Oral Answers to Questions

Gareth Thomas Excerpts

Thursday 13th March 2025 Commons Chamber

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

1. What steps he is taking with Cabinet colleagues to support businesses in rural areas.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Businesses in rural areas offer significant potential for growth and are central to our economy. We are working across Government to unlock the full potential of rural businesses as part of the Government’s growth mission. We are committed to launching a business growth service inspired by the US Small Business Administration, which will operate in partnership with devolved Governments and the growth hub network in England to make it easier to access support from Government for all businesses.

[Jamie Stone]

In conversation this morning with Trudy Morris, the CEO of the Caithness chamber of commerce, she outlined the sheer importance of tourism businesses to the local economy and the farmers in Scotland. The concern expressed to me is on the rate of VAT on tourism and similar businesses, and although we do not know whether the Highland council will impose a tourism levy, that could be a double whammy. I do not expect for one instant hon. Members on the Front Bench to say, “Jamie, you can have a cut in the rate of VAT”—well, I dream sometimes—but I would be grateful for a meeting to discuss the nature of the problem and how we could possibly tackle it.

[Mr Speaker]

You might get a chocolate biscuit these days.

[Gareth Thomas]

I apologise to the hon. Gentleman, as I cannot fulfil his dreams right now. However, I am happy to meet him to talk about that issue. I recognise that there is considerable interest in that question from the hospitality industry, so I am happy to meet to hear, in a bit more detail, the particular concerns expressed to him.

[Mr Speaker]

I call the shadow Minister.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

The Business Secretary, the Minister and the Chancellor have all said that they want growth, including in rural areas. I have searched high and low for business growth statistics since the Budget of broken promises, and I find that, in the last quarter, there has been a growth of 50% in the number of businesses that are in critical financial distress. Why does the Minister think that is?

[Gareth Thomas]

I say gently to the hon. Lady that the difficult decisions that my right hon. Friend the Chancellor had to take in the Budget were, interestingly, particularly well explained by her former colleague Kwasi Kwarteng, who made it clear that he thought they had to be taken because of the mistakes that he and the Conservative party had made when they were in government.

[Shaun Davies (Telford) (Lab)]

2. What steps he is taking to support manufacturing in the west midlands.

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[Bradley Thomas (Bromsgrove) (Con)]

16. What steps he is taking to support high street businesses.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

Working across Government, we are determined to revitalise our high streets and support the businesses on them. We are working with industry to create a fairer business rates system that protects the high street and supports investment. We have introduced the Crime and Policing Bill, which will give better protection for businesses and retail workers against assault and theft. Our forthcoming small business strategy will set out our plan for further support for small businesses on the high street and beyond.

[Dr Huq]

From 5 am to 10 pm daily, the Patels’ newsagent, off licence and post office was an Acton staple—until Horizon slapped it with a £123,000 demand, and Mrs Patel had a series of mini-strokes. Will Ministers look into the fact that their compensation was rejected because Mr Patel was the postmaster, and show their love for high-street heroes everywhere by attending a tea organised by the all-party parliamentary group for ethnic minority business owners on 3 April? You are welcome too, Mr Speaker.

[Gareth Thomas]

I am grateful for my hon. Friend for raising the case of the Patels. I am keen that any sub-postmaster who was a victim of the Horizon scandal gets access to the compensation they rightly deserve as quickly as possible. She will understand that I cannot comment on individual cases, but if she wants to write to me about the specific case, I would be happy to look into it further and to discuss it with her.

[Bradley Thomas]

There are over 70 pubs across Bromsgrove and the villages. One of them—the Queens Head—faces a staggering £42,000 annual increase in the cost of business rates and national insurance contributions as a result of choices made by this Government. That is on top of increasing concerns around a banter ban. Will the Minister confirm that nobody will be ejected from a pub or hospitality venue for sharing a joke, and will he outline what steps he is taking to support pubs, rather than putting them out of business?

[Gareth Thomas]

I note in passing that 10,000 pubs closed their doors under the Conservative Government, so I do not think the pub industry is looking to the hon. Gentleman’s party for guidance going forward. On the specifics he asked about, he will be aware of our plan for business rates reform, which will help and make a significant difference to many pubs. On the so-called “banter ban”, I gently suggest that he should not believe everything that he reads in the newspapers.

[Sally Jameson (Doncaster Central) (Lab/Co-op)]

Pubs and restaurants are part of a thriving high street in Doncaster that is known for its iconic nightlife. Will the Minister set out what action the Department is taking to support hospitality and ensure that high streets continue to thrive, and may I invite him to Doncaster to see how nightlife is done properly?

[Gareth Thomas]

I will give careful consideration to my hon. Friend’s very generous offer. In answer to the hon. Member for Bromsgrove (Bradley Thomas) I mentioned business rates reform, which could make a significant difference for many businesses in the night-time economy. Another crucial issue that we want to tackle is the rising crime and antisocial behaviour on our high streets. As she will know, the Crime and Policing Bill, which is beginning its journey through Parliament, will make a significant difference in that regard.

