Future of the Post Office
Andrew Griffith Excerpts(1 week, 1 day ago)
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Andrew Griffith (Arundel and South Downs) (Con)
I thank the Minister for his statement and for sharing an advance copy with me. Let me add from the Opposition Benches that the victims of the Horizon IT scandal deserve full redress and I welcome the efforts to hasten the roll-out of the payments being made, building on the work of my excellent hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake). I note that we were promised an update on that particular matter by the Government in mid-November. I am not sure whether that was what the Minister was doing today, but please can he undertake to give this House regular updates on such an important matter?
We also welcome the increased focus on postmasters. That is absolutely right. It is, however, with regret that we learn today that the Post Office feels it has no choice but to begin the process of making radical decisions to reduce costs. How has this come about? In common with many other town centre enterprises, the Post Office’s costs are skyrocketing. Business rates are going up, national insurance contributions are going up, the threshold at which national insurance becomes payable is going down and its obligations around the minimum wage are going up.
There is a direct line of sight connecting today’s announcement and the Chancellor’s Budget, yet the Minister did not mention that once in his statement. The chairman of the Post Office himself said in his speech this morning that those changes have made business more difficult for Post Office branches. That is something for Labour Members to consider. Can the Minister guarantee that the Budget has had no impact on this decision? Alternatively, since that is not the case, does he acknowledge that this was the inevitable consequence of the burdens that his Government are placing on businesses, large and small?
Will the Minister tell us when he first knew of the plans set out by the Post Office today and whether he approved the chairman’s statement? The Post Office chairman has made it clear that these plans are subject to Government funding, so can the Minister make a commitment from the Dispatch Box today that that funding will indeed be coming, and that we will not face six months of uncertainty while those negotiations continue? Did his Government do an impact assessment to determine the cost of the Budget measures on the Post Office and other local services? If they did that impact assessment, will they publish it, and if not, why not? Were they worried that the Post Office would not like the result? The measures in the Government’s Budget were clearly, as we see here today, a jobs tax. After today’s impact on 100 high streets, will the Minister go back to the Chancellor and ask her to nix the NICs increase?
This news is yet another pasting in the onslaught on many rural communities. Thousands of our constituents in communities up and down the country will be waiting in trepidation today to discover the fate of their local post office. Those who rely on their post office are often the most vulnerable in society. What guarantees can the Minister provide that, unlike the family farm tax, this is not a further assault on rural communities from this Government? It was under the last Government that we entered into a new partnership with the Post Office to help millions of people to access Government services and support online, enabling them to visit a post office to confirm their identity in person. That guaranteed to those without the internet that they would not be left behind. Can the Minister confirm that there will be no withdrawal of Government services currently provided through the Post Office?
For many, post offices also provide valuable, vital banking services. I am proud of the role the last Government undertook to launch banking hubs across the country. It was a privilege to see the focus of my hon. Friend the Member for West Worcestershire (Dame Harriett Baldwin), working in the Treasury Committee to drive forward that lifeline for communities from Saltash to Kilkeel. It was encouraging to read in Nigel Railton’s speech this morning that the Post Office has committed to the significant increase in the number of banking hubs to 500 by 2030. We welcome that. However, the devil is in the detail, especially where this Government are concerned. Has the Minister engaged with colleagues in the Treasury to discuss the impact of today’s news on the banking framework negotiations, which are essential to underwrite that roll-out of banking hubs? What support will the Government offer to secure the future of more banking hubs in areas that need them most?
Despite the fact that no one around the Cabinet table has ever set up a business, I would have thought it would be obvious that placing unaccountable burdens on business would push up the cost of wages and employment, and that if they introduced a jobs tax, that would be the consequence. However, that is exactly what this Government have tried to do, and here we are, no less than two weeks later, with our high streets facing the devastating consequences of the Government’s decisions.
Budget Resolutions
Andrew Griffith Excerpts(2 weeks, 1 day ago)
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Andrew Griffith (Arundel and South Downs) (Con)
Thank you, Madam Deputy Speaker. May I start by congratulating our US allies on the election of their 47th president? When it comes to business and trade, America is our most important partner. As our economies are so interlinked, nearly 1.5 million Brits work for American companies, and more than 1.2 million Americans work for British companies. That trade relationship is worth £280 billion a year, and the amount invested in each other’s economies has now surpassed £1 trillion.
The Government may be right to say that there is much to rebuild in Britain today, but what this Budget does, combined with the Government’s nationalisation of railways, Employment Rights Bill, and Great British Energy, is to take us further away from that goal, with higher taxes, more regulation, bigger government and a smaller wealth-producing part of the economy. It is a Budget for prejudice rather than for progress. While Labour Members will praise the Budget for its finer measures and the socialist purity of its design, their constituents can see that, when it comes to growth, the Budget emperor has no clothes. The Office for Budget Responsibility strips it back to its stark, naked flesh. It says that Budget policies temporarily boost output in the near term, but leave GDP largely unchanged in five years. If growth is their central mission, the Government have already failed.
