Reducing Costs for Businesses

Lord Grayling Excerpts

Tuesday 11th January 2022 Commons Chamber

[Stephen Flynn (Aberdeen South) (SNP)]

It is a pleasure to take part in this important debate, and, of course, to see so many Members on the Government Front Bench. That contrasts starkly with what we saw earlier today, when the Conservatives were seeking to defend their Prime Minister—or not, as it so happens.

Given that this is such an important debate, I for one am a bit surprised by its content so far. We heard from the Minister that the Government had done everything that they possibly could to assist businesses throughout the pandemic, but what the Minister did not say—and what the shadow Minister, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), did not seem to reflect on either—was that at the height of the pandemic, what the UK Government chose to do was leave the world’s biggest single market.

What we have not heard about at any point during the debate so far is the impact of Brexit on businesses in Scotland and, indeed, throughout the United Kingdom. It is the proverbial elephant in this Chamber. All of us, every single one of us, will have businesses in our constituencies that are facing challenges, and the vast bulk of those challenges emanate from Brexit. We all know that the headline will be our figures relating to the 4% hit to the UK’s economy. We all know about the trade deficits that we have seen, the impact on exports and imports, the problems caused by labour shortages. The right hon. Member for Epsom and Ewell (Chris Grayling) shakes his head, but that is the reality of the situation.

[Chris Grayling (Epsom and Ewell) (Con)]

rose—

[Stephen Flynn]

I am more than happy to give way to the right hon. Member.

[Chris Grayling]

May I ask the hon. Gentleman to point out to the House that this country’s trade deficit in the last few months has narrowed, not widened, as he has just suggested?

[Stephen Flynn]

I hoped that the right hon. Member was going to rise to defend Brexit, but unfortunately he chose not to do so, because the fact is that it cannot be defended. It cannot be fixed, as the Labour party seems to think it possibly can.

I talk to businesses in my constituency regularly, and hear about the challenges that they face. Goods that took a couple of days to ship to the continent now take a couple of weeks, if not a couple of months. The order book is not there. The impact is huge. Those businesses’ ability to grow has been constrained and, in exchange for that, the Government tell them they can perhaps have a trade deal with Australia instead, which will do a fraction of good in comparison to the damage being done by leaving the EU. And that is of course before we get on to the labour shortages I mentioned earlier, which are enormous. Businesses seeking to function and to grow simply cannot get the employees they were able to get before. We see some puzzled expressions on the faces of Conservative Members; perhaps that is because they have not been engaging with the hospitality sector. Would the hon. Member for Stourbridge (Suzanne Webb) like to clarify whether she is disagreeing with the fact that businesses have difficulties in terms of labour shortages? I will happily give way to her. No? Of course not, because the reality is that labour shortages are damaging businesses exponentially. She continues to shake her head, but that is the reality on the ground in hospitality, food processing, agriculture, right across the board, and that is before we get to the public sector challenges, including in recruiting staff to our care homes and hospitals.

So Brexit should be at the forefront of our debate and, frankly, I am a little disappointed that the Labour party seems to be trying to walk away from that. Notwithstanding that, a lot in the Labour motion is somewhat difficult to disagree with. It seeks to raise various topics, including businesses. I think all of us across the Chamber realise there are challenges in relation to business rates; it does not take a genius to figure that out. However, I have some concerns with Labour’s proposals, albeit not necessarily with the motion. What comes next? What does Labour want to replace this with? Coming from a local authority background, I know the huge role business rates play in funding local authorities. Unless you can say, “This is what we are going to replace it with” it is inevitable that the public will say “Where is the detail?” Without seeking to do the Conservative party’s job for it, that is a fair question to ask and Labour is going to have to answer it in due course. We in Scotland have done things slightly differently from the UK Government because in Scotland there is currently 100% rate relief for retail and hospitality, which does not exist in England at present. That is a phenomenal benefit to businesses—[Interruption.]—irrespective of what the chuntering Member, the hon. Member for Peterborough (Paul Bristow), is saying.

