Welfare Reform Bill

Lord McAvoy Excerpts

Tuesday 1st November 2011 Grand Committee

[Lord Freud]

My Lords, the noble Lord makes a very important point and it is related to the point of the noble Baroness, Lady Donaghy. There are two areas where we will have to have specific rules. First, in the start-up phase, what are the rules for that and how long does one allow for it? Secondly, in the period when something goes badly wrong, when you have had a business going very well with profits and then you have a sudden collapse, what do you do about that period? That was the example that the noble Baroness, Lady Donaghy, raised. Those are two of the issues that we are looking at very closely and how to get that right.

One of the things we want to get out of this is the most business-friendly suite of support that we can put together. In this sense, working tax credit for the self-employed does become a support for entrepreneurial endeavour, tied with other support for new business such as the new enterprise allowance.

[Lord McAvoy]

My Lords, on the small businesses aspect—and I declare an interest as I am “lucky” to own a public house although I am a teetotaller and they are closing down all over the place in Scotland—

[Baroness Hollis of Heigham]

Because they are all teetotal?

[Lord McAvoy]

Most are tight-fisted so do not think you will get a free drink. What information is needed, and where would you get the information, to make that sort of calculation and deliberation? The feeling among small businesses is that nobody listens.

--- Later in debate ---

[Lord Freud]

And I hope that it has a nice picture of him. I look forward to going there.

[Lord McAvoy]

You will need a Labour Party card to get in.

[Lord Freud]

The basic way to get information from the self-employed is this: they will put in the information in the universal credit system, or an equivalent system, which will potentially match up later with the information that they provide either to the VAT authorities or to HMRC. There is a process of reporting.

To get back to the point, there is an opportunity to provide real support for entrepreneurial business, but as the noble Baroness, Lady Donaghy, so shrewdly said, we must not be an open cheque book for people who are not running genuine businesses. We need to get that right.