In the harsh light of day, the Secretary of State’s colleagues are starting to realise that the Budget is not such an appealing sell. As was reported on Sunday, Labour Back Benchers have said that the Chancellor’s Budget is impossible to sell to horrified constituents—they have been reading their emails again. One colleague of the Secretary of State for Business and Trade told The Daily Telegraph, “It has been received very badly indeed within the Labour party”. There is a stark contrast between what the OBR is saying and what those on the Government Front Bench are claiming. The chances are that it will not be a growth Budget, as is claimed. All the evidence is that it will have no more growth by the end of it, and it will certainly be paid for by higher effective taxes on working people.
The Secretary of State’s colleagues are right, and no wonder. The private sector experience of the Cabinet could barely fill a beer glass, let alone a boardroom. Conservative Members know that it is business that creates jobs and the prosperity to pay for our public services. Businesses are the builders, and there is no rebuilding without them. That is something that Labour Members simply do not understand. Britain’s business needs a Government who have their back, not one that drags them down.
David Baines (St Helens North) (Lab)
Under the previous Government, life expectancy plateaued, and the number of people living with long-term ill health increased. Was that good for business?
Andrew Griffith
The ability to continue to invest in our public services, and the sterling work done by the predecessor Government on levelling up every part of the United Kingdom—[Interruption.] Government Members do not like it, but that work relies fundamentally on private enterprise, which pays the taxes that fund the prosperity and the infrastructure that this country needs. I am afraid that the hon. Gentleman is merely showing once again his party’s deficient understanding of how a modern economy works—it is markets, not Governments, that drive up prosperity—and how free trade has improved human health.
Mike Martin (Tunbridge Wells) (LD)
Does the shadow Secretary of State think that the Conservative-designed and implemented Brexit is good for markets, good for business, and good for growth?
Andrew Griffith
Well, we will talk a little later about stability. If colleagues do not have maiden speeches to make, I will be very happy to talk at great length about the many benefits of Brexit and the important ability for a country to make its own laws and deliver benefits for the economy.
Let me make some progress. The Secretary of State has talked much about infrastructure, and, indeed, that is partly the subject of today’s debate. Although creating infrastructure is a noble goal, important to all the constituents who send us here, words, I am afraid, are cheap, and the actions of his party somewhat undermine his position. His party voted in the other place against measures to allow 100,000 homes to be built, and his Labour Mayor of London failed to build to such an extent that the Secretary of State for Housing, Communities and Local Government now proposes lowering his targets. This Labour Budget has pulled up the housing ladder for so many, by increasing the burden of stamp duty for first-time buyers. Currently, an estimated 80% of first-time buyers pay no stamp duty, but from April 2025, that could fall to only half.
Andrew Griffith
I will happily give way to the hon. Lady, particularly if she can tell me how this Budget will help deliver for first-time buyers.
Florence Eshalomi
Does the shadow Secretary of State agree that this Labour Government will help renters by banning no-fault evictions?
Andrew Griffith
I was party to the debate in which my right hon. Friend the Leader of the Opposition talked about the unintended consequences of piling burden upon burden on the rental market—in a well-meaning way, I accept. We have only to look north of the border, where similar measures were introduced, to see their devastating effect on the rental markets, and the shocking increase in rents as a result of a Government trying to over-regulate a sector.
Laughably, while the Government talk about investment, in their first 100 days, they cancelled the restoring your railway programme—clearly, with some projects being honourable exceptions—which would have made it easier for constituents to get to work sustainably. They have also cancelled road schemes, including the A303 scheme and—I declare an interest—the A27 Arundel bypass in my constituency. It is not the first time that a Labour Government have cancelled that bypass. The Government talk a great deal about the future of this country, the technology and their modern industrial strategy, but should not new innovative technologies, such as artificial intelligence and supercomputing, be at the heart of that?
Andrew Griffith
I will happily give way to the Secretary of State if he wants to explain why he no longer deems it important to invest in these crucial parts of the economy.
Jonathan Reynolds
Let us reflect on where we are today—the first day of the constructive Opposition. The new Leader of the Conservative party stood at the Dispatch Box two hours ago and called for both tax cuts and massive public spending on defence. How are you going to pay for projects that you promised but never delivered, and that you knew you could never pay for?
Madam Deputy Speaker (Caroline Nokes)
Order. The Secretary of State knows better than to say “you”.
Andrew Griffith
We would have got a better answer from ChatGPT. The reality is that the Budget not only increased taxes in the outyears by £40 billion a year but increased borrowing by £140 billion over the course of the plans—yet despite that largesse, there was no room to fulfil the mandate of British researchers and continue to invest in the supercomputer and infrastructure that they need.
