Backing Business to Create Economic Growth Debate
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Ben Coleman
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Backing Business to Create Economic Growth
Ben Coleman Excerpts(3 weeks, 2 days ago)
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Sir Desmond Swayne
No, I will not.
The reality is that Ministers are trying to have their cake and eat it by saying that the British economy would be performing so much better if it were a member of the European Union while at the same time trumpeting its performance.
Sir Desmond Swayne
I am with the hon. Gentleman—I believe the reality is that the British economy is performing in a lacklustre way.
But I put it to you, Madam Deputy Speaker, that the cause of that lacklustre performance is the huge imposition of regulation in the previous King’s Speech, and the delivery of new employment taxes on every enterprise in the land as part of that deal. The best King’s Speech that we could have had would have been a very, very short one, containing only a statute of repeal of all the impositions of the previous King’s Speech.
Gavin Robinson
The agricultural sector does need help, as do many other sectors besides. Just this day, I had a conversation with a lovely young gentleman—a 14-year-old student from Broxbourne in England. He is a secondary school student, and he told me about his school and his classmates. They live in a Conservative constituency, but last year in a mock election, the majority of pupils his age were not interested in this Government; they were putting their store in the Greens. I wonder just how often Members in this Chamber engage with real people and understand their concerns. [Interruption.] Labour Members laugh, but they were not laughing two weeks ago, and I suspect they will not continue laughing.
Earlier in this debate, I raised the issue of defence spending in Northern Ireland. Do Labour Members know that the average spend per head of population is £300, but in Northern Ireland, it has been a fifth of that? I asked whether this Government recognise that Programme Euston, which could see investment in both Scotland and Northern Ireland, could be designated as a defence project. Again, officialdom is reticent. When I served on the Defence Committee with Labour Members for eight years, we fought those campaigns together and secured investment, but now that they are in government, they buy the same official line. There are things we can do to encourage investment, business and economic growth, but I am sorry to say that I do not see them.
We have heard colleagues talk about stability in the economy. I want to see stability in Northern Ireland. The Secretary of State for Northern Ireland was in the Chamber earlier. We are now two months into a financial year with no budget. Where is the clamour? Where is the concern? Where is the effort to ensure that our politics can work and we can stimulate business and growth? That has not been mentioned, and it is not a concern.
Labour’s big idea is the relationship with the EU. It is a big idea that seems to ignore a referendum that took place in 2016—its Members do not want it mentioned. Forget about betraying the people of this country and a referendum that decided our fate 10 years ago; the bigger concern among Labour Members is betraying the aspirations of their candidates, with one candidate letting slip their view so that the king of the north is left with no clothes. And yet, on a closer relationship with the European Union, what do we hear for Northern Ireland? Nothing. All are still content that laws for Northern Ireland, applying in Northern Ireland, are set in Brussels; for two years, this Labour Government have dishonoured their own position and dishonoured the pledges they made to the people of Northern Ireland to fix it. Talk about a closer relationship with the European Union: in the coming months, customs duties on parcels to customers in Northern Ireland—
Jim Allister (North Antrim) (TUV)
It is strikingly surreal to be debating a King’s Speech from a Government who are patently on their last legs. This is the King’s Speech of a Prime Minister who is working out his notice in Downing Street. It is equally surreal that after the biggest electoral trouncing that any Government have ever had, particularly in red wall seats, and in areas that voted strongly pro-Brexit, the Prime Minister thinks that the answer is more Europe. Dear help his wit, if that is his solution. Of course, that is also the solution of the wannabe Prime Ministers who are queuing up, bristling with European credentials—although I notice that Andy Burnham is feverishly trying to cover his Europhile tracks, because he thinks they might not go down too well in Makerfield. It is the height of folly for any Government who have been so trounced in an election in those areas to think that the answer is more Europe, but we are told that that answer will come in the European partnership Bill. I suspect that it will be a mere shell of a Bill, loaded with Henry VIII powers, so that as we increasingly align with the EU, this House will not even have the right to scrutinise those measures.
