Family Businesses

Wednesday 26th February 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

The Speaker has not selected the amendment. I call the shadow Chancellor.

13:56

[Mel Stride (Central Devon) (Con)]

I beg to move,

That this House regrets the Government’s decision to introduce a cap on Business Property Relief, meaning that some family businesses passed down upon death will face Inheritance Tax for the first time in 50 years; further regrets the Government’s other economic policies that will damage family businesses, namely raising employers’ National Insurance contributions, reductions to business rates relief, making employers potentially liable for third-party harassment, the powers in the Product Regulation and Metrology Bill [Lords] that would allow the Government to ban pubs from selling pints, and the provisions in the Employment Rights Bill for guaranteed hours which will make flexible working harder to achieve; and therefore calls on the Government to support family businesses which provide employment for almost 14 million people, and contribute more than £200 billion in taxes each year, by lifting the cap on Business Property Relief, not implementing the increases to employers’ National Insurance contributions and business rates, and powers to change units of measurement, and to stop the progress of the damaging Employment Rights Bill.

At the last general election, the Labour party—now the Government—told us that it aspired to become the natural party of business, which is an absurd suggestion given what has happened over the past seven short months. It is as absurd perhaps as the Business Secretary claiming to be a qualified lawyer, as absurd perhaps as the Attorney General claiming to be a patriotic lawyer, or as absurd perhaps as the Prime Minister claiming to be anything other than a lawyer. The economy has tanked. Inflation recently spiked at 3%, and it is to go still higher; it was 2% on the day of the general election, a legacy that we bequeathed to the Labour party. Borrowing is up—substantially up—on the forecasts that the Office for Budget Responsibility produced at the last Budget, and growth has been killed stone dead. The Bank of England tells us that the economy will grow at half the rate it had originally suggested.

It is no wonder that all the business confidence surveys show confidence crashing through the floor as a result of what this Government are doing. Businesses are laying off jobs, businesses are putting up prices, businesses are reducing investment, and businesses are sometimes having to put themselves up for sale or, even worse, are going under.

[Wendy Morton (Aldridge-Brownhills) (Con)]

On that specific point, a local businessman wrote to me:

“I have spent over 50 years building my engineering business from the ground up, only to now face the possibility that my life’s work could be dismantled due to an unfair tax burden.”

Why on earth would anybody want to start a business in the current climate, which has been created by the Government?

[Mel Stride]

My right hon. Friend is absolutely right, and we see that in the surveys to which I referred; business confidence is at virtually an all-time low.

Before this whirlwind of disaster visited us, we had a calmer time during the general election. It was a Labour party on best behaviour with business, a Labour party with a manifesto that sought to reassure business—indeed, it explicitly ruled out the possibility of an increase in national insurance—and a Labour party on the prawn cocktail circuit, countenancing canapés and calm, with the breathy seduction of the former shadow Chancellor and the now Business Secretary hopping about in the background dispensing free legal advice to whoever cared to listen. With Labour, everything seemed possible; business would be safe in its tender hands—but it was not. Trust was destroyed, and the wrong decisions were taken. Why? Because those on the Government Front Bench have not a jot of real-world business experience. In fact, fewer than half of those around the Cabinet table have any experience in the private sector whatsoever. Far from being the natural party of business, this is the most anti-business Government in modern political history.

Surveys by the British Chambers of Commerce show that tax is now the No. 1 concern of businesses. According to the Federation of Small Businesses, in the last quarter of last year, business confidence hit the lowest level ever recorded in its surveys, save for the pandemic. It is almost as if the only way that small businesses are created today is through the shrinkage of larger ones.

Firms are being crushed by the wrong policies. Take the national insurance measure, which, despite having not yet commenced—it comes in in April—is already driving down employment and driving up prices and inflation. It is a ticking tax time bomb waiting to go off in early April. It will affect the lowest paid the hardest, with those in part-time work bearing the brunt of this measure, and it will impact those in labour-intensive sectors. UKHospitality found that three quarters of a million more jobs will be subject to national insurance as a direct effect of this Government’s plans. According to Young’s, the brewer, the policy will add an extra 20p to the price of a pint.

[Andrew Lewin (Welwyn Hatfield) (Lab)]

I am pleased that the right hon. Gentleman has expressed concern for people on lower wages, and I hope he will therefore welcome the decision announced at the Dispatch Box by this Labour Government to increase the living wage by 6.7% from April.

[Mel Stride]

As the party that increased the personal allowance, doubling it between 2010 and the present day, taking millions of people out of tax altogether, and that brought in the national living wage, we have done a great deal to support the lowest paid in our society in particular.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

The point is about the culmination of all the changes the Labour Government have brought in. This Government have indeed raised national insurance, and may need to do so again in future. However, the key point is what the ramifications of all these changes will be—the living wage change, the cuts to business rate relief, the red tape being introduced with the Employment Rights Bill and the national insurance contributions going up. That toxic concoction will kill off growth. That is the problem. Does my right hon. Friend agree?

[Mel Stride]

My hon. Friend is absolutely right. It is not as if the Government were not warned about these issues. In its reports, the OBR made it extremely clear that while the headline figure to be raised through the national insurance contribution changes is £25 billion, the net figure will be far less because of the behavioural impacts that necessarily follow when jobs are taxed—one does not need to have spent a decade at the Bank of England to know that. National insurance increases lead to fewer jobs, lower wages and higher prices.

Of course, this Government are piling on the regulation with their Employment Rights Bill. We know that this will increase the risk of employing people at a time when the employment market itself is softening and putting an end to flexible working practices, which not only benefit many businesses but suit many people, particularly younger people and those who are more elderly. Given that, it is astonishing that the Chancellor has launched a tax raid on family businesses.

[Gareth Snell (Stoke-on-Trent Central) (Lab/Co-op)]

I thank the shadow Chancellor for giving way. Will he spell out the specific rights in the Employment Rights Bill that he and his party believe should not be afforded to working people in this country?

[Mel Stride]

The hon. Gentleman asks a very fair question. The Bill will create a situation where employers are fearful of taking on new hires because of the consequences that may follow, where trade unions are advantaged in the way the Bill suggests—the trade union paymasters who may, perhaps, support the hon. Gentleman, but who certainly support many of his colleagues—and where the minimum service standards legislation that we brought in will, as I understand it, be overturned. None of those things will be good for jobs, for people searching for employment, for businesses or for the UK economy.

[Gareth Snell]

rose—

[Hon. Members]

Declare an interest!

[Gareth Snell]

I will happily declare an interest, Madam Deputy Speaker, as a proud member of many trade unions. My declaration is up to date and free for all to see.

I very much enjoyed the shadow Chancellor’s answer to my question, but perhaps I could pose it again, taking a lesson from the leader of his party, and say that he might want to answer it this time. What are the specific rights in the Employment Rights Bill that he and his party oppose? The motion says that the Employment Rights Bill should be stopped. Which rights in the Bill does he oppose working people having?

[Mel Stride]

To paraphrase the leader of the hon. Gentleman’s party, I have already answered his questions. I do note his serial offence of being a member of several trade unions at the moment—it is good of him to disclose that.

The changes to business property relief will see the break-up of many family firms. Of course, the Government will say that it will have an impact only on the wealthiest estates because of the £1 million threshold, but how many of those companies will have the cash available to settle those liabilities? The value of many businesses, of course, lies in their assets. Liquidating those assets to pay those kinds of liabilities, given that the assets are often instrumental to the effective working of the firm, is an absurdity. We also know that the changes will damage businesses’ ability to borrow against assets when there is a sword of Damocles hanging over their head by way of a potential future inheritance tax liability.

Research by CBI Economics for Family Business UK suggests that this policy may not even raise any money. The firms that will be impacted have said that on average, they will invest 17% less in their business as a consequence of this measure; in fact, 15% of those businesses have said they would sell their business altogether.

Of course, the rules will be complex. There will be plenty of red tape and legal advice to be taken from solicitors—real ones. Some people will pay through dividends on which they have already been taxed, so they will be taxed twice. Tax on tax, as we know, is the Labour party way. William Lees-Jones of JW Lees, the long-established family brewery and pub operator in the north-west, has said that the family business tax would

“inevitably reduce future investment in the company.”

Importantly, he goes on to say:

“It would also place our business at a considerable disadvantage to our competitors who tend to be listed or owned by private equity, sometimes overseas.”

So it is that British institutions, which, in some cases, have been in the same family for decades, or even centuries, may end up shutting down or being forced to sell to foreign buyers as a result of this single reckless policy.

[Dr Caroline Johnson (Sleaford and North Hykeham) (Con)]

What Labour seems not to understand is that every business starts with an idea, a hope or a dream, and the individual then puts their whole heart and soul, and every working hour they have, into building their business, often as a whole family endeavour over many generations. It is that, not just the economics and the jobs, that Labour is destroying.

[Mel Stride]

My hon. Friend is absolutely right. That is where the dearth of experience of entrepreneurship on the Government Front Bench really shows. We see this not just with BPR, but with agricultural property relief. Family farms will be broken up, with years and generations of people struggling and working hard, whatever the weather, to grow businesses and provide the food that we need torn asunder with a stroke of the Treasury’s pen.

[Dr Luke Evans]

In an interview, the Prime Minister said that the reason for doing this to farmers was to be able to give them the NHS that they might need. Only a week later, the £10 million fund that was there to support the mental health of farmers had been taken away. It must stick in the throat of farmers when they are told that they are not a priority, that food security is not a priority, and that they will now not have the health service in place, despite having to pay the tax that is about to come into force.

[Mel Stride]

The treatment of our farmers by this Government has been utterly atrocious. Right before the general election, the shadow Secretary of State for Environment, Food and Rural Affairs—now the Secretary of State—looked the NFU in the eye and told them that, at least on inheritance tax, farmers had nothing to fear from a future Labour Government. The point that my hon. Friend makes is telling: they cared nothing about any of them. Within a matter of months of coming into office, they had brought in their agricultural property relief changes to the detriment of thousands of hard-working farmers up and down our country.

[Becky Gittins (Clwyd East) (Lab)]

I thank the right hon. Member for giving way. Were the wellbeing and mental health of our farming communities and the security of our food, which have just been raised by those on the Opposition Benches, a concern of yours when the Conservative Government sold our farmers down the river with dodgy trade deals with Australia and New Zealand? Was that your concern then?

[Mel Stride]

rose—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Before the shadow Chancellor responds, let me says that “a concern of yours” would mean a concern of the Chair’s. Let us start off today’s business in good form.

[Mel Stride]

Madam Deputy Speaker, I think that I should put it on the record that you have always been very pro-farmer, and that should never ever be brought into question by anybody in this Chamber.

I have always been extremely proud of our record of supporting farmers up and down the country. That has been the case ever since I first came into the House in 2010, representing a highly rural constituency right in the middle of beautiful Devon. This party should be very proud of the many schemes, financial support packages and so on that it introduced while in government.

[Mike Martin (Tunbridge Wells) (LD)]

I thought that I would let the shadow Chancellor make a little progress in his speech before intervening on him. It seems odd to hear a speech about the economy from the Conservative party without any mention of Liz Truss. Now we hear mention of trade deals. Let me ask him this very directly: does he think that the policies of Liz Truss—[Interruption.] The shadow Chancellor cannot hear what I am saying, because the Members behind him are shouting.

[Madam Deputy Speaker]

Interventions should be very short. Come to a conclusion quickly.

[Mike Martin]

Does the shadow Chancellor think that the policies of Liz Truss were good for business investment and confidence in the economy?

[Mel Stride]

The hon. Gentleman may or may not be aware of this, but, at the time of the mini-Budget, I was the Chair of the Treasury Committee. I had a lot to say about what was being proposed before it happened, I had a lot to say at the time that it happened and I have had a lot to say since then. All of that is a matter of public record. [Interruption.] If the hon. Lady wants to intervene on me, I am very happy to give way.

[Daisy Cooper (St Albans) (LD)]

I have been invited to make an intervention, so I will very quickly say that while the right hon. Gentleman was reasonably outspoken on the mini-Budget, the same cannot be said of his colleagues on the Front Bench.

[Mel Stride]

I have made the position extremely clear. What is very clear is that we actually left the current Government with an excellent inheritance—[Laughter.] Well, where has it all gone now? We left the Labour party with the fastest growing economy in the G7. We left the Labour party with a near-record level of employment. We left the Labour party with a near-record low level of unemployment. We left the Labour party with 13 consecutive months of real wage growth. And we left the Labour party with inflation figures, which had gone up to over 11% in October 2022 due to the Ukraine war, of just 2%—bang on target—on the day of the general election. That is a decent inheritance. It has taken the Labour Government seven short months to completely trash it, so we will take no lectures from them.

We would do things very differently, because we recognise that small businesses and family businesses are the backbone of our economy. They are the life and fire of our economy, but there is no life or fire in the Chancellor—just tragic mistakes and miscalculations. The sugar rush of borrowing and spending that we saw in the last Budget further bloated the size of the state and forced taxes ever upwards. We have seen the Government failing to grasp the nettle of productivity, giving into those trade union paymasters, and awarding above-inflation wage settlements with no strings attached whatsoever. They have had absolutely nothing to say on the issue of welfare, the budget for which has been ballooning out of control. When we were in government, we reduced the welfare budget on my watch by £5 billion. The OBR recorded over 400,000 fewer people going on to long-term sickness and disability benefits as a result of the reforms that we brought in.

There was, however, more to be delivered. We went into the last election with a clear plan to save a further £12 billion every year as a result of our welfare reform. Where has the zeal for welfare reform gone? It has evaporated entirely under the Labour Government—in fact, it was never there. Simply, if the Government have the backbone to come forward with some serious proposals to deal with the welfare budget, such that the Chancellor says at the Dispatch Box on 26 March that she will unwind the national insurance increases, the Opposition will support her.

[Kanishka Narayan (Vale of Glamorgan) (Lab)]

I notice that the motion is on family businesses, but 96% of them have either no employees or a very small number. They are unaffected, if not helped, by the doubling of the employment allowance. Only 4% of family businesses have claimed BPR; most are unaffected. Moreover, the shadow Chancellor cannot name a single proposal under the Employment Rights Bill. Will he apologise to family businesses for the total irrelevance of his complaints to the theme that we are discussing?

[Mel Stride]

With great respect, I think the hon. Gentleman should get out a bit more and speak to some of those businesses.

Politics is about priorities. For all their talk of being the natural party of business, the Government are instead simply reaching for the socialist comfort blanket of tax, spend, borrow and regulate. It has not worked before, it is not working now, and it will never work. The truth is that this Government are totally out of their depth, businesses are reeling, and we are all paying the price.

14:17

[The Exchequer Secretary to the Treasury (James Murray)]

I thank the shadow Chancellor for opening the debate.

In their motion, the Opposition have set out a list of objections to the decisions that the Government have taken—or, in the case of the measurements around pints, decisions that shadow Ministers seem to have entirely imagined. They may be able to list their objections, but they are unable to accept responsibility for the damage that they did to our economy. Crucially, they are unable to offer any credible alternative. The motion makes it clearer than ever that the Conservatives have no vision, no ideas and no plan to deliver the change that our country needs.

In contrast, Labour is the party with a plan for change—a plan to restore economic stability, boost investment and drive growth across the UK to put more money in people’s pockets. We know that it is up to the Government to provide stability, security, fiscal responsibility, and to remove unnecessary regulation when it stands in the way of growth. It is businesses large and small—including family businesses and their workforces—that will create jobs and wealth and be the engines of growth in the economy. We know that pubs, shops, traders and services across the country not only play an important role in all our lives, but drive economic growth. Those businesses and their workforces are the backbone of our economy, and they need a Government who will take the right decisions in the national interest, even when they are difficult, to support our security and prosperity.

I briefly remind Conservative Members of the context in which the decisions have been made. That context is, of course, the inheritance that this country faced after 14 years of the Conservative party being in power.

[Dr Evans]

The context is that back in 2010 the then Government had to borrow £158 billion. Fast forward another decade, and we had something called the pandemic, when we had to borrow £400 billion on top of that. Collectively, that is a great big difficulty. Five years ago, when the pandemic happened, I sat in this Chamber listening to all the interventions asking for more spending. Does the Minister not agree that that is the problem the Conservative Government dealt with?

[James Murray]

The hon. Gentleman said that we had something called the pandemic; we also had a Prime Minister called Liz Truss and that had a pretty big impact on our economy. I know the shadow Chancellor is distancing himself from it. If his colleagues would like to leap to Liz Truss’s defence, I would welcome an intervention. No, they are not seeking to intervene. Funny that, Madam Deputy Speaker. Perhaps, in closing, one of the other shadow Ministers can defend Liz Truss’s record.

[Dr Evans]

Will the Minister give way on that point?

[James Murray]

Yes—on Liz Truss’s record.

[Dr Evans]

The way I see it, the problem that Liz Truss had with her Budget was that she did not set out her workings. The problem with Rachel Reeves’s Budget is that she did, and the country and the world does not believe it. That is far more detrimental to the situation we find ourselves in because she cannot get out of that problem. That is the difference between Liz Truss and Rachel Reeves.

[James Murray]

Wow. I should let the hon. Gentleman intervene more often if he is going to say that the only problem with Liz Truss is that she did not set out her workings. I think the problem was rather more fundamental than that, as people across this country will attest.

Frankly, it is no wonder that Conservative Members want to bury their heads in the sand and try and pretend the last 14 years did not happen. It was 14 years of mismanagement and decline, along with jolts of disaster, digging ever deeper holes in our public services and our economic resilience. It was their decisions that led to their resounding electoral loss last year and it was their record in office that made necessary the difficult decisions that we had to face on entering government.

