Employers

Esther McVey Excerpts

Wednesday 11th November 2026 Commons Chamber

[Esther McVey (Tatton) (Con)]

Nothing highlights the fiscal failure of this Government more starkly than the plight of Poundland. The chain’s 600 stores and 12,000 workers sit on the verge of collapse, not because customers have walked away—they have not; sales grew by 6.7% in September—but because of the Government’s unaffordable tax rises, which make it impossible to run a business that works on slim profit margins. Those that work on slim profit margins keep prices down for customers. How ironic it is that a Government who preach about helping the least well-off and helping with the cost of living are forcing those firms out of business.

Business owners in my constituency are mystified by the damage that the Government have inflicted on businesses up and down the country. What I am asked by them most often is, “Do this Government not understand the harm that they are doing, or is it that they just do not care?” They have concluded that it is both. The Chief Secretary to the Treasury, the right hon. Member for Wycombe (Emma Reynolds), made sure of that when she said that employers were not working people—which, by the way, was a kick in the teeth for every employer in the country who is often at work before everyone else, and leaves work after everyone else. When the former Chancellor, the right hon. Member for Leeds West and Pudsey (Rachel Reeves), announced that she would raise business and employer-related taxes by over £50 billion by the end of the decade, she wanted money for Labour’s pet projects—benefits and net zero—and she did not care that they squeezed the life out of businesses. Labour did not care where that money came from. I asked the right hon. Lady on several occasions whether she expected the number of jobs to go up or down when she taxed them. She did not say. She did not know. She was shocked.

Labour does not seem to understand that you cannot tax your way to growth and you cannot spend your way out of debt. The consequences have been job losses and, combined with day one workers’ rights, fewer opportunities. The tax rate policy hit on family businesses was hard as well.

[Ben Maguire]

I have sat here for nearly an hour and a half, and I have not heard anything from Conservative Members about how they will address the elephant in the room: how to generate economic growth and rebuild trade relationships with our closest partners in the EU and elsewhere. Instead, we just hear criticism of the national insurance jobs tax. I completely agree with the right hon. Lady about that, but we are not hearing anything—

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. This is a debate about employers, not about our relationship with the EU.

[Esther McVey]

When it comes to getting costs down for employers, I would start with energy. I welcome the Government’s—eventually—approving the drilling in Jackdaw, and they need to admit to doing the same in Rosebank and going further. They should look at what our neighbours in Norway have managed to do by drilling in their country.

Let me return to the subject of family businesses. The Government showed a complete lack of knowledge of family businesses and how they are run when they capped what would have been 100% tax relief for business properties and taxed the assets as they did so. They did not understand that the life of a business can be a couple of years—it may not last—or it can go on for generations. It does not end when the founder of the business dies; it goes on. The Government did not seem to have a clue about that; they showed complete disregard.

The other thing my constituents talk about is why the Government hate wealth creators. Why do they hate the wealthy? It must be—has to be—the politics of envy and jealousy. Frankie Dyer of Barbakan Delicatessen—one company in my constituency, but it could have be any of the 365 hospitality businesses there—sent an open letter to the Prime Minister before the Budget. She wanted help, particularly with national insurance contributions, which have had the worst impacts on her business, now costing her an extra £1,000 per employee. If someone has 50 or more employees, they will have no profit left at all, and they certainly cannot invest to grow their business.

Frankie said that her business is second-generation, and it is 62 years old. It is now facing severe financial pressures. Despite the business having an annual turnover exceeding £2.3 million and winning more than 10 awards for its products, soaring operational costs—energy bills, tax obligations and national insurance—mean that the business is now struggling to stay afloat and to pay its bills each week. She is calling on the Government to reduce national insurance contributions. She wants to employ more young people, as does the whole of the hospitality sector. People in the industry want VAT, which those on the Labour Benches led them to believe would be reduced, to be reduced to 13%, and they want the charge on employment—the tax on jobs—to be reduced. The Government should reduce national insurance contributions.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Business, Innovation, Science and Trade (Blair McDougall)]

It is a pleasure to respond to the debate with you in the Chair, Madam Deputy Speaker. I join other Members in paying tribute to the work that entrepreneurs do in our country—to the sacrifice, long hours and sleepless nights that have been referenced.

The right hon. Member for Beverley and Holderness (Graham Stuart) singled me out as being someone who has empathy with and an understanding of business. I do not know if that will result in him having to surrender his party card, or perhaps in me doing so, but I will take it in the spirit that it was intended. We absolutely understand the feeling of jeopardy that he talks about.

My hon. Friend the Member for Loughborough (Dr Sandher) spoke powerfully about the feeling of responsibility that employers have, including his parents, towards their workers. For all the disagreement that there will be in this debate about how we do it, our job is to make that just a little bit easier, because it can be an all-encompassing and, at times, lonely enterprise running a business.

I will endeavour to respond to as many points raised by right hon. and hon. Members around the Chamber as possible. Several made me hungry and reminded me that I skipped lunch earlier on today. The right hon. Member for Witham (Priti Patel) and my hon. Friend the Member for Truro and Falmouth (Jayne Kirkham) referred to fantastic food businesses in their constituencies, and even the reference to the prawn sandwich offensive from the hon. Member for Central Suffolk and North Ipswich (Patrick Spencer) brought on that feeling.

I do, however, want to echo the remarks made by my right hon. Friend the Financial Secretary to the Treasury in his opening speech. The big macroeconomic picture for the UK is this: we were the joint fastest growing economy in the G7 in the first half of this year, the IMF has upgraded our growth for this year, and the IMF’s chief economist has called the UK the “stand out” economy for deficit reduction, with the lowest forecast deficit in the G7 by 2029.

[Esther McVey]

Will the Minister inform us how many businesses have gone to the wall since Labour came into government?

[Blair McDougall]

It has been a dreadful decade for businesses, and for small businesses in particular. As I said at the beginning, our job is to make it easier to invest and to ensure that we are cutting red tape and increasing access to finance. I will talk about that in a moment.

In the Budget, we took action to give the businesses that the right hon. Member for Tatton (Esther McVey) is concerned about and employers some breathing space. We continue to work on the long-term changes that are necessary to create good jobs and growth in every part of our country. As a result of that work, employment is up this year—it is higher than previously forecast in March—and, in fact, the UK has the third highest employment rate in the G7. Meanwhile, business investment—so often embarrassing under the previous Government—relative to the size of the economy remains at its highest level for a decade.

Of course, as Members have said, there are global headwinds from the conflict in the middle east. [Hon. Members: “Ah!”] Conservative Members say “Ah”, and they do not like to be reminded of that, because they were calling for us to take part in that conflict. People and employers are seeing the impact of that conflict in their bills. We know that there is more to do, but this is a country that is turning a corner.

With that, I turn to the points raised throughout the debate, starting with national insurance, which was raised by several hon. Members. The facts are these. Employer national insurance contributions are forecast to raise about £150 billion in 2026-27. That is a significant contribution to the funding of our public services. Why is that needed? Because we cannot have a strong NHS or strong public services without investing in them, investing in our country and rebuilding the crumbling infrastructure we inherited after 14 years of austerity.