Finance Bill

Baroness Burt of Solihull Excerpts

2nd reading & Committee negatived & 3rd reading & 2nd reading (Hansard) & 2nd reading (Hansard): House of Lords & 3rd reading (Hansard) & 3rd reading (Hansard): House of Lords & Committee negatived (Hansard) & Committee negatived (Hansard): House of Lords
Friday 17th July 2020 Lords Chamber

[Baroness Burt of Solihull (LD) [V]]

My Lords, I will address my remarks from the perspective of small business. As other noble Lords have said, there is much to be welcomed in this Bill, especially the £3.7 billion to support jobs and the help for our struggling hospitality sector.

However, an eye-watering £9 billion has been allocated to the supporting jobs programme. This will be largely dead money and not well spent. Either a job is economically viable enough to be retained or it is not. I do not think that a £1,000 pat on the back for keeping on someone whom you already need will change the decision if the job is not viable.

Some categories of people have been left out, such as newly self-employed people and company directors who rely mainly on dividends for their remuneration. I know that the Chancellor has steadfastly resisted the pleas from representatives of these two categories, but many entrepreneurs—those arguably at the most precarious stage of their journey and who receive awards only when they have been earned—will be lost to the economy at a time when their willingness to take risks is most needed. Rather than showering £9 billion on companies for workers who would have been retained anyway, a small fraction of this money could have saved tens of thousands of wealth generators for the future.

Finally, I make a plea on behalf of those companies whose ability to borrow will be blighted to the tune of over £1 billion—possibly far more—by proposed changes to the Government’s Crown preference policy. Floating charge creditors and unsecured creditors, such as pension schemes, would be leapfrogged by HMRC in any subsequent insolvency proceedings. Who is going to lend when they could lose everything if the company to which they are lending goes bust? This will seriously hamper the recovery, especially for small businesses. The insolvency and restructuring profession has been clear that the policy will make it harder to rescue businesses from administration and will reduce the likelihood of successful CVAs. This measure should be paused, at least until the full economic impact of Covid-19 is known. I urge the Government not to help with one hand and take away with the other.