[Paul Holmes (Hamble Valley) (Con)]

I thank the Minister for handling this debate in his usual courteous way. May I take him back to something that he said in his remarks about hospitality businesses and pubs delivering economic growth? There is a small pub chain in my constituency that must find a third of its total turnover because of the actions of this Government, with the result that it may have to close a venue that supports a small village in my constituency. Is that the economic growth that he thinks he is delivering?

[James Murray]

I assume the hon. Gentleman refers to the changes around employer national insurance, to which I will come in my remarks.

Let me be absolutely clear about the context: no responsible Government could have let things carry on the way they were. That was simply not a tenable situation and I think Conservative Members know that. That is why at the autumn Budget, we took the difficult but necessary decisions on welfare, spending and tax, and those decisions were vital steps towards restoring economic stability and fixing and supporting the public finances. As I said earlier, while Conservative Members have taken every opportunity to say they oppose those choices, they have yet to offer any solutions of their own. Difficult decisions were necessary, so let me set out why we made some of the choices that we did.

[Nick Timothy (West Suffolk) (Con)]

The Labour party manifesto said that by the year 2028-29, it would increase spending by £9.5 billion a year. Why, then, did the Budget increase it by £76 billion—eight times more than the Labour manifesto said?

[James Murray]

As I am sure the hon. Member will know, upon entering Government and speaking to Treasury officials about the state of the public finances, we uncovered a £22 billion black hole, which was known to then Ministers but which the OBR was not informed about.

[Nick Timothy]

Will the Minister give way?

[James Murray]

I will give way one more time.

[Nick Timothy]

The Minister might have noticed that there is a bigger gap between £9.5 billion and £76 billion than £22 billion. His answer is clearly ridiculous. We are talking about such tax rises not because of the £22 billion fictional black hole, but because of the decision to increase spending by eight times more than the Labour party promised at the election. Will he accept that or not?

[James Murray]

The hon. Member’s comments are clearly ridiculous if he thinks the £22 billion black hole was fictional. It has real-terms consequences in terms of the pressure—

[Nick Timothy]

Will the Minister give way?

[James Murray]

I will make some progress as I have been very generous in giving way to the hon. Gentleman. He will know that his colleagues who were in government were aware of the in-year spending pressures and they chose not to share that with the Office for Budget Responsibility and thereby not to share it with the British people. That is the truth of what we inherited, and that is why we had to take difficult decisions.

I turn to some of the difficult decisions that we had to take in the Budget last year, because the Opposition motion refers to our decisions on business property relief. I assure hon. Members that the decisions we took on that and on agricultural property relief were not taken lightly. The Government recognise the role that those reliefs play, particularly in supporting small farms and family businesses, and that is why we chose to maintain rather than abolish them, which has meant maintaining significant levels of relief from inheritance tax beyond what is available to others. Indeed, the reliefs will remain more generous than the last time they were changed. The changes we are making mean that agricultural and business property reliefs will be better targeted and fairer.

According to the most recent data from His Majesty’s Revenue and Customs, 40% of agricultural property relief benefits the top 7% of estates making claims. It is a similar picture for business property relief, with more than 50% of business property relief claimed by just 4% of estates making claims. Those data bear out the fact that the benefit of the existing 100% relief on business and agricultural assets has become heavily skewed towards the wealthiest estates.

It is neither fair nor sustainable to maintain such a large tax break for such a small number of the wealthiest claimants, particularly in the light of the wider pressures on the public finances. That is why we are changing how we target agricultural property relief and business property relief from April next year. Individuals will still benefit from the 100% relief for the first £1 million of combined business and agricultural assets. On top of that amount, there will be 50% relief, which means that inheritance tax will be paid at a reduced effective rate of up to 20%, rather than the standard 40%. That sits on top of the other spousal exemption and nil rate bands, which apply more widely within the inheritance tax system.

[Gregory Stafford (Farnham and Bordon) (Con)]

Kilnside farm in my constituency, run by Bob Milton, is only 36 acres in total. It is a tiny farm, yet it will be subject to the new taxes. How can the Minister say that only 4% will be affected? Even the smallest farmers in my constituency will be hit.

[James Murray]

To correct the hon. Gentleman, I did not say that only 4% will be affected. We have set out that up to 520 estates claiming agricultural property relief, including those that also claim business property relief, are expected to be affected in 2026-27. That means that about three quarters of estates will be unaffected and will not pay any more inheritance tax. All the data on that has been set out in a letter from the Chancellor to the Treasury Committee, and if the hon. Gentleman looks at that document, he will see some of the stats that I refer to.

[Rebecca Smith (South West Devon) (Con)]

Of the 500 or so that the Minister has just explained will have to pay inheritance tax, does he have any idea what number are small businesses, compared with the large estates that he seeks to challenge in the legislation?

[James Murray]

The data that I refer to is based on claims data. This is an important point that comes up frequently when we have debates on agricultural property relief and business property relief. If one were to consider assets owned by farmers or other business owners, the actual value of the asset does not give a guide to what claim might be made against inheritance tax because that will depend on the ownership structure, on debt that might be owned or on what inheritances have happened earlier in people’s lives and so on. The only data that can give an indication of what impact the changes will have from April 2026 is the claims data.

The data that I referred to earlier and which I referred to in response to the hon. Member for West Suffolk (Nick Timothy) is the real claims data that HMRC has. That is the data on which we made decisions around this policy and which informs some of the Chancellor’s statistics in her response to the Treasury Committee, which the hon. Lady may like to consult.

[Carla Lockhart (Upper Bann) (DUP)]

In Northern Ireland, the Agriculture Department has indicated that almost half of all farms, and 75% of all dairy farms, will be impacted by the inheritance tax. When will the Minister start to speak with, and listen to, industry leaders? Quite frankly, the meeting last week was an outrage. He needs to sit and listen to industry leaders, who know the industry and are speaking on behalf of real farmers on the ground who will be impacted by this inheritance tax.

[James Murray]

The hon. Lady referred to meetings that I held last week, both with representatives of UK-wide organisations and those that represent other nations within the UK. There is a difference between listening to people and having to agree, because sometimes we listen and we disagree. That is the situation we found ourselves in after that meeting—we listened to concerns but we have a different approach. I have been setting out in this debate exactly why we have taken this decision.

[Caroline Voaden (South Devon) (LD)]

I recently surveyed all the farms in my constituency, and 85% of the people who responded said that they would be affected by this inheritance tax, mainly because of the cost of land in South Devon—practically all farms will be subject to it. When will the Government listen to the evidence that we are collecting from our farmers, which shows that their assessment that only 25% of farms will be affected is not correct?

[James Murray]

It is important to emphasise that the correct data to work out the impact of these changes is the claims data. That is what is available to HMRC, and it is the basis on which we have established how many farm estates are likely to be affected by the changes.

[Wendy Morton]

The point that we are trying to make is that the Minister is looking only at one dataset, not the big picture. We have spoken a lot about farmers, but the business property relief is about the whole of the business community. Will he not go away and have another look at this, taking account of all the evidence that, hopefully, he has been listening to since the announcement of this reckless policy?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Before the Minister continues, let me remind Members who have not understood the etiquette that they cannot just wander into a debate when someone is on their feet and try to intervene. They need to take part in the whole debate.

[James Murray]

I return to the point that I have made several times today: the way to understand how the policy on agricultural property relief and business property relief will work is to look at actual claims data—the claims as they relate to individual estates. The overall value of farms or businesses does not tell us exactly what the estate value will be through an individual claim. That is the correct way to approach it.

[Several hon. Members rose—]

[James Murray]

I will make some progress, because I have given way many times on this particular point. I have plenty more to get through and I am sure that other Members would like to contribute.

Depending on people’s individual circumstances, a couple will be able to pass on up to £3 million to their children or grandchildren free of any inheritance tax at all. If owners pass on their assets more than seven years before death, no inheritance tax will be due either. Where any payment is due, it can be paid over 10 years interest-free in most circumstances. That benefit is not seen anywhere else in the inheritance tax system.

I recognise, as evidenced today, that the inheritance tax reforms generate strong views, but reform is necessary given the fiscal challenge that confronts us. This is a fair approach that helps put the public finances back on a sustainable footing.

[Several hon. Members rose—]

[James Murray]

I am going to make some progress.

Let me move on to the changes to employer national insurance contributions, which is another of the difficult decisions that we had to take at the Budget. I recognise that the changes will have impacts, but asking employers to contribute more is the fairest way to restore fiscal stability and to provide essential services, such as our NHS, with the resources they desperately need. The rate of employer national insurance will increase from 13.8% to 15%, while the per-employee threshold at which employers start to pay national insurance, known as the secondary threshold, will be reduced to £5,000.

At the same time, we firmly recognise the importance of small businesses, and we will protect the smallest businesses and charities by more than doubling the employment allowance to £10,500. That means that next year, 865,000 employers will pay no national insurance contributions at all. More than half of employers will see no change or will gain overall from this package, and employers will be able to employ up to four full-time workers on the national living wage and pay no employer national insurance contributions.

Employers will also be able to benefit from other employer national insurance contributions reliefs, including hiring under 21s and under-25 apprentices, where eligible. These changes broadly return national insurance contribution revenues as a proportion of GDP to the level that they were before the previous Government’s cuts to employee and self-employed national insurance, but in a way that does not result in higher taxes in people’s payslips.

The Opposition’s motion also refers to business rates. We want local shops and high streets to thrive again, which means we must act to support the businesses behind them, which have had to contend with changing consumer habits and significant economic headwinds in recent years. While online shopping is convenient and offers great variety, the high street brings people together. Hospitality businesses have played a key role in bringing people into town centres.

However, at present the business rates burden falls more heavily on property-intensive sectors, which is why business rates need rebalancing. From 2026-27, we therefore intend to introduce permanently lower tax rates for high street retail, hospitality and leisure properties with rateable values below £500,000. This will benefit more than 280,000 properties. At the same time, to make this tax cut sustainable, we will apply a higher rate to properties with a rateable value of £500,000 and above. That group represents less than 1% of all properties, but covers the majority of large distribution warehouses, including those used by online giants, helping to level the playing field for high street businesses.

[Damian Hinds (East Hampshire) (Con)]

The hon. Gentleman and other Ministers have constantly come back to the point about the higher rateable value commercial premises, saying that they include distribution centres for online giants. What proportion are they of the total?

[James Murray]

Data is being set out by the Valuation Office Agency, which should give the right hon. Gentleman the details that he requests, but I am happy to write to him with the details that are available. In order to sustainably fund a permanent cut for retail, hospitality and leisure properties below £500,000, we have to ensure that it is paid for. We are seeking to increase the rate on properties with a rateable value of £500,000 or more to ensure that it is sustainably funded. That will come in from April 2026.

[Andrew Lewin]

My hon. Friend is talking about the importance of sustainable funding, and I completely agree. It is fascinating that the last Government had a business rate relief system, which was a good one, but had nothing in the Budget for it at all, so they planned to cancel it entirely. That is why we are now in this situation.

[James Murray]

My hon. Friend is absolutely right to point out that, under the previous Government, there was a series of cliff edges and one-year extensions that provided no stability whatsoever to businesses trying to plan investment, hiring or expansion decisions. That is why we have decided to extend the relief that the previous Government were due to end in April 2025 for one further year, before introducing permanently lower rates from April 2026.

[Dr Johnson]

The Minister is talking about planning—I should declare an interest as a farmer’s wife—and says that 500 farmers will be affected. Of course, none of us can know who is going to die next year. While 500 farmers will be affected, there may be many, many more who might die and might be affected. There is a discrepancy between how many he thinks will definitely be affected—how many he predicts will die—and the actual number of people who may be affected and cannot plan their businesses accordingly, because they simply do not know. He argues that they can put their assets down a generation, but no one knows if there will be a car accident and the younger generation will be killed. He is simply taxing tragedy.

[James Murray]

I think I was following the hon. Lady point that in many cases no one knows when inheritance tax will be due, because people cannot predict the sad events that may happen in their lives. But it is clear that, in trying to work out the impact of changes to tax policy, the best source of data is the actual claims data for those reliefs in the past. That is exactly what we have used. We have looked at the HMRC data on actual claims under agriculture property and business property relief. That is what determines the data that I mentioned of up to 520 estates being affected in 2026-27.

[Dr Johnson]

My point was that the Minister may be correct that 520 estates will be affected, but others who may be affected will need to plan their businesses and lives accordingly. That is why so many more people are affected by his announcement than simply those who will die next year or the year after.

[James Murray]

I return to my point that three quarters of estates claiming agricultural property relief, or agricultural property relief and business property relief, will not pay any more inheritance tax in 2026-27 as a result of these changes. In terms of the extra inheritance tax liability, which is what the data about claims points towards, the data is clear that the majority of estates will not be affected. As I mentioned to several of the hon. Member’s colleagues on Conservative Benches, the data is set out in quite some detail in the letter that the Chancellor wrote to the Treasury Committee. If she has a look at the data in that letter, that might answer some of her questions.

I will briefly finish my comments in relation to business rates. I was thanking my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) for intervening to point out what we inherited from the previous Government: a situation where relief for retail, hospitality and leisure was chopping and changing year to year. Indeed, from April this year there was to be a cliff edge, so it would have gone away entirely—according to the plans we inherited from the previous Government, there was to be no relief at all after April. We therefore decided to extend the relief at a fiscally responsible level for a further year, ahead of our permanent reforms coming in.

While we are on the subject of hospitality, let me address the absurd notion in the Opposition’s motion—I do not believe the shadow Chancellor mentioned this in his comments—that the pint is under threat. The pint is part of our nation, and we do not need a new law to protect the pint any more than we need a new law to say that the sun must rise in the morning—I wonder whether the Opposition Members who drafted that part of the motion may have been close to a number of points when they did so. In any case, I am proud to reject the insinuation in their motion and to put on record—if it needs to be said—that pints are at the heart of our nation and, under Labour, they will stay that way.

[Bradley Thomas (Bromsgrove) (Con)]

The Government continually talk about how the Chancellor has shaved one penny off a pint, but many publicans in my constituency tell me that they are having to find an extra £2,000 a month for additional costs as a result of the Government’s Budget. Does the Minister accept that a penny off a pint is futile if there are no pubs left to drink in?

[James Murray]

What I accept, as I said earlier, is that our difficult decision on employer national insurance contributions will have impacts on different businesses across the country. But the hon. Member should welcome—businesses across the country will welcome this—the extra support that we have provided through draught relief to support those pubs to succeed. That is an essential part not just of our economic activity across the country, but of our social lives and enjoying pints. I know that enjoying pints matters very much to Opposition Front Benchers.

I will try to make some progress, because there is quite a lot to cover in the Opposition’s motion. On employment, the motion seeks to undermine the Employment Rights Bill, so let me directly address those points. The Bill is the first phase in delivering our plan to make work pay, supporting employers, workers and unions to get Britain moving forward to bring greater predictability to the lives of working people. While I recognise that the flexibility offered by zero-hours contracts, zero-hours arrangements and low-hours contracts can benefit both workers and employers, without proper safeguards that flexibility can be one-sided, and it is far too often the workers who end up bearing all the financial risk.

That is why we have committed to ending this one-sided flexibility, to ensure that all jobs provide a baseline of security so that workers can better plan their lives and their finances. That includes ending exploitative zero-hours contracts. We will deliver the commitment through two measures: first, a right to guaranteed hours where the number of hours offered reflects the hours worked by the worker during a reference period; and secondly, new rights to offer reasonable notice of shifts, with proportionate payment for shifts that are cancelled, moved or curtailed at short notice.

I will try to draw this to a close. [Interruption.] Opposition Members might not want to hear it but, out of respect to you, Madam Deputy Speaker, I will bring my remarks to a close. The motion exposes a Conservative party that is happy to object to the difficult decisions that we have taken but totally unable to offer an alternative plan of its own. The debate has also allowed me to set out, on behalf of the Government, how we are moving fast to take the sometimes difficult but necessary decisions to deliver our plan for change.

We are taking the right decisions to fix our public finances, to restore stability and fiscal responsibility, and to ensure that both businesses and their employees can work productively and securely to drive economic growth. The changes that we have begun making are essential for economic growth, so we reject the Opposition’s motion. We are determined to move further and faster to make people across the UK more secure and better off.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

14:45

[Daisy Cooper (St Albans) (LD)]

I am delighted to speak on behalf of the Liberal Democrats about family businesses, because they are so important and make a distinct contribution to our economy and to their local communities. Family businesses are synonymous with quality, trust and reliability. Family businesses have a strong sense of stewardship of their craft, their capital and their customer base. By their very nature, family businesses have the goal of nurturing their business to pass through to the next generation and, as a result, have a vested interest in long-term decisions, the stability of the economy and building a resilient community.

Where family businesses are located on high streets, they are often the anchor stores, bringing back loyal customers time and again. Family businesses are present in every part of the UK. Indeed, they are often the largest employer in a region and the largest philanthropic organisation in those communities, too. But in tabling the motion, the official Opposition do not seek to acknowledge or accept the damage that they have done to family businesses over the years. [Interruption.] If the official Opposition are patient, they will realise that I will not pull my punches when addressing the Government, but it is an Opposition day debate, so let me continue to outline the litany of mistakes that have occurred over the years.

The Conservatives scrapped the industrial strategy, which was the bedrock of long-term planning. They failed to reform the broken business rates system, which has hammered family businesses on the high street. They starved family businesses of seasonal workforces, which many of them need. Their botched Brexit deal has deprived many family businesses of access to European markets, raising trade barriers for imports and exports, and wrapped them up in reams of red tape. They wreaked havoc with their mini-Budget, making access to finance too expensive for many, and they failed to address the soaring energy costs and broken energy market that has resulted in many small family businesses suffering from extortionate energy contracts and being frozen out of the best deals.