What does “dynamic alignment” mean? I can tell the House what it means, because I represent a part of the United Kingdom that, sadly, has continued to be dynamically aligned with the EU. It means that we become a supplicant rule taker. It means that we are subject to laws that we do not make and cannot change. It means that laws of absolute folly impose costs on our constituents. Let me give but one example. Northern Ireland is subject to the European vehicle type regulations. What does that mean? It means that buying a new car in Northern Ireland costs £4,000 more than it does in Great Britain, because it can be imported to and used in Northern Ireland only if it meets EU standards. That is what it is to be a supplicant rule taker in the United Kingdom.
Ben Coleman
The sanitary and phytosanitary rules, which are being discussing and negotiated with the European Union, will be implemented by the European partnership Bill. Does the hon. and learned Member not accept that that will give us a seat at the table, when it comes to developing food and drink standards? Does he not also take a certain amount of pleasure from the fact that the Bill will remove the food and drink trade barriers between Great Britain and Northern Ireland, which arise from Northern Ireland’s effective membership of the European single market?
Jim Allister
I am sorry the hon. Member is so ill informed. Let us take the SPS deal. The Government are seeking an SPS deal not between the United Kingdom and the EU, but for GB and the EU. Why? Because, shamefully, in all SPS measures, the Government are going to leave Northern Ireland subject to the jurisdiction and sovereignty of the EU. It would not be so bad if they were saying that they will have an SPS deal to take back sovereignty over SPS matters in Northern Ireland, but they do not even have the courage to say to the EU, “If we’re going to align, we’re going to make the laws for the whole United Kingdom.” They are prepared to continue to make Northern Ireland subject to the foreign jurisdiction of the EU.
What does that mean, and what will dynamic alignment mean for Great Britain as well as Northern Ireland? It will mean huge disfranchisement of the people of this United Kingdom. In Northern Ireland, there are over 300 areas of law in which we do not make and cannot change the laws; they are made by a foreign Parliament. This Government are going to mirror that for the whole United Kingdom. That means that the people we represent cannot elect anyone to make those laws; they are disfranchised. Disfranchising is the very antithesis of democracy, yet it is the democratic price of dynamic alignment. What about the financial price? How much are this Government going to pay the EU to be a supplicant rule taker? It will be tens of millions of pounds, I am quite sure, but the Government have not wanted to tell us. That is the challenge: let them tell us how much it is going to cost financially.
I want to comment on one other Bill. The energy independence Bill will wilfully shut down our oil and gas industry. Only the deluded would want to produce a plan that will make us weaker, poorer and more dependent on others to meet our energy needs. Here we have a Government saying, “Let’s choose to leave billions in value under the sea, so we can squeeze our taxpayers for the money that is required to buy oil and gas from a foreign Government.” Where is the logic in that? It is the ultimate delusion, and it is because of such delusions that this Government are heading for the exit.
Ben Coleman (Chelsea and Fulham) (Lab)
That was a very powerful and upsetting speech. I am grateful to the hon. Member for Rutland and Stamford (Alicia Kearns) for raising that issue. There is a lot to think about.
In a world of growing uncertainty, our country’s economic security has never mattered more, which is why I have to say I am delighted by the European partnership Bill in the King’s Speech. Right now, our rigid distancing from the EU is simply holding us back. It has piled costs on to business and has done nothing for ordinary people. If Members visit the Italian-Spanish deli on the King’s Road in my constituency, they will see that the shelves are half bare because the white van person who used to make buying runs across northern Europe cannot or does not want to do the paperwork any more. A drinks importer in Fulham is paying £100 to £150 extra per pallet. These are import businesses, but the costs fall on exporters just as hard, and small businesses can least afford the costs they now face.
Large sectors are also paying heavily for our rigid distancing from the European Union. British cars now have to meet a separate set of regulatory requirements just to enter European markets, and it is costing the automotive sector £600 million a year that they did not used to have to pay. In chemicals, leaving the EU REACH registration scheme and creating an entirely separate one has left the UK industry facing a £2 billion bill. In pharmaceuticals, British products are waiting for four to six weeks for batch testing before they can get into European supply chains.
Ten years ago, none of those costs existed. Why not? We all know the answer: because we and our European neighbours were in a single market together. Once outside that market, Britain became subject to all these new trade barriers, just like any non-EU country, which pushed up costs.
