insolvency Bill, be withdrawn. Reintroducing HMRC preference seems to me to be pulling in the opposite direction from taxpayer support being provided by the Government at the current time to help businesses survive. This impacts on pensioners, suppliers, customers and lenders. Trade creditors and floating charge creditors could be forgiven for thinking: what has HMRC ever done for me?

There will be a substantial number of cases where a company is unlikely to be rescued as a going concern, but where part of the business can carry on and the employment it supports be sustainable, if sold off to another company through the administration and insolvency procedure. It is not clear why the moratorium should not be available in these cases.

Companies of a certain size are excluded from the moratorium, and this excludes many private companies with many employees and supply chains. Will the Minister provide further information underpinning this decision, to enable parliamentary scrutiny, or consider extending the moratorium to these companies that are not covered by this Bill?

Covid-19: Businesses and the Private Sector

Lord Palmer of Childs Hill Excerpts

Thursday 21st May 2020 Lords Chamber

[Lord Stevenson of Balmacara (Lab)]

I add my thanks to those of others to the noble Lord, Lord Dobbs, for securing this debate. Despite the limitations on speaking time it has been of high quality throughout, with many interesting insights.

Most noble Lords have singled out our magnificent health and care workers for their exemplary work during the crisis. The Motion also allows us to recognise the contribution and generosity that we have seen from businesses and the wider private sector during this crisis. The noble Lord, Lord Dobbs, called it a roll-call of honour, and I think he is right. This has included the crucial role played by corner shops; special opening hours and discounts for key workers in many retail stores; companies deciding to build ventilators to increase capacity; and, as the noble Lord, Lord Bilimoria, reminded us, companies ignoring commercial rivalries to develop services and medicines to assist those afflicted by the virus and in pursuit of a vaccine. We have just heard about the role of the CMA in that.

On the whole, businesses have stepped up when we needed them. Indeed, they could have done much more if their offer of help had not been ignored when it was made, as the noble Lord, Lord Hunt, reminded us. We thank them for their continued efforts. There really is no limit to what can be achieved if we all pull together.

As many noble Lords have pointed out, what the Government have asked from business and the wider private sector during the pandemic is unprecedented in peacetime, and they have complied. However, because of these measures, thousands of businesses face an existential threat and possible closure, with all that that means for millions of workers. This supply shock could have been disastrous in an economy that was already showing strains earlier this year, but it is a credit to the Government that they have provided a range of support measures, including the job retention scheme, various business loans and the self-employment scheme, which has worked very well. Combined with the forthcoming changes to the insolvency laws, which we support, these measures will ensure liquidity, prevent unnecessary bankruptcies and hold jobs open for millions of workers until it is safe for businesses to reopen. In this context, I agree with the noble Lord¸ Lord Fox, that the Health and Safety Executive has been given a major responsibility, and it needs to be supported now and in future.

I hope the Minister will accept that some of the measures have been improved by scrutiny here and in the other place. There are still issues to be resolved, such as schemes for SMEs that are looking to access loans with a 100% guarantee above £50,000. As several noble Lords have pointed out, additional support may need to be provided for companies operating in the tourism, hospitality and cultural industries, particularly where taking on more debt is not a viable option. What plans are the Government considering for these sectors?

Does the Minister agree that where the state has assumed responsibility for providing support to a private sector company, it is absolutely right, as the noble Lord, Lord Balfe, has pointed out, to require all such firms to make the correct tax payments when they fall due; to require that they are not registered in a tax haven; and that they should not pay dividends to shareholders while they are claiming government resources?

I turn to the recovery. Private businesses and the wider private sector will also have a significant role to play after the pandemic. It is true that businesses want to reopen and people want to return to work, but this must be done with maximum safety. It is equally important that such moves have full-hearted public support so that the great pause, as some are calling it, does not turn into a great depression. The Chancellor has said, perhaps rather chillingly, that he cannot save every business, but surely he recognises that every business that goes bust risks deepening the recession and extending the time taken to recover our economic health. We are fast approaching the point where the focus of the Treasury’s efforts has to switch from supply to demand. How are we to persuade people to spend more than they do at present on goods and services, preferably those that are not imported? To do that, people need to feel secure about their income, their employment and, as the noble Lord, Lord McConnell, said, their consumer rights, and they have to be certain that spending today is not going to take them into unmanageable debt. There are both monetary and fiscal aspects to this, and it will need careful planning and timing if it is to work. As the noble Lord, Lord Campbell of Pittenweem, said, threatening a return to austerity will not take this trick.