Dan Carden (Liverpool Walton) (Lab)
A Business Secretary in the last Government wrote an industrial strategy, but it was quickly binned. Under the Conservatives’ new leadership, what is their position on industrial strategy, because we went without one for many years?
Andrew Griffith
Forgive me if the hon. Member has been here for more than 120 days, but I fully support the sectors, and the industrial strategies that the Government have articulated for them, because the strategies continue on from, and are identical to, those of the previous Government. Not for the first time, we see what I call name-plating from this Government. A British business bank—the UK Infrastructure Bank—is being re-name-plated as a national wealth fund. The modern industrial strategy takes the existing science, technology and innovation framework, our plan for financial services and our creative industries strategy and re-name-plates them under a different banner. That is welcome. There is nothing quite as flattering as plagiarism, and I am delighted that those really important sectors of the economy will benefit from a degree of continuity.
The Budget has been absolutely crushing for business. If the Secretary of State is honest, he will know that from his engagement. The only thing that it has delivered to businesses across the country is more burdens. According to the Institute for Fiscal Studies, the increase in national insurance contributions amounts to a £25 billion tax on business. The reduction of the national insurance threshold by over £4,000 will keep small and medium-sized businesses up at night. Let us not equivocate: the measures in the Budget amount, in the words of the Chancellor herself, to a “jobs tax”. From industry leaders to shop owners, those in the retail, hospitality and leisure industries in particular will think back to what they heard during the election campaign.
Graham Stuart
I know that my hon. Friend follows these things closely. According to the OBR, the £26 billion jobs tax bombshell actually nets only £16 billion because of reduced investment and other funds, and three quarters of the £26 billion falls on workers’ wages. Only this socialist Government could be so incompetent as to reduce wages by more than they will take from a tax that they have introduced. I have not heard that observation yet in the debate, but I share it with my hon. Friend.
Andrew Griffith
My right hon. Friend is exactly right. We have heard talk from Labour Members of a circular economy. Well, this is entirely circular. As the OBR observes, the measure does not add to growth, and as my right hon. Friend mentioned, three quarters of the burden will fall on the low-paid. The Labour party has a distinguished record on these matters, and if Labour Members are serious and thoughtful about this, they will interrogate their Front-Benchers in much greater depth, because the measure will result in lower-paid, poorer jobs—and it will be much harder for people to get on the jobs ladder in the first place.
There is an enormous number of unanswered questions. The impact on GPs is uncosted.
Andrew Griffith
Indeed, there will be an impact on charities and the third sector—those who care for us at the most difficult points in life. On Friday, I met representatives from a charity in my constituency that cares for those with dementia. Its income is fixed, its needs are ever present, and as a result of this Labour Budget, it simply does not know how it will balance its books.
Dr Caroline Johnson (Sleaford and North Hykeham) (Con)
Is the reality not that the Labour Government also do not know how they will balance the books? I asked the Secretary of State for Health and Social Care in a written parliamentary question how much the rise in employer national insurance contributions will cost the Department. The Government said that they did not know.
Andrew Griffith
Either the Government do not know but should know, or they do know and should say.
The Budget also included the highest-ever increase in capital gains tax, and a reduction in business property relief. Just as with the family farm tax, that reduction is an attack on the family-owned businesses that dominate our high streets and industrial parks. The incentive to take risk, and to create and grow a family business with the objective of passing it on, will be fundamentally undermined. Some 75% of UK businesses are family run, and in aggregate they employ 50% of all workers in the economy. We are talking about decades of hard work, dedicated to building a legacy, and people creating an insurance policy for their passing. The so-called “loopholes” in inheritance tax that Government Front-Benchers talk about are legitimate tax policies, introduced by a Labour Government in 1976 to ensure that businesses were not broken up and devastated on the death of an owner, to the detriment of the remaining employees, workers, suppliers, customers, the wider economy, and even the Treasury, which would lose future tax take. This measure could be devastating for our communities and our high streets up and down the country.
It is not just Conservative Members who are sounding the alarm, though we may be doing it with a greater degree of passion. The chief executive officer of UKHospitality said that the increase in national insurance will undermine businesses operating at the margins and
“be a brake on growth”.
Family Business UK, which represents family-owned enterprises, has said that the Budget
“removes entirely any incentive for starting or running a family business.”
Lewis Atkinson (Sunderland Central) (Lab)
The hon. Gentleman will recall that in the 2022 spring Budget, the Conservative party increased national insurance for employers by 1.25%, and he supported that. Can he explain why he was in favour of it then but opposes it now, even though we have introduced increased employment allowances that counteract the change?
