Covid-19: Small Businesses

Lord Stevenson of Balmacara Excerpts

Thursday 29th October 2020 Lords Chamber

[Lord Callanan (Con)]

Again, the noble Baroness is tempting me to enter the territory of the Chancellor. We have been clear that the digital services tax is temporary, and businesses are liable to it only when they have worldwide revenues of more than £500 million, and more than £25 million of those revenues is derived from UK users. So it applies only to the very largest businesses.

[Lord Stevenson of Balmacara (Lab) [V]]

My Lords, the AAT reports that during the pandemic more than 50% of businesses have seen an increase in late payments, and nearly one-third admit to delaying payments that are contractually due. The Government have taken emergency powers, so this is a matter for BEIS, and these powers do help businesses. The FSB says that sorting the scourge of late payments would be a huge boost in these difficult times, and would aid the recovery when it comes. Will the Government act?

[Lord Callanan (Con)]

I totally accept the noble Lord’s point; he raises an important issue. But accepted payment terms vary from sector to sector, and a one-size-fits-all approach is not, in our view, the best way to deliver a culture change. Government would be restricting businesses’ ability to negotiate terms, which could have a negative effect on the UK economy by making business more difficult to do.