That is why it is disappointing to see that the Labour Government are making some of the same mistakes. The national insurance contributions rise is unnecessary. The Government could have raised that £10 billion through other, fairer means such as taxes on big corporations that have raised billions, using that money to put public services back on their feet.

The business rates proposals will be incredibly damaging for small businesses on our high streets. On a number of occasions in the House, I have invited Ministers to look at House of Commons Library research commissioned by the Liberal Democrats that shows that chains will continue to be subsidised by small independents. Of course, there are also the changes to APR and BPR, which will raise a relatively small amount of money for the Treasury but could be devastating to many small family businesses across the UK.

Family Business UK, which I met this morning, is urging the Government to run an impact assessment. It is conducting its own impact assessment in partnership with the National Farmers Union, where it intends to speak to more than 3,000 family businesses about the potential impact of these measures. May I invite the Minister either to intervene on me now or to say in responding to the debate whether the Government will meet Family Business UK to discuss the findings of its survey once it is complete?

We should not just think of family businesses as units for tax revenue. Family businesses are different. Family farms rightly grab the public’s imagination, but there is more than that. In my constituency of St Albans, I can think of many. Hedges Farm Shop is a much loved, family run, award winning farm shop, and its delicious meat is often on the menu of our award winning restaurants. Waterers tailors is run by two generations of the Masi family, providing bespoke, high quality tailoring and some especially fancy men’s jackets. Burston Garden Centre is a long-established family business with a lovely restaurant and is a fantastic place for a day out. We have beauty companies, building merchants and electric vehicle charger stores, all of which are family businesses. And one of my favourite pubs, too: The Boot, handed down from Will to his son Sean.

On the subject of pubs, what on earth is this absurd idea in the Opposition day motion that the Product Regulation and Metrology Bill will somehow put the British pint at threat? The pint is well and truly safe. [Interruption.] The pint is well and truly safe, something I am sure the entire House wants to hear. The pint is enshrined in law in the Weights and Measures Act 1985, so this scaremongering is just total nonsense. I am tempted to call it a load of old Codswallop, but I would not want to insult the makers of that very fine pale ale. I could instead accuse the Conservatives of scraping the barrel. Let us just say that the Conservatives’ claim that the pint will be abolished is as fanciful as Labour’s claim that punters will see a penny taken off the price of their pint. They won’t. Frankly, if the Opposition think they are standing up for pubs they need to think again. I say this not only as the MP for St Albans, where we have more pubs per square mile than anywhere else in Britain, but also, I am proud to say, as the MP crowned last year as pub parliamentarian of the year. [Interruption.] I was, yes.

The last Conservative Government proved, unfortunately, that they did not know their firkin from their pin. They could not tell a kilderkin from a craft keg. Their defective attempt to introduce a draught beer relief ended up excluding the very small craft brewers they were claiming to help. When a former Conservative Prime Minister had the audacity to have a photo op with the casks that he had mistakenly left out of the draft duty relief support scheme, it was the Liberal Democrats who worked with publicans and small brewers to force that correction.

If the official Opposition want to pretend to stand up for the great British pub, they will need to do their homework. They should get out and speak to the struggling pubs and hospitality businesses that they have ignored. If the Conservatives want to continue with their pint-sized politics, it will be the Liberal Democrats who will continue to have the official Opposition well and truly over a barrel. Jokes aside, there are changes in the Labour Budget that are no laughing matter: the national insurance contribution changes and the reduction in business rates relief will deliver a hammer blow to our pubs. They will have no choice but to put up prices for punters and many more may be pushed to the brink.

[Carla Lockhart]

A joint survey by leading hospitality trade associations in Northern Ireland has revealed that 65% of hospitality businesses will reduce their employment levels, 55% will cancel planned investment, and 22% believe they will have to close their doors. The same can be said of retail because of the extra threat around big business and online sales and the fact that they get away in the smoke around taxation. Does the hon. Lady agree that there will be tumbleweed on our high streets, rather than the thriving high streets that the Minister suggested today?

[Daisy Cooper]

I am grateful to the hon. Member for raising those points. Our high streets are the beating hearts of our communities all over the UK. There is real concern that when the national insurance contribution changes and the reduction in the business rates relief kick in, our high streets will be absolutely hammered and we may indeed see tumbleweed. That matters for two reasons: there will be an impact on our local economies and that could have a knock-on impact on people’s confidence. Many people with busy lives do not always get to follow headlines about growth, inflation, interest rates and all the rest, but they do look to their high streets as the primary signal of whether or not the economy is working for them and whether it is working in their local area.

In hospitality, of course, it is not just the increase in the national insurance contribution rates that will have an impact. The changes will also mean that many part-time workers will not be recruited to work in those businesses. That will impact in particular women, people from ethnic minorities and young people. Young people often work in hospitality as their first job. Often hospitality can give them the chance to work after something adverse has happened in their life. I think all of us in this House can say that we support hospitality, and it is vital that we continue to support it.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

My hon. Friend talks about businesses run by women. I have a constituent who runs a nursery in Somerton. She has been struggling to stay afloat for some time, after issues relating to the Conservative Government and the impact of the increase to national insurance contributions. The announcement on nursery provision could be the last straw for her business. Does she agree that the Government must urgently look at the impact their measures are having on the early years sector?

[Daisy Cooper]

I am grateful to my hon. Friend for that contribution and I absolutely agree. The House has debated many times the impact of the national insurance contribution rise. Colleagues may remember that the Liberal Democrats tabled a number of amendments to exclude particular groups. We are opposed to the NIC rise full stop, and we put forward alternative ways in which the Government could raise the revenue, but we said that if the Government were intent on pursuing that particular measure, then some organisations should be exempted. We pointed in particular to health and care providers, including social care providers, but we also talked about early years providers, universities, charities and hospices. We have debated such things many times, and we urge the Government once again to look very closely at the impact of the NIC rise and to do the impact assessment that we all so desperately want.

[Caroline Voaden]

My constituency has a large employer with several sites who is now looking at automation because of the impact of the NIC rise. It will add a quarter of a million pounds to his bottom line, so he is actively looking at how he can make redundancies to keep his business afloat. Does my hon. Friend agree that that is not the way to improve the local economy and make people feel good about jobs and investment?

[Daisy Cooper]

I am grateful to my hon. Friend for that contribution. Automation can have some value many sectors and industries, alongside employing and training up the next generation, but it would be devastating to other sectors if automation replaces the next generation. That is particularly important in farming, but also hospitality. The very nature of hospitality is that it is hospitable. Going to the pub and being served by a vending machine is not really someone’s idea of a good night out. I agree with my hon. Friend that automation, when put alongside investing in the next generation and staff, can be a good thing, but as a replacement it can have devastating impacts on the future of sectors and on people’s opportunities.

We have rehearsed on a number of occasions the impact of the Government’s Budget on small businesses and family businesses across the land. The Liberal Democrats are incredibly concerned about the impacts on family businesses and on the future of our high streets. We will not be supporting the official Opposition’s motion today, which I am sure they will be astonished to hear. [Interruption.] They are astonished, as you can tell, Madam Deputy Speaker, from the chuntering from the Conservative Benches. Notwithstanding, we urge the Government in the strongest possible terms to conduct an impact assessment and to look again at the amendments the Liberal Democrats tabled to exclude key organisations from their hike to national insurance contributions.

[Several hon. Members rose—]

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. As the Front-Bench contributions were so substantial and so many colleagues wish to contribute, there will be a time limit of five minutes.

14:58

[Kanishka Narayan (Vale of Glamorgan) (Lab)]

I will start by doing what the Opposition failed to do, which is to recognise the particular contribution of family businesses. I think family businesses in the Vale of Glamorgan will be disappointed that the shadow Chancellor trotted out a generic business conversation, rather than honing in on what is special about family businesses.

What is special about family businesses can be counted in the Vale of Glamorgan and across the country. Family businesses make up the majority of businesses in the Vale of Glamorgan, but their contribution cannot just be counted, it can be felt. I feel it on a weekly basis in the sandwiches of the Food for Thought deli on Barry high street, where I see the incredible effort that Nathan, Sarah, Leroy and the whole team put in. I felt it on a visit to Clive Edwards Contracts in Colwinston, where Josh Edwards is taking on what his father started. I have felt it in the coffee of the Welsh Coffee Company, best consumed on the coastline of Ogmore-by-Sea. And I have felt it very specifically in the joy delivered by the traders of Barry Island, the primary effort drivers who bring waves of tourists to our shores.

I have mentioned those contributions being felt, because they are the distinct contributions of family businesses. Many family businesses work way over time, putting a huge amount of personal and financial risk and wider collective effort into their businesses, but they make a wider contribution too. The median tenure of a FTSE chief executive officer is around five and a half years, but the tenure of family businesses is multigenerational. They are the drivers of patient capital decisions, they are the drivers often of conviction in those decisions, and they are the drivers often of both philanthropy and values in a number of business decisions, as Opposition Members have mentioned.

[Wendy Chamberlain (North East Fife) (LD)]

The hon. Member is highlighting the value that family businesses have in the community and beyond. I have a constituent who has been investing 80%-plus of all their profits back into their business for many years, but with the changes to business property relief, they are going to have to divest equity in the business. Does he agree that that is not the right way to guarantee growth?

[Kanishka Narayan]

I thank the hon. Member for her question; let me say something that I was going to come to later. In all my experience of business, the one thing I have learned is that businesses are nothing but collections of people. They are mums and dads who drive their kids to school. They are people who drive through the potholes created by the Tory Government. They are people on our NHS waiting lists who want a decent health service. Of course it is difficult when we have to bear some of the burden of paying for our public services, but the people who run our family businesses benefit as well.

Let me hone in again on the contribution that family businesses make, which I am passionate about in the Vale of Glamorgan. Family businesses are now looking at the fact that employment allowances have been doubled. We know that 96% of them are microbusinesses employing fewer than nine people. In fact, the vast majority are sole proprietorships. They are looking at the fact that the path of corporation tax has been fixed, bringing stability back after a decade and a half of total chaos. They are looking at the fact that late payments—the fundamental challenge for small and family businesses in the Vale—have now been cracked down on. They will look at today’s motion and feel the comfort of their pints being protected, too.

The fundamental decision that family businesses make often comes down to a question of endurance—a question, in particular, of how they can sustain themselves across generations and be productive. In that context, what the Government are doing on late payments is critical. British family businesses are limited in their use of external finance. They often rely on cash flow, so to be able to deliver greater cash flow by tackling late payments is a fundamental contribution by this Government.

Family businesses are also drivers of technological innovation. Almost half the family businesses in this country are users of accountancy software, moving to digital bookkeeping far ahead of many other businesses. I am passionate about what this Government are doing in driving the adoption not just of technology but of artificial intelligence software in businesses.

Let me end where I started in my response to the hon. Member for North East Fife (Wendy Chamberlain). Family businesses are indeed just collections of people. When we make choices on taxation, we are making choices on spending in our public services. Those choices are at the heart of driving the long-term health, prosperity, stability and, indeed, effort of our family businesses.

15:03

[Joy Morrissey (Beaconsfield) (Con)]

It is a privilege to stand here today on behalf of businesses in Beaconsfield, Marlow and the South Bucks villages. These small family businesses are the backbone of our economy. They are the job creators, they play a vital role in helping our communities, and they deserve our support in this House. Yet it is now clear to businesses in my constituency that they find themselves with a Labour Government who simply do not understand business. This is a Government who seem to think that just by saying the word growth over and over again, it will magically happen. The truth is that businesses create growth, not hot air from the Chancellor. This Government are seriously damaging businesses with a national insurance tax raid that will destroy jobs and put at risk thousands of businesses. Time and again, business owners have warned of the consequences, but they have been met with a wall of silence from the Government. Why? Because this Labour Government simply do not understand business or the consequences of their actions.

At the end of last year, I hosted a roundtable of local, family-run, multigenerational businesses. They have been at the heart of our local economy for decades, but now they are struggling not just with the national insurance threshold increase or the differences that the Employment Rights Bill will bring in, but with skills shortages and the economic uncertainty that that will cause. Now, thanks to this Government’s tax raid, they are being forced to make impossible choices: to cut back on hiring, reduce investment or close their doors altogether.

Let me give the House just one example. I met the owner of a proud family business that has been serving Marlow for over 88 years. He told me plainly that this Government’s policies will make it harder for businesses such as his to survive. His story is one I have heard time and again. This Government do not seem to get that, in lowering the employment national insurance threshold so dramatically, they have made it almost impossible for businesses that employ lots of people to operate in the low-margin sectors.

[Richard Tice (Boston and Skegness) (Reform)]

Does the hon. Lady agree that the Government’s policies have created a hostile environment for family businesses to continue to invest in hiring people and equipment? The damage is that that reduces growth in our economy.

[Joy Morrissey]

The hon. Member makes an excellent point. The policies are damaging; it is a hostile environment for businesses and entrepreneurs who make a difference and who grow the economy and our tax base. That is who this Government are hurting: the people who will make this country great and grow us out of any of the economic issues that we are having now. By hurting entrepreneurs and small businesses, we are cutting ourselves off from growth. Again, growth is not some mythical thing that the Chancellor refers to; it is something delivered by hard-working small family businesses in this country.

Not only small businesses but all service-level jobs in our economy are affected. Care services, retail, hospitality, events—they are just a few of the sectors where businesses increasingly face the impossible choice of cutting jobs or shutting their businesses. Of course, it is not just through national insurance that the Government are raiding businesses or burdening them with over-regulation. Businesses already reeling from the national insurance raid are facing higher business rates, an Employment Rights Bill that is destined to lower employment and the destruction of family farms.

Just yesterday, the British Chambers of Commerce described the stark reality of the “powder keg of costs” facing British businesses. In the avalanche of inconvenient facts for the Government that the British Chambers of Commerce unleashed, one stood out to me: 58% of businesses told the BCC that the costs will impact recruitment, meaning fewer jobs at a time when we need the economy to be growing. This is economic illiteracy on steroids.

I will always stand up for our local family businesses in Beaconsfield, Marlow and the South Bucks villages. Their message to me has been crystal clear: this Government’s tax raid is damaging to them, to jobs and to growth for the future. I urge the Government to wake up to the disaster they are unleashing on businesses in my constituency and across this House.

15:08

[Mark Ferguson (Gateshead Central and Whickham) (Lab)]

I refer the House to my entry in the Register of Members’ Financial Interests.

I was very taken by the point made by the shadow Chancellor when he talked about the excellent inheritance left by the previous Government. We have had to listen to his views on what his Government have done and been given the benefit of his knowledge and his experience during his time in government. I regret to say that I have spent most of my adult life in the Labour party in opposition, but as a result, I have gained a huge amount of experience about opposition, which I am more than happy to pass on to the Conservatives. Let me say this very clearly: if they continue to say throughout the next few years up to the next election that they left an excellent inheritance for this country, they will be sent into an even greater electoral oblivion than last July. I urge them to put it on their leaflets, because I will certainly be putting it on mine.

I will also proudly be putting on leaflets the measures in the Employment Rights Bill. Let me talk about some of them: getting rid of zero-hours contracts; introducing day one rights; and getting rid of fire and rehire. I do not think, when the Bill passes and its measures are a success, that Conservative Members will be quite so keen to trumpet what terrible things they think they are, but if they wish to do so, they are more than welcome to say on leaflets at the next election how they want to bring back zero-hours contracts and the ability to introduce fire and rehire, and abolish day one rights.

[John Slinger (Rugby) (Lab)]

Does my hon. Friend recall that the Conservative party back in the 1990s under the previous Labour Government vociferously opposed the introduction of a national minimum wage, and might he reflect on that?

[Mark Ferguson]

rose—

[Damian Hinds]

What about the corn laws?

[Mark Ferguson]

I thank my hon. Friend the Member for Rugby (John Slinger) for his question. I am afraid I do not remember that, because I am far more youthful than I look but, as with the corn laws, I have read about it in the history books and have no doubt my hon. Friend is correct.

I am also aware from the history books that the Conservative party has often been very worried about the humble pint and what might happen to it. As a proud pint drinker, perhaps sometimes to the detriment of my health and my finances, I can say that the great British pint is going absolutely nowhere, not from the small businesses in Gateshead Central and Whickham and not from anywhere else.

[Laurence Turner (Birmingham Northfield) (Lab)]

My hon. Friend is making a characteristically powerful case. Do the history books not show that Labour has always been the party of the pints? Harold Wilson expressed enthusiastic support for preserving the pint measure. Labour is the party of the pints, while the Conservatives do not serve anything more than small bitter.

[Mark Ferguson]

I defer to my hon. Friend; he is a learned historian and I dare say knows far more about the history of the pint then I will ever muster. I have probably drunk more than him, but he has probably read about more of them than I have.

The title of this motion is “Family Businesses”. My hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan) has already assiduously made the point to the shadow Chancellor that 96% of family businesses will not be affected by some of the measures mentioned in this motion, but I wish to discuss some of the family businesses in my constituency, a couple of which I have spoken to recently.