The Government need to come up with a rescue plan to drive up demand and reduce business uncertainty for the long term, a strategy that focuses on sustainable high-quality jobs and growth. As the noble Lord, Lord Dobbs, said, we particularly need to reach out to young people entering the workforce this year and guard against this becoming a lost generation. However, I believe that recent polling suggests that the public also want something else. They do not want the economy simply to return to where we were pre-pandemic. They want a new deal, with growing support for a green new deal. What could that be composed of? As the noble Lord, Lord Hendy, said, surely we first need to learn the lessons of recent months and get real about the sort of income levels and support that those who have borne the brunt of the pandemic will need in future. It is after all the lowest-paid workers whom we have relied on most, as well as our key workers, and they need a new inclusive approach to employment laws and protection if we are to tackle their insecurity.

But the climate emergency is a challenge that we can simply no longer afford to ignore. I read recently, in an FT editorial last weekend, that

“governments should use their spending power to help stimulate a recovery from the virus that does not lock in a fossil-fuelled economy.”

Such a strategy could create an army of zero-carbon workers planting trees, rewilding our countryside, restoring natural habitats, insulating our existing housing stock and office buildings, and working on green energy technologies. This could help us to achieve our zero-carbon target much earlier than the Government are currently planning, provide people with much-needed job security after a period of such turmoil, and benefit everyone’s financial security through lower energy bills. The public should look back on the support that they have given business over this period with pride, but it would be strange if that investment were not used to return benefits to the public good.

My noble friend Lord Liddle called for a public/private partnership while my noble friend Lord Desai suggested a sovereign wealth fund. I hope that both ideas have been given serious consideration. Another way, which would follow on from the support given to the banks in the 2009 crisis, is that the Government should be willing to consider taking an equity stake in firms that they have supported, particularly where there is a compelling economic, security or environmental reason. Other countries are already doing this—for example, the French and US stimulus packages allow for the Government to take equity stakes in airlines that receive aid—but we could go much further by taking government stakes in line with long-term green new deal goals. We can invest in new technology companies to power the fourth industrial revolution or require energy-intensive industries such as steel to switch to alternative manufacturing methods.

I doubt that many people think the global supply chain will return to its shape pre Covid-19. Indeed, some commentators are saying that globalisation will enter a new phase after the pandemic that will demand a new sustainable trade policy more capable of dealing with the demand and supply shocks caused by Covid-19. Coronavirus has cruelly exposed global inequality, so different priorities for trade need to reflect a reoriented world. A sustainable trade policy could focus on securing opportunities for all sizes of businesses, human and employment rights, consumer interests and climate protection for the whole world long term. It would also provide a proper role for Parliament, something that we will return to in round 2 of the Trade Bill.

Business and the wider private sector have contributed greatly to the work of combating Covid-19. We welcome their contributions. We have supported the Government as they have tried to deal with their concerns during the crisis, and there is more to come. The noble Lord, Lord Dobbs, said it would be a tragedy if we ended this crisis with greater poverty. I agree with him that we must now work with business and the wider private sector to secure the recovery with a green new deal that shares the benefits of cleaner inputs and more sustainable outputs for the benefit of us all.

[The Deputy Speaker (Lord Palmer of Childs Hill) (LD)]

I call the noble Lord, Lord Callanan. Lord Callanan, you need to unmute.

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[The Deputy Speaker]

My Lords, the Virtual Proceedings will now adjourn until a convenient point after 4 pm for the Question for Short Debate in the name of the noble Lord, Lord Cormack.

Coronavirus Business Interruption Loan Scheme

Lord Palmer of Childs Hill Excerpts

Tuesday 12th May 2020 Lords Chamber

[Lord Callanan]

The Government will continue to monitor and review all their business support schemes and make changes where necessary. I am sure that the noble Baroness has noticed that this afternoon the Chancellor will be making a Statement in the House of Commons on the job retention scheme and the Government’s wider economic coronavirus support package. I am sure that she will get more information then.

[Lord Palmer of Childs Hill (LD)]

My Lords, under the bounce-back scheme, interest is charged at 2.5%, but under CBILS lenders are charging considerably more. At the same time, banks are paying savers interest of less than 1%. My noble friend Lord Razzall talked about the small number of SMEs taking up loans under the scheme. Does the Minister agree that banks have a different idea of “We are all in it together” compared with the rest of the population?

[Lord Callanan]

No, I do not accept that criticism of the banks. They have worked extremely hard, as have the British Business Bank and the department, to try to get as many loans approved as possible for businesses that want them. The Government are—certainly through the bounce-back scheme—supporting 100% of the amount of those loans. Therefore, a lot of work is going on in all the sectors to try to help the businesses that require support.

Prompt Payment Code

Lord Palmer of Childs Hill Excerpts

Thursday 10th May 2018 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, forgive me for my hoarse voice. I thank the noble Baroness, Lady Burt, for introducing this debate and—I do not have to thank too many people—the noble Lords, Lord Mendelsohn and Lord Aberdare, for their incredibly detailed contributions. As the noble Lord, Lord Aberdare, rightly said, it is very difficult not to repeat, to some degree, what has already been said.