Indeed, in the food and drink sector, costs for British exporters have risen by as much as 20%. Since 2023, businesses have had to pay for over a million multi-page export health certificates just to trade with the EU, at a total cost of between £90 million and £210 million. Each certificate costs up to £200 quid. This did not used to be the case. A salmon shipment can then face sampling costs of £1,400 on top. The cost can be £1,200 for a consignment of beef or cheese. If you have got the forms even slightly wrong, valuable produce can be held at the border, or spoiled entirely.
Sir John Hayes
As you might know, Madam Deputy Speaker, I try to read a lot of fiction—I read two novels a month—but I sometimes think I do not need to, because what we are hearing now is a fiction about the European Union. In every Department in which I served as a Minister, I tried to encourage the procurement of British products and services, including vehicles. Every time I did so I was told that it was impossible because of EU regulations and rules, particularly state aid rules. That disadvantaged British businesses large and small. We have been freed from that now, which is why Ministers on the Treasury Bench can preside over a regime that procures British goods and services, and I know that every day they try to do so.
Ben Coleman
I am most grateful for that intervention, but it does not in any way even attempt to address the point I was making about the loss of money to this country through trade and the fact that so many businesses have gone under.
On state aid and product procurement, I will accept that one of the most unpalatable things that civil servants have always said, along with “commercial in confidence”, is, “No, we can’t do that because of EU procurement rules.” After the changes to EU procurement rules there was, even while we were in the European Union, a huge amount that you could do to prefer small and local firms, as I knew when I was deputy leader of my local council and got officials to do that. The civil servants you were dealing with perhaps should have looked again—
Madam Deputy Speaker (Caroline Nokes)
Order. We have been here for two years; you have to stop using “you” and “your”, because it refers to me. It was not me who was dealing with civil servants.
Ben Coleman
I am most grateful, Madam Deputy Speaker. Such officials as gave that information could have looked again.
Dawn Butler
Does my hon. Friend remember when a former Tory Prime Minister gave a guarantee to small businesses that there would be no paperwork to trade with the EU, because they recognised how much of a disadvantage and how problematic it would be?
Ben Coleman
It will come as no surprise to anybody that what the previous Prime Minister said and the truth perhaps did not have the closest of relationships.
It is absolutely no surprise, looking at what has happened, that the London School of Economics found that new border checks and paperwork pushed up UK prices by more than 7% between 2019 and 2023, adding around £250 to our grocery bills. It is also no wonder that 20,000 small businesses, all with fewer than 10 employees, have simply stopped exporting to Europe—not by choice but because the costs got too high.
The war with Iran is making things even worse. It is pushing up energy and food costs around the globe. Our country’s economic security demands that we do all we can to reduce business costs and limit price increases, working with our European allies. That is where the European partnership Bill comes in. For months now, the Government have been negotiating a new sanitary and phytosanitary—food and drink—agreement with the EU. This would sweep away the certificates, checks and fees that have added so many costs to food and agricultural trade with Europe. The aim is to wrap that up by the next EU summit, but to bring it into force we need the European partnership Bill.
Under the SPS deal, multi-page export health certificates, phytosanitary certificates, port health authority costs and sampling costs would all go. The Bill will support that. It will also provide the framework to implement an emissions trading agreement, which will link the UK’s emissions trading scheme with that of the EU. That will give us a larger, more stable carbon market, support investments in new technologies and help us to decarbonise more efficiently. Together, the food and drink deal and the emissions trading agreement could add nearly £9 billion to the UK economy by 2040.
Ben Coleman
I am afraid I will not; I have given way twice, and I do not think I will get any more time.
The European partnership Bill will also give Ministers the essential power to keep UK regulations in step with EU rules more broadly, without needing an Act of Parliament every time. The jargon phrase that we have heard is “dynamic alignment”—keeping our rules compatible with those of our largest trading partner, rather than constantly playing catch-up.
Crucially, this is not a one-way street. Unlike the situation we have now, this will give the UK a seat at the table in Brussels where food standards are being developed. Parliament will also retain its say before any EU rules are applied here. We will be replacing the patchwork of ad hoc fixes that we have now with a clear and stable framework that businesses can plan around. Importantly, if we pass the Bill, which I expect we will, that will be a sovereign decision, freely made—not because we have to but because the prize is too great to walk away from.
The European partnership Bill will deliver real relief and real advantages for food and drink businesses now. It will pave the way to bringing down costs in other areas such as chemicals, pharmaceuticals and automotive. It is a patriotic and hopeful Bill. It will boost British business and strengthen our country’s economic and energy security. I look forward to it building our country’s growth and future in Europe.
