Budget Resolutions

Debate between Daisy Cooper and Monica Harding

Wednesday 6th November 2024 Commons Chamber

[Daisy Cooper]

I thank the right hon. Gentleman for making that point. He may remember that at Deputy Prime Minister’s questions two weeks ago, I raised precisely that point with the Deputy Prime Minister and advised the Government that if they went ahead with the rise in national insurance contributions, it would affect social care. The right hon. Gentleman will, however, remember that it was the Conservative Prime Minister Boris Johnson who stood on the steps of Downing Street in 2019 and promised to reform social care “once and for all”, but clearly failed to do so.

[Monica Harding (Esher and Walton) (LD)]

Two managing partners from GP practices in my constituency have written to me about the significant impact of the increase in employer NI contributions, which they say will directly undermine access and patient care. They will also have a huge impact on the brilliant work of Princess Alice hospice in my constituency, which is already hugely stretched—it will cost that hospice £400,000 a year. Does my hon. Friend agree that that hospice and those GP practices should be exempt?

[Daisy Cooper]

I thank my hon. Friend for that excellent intervention. I absolutely agree that they should be exempt; I think the rise in national insurance contributions is the wrong thing to do, full stop, but if it is going to go ahead, there must be exemptions. In my own area, for example, one local hospice in Hertfordshire will see its national insurance contributions go up by £150,000. Its warning is very clear: that if this rise goes ahead, beds will have to close.

People must see opportunities in enterprise as well, but the rise in national insurance contributions will hit small businesses hard, especially those on the high street. The success of our high streets really matters, not just for growth but for confidence: for so many people, the high street is the most visual and visceral mark of whether or not the economy is thriving. I would be grateful if the Minister could indicate later today whether the Government intend to bring forward a high streets strategy, and if so, when we might see it.

I have been inundated with messages from small businesses on my high street in St Albans. Here are just some of the quotes: one business said that

“the reality of last week’s budget will mean no more investment and no further recruitment as was planned and in all likelihood redundancies.”

Another small business said:

“I provide employment locally, raise money for local charities and have created a much-loved addition to our town centre…I am worried about how much longer I can go on.”

One business said that it

“would be impacted mainly with our business rates increase and my plea is that that can’t happen. The high street challenges are hard enough as they are”

without having to face

“an uncertain Christmas trading period.”

Other colleagues have mentioned the impact on medical charities, hospices and GPs. In Hertfordshire, the local medical committee said:

“Since 2014 we have seen 56 practices close or merge across Bedfordshire and Hertfordshire, representing 35% of the 216 practices that existed back in 2014.”

GP practices need certainty as to whether any of these costs will be passed on to them at a time when they are already feeling the squeeze. I can guess what the Minister may say: he may encourage Members on the Opposition Benches to indicate how we would raise taxes instead. In the spirit of constructive opposition, we Liberal Democrats urge the Government to think again, because we believe the burden of fixing our public services should fall on the shoulders of the big banks, the gambling companies and the big tech companies, not the small businesses that are the beating heart of our communities. Suppressing small business is not the route to growth.

The business rates reforms in the Budget not only fall short of what we need, but actually make things worse in the short term. The last Conservative Government promised to reform the business rates system, but failed to do so. The current system penalises bricks-and-mortar retailers, while out-of-town retailers manage to get off almost scot- free. Pubs, high street shops and the rest of the hospitality sector have been hit really hard, with the discount being reduced from 75% to 40%. That is going to have a major impact. St Albans is renowned for its pubs—as many of the more long-established Members will remember, I talk about the pubs in St Albans on many occasions. We have more pubs per square mile than anywhere else in the UK, but those pubs will now face additional business rates bills of between £5,000 and £35,000. Some fear that this could push them over the edge.

Over the past few days, much has been said about food security as well. We Liberal Democrats agree that the loopholes that are being exploited by big corporations that buy up swathes of our land must be closed, but we are concerned that the Government’s approach is rather crude—that as they try to close those loopholes, some family farms will be collateral damage. Again in the spirit of constructive opposition, I encourage the Government to look again at our proposal for a proper family farming test, as is used in some other countries.

Finally, I will say a word or two about investment. We Liberal Democrats believe that the Government have done the right thing in changing the fiscal rules, and in principle, we believe in the importance of borrowing for productive investment. However—once again, I say this in the spirit of constructive opposition—I think the Government have put all of their growth eggs in the building back basket. I understand why they may be doing that. However, given the Trump presidency and the prospects of potential tariffs and trade wars that could drive up the price of products such as semiconductors and construction materials, there is a very real risk that the investment that the Government make will not reap the rewards that we all hope for—through changes in the global climate, rather than any fault of their own. We need a resilient economy, so I praise the Government for investing, but urge them to look at the question of resilience. At this time, it is even more important that we look to small businesses and high streets for growth, so I urge the Government to think again and unleash the power of our high streets and small businesses, rather than hamper them.