My noble friend Lady Burt quite rightly pointed to Carillion. The effectiveness of the Prompt Payment Code is clearly seen in its collapse. Carillion was an early signatory to the code but prior to collapse had been exposed as making creditors wait 120 days to be paid. It is often small businesses that suffer most. The Government should mandate that all FTSE 350 companies sign up to a stronger code with a new “three strikes and you’re out” rule—something that many bodies have mentioned. This would target repeat offenders. At least the penalty would strip them of the right to be awarded government contracts, and it could be even harsher than that. Will the Minister detail how the Government feel that the “three strikes and you’re out” rule could be implemented, and what the penalties and the enforcement procedure would be?

During my preparations for this debate, many helpful points have been made from within the industry. I am sure that these points have also been made to other speakers. Late means late—that is, paying after a previously agreed date between two or more parties. It does not mean extended—extended payment is also late. Bills ought to be settled promptly, in full, to agreed terms and free of unnecessary charges. Small firms cannot be expected to lend interest-free to big companies.

Many firms view the Prompt Payment Code as toothless. It cannot be right that firms whose default position is 60-plus days can sign the code. It is the Prompt Payment Code, not the extended payment code. There is no obligation on signatories to pass on favourable terms they receive to sub-contractors or merchants.

Moreover, too many invoices are disputed or overlooked: “Oh, we never received your invoice. I’m sorry but you’ll have to wait for the next round for it to be seen”. An invoice can be disputed because it has a typing error: “I’m afraid it has to go back to the end of the pile. And by the way, we only settle our bills on the 7th of the month. You’ll have to wait for the next 7th of the month”. This is normal practice, and completely wrong according to the code. The date of the invoice ought to start the clock, not the date received. What, furthermore, is a “disputed” invoice? Something has to be put into legislation to describe what would be a disputed invoice that could delay payment.

One-sided changes in payment terms and conditions, or the length of time taken to settle invoices, are often a sign of cash-flow or other financial problems. Delays by big companies can cause SMEs cash-flow problems and take too much time and effort on the part of the creditor to chase debtors.

Previous attempts to eradicate bad practice by voluntary approaches have floundered. The scourge of late or non-payment is a long-standing issue that cannot be tolerated. The trend by some businesses to move to 120 days as a default position has to be confronted. Until settlement of bills becomes elevated to a board-level responsibility, late payment will persist. Those noble Lords who have been in business, or, as I was, practising as a chartered accountant, know what happens in reality. The very large client, which you treasure, has built up a debt to you of many thousands of pounds—I talk from bitter experience. At a certain date in the month that valued client will make a payment on account—a round sum. “Here’s £1,000, £2,000, £10,000” or whatever it is, they will say, at the same time as initiating new work—and the debt to you goes up. This is the bullying practice of the large client towards the companies that service it.

The Small Business Commissioner should focus on poor payment practice issues, including the more subtle forms of bullying such as the one I have just described. The commissioner’s “name and shame” powers—they have briefly been referred to—should be used more obviously. If they are to be named and shamed, let us broadcast the fact and say that you should not be dealing with Carillion, or whichever firm it is, because they do not treat you properly. The powers should focus on serious instances of supply chain bullying. If you supply goods or services to a large organisation you do not want to risk losing the work, so the practice continues.

The word used in the heading of this debate is “code”—the Prompt Payment Code. I am afraid that codes are obeyed by ladies, gentlemen and boy scouts. They are not obeyed by anybody else. We must put some teeth into this legislation.

Manufacturing: Digital Technology

Lord Palmer of Childs Hill Excerpts

Thursday 2nd November 2017 Lords Chamber

[Lord Henley]

I can only agree with everything the noble Baroness said, other than her comments on cocoa. I will read the report over the weekend. It is too early to say, but she will be aware that we have the industrial strategy coming out later this month. If she is a little patient, she will hear more from the department and my right honourable friend about what we plan to do, particularly on the challenges that these changes present to the United Kingdom and the Government—challenges that both she and her noble friend Lord Haskel have highlighted.

[Lord Palmer of Childs Hill (LD)]

The Minister talks about challenges. He has not had a chance to read the report, but does he agree that its proposals will be relevant only if manufacturing has access to a high-quality digital network, and that this will be even more critical when—if—Brexit happens? When will we have a meaningful and effective universal internet service? Without that service being universally available in the whole UK, we will not be able to compete internationally. Does the Minister agree?

[Lord Henley]

My Lords, again, I can only agree with the noble Lord. We are doing well. There is more to be done and he will hear more in due course. Again, if he is patient he will see the industrial strategy later this month.