Meldrum, for example, is a successful construction business that recently conducted a transfer into employee ownership—a show of confidence in our economy. Savour bakery was set up from scratch under this Government. It was a shell during the general election when I went to visit it. An orthodox Haredi family in Gateshead—generations of the same Gateshead family—have invested hundreds of thousands of pounds of their own money into setting up what some might find slightly unlikely. I admit that when I first heard of it I was not sure that it would be a success. It is a kosher Parisian patisserie in the heart of Bensham in Gateshead, and it has been a tremendous success. There are queues around the block most days and if anyone makes the mistake of going in at 2 o’clock in the afternoon, as I did last week, they will be greeted by a coffee machine and an empty patisserie counter. The idea that someone cannot set up a successful small business under this Government is absolutely for the birds. I have seen it with my own eyes in my own community—people doing something incredibly challenging in a community that is not often supported more widely in Gateshead. I am incredibly proud of them and incredibly proud of other small businesses like them.

I am not astonished that we are discussing this interesting pick-and-mix motion, which might as well be called “Things the Conservative party does not like that the Labour party has done”, because that is the nature of Opposition day debates. I am enjoying this opportunity to talk about the family businesses in Gateshead and about my passion—our passion on the Labour Benches—for the humble British pint.

[Paul Holmes]

Will the hon. Gentleman give way?

[Mark Ferguson]

I am having so much fun that I will happily give way.

[Paul Holmes]

The hon. Gentleman is giving a very entertaining speech and I look forward to visiting the business he mentions, I hope, in the future. He has outlined that businesses are being set up in his constituency and he is perfectly entitled to do so, but did he speak to the new business about the extra £800 per employee that this Government have put on it in the Budget, and what does it have to say about that?

[Mark Ferguson]

I have spoken to Josh who runs the business about every single aspect of it and I assure Members that he is delighted with how his business is going. I am delighted—[Interruption.] Opposition Members are chuntering from a sedentary position, as of course is their right, but my high street in Gateshead, for example, which I am pleased to say the Minister who will be responding later has been to visit, was wrecked under the last Government. The decisions made by the last Government had a profound impact on my high street and those across the country, so the idea that the Conservatives are tribunes of small business is for the birds. This Government are going to rebuild the great British high street and we will do so by supporting small businesses.

I will rightly be voting against the motion because I am afraid, to quote a former leader of the Conservative party, that it is an “inverted pyramid of piffle”.

15:16

[Bradley Thomas (Bromsgrove) (Con)]

It is a pleasure to stand here on behalf of dozens, probably hundreds, of businesses across my constituency, many of which are run by families. It is discomforting to sit here and hear the sense of sheer denial and arrogance from Labour Members about what actually drives growth in our economy. What makes me most despondent is that the Government’s default ideological position and mentality is one where they ask, “What taxes can we raise?” Rather than asking how they as the Government can cut their cloth accordingly and pass on the benefits to the economy in the form of reduced taxes, their default position is to ask, “What taxes can we increase on the businesses that provide the very backbone of our prosperity?”

In that vein, family businesses provide employment for almost 14 million people across the country and contribute £575 billion to the national economy. These businesses are founded on principles of entrepreneurialism, which I am proud that my party has championed for decades. Labour is showing once again that it does not understand the value of business; it knows only how to tax and regulate enterprise, which ultimately makes our economy weaker and poorer.

[Simon Hoare (North Dorset) (Con)]

Labour Members may speak of their support and passion for small business, but they never speak of their experience of setting up and running one. There is very limited experience of that on the Labour Benches. Does my hon. Friend agree that that is part of the problem? Having never set up and run a business, they have no idea of the impact of their policies on one.

[Bradley Thomas]

I agree wholeheartedly. That strikes at the heart of the Government’s lack of appreciation for what fundamentally drives the economy.

[Dr Luke Evans]

To be fair to the Government, we may not know what their CVs show, so there could be business experience but it is just not on their CV.

[Bradley Thomas]

My hon. Friend raises a very valid point, but let us look at the facts. The Government will attempt to tarnish the Conservatives’ record, but in July Labour inherited the fastest growing economy in the G7, with unemployment at near-record lows and inflation at the Bank of England’s target. We have seen a complete reversal of that, in part because the choices the Government made in the Budget have destroyed that progress. The Government’s Budget and fundamental overall approach threaten the future of family businesses through new red tape—we have the family business tax, the family farm tax and the national insurance job tax. Businesses know that they are paying more and the Government know that businesses are paying more, and I do not know how some Labour Members have the gall to sit there and think that their position is one of honesty and credibility when it comes to growing the economy.

A business in my patch has got in touch with me. Jack and his family run an apprenticeship training provider. Jack said,

“My parents left school with no qualifications and over the last 50 years have worked hard paying their way getting on and building a good life and business for us as a family. Since 2007, they have been majority shareholders and owners”

of a business called Birmingham Electrical Training, for which Jack is also a director. He goes on to say that they

“currently are the 2nd biggest provider of electrical apprenticeships in the UK”

and

“train 700+ apprentices in partnership with 275 local and national…contractors, many of which reside and work within”

the west midlands region. They

“hold a department of education contract and are recognised by the Electrical Industry in providing a crucial role in training the next generation of electricians”.

That is a pertinent point when the Government are pursuing policies like the ludicrous clean heat market mechanism, which will require a step change in the number of electrical contractors to deliver on the Government’s net zero folly.

Jack makes this point:

“There is no way that I would be able to afford £800k worth of tax to access the business I have helped build and grow over the past 10 years”

as a result of the changes announced by the Chancellor to inheritance tax. He will personally be liable for £800,000 that he will not be in a position to pay. That jeopardises one of the family businesses that form the backbone of the country’s economy. He asks,

“Why would the government want to destroy family businesses, which are crucial to helping local people and provide the growth in the economy in the years to come?”

That is not an isolated case. The Confederation of British Industry and Family Business UK have warned that changes to business property relief could lead to up to 125,000 job losses and reduce economic output by £9.4 billion, as their analysis found that average family businesses would cut investment by a staggering 16.5%, reduce headcount by 10.2% and lose turnover of 7.4%. That recognises the fact that the Government do not appreciate the fundamental positive benefits to wider society of promoting small businesses and their long-term financial viability. The Government are making the UK a hostile destination for investment, both large and small. They must work to ensure that our country is the most attractive destination possible for businesses to invest and grow and to make us wealthier.

[Aphra Brandreth (Chester South and Eddisbury) (Con)]

For some family businesses like those in my constituency, their main competitors are international companies. Does my hon. Friend agree that the Government have not considered how increasing costs for UK businesses are making some of our family businesses less competitive?

[Bradley Thomas]

My hon. Friend hits the nail on the head. What rings in my ears are the words from the Chancellor just a few months ago when she said that businesses need to cut their cloth accordingly. I go back to my initial point: Government must also cut their cloth accordingly. The default position of the Government in supporting business should be to spend taxpayers’ money—the funds generated by the very businesses we are talking about—in the most efficient way possible, so that we can have the lowest possible tax base in our economy to make the UK a great destination for inward investment.

[Kanishka Narayan]

The hon. Member talks of cutting one’s cloth. Perhaps he can tell the 14 million people employed by family businesses how he would cut the public services they rely on to fund the unfunded tax cuts he is talking about making.

[Bradley Thomas]

The hon. Gentleman’s intervention is a good one, in that he demonstrates that his party believes philosophically that it has to either tax or cut. The Government have no appreciation of the fact that money could be spent more effectively in the first instance. It is a fundamental ideological weakness of the Government.

[Lincoln Jopp (Spelthorne) (Con)]

Will my hon. Friend give way?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. You have 10 seconds left, Mr Thomas. Do you want to finish?

[Bradley Thomas]

I will finish by saying that I will always be proud to stand up for small businesses in Bromsgrove and the villages, and across the country.

15:23

[Laurence Turner (Birmingham Northfield) (Lab)]

I draw attention to my declarations in the Register of Members’ Financial Interests. It is a pleasure to follow my constituency neighbour, the hon. Member for Bromsgrove (Bradley Thomas). I will just say that the clean heat market mechanism that he spoke about, which is causing concern to a business in his constituency, was of course brought forward by the last Conservative Government.

I will start by talking about the Employment Rights Bill, because some of us have just spent two months in Committee going through it line by line. I thought that the House might want to hear about some of the opinions and positions put forward by the Opposition during that process. The Opposition tried to exempt millions of workers in some of the lowest paying sectors from protection against harassment at work. We heard from the shadow Minister that he does not believe that public sector employers should offer facility time at all. The Opposition attempted to block better contracts for teaching assistants and other low-paid members of school support staff. A witness who was presented as representative of business opinion had previously said that lockdowns would kill far more people than covid. I do not think that the motion or the party putting it forward is a credible voice of economic growth or business.

[Dr Luke Evans]

The independent Regulatory Policy Committee looked at the Bill back in November and said that eight out of the 23 categories were “not fit for purpose”. Was that discussed? Given that the committee is independent, does the hon. Member give that point any credit when it comes to discussing the Bill?

[Laurence Turner]

One of the pleasures of the Committee is that we have 970 pages of transcript where those matters were discussed at length, and the Government are indeed bringing forward further impact assessments on those points.

Looking at my constituency and, indeed, the constituencies of all Members of the House, the economic record that we have inherited is one of pallid economic and wage growth. After 15 years, average real wages in Birmingham Northfield are £300 lower a month than they were in 2010. The costs of delayed and cancelled NHS appointments, crime that goes without investigation and shortages in key teaching posts are borne not just by our constituents, but by businesses. We should say this clearly: public services create value. Businesses and the people who work for them need strong public services to sustain themselves and grow.

When I recently met small businesses on Northfield high street, we had—as you would expect, Madam Deputy Speaker—a serious and robust discussion about a whole range of Government policies and policies enacted by the previous Government, but the first issue raised was crime and antisocial behaviour. Anyone who has been a victim of crime can attest to the devastating impacts that it can have on a person or business.

[Chris Vince (Harlow) (Lab/Co-op)]

My hon. Friend makes an eloquent point about the issues of antisocial behaviour and crime on the economy and particularly on small businesses. Does he recognise that small businesses like mine in Harlow have been massively affected by the increase in crime and antisocial behaviour? I am thinking particularly of tool theft and thefts of vehicles.

[Laurence Turner]

My hon. Friend makes a sensible point, and the issues that he raises are reflected in my constituency. That is one of the major barriers to getting jobs and spending into our high streets.

If the Budget last year had failed to raise money for investment in public services, it would have been like changing the colour of the shovel before continuing to dig a hole in the same old ditch. We could not prolong the failed approach of the past 14 years. We can add to that the disgraceful situation that awaited the incoming Labour Government. For all the sound and fury that we have heard from the Conservatives, there is little mystery about that now. Richard Hughes, the chair of the OBR, told the Treasury Committee:

“When we had a high-trust relationship with the Treasury those things were being well managed, and managed within the total. That system very clearly broke down.”

He said that

“there was about £9.5 billion-worth of net pressure on Departments’ budgets, which they did not disclose to us…which under the law and under the Act they should have done.”

The decisions that awaited the incoming Government on public sector pay, which is the other element of the £22 billion, had been ducked and delayed until after the election. [Interruption.] We need to be clear on that. The right hon. Member for East Hampshire (Damian Hinds) indicates from a sedentary position. He will know about the situation with the School Teachers Review Body. Conservative Ministers already knew about the STRB’s recommendations and that the recommendations of the other review bodies tend to be similar.

Given that the pay year starts not in July or even at the beginning of the election period but in April, why were those recommendations delayed? Because Conservative Ministers and their Departments were late to submit the remit letters and evidence. The Office for Manpower Economics has been clear on that point:

“The work of the PRBs is demand led and essentially non-negotiable—departments set the remits and timetables.”

That is the truth of the matter. The additional costs were always coming, and the only reason they came seven months into an election year is that Conservative Ministers were content for them to be so delayed.

Conservative Members claim that they would not have accepted those recommendations, but they have not said at any point what their offer to public sector workers would have been. I wonder whether any Conservative Member wants to tell us today what their offer would have been, if not 5.5%, had they won the election. It should not be a hard question to answer. What would the difference be in the pay packets of nurses, teachers and members of the armed forces? I would be very happy to take an intervention on that point. [Interruption.] They cannot answer the question.

[Andrew Lewin]

In the absence of an intervention from the Conservatives, I say for the record that this has been a hugely important week for the House with the increase in defence spending, and it was so important that Labour gave a 6% pay rise to members of the armed forces—the biggest in 20 years.

[Laurence Turner]

My hon. Friend makes his point as well as it could be made, and I thank him for his intervention.

Let us not forget the costs that the previous Government inflicted upon businesses. Their botched EU withdrawal policies have meant up to £7.5 billion in costs from customs checks alone according to HMRC, £1 billion from higher energy trading costs, and a further £1 billion from the cost of chemical regulations in that sector every single year. One former Conservative Prime Minister said something like, “Screw business.” At least we can say that he lived up to his word on that.

The motion is not a serious proposition. I hope that the House rejects it.

15:31

[Esther McVey (Tatton) (Con)]

I must say, I am disappointed—as will be business owners up and down the country—that the Chancellor could not find her way into the Chamber today. If she had done, she might have learned a thing or two.

In Tatton, there are family businesses that go back four or five generations. Before the Budget, some were planning to get ready for the next generation—but not now. Some, founded in the 1800s, have told me that their businesses survived two world wars, the Spanish flu, the high tax and economic lunacy of the 1970s, and even the recent covid lockdowns, but the Chancellor’s Budget will be the death of them. They have told me that on their family business gravestone will be written: “RIP. 1830-2026. Reeves’ budget the fatal blow.” Here we have a Chancellor who wanted her legacy to be that she was the first female Chancellor; in fact, her legacy will be as the grim Reeves reaper who fatally killed off family businesses and destroyed enterprise in the UK.

The Labour Government show no sign of understanding business, let alone family businesses that employ 14 million people and add £575 billion to the economy. The family business is a living entity; it needs to be nurtured, and if it is, it will grow and last hundreds of years, to be passed on to the next generation. It has a unique place in the business ecosystem—it serves a special purpose. Even previous Labour Governments knew that. That is why they introduced the business property relief; they knew that it was required. But not this Labour Government—oh no! Now, the death of a family member could spell the death of the family business, too.

The CBI and Family Business UK have warned that the changes to property business relief alone could lead to 125,000 job losses and reduce economic output by £9.4 billion. Businesses must think about how much money they will put aside for those tax changes. With every £1 put into tax, they can invest £1 less in their business, which will stifle the growth of the company. This Labour Government talk about growth, but these measures will only kill it off. The impact is not just from inheritance tax: we have the family farm tax, the increase to employer national insurance contributions and the minimum wage changes. Every single one of those will add a final nail in the coffins of many of our businesses.

[Rebecca Smith]

Does my right hon. Friend agree that the myriad Labour attacks on family businesses will have a huge impact on businesses like Vospers vehicle franchise in my constituency? Founded in 1946, it employs 600 people but faces a £1.4 million increase in national insurance contributions and a future business property relief levy on the next generation, in an industry that has seen a 20% reduction in sales in January alone, following the Government’s so-called growth Budget.

[Esther McVey]

My hon. Friend speaks knowledgably and passionately about the business in her constituency, and she is right. A family business I spoke to said, “We are already working on small profit margins. We do not know how we will cope. The enormity of the changes will change the way we look at our business. What are we going to do? We might have to carve up the business or cut it down. We might end up selling up or we might look for foreign investment, whether we seek that out or they seek us out”. They say that their business will not survive and thrive, and there is no doubt that it will shrink or end.

Another essential point, which other hon. Members have mentioned, is that family businesses are the breeding ground of entrepreneurs. Family members will work of a weekend, be trained up and go into the family business. People talk about love and passion—all those things—but it is that entrepreneurial spirit that this Government will kill, along with jobs in local communities, because family businesses have a special place in the heart of communities.

This Chancellor said that the changes would only impact the wealthiest of businesses—have we not heard that before? The Government said that the farm tax would impact only the wealthiest of farms, that the removal of the winter fuel payment would impact only the wealthiest of pensioners, and that VAT on schools would impact only the wealthiest of people: that is utter nonsense. The Labour party is removed from reality, ideologically driven and blinded by jealousy.

Labour’s raid on family businesses, worth about £500 million by 2030—that is the Treasury’s forecast—will actually lose billions of pounds more. These tax changes are ideologically driven and the Chancellor is killing the geese that lay the golden eggs. There is a vacuum of business know-how and business knowledge among those on the Government Benches. What they are doing to our country is an utter disgrace.

15:37

[Deirdre Costigan (Ealing Southall) (Lab)]

I draw the House’s attention to my entry in the Register of Members’ Financial Interests.

Unusually, I welcome the motion tabled by the Conservatives because it sets down on the record, loud and clear, that they are no friends of working people, and they are no friends of working women in particular. Their motion calls for an end to Labour’s groundbreaking Employment Rights Bill and would allow bad employers to continue to exploit workers, to sack anyone who objects and to continue paying women less than men. That is not a surprise, of course, because the Leader of the Opposition has already made it clear that she thinks maternity pay has “gone too far” and is “excessive”. Statutory maternity pay is based on earnings, and for most of the leave period it is set at a maximum of £184 a week or 90% of normal pay, whichever is lower. That translates to about £9,500 a year. I do not think many women, or their partners, would think that is excessive.

I am at least grateful that the Conservatives are being honest: they could not care less about working people. Earlier, the shadow Chancellor was unable to tell us which bit of the Employment Rights Bill they wanted to get rid of. Well, he should read his own motion—it is written in black and white. Their motion explicitly objects to Labour’s new law to finally make employers put a stop to sexual harassment in the workplace and to take all reasonable steps to stop sexual harassment of staff by customers, contractors and service users. The Conservatives seem to be especially against that in their motion, which is peculiar, because just two years ago they said that they would bring in exactly the same law. What happened? Oh yes, I know: they abandoned working women, broke their promises and left shop workers, office staff and women managers at the mercy of sexual harassers, and they want to do the same today.