Andrew Griffith
I am pretty sure that at the time, the now Chancellor described the increase as a “jobs tax”, and that is exactly what this is. What we are seeing is not a need to balance the nation’s books on the back of a global supply chain squeeze, higher energy costs due to the war in Ukraine and the aftermath of covid, but a Government coming in with premeditated plans that they did not share with the British people, and setting the biggest-ever tax raid Budget in British history. That is an enormous difference, and business understands it; it can see through this Government.
One of the UK’s leading hospitality entrepreneurs is Luke Johnson, who runs Gail’s, which I believe some of my Liberal Democrat colleagues are rather keen on—they are the party of Gail’s. He said:
“It is heartbreaking that Britain’s proud record of innovation, flexibility and business success is being thrown away thanks to that old knee-jerk Labour instinct of taxing success.”
I agree.
Sam Rushworth (Bishop Auckland) (Lab)
It is clear that the hon. Gentleman disagrees with the way in which the Budget raises revenue. Does he oppose the £22 billion investment in the NHS, the investment in special educational needs and disabilities education, or the increases in the schools budget?
Andrew Griffith
I hope that the hon. Gentleman has a long and successful career in this House, but he will not have very long to wait; if he is concerned about a lack of investment in the NHS, I ask him to sit down with the Chief Secretary to the Treasury and ask exactly what the rate of growth will be for NHS spending and departmental spending in the years ’26-27 and ’27-28. Then perhaps he could come back and tell me what he thinks about that level of spending growth.
The Government talk of stabilising the economy—we have heard a lot about that—but this is not a Budget for stability; it is anything but. Let me educate Labour colleagues. There is nothing stable about lowering the rate of economic growth. All that does is create a more fragile and susceptible economy. There is nothing sustainable about a Government changing the fiscal rules after saying that they would not. Even with the potentially unsustainable levels of departmental spend, there is nothing stable in a Government having a razor-thin level of headroom that the OBR quantifies at only £10 billion—just one third of the level that the Chancellor’s predecessor set—to ensure that they remain within the fiscal rules, which they have just made up, by the way.
Melanie Ward (Cowdenbeath and Kirkcaldy) (Lab)
Will the hon. Gentleman give way?
Andrew Griffith
I will happily give way to the hon. Lady if she wants to talk about headroom in the fiscal rules, and the lack thereof.
Melanie Ward
The hon. Gentleman is talking about stability, but does he recognise the irony in his party—the party of Liz Truss—lecturing the Government about stability?
Andrew Griffith
The—[Interruption.] I am trying to find something relevant to say to the hon. Lady. There is a—[Interruption.]
Andrew Griffith
I will happily give way in a minute. At least the Budget that the hon. Lady talks about was an attempt to do two things. First, it sought to shield households in this country from going into a cold winter with an increase in energy bills—her Labour colleagues may wish to contemplate what they have done to 8 million pensioners through the reduction of the winter fuel allowance. Secondly, it was a Budget for growth. This Budget, as we have observed—[Interruption.] Well, some people are making interesting comments, but the direction in this Budget is to lower, rather than increase, growth.
Mr Snowden
Does my hon. Friend agree that, in the reaction to the Budget, the gilt market is in a far worse position than it was following the mini-Budget? Labour Members might want to do some research into the impact of their own Budget.
Madam Deputy Speaker (Caroline Nokes)
Order. I will hear the shadow Secretary of State.
Andrew Griffith
My hon. Friend makes exactly the right point. The Government are enormously lucky, given the spike in gilt yields over the preceding weeks and subsequent to the Budget, that the previous Government dealt with the aftermath of the financial regulatory failure in respect of liability-driven investment. We dealt with that, and as a result we have a more stable financial system, which has been able, so far, to survive what the Government have done.
In evidence taken by the Treasury Committee yesterday, Richard Hughes explained, and I shall say this slowly, that an increase to interest rates of just 0.3%—one third of 1%—would wipe out all the headroom. That is in the OBR’s economic and fiscal outlook, and is no doubt why the OBR gives the Government only a 54% chance of hitting their targets. That is barely better than the odds on a coin toss.
So there we have it. The Government spent months talking up their credentials on enterprise. They looked business owners in the eye and told them that they would have their back and support them, but 120 days later they went back on their promise—a prawn cocktail offensive with a nasty dose of indigestion. They have crushed confidence and destroyed investment. They have checked any incentive for growth. They have left thousands of enterprising strivers wondering when the day will come when the shutters on their shops are not lifted any more. I dare the Secretary of State to stand before the 4.8 million family business owners and tell them that this is a Budget that will work for them. Risk takers and wealth creators deserve a Government who have their back, invest in infrastructure and do not embolden the inefficiencies of the public sector. Be in no doubt: while the Government keep growth, innovation and entrepreneurs in their crosshairs, the Conservatives will always be on the side of business.