Small Businesses: Late Payments

Lord Palmer of Childs Hill Excerpts

Monday 11th September 2017 Lords Chamber

[Lord Prior of Brampton]

Industries are very different from each other—the construction industry is very different from the retail business, for example. Waitrose has a scheme whereby it pays small businesses selling goods worth less than £100,000 a year to Waitrose within seven days. Rolls-Royce has a scheme with a time that is longer than that, and Marks & Spencer has a scheme giving special terms for smaller businesses. Some flexibility in this area is not unwarranted.

[Lord Palmer of Childs Hill (LD)]

My Lords, the consultation on the appointment of a Small Business Commissioner was first mentioned on 26 July 2015, and the end of the consultation was 7 October 2015. If this Government think that supporting small businesses is important, surely they should get their act together in under two years. If a small business had to wait for two years to make such an appointment, it would be bankrupt.

[Lord Prior of Brampton]

The noble Lord will be pleased to know that interviews have taken place for the Small Business Commissioner and an appointment will be made in the near term—“soon” is, I think, the right word. By the end of the year, when further secondary legislation comes through Parliament, the complaints handling system which the commissioner will operate will be in place as well.

Queen’s Speech

Lord Palmer of Childs Hill Excerpts

Monday 26th June 2017 Lords Chamber

[Lord Palmer of Childs Hill (LD)]

My Lords, there is yet another glaring omission in the gracious Speech and supporting documentation. It is the lack of understanding of small and medium-sized businesses and how they are a major component of the success or failure of the UK’s businesses and the UK economy. This Government have failed to understand how smaller businesses work and thrive. Smaller businesses need to concentrate on their core activities of providing services, production and sales, and the rest of their activities is incidental.

I have, in 2015 and 2016, spoken in your Lordships’ House on the Conservative policy of MTD, making tax digital. This was apparently seen, prior to the 2015 spring Budget, as a means of simplifying our tax system, being a step change in the ways records are kept and tax collected. This will mean that the self-employed, landlords and businesses will have to keep digital tax records. All right so far, but they will have to send four digital returns to HMRC, plus a year-end return, every year: five digital returns a year. For gurus in Whitehall or 10 Downing Street this might seem a simplification, but for most small businesses, in practice, it means employing a firm of external accountants—I declare an interest there—in order to comply; expensive, unless you are an accountant. Those in business who should be concentrating on production and turnover will be overwhelmed by the digital requirements. Please, Government, think again.

Another problem faced by small and medium-sized businesses, particularly in our high streets, is the obscene rise in business rates mentioned earlier by the noble Lord, Lord Naseby. Liberal Democrats want a systemic review of the business rates system, prioritising reforms that recognise the increased role of the digital economy. We want small businesses and high street shops to remain competitive. It cannot be right and fair that an out-of-town mail order house or a retail warehouse on an industrial site pays less rates than a small shop on my local high street. Have the Government any plans to address this major problem?

I would like to see a greater acknowledgement of the courage of individuals starting their own businesses. Liberal Democrats have proposed a £100 per week start-up allowance for six months to give support with basic living costs to entrepreneurs starting a new business. Further, we need to expand the British Business Bank, introduced in 2014 by Vince Cable when he was Secretary of State, to provide more equity capital for growing firms. I would welcome an assurance from the Minister on this.

Leaving the European Union will be, in the words of “Yes Minister”, “a courageous decision”, but whether we are in or out of the single market and customs union, I trust that central government procurement is used as a tool to drive local growth and community development. Can the Minister say whether government departments, local and national, will purchase from diverse sources and use local labour, goods and services where possible? Too often, government contracts go for apparent safety with a large firm, since if that firm goes belly-up, those who commissioned the work can say, “Don’t blame me, guv—I went to a large firm”. Small firms need to get a look-in on this business.

Inevitably, most speeches will come back to Brexit, that ill-advised leap in the dark. When trade negotiations start—assuming that by then we have experienced and able trade negotiators in the UK—I believe that those negotiations should focus on start-ups, the tech sector, data movement and tariffs, and the protection of intellectual property. A hard Brexit will lock Britain out of the world’s largest free-market area and will impose another huge administrative burden on SMEs seeking to export. If no free trade agreement is reached, the UK will be subject to WTO tariffs, which range from 4.1% on natural gas to 9.8% on cars and, horror of horrors, to 32% on wine. The Centre for European Reform estimates that this would cost the UK more than £40 billion.

Further, have the Government made any assessment of the additional costs to UK businesses of the overhaul of data protection rules? These EU-generated rules, which are going to be brought into UK legislation, will mean a change in how companies process information, such as customer lists and employee records, and will come into force, unless something happens, in May 2018. It is clear that many businesses will fail to comply. Will the Minister say how businesses are being made aware of these rules and whether next spring we will see a plethora of firms paying fines? Will the Minister confirm that fining will be a last resort?