The other new law in Labour’s Employment Rights Bill that the Conservatives seem to be especially against—it is in their motion, which the shadow Chancellor has not read—is the ending of exploitative zero-hours contracts. Their motion instead supports the continued mistreatment of often low-paid workers who do not know from one week to the next how much work they will get or if they will be able to pay their bills. Let us be clear: sexual harassment can often go hand in hand with exploitative zero-hours contracts. Imagine how difficult it is for a low-paid woman to complain about her manager’s inappropriate sexual behaviour if she relies on him to give her enough hours to feed her family next week. Zero-hours contracts put way too much power in the hands of managers, and, with proper business planning, there is simply no need for them to be forced on workers.

In their motion, the Conservatives seem to have confused knowing what people’s hours are in advance with the new right of flexible working, which Labour is also introducing. They claim that those two things are in conflict—of course they are not. People can still have a zero-hours contract if they want to, but if they want guaranteed hours so that they have a secure income for their family, they will be entitled to that. If people want to work part time because they have kids or elderly parents, they will have a new right to flexible working that will allow that. The Conservatives’ motion is not clear on whether they support flexible working, but surely the Leader of the Opposition should understand and embrace Labour’s new right to flexible working, given her reported invention of Kemi mean time, or KMT, to explain being half an hour late for everything. Maybe it is one law for her and another for the workers.

In this motion, the Conservatives have squarely and unashamedly set themselves against working people, especially working women, but the British people made a choice on 4 July: they voted for a party that would stand up for working people and keep its promises to outlaw sexual harassment at work and end exploitative zero-hours contracts. That is why Labour will vigorously and vociferously vote down the Conservatives’ attempt to stop those changes today.

[Madam Deputy Speaker (Judith Cummins)]

I call Mike Martin.

15:41

[Mike Martin (Tunbridge Wells) (LD)]

Thank you, Madam Deputy Speaker. [Hon. Members: “How do you follow that?] It will be hard—probably with a lower level of energy.

I recently met with Peter, Kate and Edward, who run the two Basil cafés in Tunbridge Wells; there are four across Kent. They are a family business—the subject of today’s motion. [Interruption.] After the damage Conservative Members did to the economy when they were in government, they need to pipe down. The family told me that the combination of the minimum wage and national insurance rises and business rates has them on their knees. The only thing they can do and the only option they have, bearing in mind that they are a family business—their staff are also their friends, and these are hubs in our community—is to lay off staff or, in some cases, not to grow their employment in the way that they had planned.

Zooming out a little, about a month ago I met with the Tunbridge Wells hospitality reps. They are the owners of pubs, restaurants, hotels and bars in Tunbridge Wells, which are all small businesses—most of them are family businesses. As we went around the table, it was the same story from them. The combination of all three measures, coming at the same time, means that they are either looking at laying off staff now or delaying plans for future employment.

[Alison Bennett (Mid Sussex) (LD)]

I thank my hon. Friend for giving way, and for the excellent way in which he is setting out the problems faced by many family businesses in Tunbridge Wells. In Mid Sussex, I recently spoke to the owners of Frank’s Diner on Church Road in Burgess Hill, who said exactly what my hon. Friend has said: they are finding this combination of different moves punishingly hard, and are worried that they are going to have to close their business if things do not improve soon and the Government do not think again. Does he agree that the Government really do need to think again, and think harder, about the impact that their decisions are having on small family businesses?

[Mike Martin]

I thank my hon. Friend for her intervention. This is not hyperbole; these are real stories from real businesses, from people who stay up at night trying to juggle profit and loss, or looking at how they are going to pay their national insurance contributions or their business rates at the end of the month.

We do not have much time, so I want to zoom out a little bit and make a couple of points, followed by an ask of the Minister. For many of us, our first jobs were in hospitality. My first job was as a dishwasher in a hotel when I was 16, and the question is whether a business would employ me now with these laws, or whether they would invest in equipment that could automate that dishwashing to a point at which they do not need to employ so many 16-year-olds. I came from a relatively privileged background, but working in a hotel as a dishwasher, or working as a gardener or a labourer—all the other things that I did when I was young—were incredibly important experiences in forming me into the person I am now. We want businesses to be able to employ people in their first jobs, because we only ever have one first boss.

My second societal point is that hospitality, in particular, sits in the ecosystem of our town centres. It is hospitality, retail and leisure—one of those things will bring people into a town centre, and then they will often go and visit another business from one of the other three corners of that triangle. As has been mentioned by Members on both sides of the House, hospitality in particular acts as a glue in our society, and one of the things I have noticed since being elected last July is how atomised our society is and how many people struggle with a sense of belonging, particularly after the pandemic. We are looking for communities to belong to, and hospitality provides some of the glue that holds us together, whether that is having a pint, meeting your mates for some chips, or whatever else. If our societies are glued together better, all sorts of other things, such as antisocial behaviour, crime and health—social connection improves our health—get better, which of course costs the Government less money on other budgetary lines.

As such, I would like to ask the Minister just one thing. The Budget increased business rates, and I know that the Chancellor is not going to go back on the national insurance rises or the minimum wage. On business rates, though, the Government have indicated that a consultation is currently ongoing, and they are asking people to contribute to it. I ask that we do not just look at this issue in the context of a spreadsheet, as the Treasury often does. That is important—we must support those businesses financially—but we also have to understand that retail, hospitality and leisure in our town centres contribute to the glue that holds our society together. When we reform business rates, we must consider that as well.

15:49

[Joe Morris (Hexham) (Lab)]

It is a pleasure to follow some measured and passionate speeches from across the House on this important subject. As Members will know, I am very proud to represent England’s largest constituency by geographic area, and an area that was found to be one of the happiest in the country, with one of the best senses of community and belonging.

Over the recent recess, I was able to host a roundtable with the conductors of the “Belonging Barometer”, which was attended by many local businesses and community organisations. As has just been said, family businesses are the glue that binds together many of the strands of our community, particularly across the Tyne valley. In the aftermath of Storm Éowyn, we have seen heartening examples of family-run businesses in particular coming out, helping their community, providing those places to stay and to recuperate for communities that have taken a battering from extreme weather events that are sadly becoming all too common.

I was disappointed to read the Opposition motion. Once again, we are here discussing a kind of hodgepodge of various gripes and groans that the Conservatives have with Government policy. That is absolutely fine, and it is their right so to do—there are Members sitting on the Tory Benches now who I genuinely respect and, in some cases, admire—but they are better than that, and they should be better than that. [Laughter.] They can laugh if they want, although I know that some of them have considerable experience in writing manifestos that perhaps did not play out so well.

Ultimately, we need to achieve an environment in which family businesses and small businesses across the country and across our constituencies are genuinely supported by Government. One of the things that has come to my attention since being elected as the first non-Conservative MP for Hexham in a century is that a lot of businesses have said to me, “It is nice to have an MP who is really connected to the constituency—one who is not complacent.” That compares with some of the treatment that rural communities have received from the Conservative party in years past. We have MPs who are genuinely rooted in their communities, who went to school in those communities and who got their first jobs in local businesses. They can speak to businesses in their constituencies and deliver messages down here.

I have had conversations with businesses such as Brocksbushes farm shop, which did involve some patient disagreement over the Budget, but mainly involved real concerns over local infrastructure, such as the lack of bus stops on the A69 and the difficulties that the young people it employs have in getting to the business to work. The farm shop does a fantastic job. My now fiancée and I went pumpkin-picking there just after the election. It was a wonderful event, although I think Hana probably enjoyed it more than I did. Ultimately, from having those positive conversations and looking at what business needs, we can see that it is infrastructure and investment. They need a Government who listen, not one who embark on some kind of haywire, high-minded ideological crusade, as the Opposition did when in government. [Laughter.] They can laugh.

[Laurence Turner]

Does my hon. Friend agree that one of the other major challenges that small food businesses face is importing and exporting ingredients? That needs to be a focus for the review of the trade and co-operation agreement next year.

[Joe Morris]

My hon. Friend is far more well read and well researched than I could ever hope to be, but those barriers to import and export come up whenever I speak to farmers and food businesses. Getting the products made by fantastic businesses in our communities out to consumers is simply not as easy as it used to be.

The main concerns that I hear in my constituency are about infrastructure, bus routes and a lack of roads that are navigable, in some cases. I went out to visit the village of Newton—it has not so much a pothole, but more of a small gorge that has been carved into the road—to hear updates on the parish council’s continued missives to the county council. That is the kind of thing that holds back small and family businesses in my constituency, because they simply do not know whether the delivery driver will be able to get to their premises or they will be able to get to work. That is what is causing real uncertainty and real harm to businesses.

I urge Opposition Members to get a grip of their party and to object to some of the more terminally online things, such as this conspiracy theory over the pint. It is, as I have said, beneath them.

15:54

[John Cooper (Dumfries and Galloway) (Con)]

Britain’s got talent! Right across this great land we have many clever people innovating and working hard. As a member of the Business and Trade Committee, I have been in places as far apart as Exeter and Glasgow, talking with people who make everything from satellites to sausage rolls. The mood, however, is not good. The strivers are still striving, straining every sinew to deliver success, but confidence is not so much on the floor as deep in the cellars below.

In my constituency I spoke to a family firm of bakers who had modest expansion plans—two or three extra staff drawn from the ranks of youngsters who might struggle to find that all-important first job. Those plans are parked; those youngsters, for all I know, are on the dole. Similarly, The Usual Place, a charity in Dumfries that provides wonderful opportunities for youngsters in catering, is making cutbacks. Six people will lose their jobs as the reality of the anti-business agenda—designed in No. 11 Downing Street—bites.

When we, in government, proposed raising national insurance to fund the NHS, one Labour Back Bencher denounced it as the “worst possible tax rise”. Now that same politician is Chancellor, and the tune has changed. And spare us the claim that Labour’s manifesto pledge on national insurance covered only that paid directly by employees, which is sophistry—sheer sophistry.

We lack not for start-ups in Britain, but we struggle for scale-ups—the firms that expand and grow. Family businesses are often among the front rank of successful scale-ups, as their multi-generational nature and the investment, literal and metaphorical, of senior figures imbues stability. The Prime Minister talks a good game, but talk is cheap, and his actions have expensive consequences. He said that he and his Chancellor had made it clear to Cabinet colleagues that in each of their briefs

“growth is the number one mission”.

Well, the Deputy Prime Minister did not hear—perhaps her rave music was too loud—for how is growth compatible with her Employment Rights Bill, which the Government’s own analysis says will cost businesses up to £5 billion a year. That is £5 billion, when grandparents are in tears as family farms face being split up; £5 billion, when families who have been in business for decades look at their bottom line and despair?

The worst aspect of that Bill is the premise that all trade union organisers are saints and all business owners are robber barons intent on exploiting the workers. [Interruption.] The unions are restive. The Secretary of State for Scotland would not attend a reception in his own magnificent Dover House because of a picket line—and how ironic that the meeting was with the Scottish CBI. Now those same strikers have forced the cancellation of a Scotland Office event with National Air Traffic Services. I have said it before, and I make no apology for saying it again: “Unions gonna party like it’s 1979.”

Labour Members see business as a dripping roast to be devoured, taxed to a standstill, and not much mischief if it fails. They perceive a nobility in the public sector when they see only avarice in the private sector, but they are as wrong about that as they are about profit being a dirty word. The drivers of growth are in the private sector. They deserve our admiration and, more important, our support. What can the Government do for them? How about getting out of the way? How about less legislation, not more? How about less petty regulation, and more can-do attitude? How about lightening the tax load, not adding to it? Labour needs to step away from its anti-business policies so that firms in every part of the country can step up with wealth creation, with the private sector leading the charge.

15:58

[Becky Gittins (Clwyd East) (Lab)]

The economy that this Labour Government inherited was a total mess. We had a Conservative Government who, for so long, ignored the problems that were building up. Instead of looking for the solutions, they obfuscated and kicked problems into the long grass. When they did make decisions—such as Liz Truss’s mini-Budget—they led to catastrophic outcomes for our economy, many of which our constituents are still paying off in their mortgages, today and for some time to come. Whether it was for a failed Rwanda scheme or for dodgy covid contracts, the Conservatives wasted money by making bad decisions, and the public paid the price.

Inevitably, inheriting an economy in such a perilous state meant that there were difficult decisions to make: decisions that could not have been anticipated until the true extent of the previous Government’s economic incompetence had been exposed in the summer of last year. What the Budget did last autumn was set out clearly our path to recovery, fixing the foundations, focusing on growth and ensuring that we are giving our economy the stability, the investment and the reform that are required to get us away from the doom loop of the Tories and back to growth.

Yes, there have been tough choices. We on the Labour Benches do not shy away from that. However, these choices mean that we can invest in our public services, including our NHS, driving down waiting lists.

[Gregory Stafford]

Will the hon. Lady give way?

[Becky Gittins]

I will not.

The UK Government have prioritised investment in Wales’s future. The result of last year’s Budget is the largest funding boost that Wales has received since devolution—£21 billion of new money—and people in Wales will see the benefits through the Barnett formula, but also through direct spending. The Budget provides a record £1.7 billion spending boost for the Welsh Government to support public services such as our NHS. The investment in our public services means more neighbourhood policing, which again is something our constituents and our local business communities desperately want. More funding will be available to support the delivery of 13,000 more police officers, police community support officers and special constables in our communities, keeping our streets safe and protecting small retail businesses from the shoplifting that was allowed to run rife under the previous Government’s £200 rule.

This is what my constituents want, and they want a Government on their side. The Opposition are more than happy to take all the benefits that this additional investment will provide, but I politely suggest that, by not outlining how they will pay for it all, their position lacks real credibility. I note that the Shadow Cabinet has already racked up about £7 billion in unfunded spending commitments, which again is not serious enough.

I am heartened that the Government are taking concrete steps to protect the smallest businesses and charities. The employment allowance will double to £10,500, meaning that some 250,000 employers will gain, and an additional 820,000 will see no change at all. I know that organisations such as the Federation of Small Businesses have welcomed these changes, as do the many small businesses in Clwyd East that gain from the uplift in the employment allowance.

In north Wales, we have already seen the benefits of two Governments working together, in Wales and at Westminster, with both being utterly focused on investment and growth. We have already seen investments in Airbus, Kellogg’s, Shotton Mill and more in our little corner of north Wales, with the same business confidence as was exemplified by the £63 billion raised at this Government’s investment summit. Green jobs will be critical in north Wales’s future. Last week, the port of Mostyn in my constituency paved the way for some 300 new jobs helping support the offshore wind industry.

When I go out to speak to businesses in my constituency—family businesses such as Jones Brothers and Clawdd Offa Farm—they simply do not make representations like those we have heard from the Opposition. They share the Government’s passion on the skills agenda and apprenticeships, reforming our restrictive planning regime and the need for investment in our NHS, which this Government are already prioritising. This Government are continuing to promote entrepreneurship, attracting billions of pounds of investment and providing the certainty that our businesses need, not least as part of the Flintshire and Wrexham investment zone.

Businesses in Clwyd East deserve better than the faux outrage from the Conservatives, and this Government will not allow them to pretend to be the champions of British business, rather than the Conservative Government who sold our farmers down the river through detrimental trade deals, and the Conservative Government who ran down our economy with Liz Truss’s mini-Budget, short-term thinking and decimated business confidence. It is the Labour Government who are committed to providing our economy with the stability and investment it needs to grow, laying the foundations for thriving businesses at the heart of prosperous communities.

16:03

[Sir Ashley Fox (Bridgwater) (Con)]

I am pleased the Opposition are using our time today to debate the importance of businesses large and small. It is the private sector that creates the wealth on which our society depends, and it is the taxes businesses pay that fund our NHS and other important public services. The policies of this Labour Government, from raising taxes to imposing additional regulations, are putting those businesses at risk.

Having promised during the general election not to increase NICs, the Chancellor immediately broke that promise in the Budget. This national insurance hike will cost employers £900 for every employee earning the average salary. The tax rise disproportionately affects employees on low wages. Someone earning £9,000 a year will cost their employer an extra £600 a year in tax. This is not just a tax on businesses; it is a tax on jobs. Labour has introduced a £25 billion jobs tax that will increase the cost of hiring workers. It has also increased business rates by £2.7 billion. Under the Conservatives, businesses in the retail, hospitality and leisure sectors received a 75% relief on their business rates; Labour has reduced this relief to just 40%.

[Bradley Thomas]

Does my hon. Friend agree that the reduction in hospitality rate relief and the lower earnings threshold, which he has just acknowledged, create a perfect storm for hospitality businesses—not just because of the additional rate pressure, but because they will be less incentivised to recruit part-time workers? As has been acknowledged by other Members, that is often a route for young people into their first employment opportunity.

[Sir Ashley Fox]

My hon. Friend is right: all Labour’s measures will increase unemployment. Although Labour will say it has reduced the multiplier of business rates, this does not fully compensate—it leaves an average pub paying an additional £5,500 a year. This is not a sustainable burden for many businesses that are already struggling with inflation and rising costs. These taxes add up, and will lead to closures, job losses and harm to our communities.

Another troubling decision from the Labour party is the reduction of the cap on business property relief. BPR, introduced in 1976 by Denis Healey, was designed to protect family-owned businesses from being broken up and to ensure these businesses could continue to provide jobs and contribute to the economy across generations. It is extraordinary that Labour has found a Chancellor less sympathetic to businesses than Healey. This decision is a blow to those who have worked tirelessly to build and sustain their businesses, and will force families to sell their businesses or take on crippling debts just to pay the taxman. For many, this will be the end of their family businesses.