Dame Harriett Baldwin (West Worcestershire) (Con)
It is an honour to respond on behalf of His Majesty’s loyal Opposition to this debate on backing business to create economic growth. I would like to start by congratulating the Chief Secretary to the Treasury, the hon. and learned Member for Northampton North (Lucy Rigby), on her promotion. It seems like only moments ago that she was a colleague on the Treasury Committee, and now she is in charge of the whole nation’s spending, so I wish her the most enormous amount of luck. I also want to say, Madam Deputy Speaker, that I will be mentioning by name some colleagues who have not been in the debate, but I have warned their offices that I will be doing so.
I want to focus in this debate on a simple truth that many businesses across this country have come to recognise, which is that when it comes to backing business to create economic growth, Labour does not know what it is doing. Labour does not know how to govern when times are tough. It entered government without a plan and we are seeing the consequences. I am afraid that this goes deeper than the Prime Minister. Only one Labour Cabinet Minister has started a business, and none of the Prime Minister’s wannabe rivals has worked in a business or a start-up. This matters because it goes to the core of this Government. Whose side are they on? Time and time again, Labour shows that it is on the side of “Benefits Street”, not on the side of people who work, who strive and who save.
When this Labour Government came into office, they had a choice. They wanted to deliver growth. They could have backed business. They could have supported enterprise. Instead, they delivered higher taxes, higher costs and higher uncertainty, and I am afraid that the consequences are now undeniable. Business confidence has collapsed to record lows. The Institute of Directors reported its lowest-ever confidence reading in March 2026, and the Confederation of British Industry says that businesses expect their activity to fall. Jobs are being lost, payroll jobs are down, and the ITEM Club has forecast that there will be 160,000 further job losses this year because of a slowdown in growth and rising energy prices. Retail sales are weak, and nearly half of all businesses are now worried about business rates, which are rising sharply.
It all started with the Chancellor’s first Budget. Labour’s £25 billion jobs tax has increased the cost of employing someone by around £900 per person and, as a direct result, youth unemployment is at a shocking 15.8% on Labour’s watch. For an average pub with eight employees, national insurance means an extra £7,200 bill every year. At the same time, Labour has squeezed our high streets with rising business rates. The result of all this is that one in eight business leaders are planning to leave Britain and 30% of those on The Sunday Times rich list have fled high-tax, socialist Britain. That is a vote of no confidence in this Government.
The damage is not confined to business; it is spreading across the whole economy. Inflation is up. Borrowing costs are surging, with gilt yields at their highest level in decades. Debt interest is spiralling towards £140 billion a year. We are now paying more to service debt than to invest in our future. That is the direct result of a Government without a plan.
So what will happen if we get a new Labour Prime Minister? Will that help businesses and the economy? No, because Andy Burnham wants higher taxes and more borrowing, the right hon. Member for Ilford North (Wes Streeting) wants higher taxes and more borrowing, and the right hon. Member for Ashton-under-Lyne (Angela Rayner) wants higher taxes and more borrowing. Businesses can see where this ends. It ends in low growth and unsustainable debts. Perhaps the IMF will have to be called in, as it was under Denis Healey.
I thank colleagues on the Conservative Benches who have contributed to today’s debate, and spoken powerfully for their constituencies and the businesses that they represent. Their speeches were beams of light shining into this Chamber from the real world. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) spoke about debt and chaos. My right hon. Friend the Member for Salisbury (John Glen) talked about the importance of small businesses and deregulation, and the impact on them of national insurance. My right hon. Friend the Member for Tonbridge (Tom Tugendhat) referenced the debt markets and the pressing need for welfare reform. My hon. Friend the Member for Bridgwater (Sir Ashley Fox), in an outstanding speech, spoke about his local businesses, and said that the last thing they need is another holiday tax.
In an excellent speech, my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) highlighted the impact on jobs for young people, and in a powerful contribution, my hon. Friend the Member for Rutland and Stamford (Alicia Kearns) spoke about solar farms and the shocking information about self-swab rape kits. My hon. Friend the Member for Mid Norfolk (George Freeman) spoke about rural businesses and rural deprivation, and made an outstanding contribution on turning things around for his constituents in Mid Norfolk.
