Business Confidence

Carolyn Harris Excerpts

Tuesday 15th October 2024 Westminster Hall

[Mims Davies]

I thank the hon. Gentleman for his intervention, about his community and the local economy in Northern Ireland. This matters so much. These people are stridently working to earn wages every week—not only for themselves, but for their sectors, families and communities.

I agree with the hon. Gentleman’s point about the online challenge, which is gargantuan. It is absolutely right for us to seek to future-proof many of these businesses, which have been going for decades. It is difficult to start a business, let alone maintain one. If we let businesses fail because we do not support them for the future, we will look back in real horror.

Senior businesses, let alone small businesses, are already warning that the employment package announced last week will limit investment and reduce growth and jobs in years to come. Of particular concern is the cost imposed on small businesses. The Federation of Small Businesses is leading the charge on that, warning that small businesses will be looking at the changes with trepidation. The Government have only just managed to meet their self-imposed target of 100 days. They have left 70 measures to come in for 2026, meaning that uncertainty for businesses involved will carry on. That is a real concern.

Comments from Ministers over the past few weeks have caused chaos. First, the Leader of the House stated that there would have been a real risk of a run on the pound if the Government had not withdrawn winter fuel support from our pensioners; in the meantime, the Prime Minister had to disavow the Transport Secretary’s comments, stating that she did not speak for the Government. I say to Ministers that they speak not only for their Departments but for industry and sectors. They would do well to stop walking around with placards and remember that they are, allegedly, running the country.

I appreciate that the Prime Minister is new, and collective responsibility among Ministers is a cornerstone of Cabinet government. I am sure that this Minister will be working diligently to do what he can to support that. I was a Minister for a number of years—I was Employment Minister during the covid years—and I know how difficult it is. I genuinely wish Ministers well. Holding this debate today and being really honest about businesses’ and our constituents’ concerns has meant that the issues have been aired and heard. The national interest demands that the Government get a grip so that they can unleash the investment through the summit, spur economic growth, deliver those local jobs and live up to the promises that they have made to the British people. Otherwise, we are in for a long and costly five years.

In closing, I ask the Minister to reassure my businesses and our communities that the Government truly understand the impact of instability. What action will the Government take about Crawley college, for example? Unfortunately, it is shutting down engineering places as we strive for the new future. That concerns me because many businesses in East Grinstead and beyond need such engineering and apprenticeship places to support their future. Ministers should be truly working across Government to make sure that the next five years are a success for all our communities and constituencies, so that we have the public services and local economies that we are all striving for and aspire to.

[Carolyn Harris (in the Chair)]

Order. I intend to call the Front-Bench speakers at 5.8 pm. All Members should take that into consideration and keep their remarks under five minutes.

--- Later in debate ---

[Jerome Mayhew]

No, I am not going to take an intervention. I feel quite strongly that if an hon. Gentleman cannot make it to the start of a debate, wanders in halfway through and then seeks to make an intervention to ask a question—

[Carolyn Harris (in the Chair)]

Order. Can we keep it to the debate, please?

[Jerome Mayhew]

I will, but I would just like to refute this. Perhaps if the hon. Gentleman takes out Hansard, he will find the answer to his question in the first half of the debate.

My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) is right that business is in an uncertain holding pattern and that SMEs are the lifeblood of our community. The hon. Member for South Basildon and East Thurrock (James McMurdock) is quite right to say that his community is rich with potential. He expressed concerns, however, over the delay of the decision on the lower Thames crossing, and said that he thought the Government should have taken a more professional approach towards DP World. I agree with him. Finally, my hon. Friend the Member for Bromsgrove (Bradley Thomas) rightly pointed out that between 2010 and 2024, growth was higher in the UK economy than in all the main EU economies, and that there is opportunity if we focus on entrepreneurship and on rural businesses.

Throughout this debate we have highlighted the slump in confidence since Labour came to power—and not just in business confidence, but in consumer confidence. Why is that? Well, do not take my word for it. The ex-chief economist of the Bank of England, Andy Haldane, said that the Government’s approach has generated

“fear and foreboding and uncertainty among consumers, among businesses, among investors”.

Labour’s plan appears to have been, “We’ll come into power, we’ll say it’s all terrible and so much worse than we thought it was, we’ll say that there’s this black hole”—a black hole, by the way, that Treasury officials were unable to find when the Financial Times asked to see the data behind it—“and this will give us political cover for long-planned tax increases.”

The problem is that political games in this case have been paid for in lost jobs and futures. After nearly four months of inaction, this inept political vacuum has been filled by speculation, rumour, kite flying and denial. The “So what?” is that Government incompetence has cost jobs. The CBI has just said that it is clear that firms are holding back from employment because of Budget fears. The consultancy AJ Bell has said that directors of listed companies have doubled sales of shares since the general election—that is businesses voting with their feet. Evelyn Partners has said that a third of private business owners with turnovers in excess of £5 million have accelerated their exit strategies. Why? Because of fears about capital gains tax and inheritance tax relief. This is our entrepreneurial future being destroyed by the inaction of the Government.

It does not matter whether the rumours are true or false; the fact that they are rumours is having devastating impacts in its own right. Now the direction is clear, and it appears that the Government will increase employer national insurance contributions. As Paul Johnson of the Institute for Fiscal Studies said, that is a clear breach of the manifesto promise. When considering the issue previously, the Chancellor of the Exchequer said that an increase was an anti-business measure—I agree. The Office for Budget Responsibility has told us that an increase in employer national insurance contributions will lower wages.

Labour is pulling off the triple: misleading the public, harming business and lowering wages—all with the same policy. The more business sees of this Government, the less it likes them. When will this party of opposition that finds itself in government get a grip?