The Employment Rights Bill will require employers to spend £150 per employee on additional administrative costs to comply with new rules, including a ban on zero-hours contracts and potential liabilities for third-party harassment. At a time when businesses are already under strain, this is a further unnecessary cost, especially for small businesses that do not have the resources to navigate the red tape.

Having spent 11 weeks going through the Employment Rights Bill line by line, I know just how damaging it will be to SMEs in Bridgwater and elsewhere. Let us take just one example: the so-called day one rights. These rights would mean that if, after less than a week, it became apparent that a new employee was the wrong fit for a company, a complicated process would have to be followed to dismiss them. Speaking as a former—though fully qualified—solicitor, I know that this will have a disproportionate effect on small businesses without an HR department. If they do not dot all the i’s and cross all the t’s, they will be left exposed to being taken to court for unfair dismissal.

[Laurence Turner]

I understand the point the hon. Gentleman is making, but is it not the case that in that specific circumstance, after a week, they would be covered by the new probationary period provision? This provision is writing probationary period into the law for the first time.

[Sir Ashley Fox]

The hon. Gentleman would be correct if, in fact, there was a written contract that included a probationary period. What he forgets, however, is that many small businesses will conclude that contract on a handshake and a verbal agreement—there will not be a formal probationary period. It is exactly those small businesses that do not use a written contract that will be liable to legal action.

Let us take another example. Should a business fail to notify a new employee of their right to join a trade union in writing, it may be liable to pay an additional four weeks’ pay as a compensatory award. In what world is this system really going to work? Do we believe that those running a corner shop, pub or fishmonger are going to give their employees written notice that they have the right to join a trade union? No, they will not—and legal consequences will follow.

We on the Conservative Benches believe that businesses are at the heart of the economy and that they should not be punished by Government policies that stifle growth and investment. It is important to note that, when it comes to business, this Government’s track record is deeply troubling. Just one member of the Cabinet has ever started a business. When decisions are made by those who do not understand the pressures faced by small business owners, it is no surprise that the policies are so harmful. The Labour Government that we face is not a new Labour Government in the Tony Blair model. It is very much an old Labour Government of the 1970s, addicted to taxing, spending, borrowing and regulating. I regret to say that we will see unemployment rise. We will support family businesses, safeguard jobs and ensure that the British economy prospers.

16:10

[Saqib Bhatti (Meriden and Solihull East) (Con)]

I refer Members to my entry in the Register of Members’ Financial Interests. As a qualified chartered accountant, I spent the best part of a decade in my family business. [Interruption.] I am a fully qualified chartered accountant with a certificate to match. My family business, which was set up by my father, was a firm of accountants. I wish to reflect on some of the remarks made by those on the Government Benches. I do so with a degree of sadness and anger, which is reflected in what is said by the businesses in my constituency as well as by many family businesses across the country.

We should be in no doubt that the Chancellor’s Budget has been deeply, deeply damaging. My hon. Friend the Member for Hinckley and Bosworth (Dr Evans) put it correctly when, in his intervention on the shadow Chancellor, he said that the Budget is a toxic concoction of measures, which means that now, for the first time, many people will be wondering whether it is even worth setting up in business. The decisions that we take in this House matter, because they result in costs. Businesses, and family businesses in particular, are not just some opaque term; they involve individuals with hopes, dreams and aspirations. The political choices and decisions that the Chancellor has made and that Labour Members our now defending will incur costs for businesses, which will then be passed on to consumers and clients. Ultimately, they will feed into the cost of services and therefore the cost of living.

When we see the inflation rate increase from 2%, which it was when we left Government, to 3% now there will of course be consequences, especially given the decisions that the Chancellor is making. I understand that Labour Members may not want to accept that today, but they may well want to reflect on that.

The hon. Member for Hexham (Joe Morris) talked about our motion—I note that he did not name the Tory Members that he respects, and I hope that he does at some point—and I have to tell him that these are not things that we made up; they are things that businesses are telling us. This is what they are talking about every day. [Interruption.] I am more than happy to give some examples. The other day, I spoke to a family-run business, which is over 160 years’ old and has a subsidiary in my constituency. It has a £400 million turnover. It was looking to be a billion-pound turnover company by 2030, which means more jobs and more products for supply chains. They have had to put a hold on that because if the father of that business now passes away, the inheritance tax bill will come to about £2 million, and, as it is a family business and dividends will have to be found, it will have to find something like £18 million to fund that. The father said that it will probably have to sell about 7% of the business to be able to finance an inheritance tax bill, which is incredibly difficult for it to prepare for.

Eric Lyons, a butcher’s shop in my constituency, is over 100 years old. Nick, who I shall be meeting in the coming weeks, says that it is a great family business, which serves many of my constituents. He was very vocal on LinkedIn. I will not repeat everything that he said—it is not all repeatable—but he talked about the rise in national insurance contributions and the impact that that will have on the cost of the products that he is selling.

Rick Cressman from Nailcote Hall has a great hospitality business. What is happening to hospitality businesses is not reflected in the comments from Government Members. Hospitality businesses across the board are up in arms because the reduction in rates relief and the reduction in the threshold of national insurance—not just the increase in national insurance—are having a huge impact. Fundamentally, it means that young people will not get their first jobs in hospitality. They are the ones who suffer because they end up costing the most—not in terms of their salary, because they will normally be on the national living wage, but in terms of training costs and the time that is taken. Those are real consequences of the decision that the Chancellor is taking. I feel a great amount of sadness when I hear Members on the Labour Benches say that they listen but do not agree and talk about how great their businesses are doing. I just do not believe they are talking to those businesses, because at least 99% of the businesses that will be affected will not be happy about the changes.

When the Government came in, they had decisions to make. If the fictitious black hole is to be believed, they could have fixed the roof when the sun was shining. Now, when we are faced with a changing global scene, with Ukraine where it is, Donald Trump doing what he is doing and Putin coming to the fore, the Chancellor cannot commit to not coming back for more taxation. It is inevitable.

16:15

[Sarah Bool (South Northamptonshire) (Con)]

Since coming into office last July, this Labour Government have launched an all-out attack on businesses in this country—an attack on 5.5 million SMEs that represent more than 99% of our business population, and small businesses in my constituency, of which 88% is agricultural land, are front and centre of that assault. Not only are our farmers being hit by the cut to agricultural property relief and business property relief, but small businesses that sell their produce, such as Barnowl Farm Shop in Evenley and Towbury Court in Towcester, will also be hit by those taxes. My farmers do not deserve that. They have only ever worked hard, day and night, generation after generation.

Small businesses on Brackley high street, such as Defern Beauty, have told me that they might have to cut their highly successful apprenticeship programmes, as the tax hikes mean they can no longer afford to keep apprentices on. This Government are destroying small businesses and our high street. Our local pubs, of which there are more than 90 in my constituency, will also be hurt by the reductions in business rates relief for hospitality businesses—another punitive tax rise at a time when many of our locals are really struggling.

The Conservatives left office with one of the lowest unemployment figures recorded in recent history, but after the Hallowe’en Budget, we are seeing the number of vacancies fall and growth slow down. That is a result of the choices that this Government have made: a choice to give above-inflation pay rises to their union paymasters and a choice to target our farmers and destroy their life’s work for 22.5 hours of NHS spending. That was not driven by a growth agenda but by a socialist ideology. It is also a choice to change business property relief and destroy our local pubs. The Government are hiking taxes, and it is the working people across this country—the working people they promised to protect—who will pay the ultimate price. Labour is not working.

16:17

[Gregory Stafford (Farnham and Bordon) (Con)]

Today’s debate on the disastrous impact of the Labour Government’s policies, including on my constituency of Farnham and Bordon, of which Haslemere, Liphook and the surrounding villages are part, is timely. My inbox is filled with complaints and concerns from small family businesses about that impact.

Small and family businesses are not just places to shop or to buy things, but the backbone of our economy and the lifeblood of our communities. Across the United Kingdom, they provide almost 14 million jobs and contribute an amazing £575 billion to our economy. Yet under this Labour Government, those businesses are under siege. Labour simply does not understand business and sees businesses as nothing more than a cash cow to fund its endless state expansion.

For nearly a century, my grandparents and my great-grandparents before them dedicated their lives to Stafford’s shop in Haslemere, and they would be horrified to see this Government’s full-scale assault on family businesses. The family business tax—Labour’s reckless cap on business property relief—will decimate family-run enterprises, breaking them apart when they should be passed down to the next generation.

In the Surrey side of my constituency, we are fortunate to have two thriving market towns, Farnham and Haslemere, which are hubs of entrepreneurialism and independent enterprise. Businesses such as Hamilton’s Tea Room, Borelli’s Wine Bar, Farnham Homes, Kilnside Farm shop and Elphicks, one of the last remaining British family-owned department stores, have been the cornerstones of our high streets for generations. Similarly, Haslemere is home to R. Miles & Son, Good Horse saddlery and Davids menswear. Together, these eight businesses have had a presence on our high streets for a total of 439 years. Given that Family Business UK has warned that these policies would cost 125,000 jobs, will the Government reconsider their stance before it is too late?

Meanwhile, on the East Hampshire side of my constituency, Liphook Travel Worldchoice has been a family-run travel agency since 1971 and Hogmoor Distillery, though newer, is an outstanding artisan gin and liqueur company based in the heart of the former military town of Bordon. Those businesses, like so many across the country, are already being squeezed by Labour’s misguided economic policies, with increased business rates and tax burdens making it harder to survive.

Although Labour misunderstands business, it actively despises the countryside. This Government are rurally illiterate. They do not care about rural jobs, rural businesses or our rural communities. The family farm tax—Labour’s assault on agricultural property relief—is a direct attack on farming families who have worked the land for generations. Bob and Ros Milton of Kilnside farm expanded their business with a farm shop under the support of the previous Government, but it now faces closure due to rising costs. Similarly, Mathias nursery had hoped to pass the business to the next generation, but now fears that that will be impossible.

My campaign for local pubs and heritage clubs has seen me do a pub crawl across the constituency. I have visited 17 of the 56 pubs—everything must be done in moderation. I have had invaluable conversations with landlords. Carl from the Nelson Arms pub in Farnham highlighted the importance of zero-hours contracts for his employees, including a staff member who also works as a paramedic and relies on the flexibility that these contracts offer. Yet Labour’s Employment Rights Bill, which bans them, will impose a £150 cost on his business.

[Laurence Turner]

Will the hon. Member acknowledge that what the Bill actually says is that no one should be forced on to a zero-hours contract? It is not the case that someone who wants that flexibility will be denied it.

[Gregory Stafford]

I understand that the hon. Member has gone through the Bill line by line, but the businesses that are reporting to me, and apparently also speak to him, are seriously concerned. In our villages, including Churt, Tilford, Passfield and Headley Down, the village shop and the pub are the heart and soul of our tight-knit communities, but Labour is simply making it harder for them to survive.

Why are the Government, who are supposedly focused on growth, causing businesses in my constituency to downsize, sell up and move out? These policies are not just misguided; they are ideological. Labour’s hatred of business and contempt for the countryside are now enshrined in policy. Since their election, the Government have accepted £5.6 million in donations from trade unions. It is no wonder that their policies prioritise union interests over business interests. The Business Secretary apparently met trade unions every three days in his first three months in charge. Where is the same access for small businesses?

Conservatives believe that businesses are the engines of growth. To grow our economy, we must create jobs, drive innovation and foster prosperity. That is why we are calling for the reversal of Labour’s family farm tax, crippling jobs tax and the reduction in business rates relief. When will the Government acknowledge that their policies are driving up the cost of living, not reducing it?

While this Labour Government continue their war on businesses and the countryside, I shall finish by extending my deepest thanks to the incredible businesses across Farnham, Haslemere, Liphook and Bordon that truly are at the heart of our community’s social and economic fabric. The Conservative party will always stand up for family businesses, farmers and our rural communities, to ensure that they can thrive, create jobs and, importantly, pass on their legacies to future generations.

16:23

[Robbie Moore (Keighley and Ilkley) (Con)]

As we all know, family businesses are the very backbone of our local economy. They are the job creators, the innovators and the entrepreneurs—those that drive the local economy and are at the heart of all our communities. They employ 14 million people and contribute £585 billion to the economy.

Rightly, the Opposition are very concerned about last October’s Budget. As the shadow farming Minister, I have heard much noise that has been rightly made about the implications of the family farm tax, but I want to use the opportunity of this debate to focus specifically on the implications of business property relief.

Earlier, I heard the Exchequer Secretary to the Treasury at the Dispatch Box talk about the mechanisms by which the Government have calculated the impact that business property relief will have. I specifically question how he, and indeed the Treasury, arrived at those decisions. I note that that Minister is not even here to listen to the points I want to make, so I hope that the Under-Secretary of State for Business and Trade, the hon. Member for Harrow West (Gareth Thomas), will specifically address them. The Treasury has calculated that the agricultural property relief and business property relief changes will bring in about £500 million, yet despite the challenges that I and others have raised with Ministers and the Treasury, no economic impact assessment has been provided as a result of those changes.

I want to understand whether any specific detail has been looked at for business property relief and the wider implications that it will have on too many of our family businesses. Only last week, I met Richard Prudhoe, who runs Fibreline and employs 250 people in Keighley. He has commented that the negative implications of business property relief on his business, which is completely owned by him and his family, will be catastrophic. If something happens to him, the dire consequences of tax that will be implemented on his wider family will be catastrophic, potentially putting at risk 250 people employed in Keighley.

[Daisy Cooper]

Does the hon. Member agree that it would be helpful if the Minister, in his closing remarks, gave assurances that the Government were willing to meet Family Business UK, which is conducting its own survey of the impact of APR and BPR changes on businesses?

[Robbie Moore]

I absolutely wish that the Government would listen to the many concerns that are consistently raised by Family Business UK, which is doing an excellent job in the amount of data it seems to be providing to the Treasury, yet nobody in the Treasury seems to be listening. Indeed, just last week the Chancellor did not even have the courtesy to turn up to listen to many of our farming organisations. She is not even giving wider family business stakeholders the courtesy of listening to them.

The point is that the associated implications of business property relief will have dire consequences for businesses that are wanting to invest and employ local people. They are now having to face the same challenges as wider farming businesses of how to pay a potential IHT liability coming down the line. They could look at disposing of a shareholding in their business, but many of them do not want to do that—why would they want to sell out to a larger corporate?—as they want to keep their family business in the wider family, or they could sell plant and machinery, which negatively impacts the productivity of their business. The Treasury is not looking at that. Those businesses are saying to me, “What is the point? Why would I want to invest not only my time but my energy in growing that business if there will be negative implications on the wider family structure and the wider people we are employing within that business?”

This Budget is hostile to our family businesses and will have a hugely detrimental impact on them. Family Business UK has already said that the data it has presented to the Government shows that these changes will likely result in a gross value added loss of £9.4 billion and the potential loss of 125,000 full-time equivalent jobs during the period from April 2026 to April 2030 alone.

[Bradley Thomas]

Does my hon. Friend agree that what we are discussing demonstrates quite a perverse contradiction, in that the sums are huge for the businesses involved—as he describes, they are catastrophic—but the overall net receipt to the Exchequer in the grand scheme of the Government Budget is so small, and that that is further testament to the Government’s lack of economic and political nous?

[Robbie Moore]

Absolutely. My hon. Friend makes the excellent point that the likely revenue—albeit I challenge the Treasury’s figures—is only £500 million, yet the impact that it will have on many of our family businesses is catastrophic. That includes those in the hospitality sector, and manufacturing, engineering and tech-based businesses in my constituency. Ultimately, the Government need to listen to the concerns being raised about business property relief, because it will undermines the stability and growth of the many family businesses owned by our constituents. The Government need to rethink the policy and axe it, which is what we are calling for. The Conservatives have been very clear that not only will we reverse the changes to agricultural property relief, but we will put back 100% business property relief, providing certainty for many family businesses.

Many other challenges have been brought about by the Budget. The increase in employer national insurance is impacting many family businesses, not least Hi Energy, a gym in Keighley in my constituency, which openly tells me it has calculated that its employer national insurance bill, coupled with the challenges of its business rates bill, which is likely to increase down the line, will have catastrophic consequences. Its overheads will increase, but it will not be able to increase its gym membership fees while keeping the business competitive among the many other gym organisations across Keighley. The same narrative is reiterated by all our family businesses.

For family businesses, the Budget was yet another instance of the Labour Government saying one thing but doing another. They claim to be pro-growth, yet they directly tax employment. They claim to be pro-business, but they tax wealth creators and family firms. Growth cannot be magicked up out of thin air, as the Government stipulate. The Conservative party is on the side of family businesses and I am pleased to support the motion today.

16:31

[Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)]

The director of Family Business UK, Steve Rigby, has said that the single most important issue for the family businesses he represents is the retention of business property relief. That has come through loud and clear to me in recent weeks when I have been speaking to local businesses, both individually and collectively through organisations such as the Cairngorms Business Partnership and the local chamber of commerce. Other family businesses, which have never come together before and do not usually lobby their MPs, have come together too. They normally just get on with being hard-working and productive family businesses, but they have come together to lobby because they are so concerned about the impact of BPR.

To give a flavour of the family businesses in my constituency, we have some of the most iconic family businesses in the UK. Many will know Baxters from its food products, and Walker’s Shortbread food products can be found in pretty much every airport in the world. Glenfiddich, owned by William Grant & Sons, is another family business, and Johnstons of Elgin produces some of the finest cashmere products in the world. In Scotland as a whole, it alone employs 1,000 people.