Turning to the King’s Speech, what do we see? We see a King’s Speech full of more intervention, more regulation, more taxes and more uncertainty. There is even—I am not making this up—a regulating for growth Bill: more compliance burdens dressed up as protections and more top-down control from Whitehall. Labour Members describes it as growth coming from an interventionist Government, but they are wrong. Growth comes from entrepreneurs who take risks. Growth comes from businesses that invest and hire. Growth comes from workers who strive and succeed. That is why we have set out a clear alternative: a serious plan, a credible programme.
Dame Harriett Baldwin
I am going to make a bit of progress on our serious, credible plan—a pro-growth alternative King’s Speech, with 16 Bills designed to get Britain working again.
First, we will give people jobs and hope with our get Britain working Bill. We will repeal the job-destroying elements of Labour’s Employment Rights Act, saving businesses up to £5 billion a year. We will restore flexibility in the labour market, and reintroduce minimum service levels to protect essential services from strikes. That means more jobs and lower hiring costs—a labour market that rewards work.
Secondly, we will back our communities with our back our high streets Bill. We will introduce permanent 100% business rates relief for retail, hospitality and leisure, which will support 250,000 of the smallest businesses with lower bills, leading to stronger high streets and protecting jobs. While Labour targets family businesses and farmers with punitive taxes, our plan is simple: we will scrap the family business and family farm tax, and back those who grow our food, create jobs and create wealth.
Thirdly, we will cut red tape with our deregulation of business Bill. We will scrap unnecessary environment, social and governance reporting requirements, which cost businesses millions every year—less bureaucracy, more time to grow and more investment.
Fourthly, we will restore industrial competitiveness with our save British industry Bill. We will repeal the Climate Change Act 2008, establish a monitoring and reporting mechanism for the offshoring of emissions, axe the carbon tax, which pushes up energy bills, and repeal the zero emission vehicle mandate. That will lower costs and lead to stronger industries—jobs kept in Britain.
Fifthly, we will tackle energy costs—many hon. Members raised energy costs in their contributions today—with our cheap energy Bill. We will cut electricity bills for businesses by 20% and household bills by £200 by taking VAT off energy bills, axing the carbon tax and scrapping the Energy Secretary’s renewables subsidies. That will give businesses immediate relief and greater competitiveness, and lead to stronger growth.
Beyond those Bills, we have plans to scrap stamp duty to get the property markets moving, to properly fund our armed forces, to reform welfare, to get people back into work and to approve new North sea licences for energy security. Because growth is not achieved through slogans—
Dame Harriett Baldwin
Is the hon. Gentleman going to achieve growth through a slogan?
Ben Coleman
I was going to say that I cannot be the only person in the House who is thrilled by the great list of exciting things that the hon. Lady is setting out for the country. I wonder why she did not do any of them during the 14 years she was in power, why it is only now that she has ideas for the country, and whether she could have done something that would not have led to the catastrophe that we are trying to put right—just a suggestion.
Dame Harriett Baldwin
I am afraid it is the historical role of my party to clean up the mess that Labour Governments leave behind. Growth is not achieved through slogans; it is delivered through serious and sustained planning.
In conclusion, the debate comes down to a clear choice: Labour’s approach—
Dame Harriett Baldwin
The hon. Member mentions Liz Truss from a sedentary position. Is he not aware that gilt yields are now higher than at any time during that brief period? I am sure he will be welcoming the higher taxes and more borrowing that his Government have caused, the higher energy costs imposed on his local businesses, the more regulation that has led to less growth—or he could adopt the Conservative approach: lower taxes, lower costs and less regulation. [Interruption.] The Business Secretary says “More growth” from a sedentary position. He may be referring to the first quarter of this year when the biggest thing that happened for growth in this economy was vehicle repair. I call that the pothole growth strategy, and I am afraid that that is the reality if we dig into the growth numbers.
Our approach is less regulation and more growth. Ultimately, this is about values. Labour has the wrong values. It is for “Benefits Street”, and we are on the side of people who work, people who strive, people who save. Only the Conservative party has a plan to reduce costs and deliver the growth that we all want. Only the Conservative party is ready to govern. Only the Conservative party will back great British businesses to build a stronger economy for the future.