Beyond business rates, important though that is, the energy situation is of great concern to businesses throughout this United Kingdom and the Government are offering no solutions to that. The easier choice today would of course have been to back the earlier motion in relation VAT, but as I see it the Government have not offered any support for businesses with their energy costs. That is a wrong that needs to be righted as soon as possible, otherwise businesses, not just households, are going to face an unenviable position.

--- Later in debate ---

[Chris Grayling (Epsom and Ewell) (Con)]

I refer the House to my entry in the Register.

I have great respect for the hon. Member for Stalybridge and Hyde (Jonathan Reynolds). He deserves to sit in the front rank of his party, but I have to differ from him when he says that this Government have provided inadequate support to the business sector. I take him back to 2010. Both parties have faced a crisis; Labour had the financial crisis, we have had the pandemic. Both parties have had to spend hundreds of billions of pounds to prop up the economy. But back in 2010, when I became Employment Minister, unemployment was 2.7 million and the pressures were all upwards. Today, in the wake of the pandemic, having just before the pandemic managed to get unemployment back to the levels of the 1970s, and having feared that the pandemic would take us back to where we had begun, actually we have ended up, as we are, I hope, coming to the end of the pandemic, with unemployment heading down towards 4% and hopefully below, and significant numbers of vacancies in our economy. That has happened because Ministers took the right decisions at the right time and targeted their support in the best possible way. It is not possible to do everything for everyone—

[Jonathan Reynolds]

I share the mutual respect that the right hon. Gentleman kindly outlined at the beginning, but he will accept, because this is his background, that there are 1 million fewer people in the labour market than pre the pandemic. Yes, unemployment has gone down, but of course the participation rate has gone down; it is not because those people have simply transferred across. The huge worry right now, and what is leading those shortages, is that participation has fallen. That is the true picture, surely, is it not?

--- Later in debate ---

[Chris Grayling]

The hon. Gentleman knows from experience, when this country has been through bad times, how devastating unemployment can be for communities, when people are looking for jobs and cannot find them. Today, if people are looking for jobs in our workforce, the opportunities are a whole lot better than they were back in 2010, even after the impact of a pandemic, and we should be pleased about that. Of course it is not a reason for complacency; of course we still face many economic challenges, but it is a major step forward for this country that we are not in the place that I thought we would end up in after a devastating pandemic, going back to those days of 2.5 million and 3 million unemployed. We do not have that right now, and that, I think, is because Ministers took the right decisions at the right time. I am proud that they did that.

So what do we do now? The first thing I would do is exactly the opposite of what the Labour party wanted us to do before Christmas: I want to lift the restrictions on our economy now. I did not think that we should have them, even to the degree that we have them now. I did not support them, but I think the bold decisions that the Government took before Christmas have been proved right. Many businesses are closed and unable to function in Scotland—a country that saw a lot of its population come to England for new year’s eve to enjoy Hogmanay here, because the Scottish Government put in place restrictions that I do not think were necessary. Now we are in a position in which the right decisions were taken and we have an opportunity to lift restrictions further, so that those businesses in our city centres that are suffering because of people working from home can get back into better shape again. So I say to the Labour party, which has argued for tighter restrictions and against what this Government have done, that now is the moment for the party—and the whole House—to support the removal of our restrictions.

The last point that I want to make is about the energy issue. We have heard a lot today about energy as it affects households. The impact of what is happening globally at the moment will be devastating for households across Europe. However, we also need a smart strategy for energy to support businesses well, and we will not get there if we step away from the resources that we have.

I support the move to net zero and the expansion of renewables, but I also support the continued exploitation of the gas reserves we have in the North sea. Simply to step away now and say, “Because we are talking net zero in 2050, in 2022 we should exploit none of them”, is nonsense, in my view. We need that gas, we need the resources for the United Kingdom and we need a smarter strategy than that of those who are simply arguing that we should stop all fossil fuel exploration right now. That is the wrong thing to do and it must not happen.