Those businesses are not small fry. They put huge amounts of money and investment into those businesses every single year. I met a group of business owners last week who collectively represent 2,500 years of business ownership. They have a phenomenal story to tell. What is incredible about them is the stewardship of those businesses. They invest their time and energy. Family members get trained up and work in all aspects of the business, ready to take on the mantle of running it when it comes to them later in life. If the business was a limited liability partnership and you got rid of the business management of the business, it would not have any kind of inheritance tax to pay. Yet the only choice for family businesses operating on that scale, given the likely tax bill they will be hit with, is to either put away millions of pounds to cover the tax bill, which means they are not investing, or sell off large parts of the business. For manufacturing businesses, there is a very big chance that they will end up abroad rather than in the UK. They could be bought by a multinational or a conglomerate and the jobs would just be shipped abroad. That is not the way to grow the economy.

I was okay with the first couple of bits of the official Opposition’s motion, but they would have been better to have a laser-like focus on inheritance tax and national insurance contributions. Their inclusion of trying to stop a workers’ rights Bill is frankly ridiculous, and as for adding in the beer measures, it seems as though somebody must have been on a heady brew to come up with that notion. Those things make the motion unsupportable, but I hope the Minister is listening to what I have said about those aspects of the motion that I do support and have concerns about.

[Harriet Cross (Gordon and Buchan) (Con)]

In Scotland, businesses are also battling with the business rates relief not being passed on in full by the SNP Scottish Government. Will the Member be putting pressure on his party in Scotland to pass on those reliefs in full, to help family businesses and businesses across our high streets in Scotland?

[Graham Leadbitter]

I hear what the hon. Member is saying. There are a number of reliefs in Scotland, and Scotland went further and quicker than the Conservatives did in government when it came to the small business bonus scheme that was in place, so I am not going to take any lessons about what we do with business rates. It is a different system; there are other things going on that make the mix different. Also, that is not the issue that businesses are raising with me.

The first and foremost issue, as has been indicated by Family Business UK, is inheritance tax. That is what is causing the most consternation. The businesses that I met last week were saying that their financial advisers—or their finance directors, if they are big enough to have them—are already advising them to set aside substantial amounts of money to cover off risk. These are businesses that have never had to value themselves in their lives. They are family businesses that work on a model of working with what they have and getting on with it. They have never had to place an inheritance value on their business. That is yet another headache for them—another bureaucratic maze for them to work their way through—that does not apply to LLPs, which is a very unfair situation. I do not understand why a Labour Government in particular are tackling family-owned businesses in this way and allowing shareholder-owned businesses or LLPs off the hook. That does not make sense to me.

The hon. Member for St Albans (Daisy Cooper) spoke very well and, had her amendment been selected, I would certainly have gone for it. I am sorry that I cannot, but—

[Madam Deputy Speaker (Judith Cummins)]

Order. I call Mike Wood.

16:38

[Mike Wood (Kingswinford and South Staffordshire) (Con)]

It is an honour to rise today to speak on behalf of the very many family businesses in Kingswinford and South Staffordshire, because family businesses are at the heart of our local communities as well as at the heart of our local economies. They provide employment for nearly 14 million people, they contribute £575 billion to the economy and they are founded on solid principles of entrepreneurism and self-responsibility.

I am proud to represent so many fantastic family businesses, ranging from heavy engineering firms in the Black Country to vineyards in Pattingham and Halfpenny Green. They work tirelessly to build and sustain their businesses, creating jobs and prosperity. They offer excellent products and services to customers near and far, and they look forward to their children one day continuing in their footsteps. But their job is being made much harder by Labour’s family business tax, a barrage of burdensome red tape, a trade union charter, a family business surcharge and the national insurance jobs tax, which together mean that businesses will pay more in tax and compliance rather than in growth or jobs.

As has been said, the cumulative impact of all these measures is very damaging. I am not going to pretend that most of the family businesses I speak to are absolutely delighted by the increase in the national living wage any more than they were delighted the previous year when the last Government increased it by a higher amount, but they recognised that wage increases for their staff were the right thing to do. However, they do have a problem when those additional wage costs are compounded by payroll taxes in the form of increased national insurance contributions, which hit those sectors that rely on part-time workers particularly hard—they suddenly face enormous increases. That is compounded further by business rate rises for those in retail and hospitality, who are suddenly finding their business rate bills nearly doubling in April compared with what they have paid for the last few years. Also coming in in April is that flurry of additional regulations. If family businesses somehow survive all that and thrive and develop, they will find that they can no longer expect to be able to leave the business intact for future generations of their family to run.

The Confederation of British Industry and Family Business UK have warned that Labour’s changes to business property relief could lead to 125,000 job losses and reduce economic output by £9.4 billion. Businesses that have survived economic downturns, global recessions, war on our continent and a worldwide pandemic now face the prospect of being brought to their knees by a tax policy that will force them to break up their businesses when the current owners pass away. This is not just a policy change; it is an existential threat.

The Black Country is a region with a proud history of manufacturing and enterprise. We have always been a place of hard work, innovation and community. In South Staffordshire my constituents are proud of their thriving rural economy built on countless family businesses. Those businesses have not just contributed to our local economy; they have helped to build the United Kingdom, and the idea that a tax change could strip away the future of our local businesses is nothing short of a tragedy.

Fairness would be recognising that family businesses are not just economic units but part of the fabric of our communities. They support local charities, provide apprenticeships and create jobs for those who need them. If these proposals go forward, we risk losing those businesses and with them the local jobs they provide. I have spoken with many family businesses in my constituency. Family-owned businesses that have been operating in the community for generations are fearful and uncertain, and are already having to make decisions about their businesses and their employees because of the Chancellor’s damaging Budget. Sadly, some are being forced out of business because of these measures.

The Government’s blinkered view that sees business as little more than a source of revenue to offset their spending plans is wrong. I urge the Government to listen to the concerns of the family firms in Kingswinford and South Staffordshire and across the country who will be directly impacted by the changes. These proposals must be scrapped.

16:43

[Lewis Cocking (Broxbourne) (Con)]

I am proud to represent a constituency with so many fantastic small businesses, and employers in Broxbourne are more likely to be small businesses than under the national average. Entrepreneurs in the towns and villages I represent are working hard and taking risks day in, day out, growing our local economy and creating jobs.

Earlier this month, I was told by a Government Minister standing at the Dispatch Box that I was “sort of right” that private business creates growth. Let me gently tell the Government that it is not the Government who create economic growth in this country; it is the thousands of business owners outside of this place who work hard day in, day out, creating jobs right across the country, investing in their companies and investing in their supply chains.

We have heard good speeches in this debate from Members on my side of the Chamber explaining how it is business that creates economic growth, not Government. A Labour Member alluded to the £25 billion national insurance increase and £5 billion employment regulation not mattering to family businesses, because they are small and do not employ many people. That is no way to treat family businesses in this country. We should be telling them that the sky is the limit. We should be saying, “Invest in and grow your business, and we will help and support you. We will create the right environment for you to take those risks,” because it is a massive risk when people put their life savings and their blood, sweat and tears into a business that they want to grow, particularly when it is from their home. They are taking an incredibly risk in saying, “Do you know what? I’m going to take that jump. I’m going to make an offer to someone and employ my first employee.” We should be creating the environment for people to be able to do that. The more family businesses we have, and the more family businesses that upskill, create local jobs and invest in their business, the more money the Treasury gets to spend on our public services. We should not be hampering businesses. The Minister was making a ludicrous point.

[Gregory Stafford]

My hon. Friend makes a powerful point. Having listened to most of the debate, I make the allied point that while Labour Members have justified the need to raise taxes—which, like him, I entirely disagree with—we have heard not a single word from them about the impact of tax rises on family farms, family businesses and employers.

[Lewis Cocking]

My hon. Friend makes an important point. I go out and speak to farmers and small business owners, as he does in his constituency, and I have met not one who thinks the Government are on the right path. I do not know who Labour Members speak to in their constituencies because—

[Jack Rankin (Windsor) (Con)]

Trade unions.

[Lewis Cocking]

What my hon. Friend says from a sedentary position is probably correct. Businesses and farmers in my constituency think that the Government have sold them down the river and led them up the garden path—they are doing things that they did not think they would do when they were trying to get into power. We have not heard from the Government what they are doing to support businesses and family businesses.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

The hon. Member speaks with great passion about his constituency, and I understand some of the concerns he has raised. He asks what the Government are doing. Apart from all the money we are putting into the NHS and all the money going into education, what are we doing? He earlier gave the example of a single person running a business about to employ their first person, which is a big step for any business—I accept that. But is it not the case that those small businesses will be paying less national insurance as a result of this Budget?

[Lewis Cocking]

Businesses in my constituency are putting off investing and employing local people because of the jobs tax and the Government’s proposed new regulation. I hope that when the Minister winds up, he will say what the Government will do to create the next generation of entrepreneurs.

We could turbocharge the education system. There are lots of fantastic teachers in my constituency and across the country who do a sterling job for young people. We could say to people who have created businesses, “We will give you some money off your tax bill if you go back to your secondary school and teach not from a textbook, but from real life experience about how to create growth, jobs and businesses and enthuse those students about creating their own businesses.” People do not have to go to a maths class to understand maths. Someone who has run a business could come in and say, “Right, we’ve got to do your accounts now. You’ve got to see how much you are going to pay people and how much tax you will pay.” We could get people in from the creative industries. They could say, “Right, now you have to design your logo. How are you going to do that? You’ve got to design a TV advertisement for your product, for what you are going to sell.” We could be doing that. We could be thinking outside the box.

I have not heard what support the Government are giving to create the next generation of entrepreneurs. If we do not unlock their aspiration and continue to allow people to take risks and invest in their ideas, there will be no taxes coming in or money for public services. We must do this, and we must do it more regularly. I hope the Minister will tell the House how he will unlock the next generation of entrepreneurs and how we will support people to take what is, as I said, a massive risk.

[Joe Morris]

Does the hon. Gentleman agree that if the next generation of young people cannot get to work because of broken public transport, potholes or illness, it will ultimately hold them back? We are taking steps to fix those problems.

[Lewis Cocking]

The hon. Gentleman’s party is actually cutting the capital budget for transport. I have made this point time and again, but the Government could take on the utility companies that endlessly dig up the roads so that my constituents and many others across the country have to sit in traffic. That costs the taxpayer and the economy billions of pounds. If we get people to the shops and to work quicker, and traders, electricians and builders get to their sites quicker so that they can do their jobs, that will unlock growth, put more pounds in their pockets to spend on local high streets, which we need to protect, and enable them to take risks and employ people. But I have not heard that from the Government—I have not heard that we will take on the utility companies; I have not heard that we will unlock the aspiration of this country’s next generation through the education system.

Labour Members said in their manifesto and during the election campaign that they were the party of economic growth. I gently say to them that that is not working because fundamentally they do not understand that it is private business and our hard-working constituents in family businesses who create economic growth—not this disastrous Labour Government.

16:51

[Llinos Medi (Ynys Môn) (PC)]

Small and medium-sized businesses account for 99.3% of all businesses in Wales. It is not simply their economic value that we measure, but the social and cultural value they create in our communities. Those businesses employ local people, keeping wealth in their area, and are a crucial part of a thriving community.

Small businesses have been under enormous pressure for several years. The Chancellor’s decision to increase employer national insurance contributions has placed huge financial strain on small businesses—a damaging decision that will cost jobs. The cuts to business property relief will also damage local businesses in Ynys Môn. Lewis Forecourts, a family-run business on the island for over 40 years, says that the change will have huge implications for its business. As a key employer, it will be restricted in job creation and growth. In a letter to the Prime Minister, it noted that that will mean less investment in infrastructure at their sites.

The Brexit deal pursued by the UK is particularly damaging for Welsh businesses. Wales is more reliant on trade with Europe: 58.6% of total goods exports from Wales go to the EU, compared with 50.3% for the UK as a whole. The Government must start removing those damaging trade barriers, a simple step that would help struggling smaller businesses.

As if that was not enough pressure, the Welsh Labour Government continue to charge higher business rates than anywhere else in Great Britain. The recent closure of Holyhead port for nearly six weeks had a significant impact on many small family businesses in Holyhead and Ynys Môn. Footfall in the town was down 40% to 60%, and businesses tell me that that is having a direct impact on their sustainability. It will clearly take time for Holyhead and the surrounding area to recover from Storm Darragh. The UK Government must recognise the huge long-term impact of the closure of the port on business and the economy in Ynys Môn, and I call on them yet again to establish a hardship fund to support businesses directly affected by the closure of the port.

We have wonderful businesses on the island. Last week, I visited Mr Holt’s chocolate factory in Llangefni, which makes magical and delicious Welsh chocolate with a colourful packaging. Mr Holt is giving a boost both to the local economy and to our rich culture. Finney’s, from Benllech, is today competing in the national fish and chip awards final, and I wish it the best of luck. There are so many hard-working family businesses on Ynys Môn, but after years of neglect in Government policy, many are questioning their future. I fear that the Government are prioritising large corporations over the small family businesses that are the backbone of the Ynys Môn economy. If the Government want growth, they must change track and prioritise our hard-working small and local family businesses.

16:54

[Peter Fortune (Bromley and Biggin Hill) (Con)]

Like many Conservative Members who have started a small business, I draw the House’s attention to my entry in the Register of Members’ Financial Interests. It has been fascinating to listen to stories about businesses from across the country during the debate. I was particularly moved by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) who talked about the pressure facing a local gym. It made me feel better as I am contributing to my local gym by paying the membership fees and not using any of the facilities.

Seven months ago, when Labour came to power, the new Government proclaimed that economic growth was their first mission. For all the doom-mongering, Labour inherited an economy that had turned a corner, following the pandemic and the energy crisis. The economy was growing, energy bills were falling, inflation was back on target and employment was high. However, in seven short months, economic growth has stalled, the Bank of England has halved its growth forecasts, the cost of living is rising again, with high inflation and energy bills, and unemployment is increasing, as businesses brace for tax rises.

Britain’s economy is stuttering because of this Government’s failing policies: a family business tax to break up thriving enterprises, a jobs tax to make it more expensive for businesses to employ people, a business rate hike to squeeze the already struggling British high street and more employment red tape to tie businesses’ hands. But Labour is not content with cutting jobs and closing businesses—it is giving Ministers the power to shrink the great British pint. While they say they will never do it, who could trust a word this Government say? Not pensioners, not working people and certainly not farmers. On an issue of such vital national importance, can we take that risk?

Every employer I speak to in my constituency tells me that they have no choice but to cut jobs, wages and investment. That is true whether the employer is a nursery in Bromley Common, a large franchisee on Bromley High Street or a charity serving our borough. That is what an anti-business Government look like, not a pro-growth Government.

The policies are all the more bizarre as the Prime Minister once said:

“Wealth creation is our number one priority.”

In reality, he does not know how to create wealth, only tax it. The Government are taxing family farmers who will be forced to sell off their land, family businesses that will be forced to sell and high street businesses that will be forced to close, taking jobs so that working people face redundancy.

It is not too late for Labour to spare family businesses. Those businesses employ 14 million people and contribute £575 billion to the economy. Labour’s decision to cap and cut the business property relief risks breaking up long-running family businesses. Instead of continuing those businesses, the next generation will be forced to sell. The Government’s policies will not grow the economy, but hollow it out. Britain simply cannot afford Labour’s assault on our nation’s economic future.

16:58

[Nick Timothy (West Suffolk) (Con)]

This debate has been held against the absurd backdrop of a Chancellor of the Exchequer writing to Government colleagues and begging regulators, desperately seeking advice on how to find economic growth, while the Department for Energy Security and Net Zero is deindustrialising the economy, the Home Office is welcoming fiscally negative immigration and the Department for Business and Trade is adding more than £5 billion a year in new costs to business in a single Act of Parliament. And the Government are whacking up taxes, including through the change to business property relief, because they broke their election promises as soon as they got into office.

In its manifesto, Labour promised the country that by 2028-29, it would increase spending by only £9.5 billion a year. It knew all the facts at that point, as the Chancellor of the Exchequer told the Financial Times, but just a few months later, Labour increased spending in the Budget by £76 billion a year, eight times more than promised in the manifesto. That is the reason for Labour’s broken tax promises, the higher taxes and the extra borrowing, not the poor excuses offered by the Minister earlier.

[Dr Arthur]

The hon. Gentleman makes the point that public spending is increasing faster than he expected. Perhaps he could outline where he thinks it should now be cut to make that good, starting with public services in his own constituency.

[Nick Timothy]

The hon. Gentleman is a little confused. Public spending is not increasing faster than I expected; it is increasing faster than his party told the country. That is the point.

The Treasury might not be what it once was, but even if we believed what the Minister said about the fictional black hole, which the Office for Budget Responsibility has disowned, £9.5 billion plus £22 billion does not reach even half of the £76 billion in extra Labour spending. I am not sure whether the Minister is listening, but he can intervene if he wants to explain himself at this point—he clearly is not.

What do we get for these extra taxes? The Home Office budget is being cut by 2.7% in real terms compared with last year. The Department for Transport budget is being cut by 2.5%, and its capital budget is being cut by 3.1%. That is economic illiteracy. This amounts to taxsterity —tax rises and spending cuts—to go with stagflation, or stagnation and inflation. That is Labour economics.

[Dr Evans]

To be fair to the Labour Government, they have seen a surplus in self-assessment tax receipts, at £15 billion. The problem is that the OBR was expecting that to be £21 billion. We therefore have the prospect of them trying to find where we get that extra money from. The Government need to set out whether they are going to break their fiscal rules, cut public spending again, or increase taxes. Does my hon. Friend have any inclination on what they might choose, because I certainly have not heard anything?

