Business and the Economy

Gagan Mohindra Excerpts

Wednesday 21st May 2025 Commons Chamber

[Mr Gagan Mohindra (South West Hertfordshire) (Con)]

It is a pleasure to follow the hon. Member for Harlow (Chris Vince). Harlow is quite close to my old stomping ground, so I know some of the areas to which he referred, although I am surprised that he did not mention the enterprise zone, which is a world-class area for business.

I will focus my comments on my constituency—Three Rivers district council is the main council area there—where we have seen business closures outpace new openings since July 2020. My local high streets in Rickmansworth, Chorleywood and South Oxhey are visibly suffering, with shuttered shops, rising costs and dwindling support. Historically, those high streets never had vacancies. As a former retailer, I am increasingly concerned about the volatility in our high streets. Whichever side of the House we are on, if we do not fix this problem, we will leave a poor legacy.

The small businesses that I speak to say that they feel abandoned by the Government. They are facing high energy bills and rent, and poor footfall. Part of that—things like parking charges and on-street parking—is not the Government’s responsibility but down to decisions made by Lib Dem local councils. I continue to have dialogue with those councils to ensure that high streets like Kings Langley’s can survive during these difficult economic times.

On an international basis, we need to recognise that a lot of wealth creators are leaving our country. Many years ago, I read a book called “Atlas Shrugged” by Ayn Rand, and I did not think at the time that it would have such an influence on my life. As many hon. Members will know, I was not politically active at school or university, so I never thought or dreamed of being in this place—let alone aimed to be here—at this stage of my life, but all of us come to this place with life experience and a journey, and part of that for me has been that Ayn Rand book. My overriding memory from that book was that, if the Government do not support wealth creators, those people will find a way to leave, to the detriment of the rest of society.

[Yuan Yang (Earley and Woodley) (Lab)]

rose—

[Mr Mohindra]

According to a New World Wealth report, 9,500 millionaires left the United Kingdom in 2024: the highest outflow in recent memory. [Interruption.] Is the hon. Member for Earley and Woodley (Yuan Yang) looking to intervene?

--- Later in debate ---

[Yuan Yang]

I thank the hon. Member for giving way and apologise for not being louder. I wonder if he has a source of data on the so-called exodus that does not come from a firm that gives advice to the very wealthy to migrate abroad, and which therefore has a great economic interest in propagating such figures.

[Mr Mohindra]

I am conscious that the hon. Member was a journalist for the Financial Times, so she will know the data source better than I do. I am not an economist and have never claimed to be—I have never claimed to be a lawyer, either. I come from a small business background and have local government experience. When I speak to people in my own limited social circle who are employers—people who I hope will inspire the next generation—I hear that a lot are looking to leave these shores. That causes me massive concern. Although our parliamentary system means that parties come and go, we rely on such businesses to grow, succeed and expand.

I am a second-generation Indian. When my parents came across in the 1970s, they had the aspiration and hope that, by being willing to work hard and being lucky enough to be in the right place and the right industry at the right time, the state would not intervene. I do not see that type of ambition now. I do not wish to get party political; it is an issue that we all need to be concerned about. Governments of all stripes will spend taxpayers’ money, but it is well worth remembering that Governments have no money.

That money comes out of the pockets of people who pay taxes, and we need to acknowledge that wealth creators pay a lot more tax than other parts of society. We live in a global world, and if those people choose to leave, it will mean that the Treasury—I look at the Parliamentary Secretary to the Treasury in his place—will not have the benefit of income in its coffers to spend on things that are vital to us and to our communities.

Business confidence was mentioned earlier. We need to recognise that there is significant volatility, both around aspiration and potential capital expenditure for small and large businesses. Businesses need certainty about the direction of travel.

[David Pinto-Duschinsky (Hendon) (Lab)]

The hon. Member is right that businesses need certainty. Does he agree that the thing that most undermined the certainty of businesses was the chaos that the Conservative party created through Liz Truss’s disastrous mini-Budget?

[Mr Mohindra]

I will let the new Member make his political point. The only thing I will say in response is that in my first two years in Parliament, we dealt with a global pandemic, in which we spent more than £400 billion of taxpayers’ money. When I was elected in December 2019, as part of an 80-seat majority, we were looking to reform our tax base and the way we financed our Government spending, but we did not have that opportunity. With the Government’s current majority, I hope that they are ambitious.

Other Members have spoken about business rates reform. It is massively outdated to look at businesses based on bricks and mortar, and if I were a furniture retailer today, I would have an online presence only. However, that would mean that the vibrancy of our high streets would be lost, because they would end up with only bookmakers, hairdressers, charity shops and coffee shops. There is nothing wrong with those, but the high streets that I support and am honoured to be the Member of Parliament for offer significant diversity; we have not yet spoken about banking and the move away from on-street branches, but we are trying to deal with that issue locally through places such as post offices becoming banking hubs.