[Nick Timothy]

Based on Labour’s track record, one would always bet on tax rises rather than fiscal responsibility.

The bond markets have taken a single look at the Chancellor’s fiscal plans and increased Britain’s borrowing costs, which means another Labour tax rise for all of us. Not one word in the speeches we have heard from Labour Members today recognised the cumulative damage caused by their Government’s policies. There is the national insurance jobs tax, hiking the cost of hiring staff by £900 for an employee on the average salary and costing businesses £25 billion in total. There is the business rates relief cut, from 75% to 40%, meaning that businesses will spend £2.7 billion extra a year by 2026-27.

There is the Employment Rights Bill, which, as I said, will cost businesses £5 billion a year, and probably more once the Government finally get their impact assessments right—normally Governments produce an impact assessment before a Bill is published, not after it has passed through all its stages in the House of Commons. There is the Energy Secretary, who wants to increase the carbon price higher than Europe’s and, according to the National Energy System Operator report that he constantly endorses, up to as much as £147 per tonne of carbon dioxide by 2030. As industry is lining up to tell the Government, that is yet another jobs killer. There are also, of course, the changes to business property relief that we have discussed today, which will cost £1.25 billion in lost revenue and mean 125,000 jobs lost by 2030.

[Charlie Dewhirst (Bridlington and The Wolds) (Con)]

Does my hon. Friend agree that the impacts of the changes to agricultural property relief and business property relief are already being felt by businesses across the country? Farmers are simply having to shelve investment for fear of a huge inheritance tax bill. That is affecting the wider rural economy, because no new machinery is coming and no new buildings are being built. It means fewer tax receipts for the Treasury, fewer jobs and a poorer United Kingdom.

[Nick Timothy]

I absolutely agree. I was baffled by the speeches of Labour Members; they were lining up to say that they had been meeting local businesses that were desperate to congratulate them on the tax rises that their Government are imposing on them. That is clearly ridiculous.

In my constituency of West Suffolk, I am proud to represent so many family businesses that contribute to the economy. The Hadley shipping group, owned by James Warwick, is one of the last remaining family-run shipping companies in Britain. The Claydon family has manufactured and exported world-class agricultural machinery since the 1980s. Wedge Group Galvanising in Haverhill is a leading business in hot-dip galvanising in Europe and beyond. We need those vibrant and successful family businesses to help us build again and, as my hon. Friend the Member for Bridlington and The Wolds (Charlie Dewhirst) has just said, they are telling us the same thing: that because of the policies of this Government, they are confronted with a choice between selling their business altogether, selling parts of their business or cutting much-needed investment.

I will conclude by saying that repeating the word “growth” in press releases, ministerial speeches and tweets does not make growth magically appear. Pummelling business, as this Government are doing, is the fastest route to killing growth and our prosperity.

[Madam Deputy Speaker (Judith Cummins)]

I call the shadow Minister.

17:05

[Andrew Griffith (Arundel and South Downs) (Con)]

When he was seeking the votes of small business owners last summer, the Prime Minister said:

“Small businesses are the lifeblood of our communities.”

He said that business is

“the beating heart of our economy”

and told small business owners in Southampton that Labour would deliver the stability that businesses need to thrive. The Prime Minister, the Chancellor and the Business Secretary all looked businesses in the eye and said that they had their back, but at the very first opportunity, Labour unleashed the biggest attack on business in a generation. It gave its union paymasters a blank cheque to craft an employment Bill that will make it impossible for businesses to grow. It gave us the jobs tax, the family business death tax, and business rate hikes up and down the high street. Business owners across this country are enduring a horror show reminiscent of the darkest days of the 1970s.

It is no wonder how we got here. Not one single person around the Cabinet table has serious experience of business. They do not understand what it means to take the risks that create growth. They do not understand the responsibility that business owners take on when they decide to employ people; what it is like to worry, day and night, about whether they can make payroll at the end of next month. They just do not get it.

Today we have heard some excellent contributions from Conservative Members, my colleagues, who do get it—who understand what it takes. My hon. Friend the Member for Beaconsfield (Joy Morrissey) reminded us that it is businesses that create jobs, not warm words from the Government. My hon. Friend the Member for Bromsgrove (Bradley Thomas) told us that the Government are in denial about the impact of the changes, the choices they have made and the tax increases—we have heard that again and again today.

My right hon. Friend the Member for Tatton (Esther McVey) reminded us that family businesses are the breeding grounds of entrepreneurs—how right that is. My hon. Friend the Member for Dumfries and Galloway (John Cooper) reminded us that when it comes to business, Britain’s got talent. Businesses provide so many people, including myself, with their all-important first job, but they are being crushed by what my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) rightly called today’s toxic concoction of changes.

My hon. Friend the Member for Bridgwater (Sir Ashley Fox), as a former and fully qualified solicitor, reminded us of the devastating impact of the employment Bill, which he has studied. My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) talked about how family businesses are people’s hopes, dreams and ambitions. My hon. Friend the Member for South Northamptonshire (Sarah Bool) reminded us that, right now, businesses are cutting apprenticeships, pubs are closing and high streets are being damaged, and that once again, Labour is not working. My neighbour and hon. Friend the Member for Farnham and Bordon (Gregory Stafford) reminded us that Labour sees business as nothing more than a cash cow to fund its spending sprees, and my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) talked about how growth cannot be magicked out of thin air, however much this Government try.

Family businesses are founded on solid principles and self-reliance. My hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood) brought his experience of business to bear on this debate —it is not Government that create, but business owners working hard, day in and day out. My hon. Friend the Member for Bromley and Biggin Hill (Peter Fortune) reminded us that, just seven short months in, the Bank of England is halving growth forecasts, the cost of living is rising and unemployment is going up, all on this Government’s watch.

Finally, my hon. Friend the Member for West Suffolk (Nick Timothy) reminded us why we are really here today. We are here today because Labour broke its election promises. It has increased spending by £76 billion a year—eight times what was in its manifesto—and it is business that is paying the price. Business is not an abstraction; it is our pubs, our cafés, our restaurants and bars, our clothes shops and our newsagents. They are very real, and they are in very real danger. For many of them, the choices the Government have made will be terminal. The British Retail Consortium, the British Chambers of Commerce, UKHospitality, the Federation of Small Businesses and Family Business UK are all ringing the alarm bells, but this Government are not listening, and we have heard that across this House, including from the other parties here today.

The Institute for Fiscal Studies has said that Labour’s job tax will hit the lowest-paid the hardest, as firms are forced to make the toughest of decisions to survive, but for what end? It is to fund pay rises for train drivers, to give away the Chagos islands and to finance Red Ed’s mad windmill obsession.

[Gurinder Singh Josan (Smethwick) (Lab)]

Will the shadow Minister give way?

[Andrew Griffith]

I will not, as time is limited.

Yesterday, the Conservatives successfully amended the national insurance Bill in the other place to mitigate the worst of Labour’s job tax. In winding up, will the Minister confirm that the Government will respect that amendment to exempt hospices, care providers, GPs, pharmacies, small charities and special educational needs and disabilities providers from the worst ravages of Labour’s job tax?

Let me be entirely clear, for the benefit of every one of our constituents, that these are choices that Labour has made, and they are not choices that will lead to growth. One archetypal small business is the family-owned pub, and we can all think of a family-owned pub that we have come to love. Thousands of them will fall victim to this Government’s anti-business agenda. That is not to mention the Government’s tax on the staff behind the bar, a Bill to ban banter, a threat to end even those cheeky cigarettes outside and even a power for the Business Secretary to shrink the size of the British pint.

The Government are giving themselves unchecked powers that could see the great British pint vanquished as part of their Trojan horse, EU surrender product regulation Bill. The hon. Member for Ealing North (James Murray), who has returned to his place, says that the Government have no plans to ban the pint. If that is the case, will they support our amendment 38 to save the pint?

[Daisy Cooper]

The shadow Minister was in the Chamber when I spoke earlier. Does he not agree that it is the Weights and Measures Act 1985 that protects our pint and that we should not be scaremongering that our pint is in anyway at risk?

[Andrew Griffith]

I deeply regret that if the hon. Lady reads the Bill, she will find that it precisely confers those powers on the Secretary of State, but she can join with those on our Benches in the other place by supporting the amendment. The Government can make clear today whether they are scaremongering or whether we should all be deeply concerned. By backing the amendment, they can remove that live risk to the British pint. [Interruption.] They can back the amendment any time they want.

The bravery—I will be kind—of those sat on the Government Benches is impressive. Every single one of them will have to look their constituency business owners in the eye. Every single one will have to face constituents as they lose their livelihoods. The choices that this Government have made will put thousands of employers in the red and some out of business for good. Hundreds of thousands of jobs will be lost. For just one second, I ask Labour Members to put themselves in the position of an employer, telling their long-standing staff that they can no longer afford to keep them on.

Those on the Government Benches do not understand business. Their interests are with their union paymasters, not the workers who will lose their jobs. They are petrified of celebrating success and supporting wealth creators. This is a Government who are taking business for granted. It is devastating our economy, and we will all pay the price.

17:14

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

I thank Members on both sides of the House for their contributions to what has been an interesting debate. We heard, in particular, excellent speeches from my hon. Friends the Members for Vale of Glamorgan (Kanishka Narayan), for Gateshead Central and Whickham (Mark Ferguson), for Birmingham Northfield (Laurence Turner), for Ealing Southall (Deirdre Costigan), for Hexham (Joe Morris) and for Clwyd East (Becky Gittins). We also heard interesting speeches from the Liberal Democrat hon. Member for St Albans (Daisy Cooper) and her colleague the hon. Member for Tunbridge Wells (Mike Martin), and from the hon. Members for Beaconsfield (Joy Morrissey) and for Bromsgrove (Bradley Thomas), the right hon. Member for Tatton (Esther McVey), the hon. Members for Dumfries and Galloway (John Cooper), for Bridgwater (Sir Ashley Fox), for Meriden and Solihull East (Saqib Bhatti), for South Northamptonshire (Sarah Bool), for Farnham and Bordon (Gregory Stafford), for Keighley and Ilkley (Robbie Moore), for West Suffolk (Nick Timothy), for Bromley and Biggin Hill (Peter Fortune), for Broxbourne (Lewis Cocking) and for Kingswinford and South Staffordshire (Mike Wood), as well as Scottish National party and Plaid Cymru speeches from, respectively, the hon. Members for Moray West, Nairn and Strathspey (Graham Leadbitter) and for Ynys Môn (Llinos Medi).

As my hon. Friend the Exchequer Secretary to the Treasury emphasised in his opening remarks, we are taking the tough decisions now to support family businesses. We recognise that they are the backbone of our economy, our communities and, indeed, our society. Unlike the Conservative party, who crashed the economy, we are determined to champion those family businesses. While the shadow Chancellor, the right hon. Member for Central Devon (Mel Stride), was sitting at the Cabinet table, the cost of loans to family businesses were going through the roof. He was part of a Cabinet that left this Government with a huge £22 billion black hole in the public finances. It is always interesting to listen to the shadow Secretary of State for Business and Trade, the hon. Member for Arundel and South Downs (Andrew Griffith), who never seems to mention any more that he was once in the Treasury helping to write the Liz Truss Budget. Any time he wants to intervene and apologise for that, he will find me willing to let him do so. He finished his time in Government as a business Minister, when a record number of family businesses went bust. [Interruption.]

[Madam Deputy Speaker (Judith Cummins)]

Order. I am interested, and my constituents will be very interested, to hear what the Minister is saying.

[Gareth Thomas]

We know that there are just over 5 million family businesses in the UK, the vast majority of them small businesses. We are determined that, for the first time for a decade and more, those small businesses will be placed at the front and centre of the Government’s plan to kick-start the economy. In our first almost eight months, we have already taken significant steps to begin to reverse the decline of the last 14 years, all of which will help to create a stronger business environment for family businesses to grow and develop—for instance, an investment summit that raised £63 billion and created 38,000 jobs; starting our programme to build 1.5 million new homes; kick-starting Great British Energy to bring fuel prices down; major reforms to the planning system; record research and development spending; and significant investment in new infrastructure. In the Budget, more than £1 billion was announced for the British Business Bank over the next two years, with more funding for start-up loans and the growth guarantee scheme—precious capital to help entrepreneurs to take ideas from design to development, and to build the next generation of family businesses.

[Robbie Moore]

I am not entirely sure whether the Minister himself believes what he is reading. Has any economic impact assessment been made of the collective impact that all the Budget changes will have on many of our family businesses, including the reduction in the agricultural property and business property reliefs?

[Gareth Thomas]

I am grateful to the hon. Gentleman for mentioning those reliefs, and I will come to them in due course.

The Budget also set out practical support for small businesses, especially those on the high street. Many family businesses are affected by shoplifting, and no one should underestimate the scale of the problems that we inherited in that regard. Out-of-control shoplifting has plagued family businesses, and businesses generally, for years, with both staff and store owners feeling powerless and police forces, cut to the bone under the last Government, inadequately resourced to respond properly. Just yesterday, the Home Secretary confirmed that in the Crime and Policing Bill we are tackling this issue head-on by scrapping the effective immunity for low-value shoplifting, thus helping all family businesses. At the Budget, my right hon. Friend the Chancellor also announced additional funding to crack down on the organised gangs who target retailers.

[Gurinder Singh Josan]

For my entire working life I have been self-employed in the family business which was established by my dad and my uncle in 1975. Does the Minister agree with my experience that family businesses do not operate in isolation? Lots of things matter to family businesses. If someone is ill in the morning, they cannot join the 8 am merry-go-round for a GP appointment—the state that the Tories left this country in—because they have to get to work, open up and get people through the door. If the buses do not work, staff cannot get in. If potholes are not fixed—

[Madam Deputy Speaker (Judith Cummins)]

Order.

[Gareth Thomas]

I do agree with my hon. Friend. As he rightly alludes to, in the Budget we had to take tough decisions to fix the foundations of our economy, to restore stability and to begin to rebuild the crumbling infrastructure and address the terrible state of our public services. While we have raised employer’s national insurance contributions, we have mitigated the impacts by increasing the employment allowance to £10,500—a record amount—which means that 1 million small businesses will be paying either the same or less in national insurance contributions than they do now.

Several hon. Members rightly pointed out during this debate that a lot of family businesses are high street businesses. Many of them have been run for successive generations, and they are part and parcel of our communities. The Conservative party did next to nothing to help family businesses on Britain’s high streets. It allowed thousands of bank branches to close and thousands of pubs and other high street family businesses to go, too. That is why this Government are focused on our five-point plan to breathe life back into Britain’s high streets.

[Laurence Turner]

As the Minister knows, the Nationwide Caterers Association, which represents small independents and family-run street food businesses, is based in Kings Norton in my constituency. I thank him for the recent positive meeting we held. Does he not agree that one of the previous problems it faced was that, under the previous Government, it struggled to get a seat at the table?

[Gareth Thomas]

I was pleased to see my hon. Friend and those from the business organisation he brought in to see us, and I hope to have the opportunity to come to his constituency to see very directly the action we discussed at that meeting.

Our five-point plan to breathe life back into Britain’s high streets, as well as to address antisocial behaviour and retail crime, means reforming the business rates system, working with the banking industry to roll out banking hubs, stamping out late payments and empowering communities to make the most of vacant properties. We are already delivering in all those areas.

To support high street family businesses and other SMEs further, we have frozen the small business multiplier and extended business rates relief for the retail, hospitality and leisure sectors. We are permanently reducing tax on properties for those businesses, too. One of the many reasons why the Conservative party lost the confidence of British business is that, despite promising many times to reform business rates, it never did. We are determined to do so. Even at this late stage—and I hope the House will join me on this—I hope the Scottish Government will agree to cut business rates for the retail, hospitality and leisure sectors in in Scotland, echoing what we are doing here.

Hon. Members will know that, since Christmas, high street rental auctions have allowed councils to tackle persistently vacant properties by putting leases up for auction. This right to rent for businesses is paving the way for further regeneration and growth, for new family businesses to emerge and for current family businesses on the high street to benefit from the extra footfall.

We are also determined to tackle the scourge of late payments. Over 50% of small businesses have reported problems with late payments. After years of tough talk and little action from the Conservative party, we have already taken decisive steps to protect family businesses in this regard. We have already announced measures to tackle late payments in contracts with long payment terms, so that small firms are not waiting months on end for big firms to pay up. We will bring forward secondary legislation in this parliamentary Session to make further changes, and will shortly launch a public consultation on potential primary legislation measures that go further still to tackle this problem.

To further help family businesses, we are creating a new business growth service, which over time will bring together under one national banner a whole array of business support services throughout the UK. However, we are not stopping there. Later this year, we will be launching our small business strategy. From boosting scale-ups to regenerating the high street, supporting the adoption of new digital technologies and further addressing the access to finance challenges that businesses face, this paper will set out the Government’s vision for all small businesses. We have set out a whole series of measures to tackle the situation facing family businesses in this country.

In his opening remarks, the shadow Chancellor failed—remarkably, perhaps—to acknowledge that according to the latest PwC chief executive survey, the UK is the second best place in the world to invest, behind only the US. He also failed to mention that the International Monetary Fund and the OECD both predict that Britain will be Europe’s fastest-growing G7 economy in the coming years, and omitted the fact that the UK was the only G7 economy, other than the US, to have our growth forecast upgraded last month by the IMF, which credited the decisions we made in our Budget.

That is the kind of change the British people voted for at the last general election. There is still a lot more to do, and we on the Government Benches are determined to get on with the task.

Question put.

17:26

Division 107

Ayes: 108

Noes: 313