There was a reference earlier to HMRC—and my remarks in this regard are a pitch to the Minister. From my limited experience over the years, HMRC has become increasingly aggressive and not necessarily fair, including in regard to interest rates. If an employer or business makes an overpayment, the interest rate that they receive is different from that which HMRC takes. We should not regard businesses as a cash cow if they have done nothing wrong. I will leave that with the Minister. Further, I would prefer HMRC not to be an arm’s length body; I would be willing at least to investigate whether ministerial control and oversight was practical, on the full understanding that civil servants need to have the freedom to raise and collect revenue.

In Hertfordshire, the median weekly wage is £851, which is higher than the UK average of £728. However, with inflation rising—we heard overnight that it is now at 3.5%—and the rising cost of living, people are feeling poorer, which means that they are spending less on our high streets and are less likely to use capital expenditure on their homes, on a new car or on whatever else they would have spent it on if they felt more flush with cash.

[Jess Brown-Fuller (Chichester) (LD)]

The hon. Member makes a great point. I was contacted by Yoddi, who owns La Fish in my constituency of Chichester. He says that the rise in national insurance contributions will cost him £1,200 a month that he now has to find. He has two choices, one of which is passing on that cost to consumers. We already know that the price of fish and chips has risen exponentially over the years and the cost of living pressures continue to make that worse. Does the hon. Gentleman agree that small businesses like that one are at risk from the Government’s NICs rises?

[Mr Mohindra]

That is an excellent point. I have a plea to Government. Perversely, reducing tax rates sometimes increases the amount of money received in the coffers. I say that as a retailer. When VAT was reduced to 15%, it allowed me the certainty to expand our furniture business; we secured another outlet, employed more people and paid more business rates. In effect, it was a win-win for both the state and for our small business.

We have spoken about NICs, but the Employment Rights Bill also causes me massive concerns. I would now think twice about the risks that I would have taken hiring a 16 to 18-year-old, because it would cost me the same to employ someone in their 30s or 40s as to employ a first-jobber. There is a ticking time bomb for people leaving university or college in the summer. Where are they going to work? We have spoken about the 100,000 fewer jobs over the last 12 months; that will only get worse when those people finish their degrees, A-levels, BTECs and so on, and cannot get into employment. That is going to affect the Minister’s workings.

We on the Conservative Benches will be fully supportive of the Government if they do the right thing. Our role in this place is to be critical friends because we all want—

[The Parliamentary Secretary to the Treasury (Torsten Bell)]

Are the hon. Gentleman’s colleagues listening?

[Mr Mohindra]

Well, I have been listening; I spend a lot of time in the Chamber. Yes, there is an element of Punch and Judy, but the reality is that there are 650 of us here who want great legislation to support our communities and make sure that people can get on with their daily lives without the burden of having to think about legislation. They want us to get on with it on their behalf.

On tax rises, we have seen the leak of the Deputy Prime Minister’s letter to the Chancellor. I remain concerned that any ambition to increase taxes is another death by a thousand cuts for our small businesses. We need certainty and support from this Government, saying to people, “Go and be ambitious.” If people are risk-averse, there will be a structural problem for us on our high streets and for our small businesses. That means that we will not create the world’s next unicorn because those ambitious people will already have left our country to generate their income in a better financial climate, typically in the middle east or other parts of Europe.

[Edward Morello (West Dorset) (LD)]

I was touched by the hon. Gentleman’s story of his father’s role in contributing to the economy. I hope that he will be present in the immigration debate later this afternoon to make the same points about the vital work of immigrants contributing to wealth creation in the UK.

The hon. Gentleman mentions NICs and the other headwinds facing small businesses. One small business in West Dorset has seen its business rates go from £8,000 to £27,000. If we want to help small businesses grow, surely we have to stop taxing them so much.

[Mr Mohindra]

I have always thought that business rates were totally outdated. They generate a significant amount of money for the Treasury, so it is resistant to reform without knowing for certain how it will fill that significant black hole.

We have not spoken about hospices and the effects of NICs increases on the charity sector. Others have spoken about the winter fuel allowance. All these things affect our most vulnerable individuals, and the community groups and charities that fill a massive void that the state or the private individual do not. My worry, which is increasing, is that we are doing things that will have unintended but significant consequences.

We chose this subject for debate to ensure that the Government heard loud and clear from across the House that where they do the right thing, we will support them, and where they need to adjust their direction of travel—I will not say “U-turn”—we will support them. It benefits no one, and provides no benefit to our communities, if we just chuck political grenades.

I will end my remarks on the loss of business confidence. Small businesses are closing, investors are leaving, inflation is rising and confidence is collapsing. I know that there is a direct lack of business experience on the Treasury Bench, but that is neither here nor there. I know that there are various economists, think-tankers and so on in the Minister’s party, but I urge him to listen to those who run businesses of whatever shape or size, because that life experience brings them value in this place. My hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) created a business that employs 1,000 people. That is real life experience; he knows how the Government’s decisions would have influenced the projections and ambitions of his business. I know from my continuing conversations with businesses that they are looking to shrink and be secure rather than expand and be ambitious. That is not what the UK is about; we are outward-looking and globally ambitious. I wish the Government success in getting to that point.