[Sir Roger Gale (Herne Bay and Sandwich) (Con)]

The high street trader John Lewis Partnership is announcing its annual results today. It is a highly successful business but this year it will not be paying a dividend to its partners, the workforce, because it has to absorb national insurance costs. Does the Minister understand the real impact that NI contributions are having on what his party likes to describe as “ordinary working people”?

[Gareth Thomas]

I say gently to the right hon. Gentleman and his Conservative colleagues that we had to take the difficult decisions in the Budget to increase employer national insurance contributions because of the mess that their party left the country in. The shadow Secretary of State for Business and Trade, the hon. Member for Arundel and South Downs (Andrew Griffith), helped to write the Liz Truss Budget that did so much damage to our country—we are trying to sort out the mess. The shadow Secretary of State still has not apologised for his part in that fiasco. He should take the opportunity to do so during these questions.

[Mr Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

Yesterday, the owner of the hugely popular Rumsey’s, which is celebrating 21 years on Wendover high street in my constituency, emailed me to say:

“We estimate the changes coming in April will add 15% to our staff costs that we simply don’t have. Therefore we have had to sadly make redundancies, put in a recruitment freeze and implement staff hour cuts to offset this.”

With real-world testimony like that replicated up and down the country, will the Minister finally acknowledge that an urgent change of course is needed to support high streets, scrap the employer NI rise, save jobs and protect communities?

[Gareth Thomas]

I gently say to the hon. Gentleman that it would be interesting to know whether he now regrets the enthusiastic support he gave the Liz Truss Budget, which did so much damage to our country’s public finances. Our Budget in October last year started the process of sorting out those situations. I looked with interest at his website recently, which has a “My plan” section. It is completely blank. Although that is probably better given that he so strongly supported the Liz Truss Budget—there is at least a bit of progress.

[Greg Smith]

Well, that was no answer to my question whatsoever. It is almost as if Labour Members have not realised that they are in charge and that it is their decisions that are having this impact. Let me tell the Minister something else that Rumsey’s reported to me:

“The reduction in business rate relief will leave me no choice but to raise prices simply to break even, further limiting growth and accessibility for customers.”

I just do not know how much more the Minister needs to hear to understand the scale of the problem on our high streets. He talks of business rates reform, but the only business rate change we have seen is the devastating cut to business rates relief, which is hurting high streets now. Will he reverse it?

[Gareth Thomas]

Had the hon. Gentleman’s party been elected, retail, hospitality and leisure relief would have come to an end. We have extended retail, hospitality and leisure relief. We have set out in the Budget our plans to permanently lower tax rates for retail, hospitality and leisure properties on the high street from 2026-27. We are taking measures to tackle crime and antisocial behaviour on the high street, which his party could have done more to tackle but chose not to. We are bringing in new legislation to end the immunity for crime on the high street where shoplifters steal goods worth £200 or less, and we are creating a specific offence of violence against retail workers to try to make it easier for businesses operating on the high street.

[Kenneth Stevenson (Airdrie and Shotts) (Lab)]

5. What assessment his Department has made of the potential impact of the national minimum wage and national living wage on families in Airdrie and Shotts constituency.

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[David Reed (Exmouth and Exeter East) (Con)]

15. What steps he is taking to support the hospitality industry.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

We are creating a fairer business rates system, reducing alcohol duty on qualifying draught products, and our forthcoming small business strategy will set out our plan to further support small businesses on the high street and beyond. In addition, through the Hospitality Sector Council, we are addressing, with business, strategic issues related to high street regeneration, skills, sustainability and productivity, and we have recently saved the pint.

[Sir Edward Leigh]

Obviously the Minister is working very hard, but he looks a bit tired, so may I offer him some Lincolnshire hospitality? Will he come and stay for a glorious weekend in one of our farm cottages, to enjoy our great skies and bracing air, and help our distressed farmers? Frankly, they need the income. The problem is that the Government have abolished the furnished holiday letting scheme, which was a tremendous encouragement for the countryside. I do not expect an answer now, but will he consider approaching his right hon. Friend the Chancellor to see if we can reinstate that in the Budget, to help our farmers and the countryside?

[Gareth Thomas]

Unusually for the Conservative party, the right hon. Gentleman has made an extremely generous offer. I am almost as tempted by that as by the offer from my hon. Friend the Member for Doncaster Central (Sally Jameson) to visit Doncaster. I am happy to look at the issue he raises and I will write to him with more details.

[David Reed]

The Crusty Cob bakery has been a constant in east Devon for the past 55 years, but last week the family-run business closed the doors on all nine of its shops, making over 100 local people redundant. The owners stated a panoply of issues, from manufacturing costs to reduced high street footfall and energy prices, but the kicker is the decision that this Business Secretary’s party has made to slam companies with increases to the national living wage and employer national insurance contributions. The effects of this Labour Government’s decisions are setting in and literally destroying working family businesses. Will the Business Secretary and the Minister please give a message to the Crusty Cob team who have just lost their jobs?

[Gareth Thomas]

I understand that this will be an extremely worrying time for employees of the Crusty Cob and their families. I gently say to the hon. Gentleman that we are offering a 40% discount to retail, hospitality and leisure properties as part of our business rates package. We are going to reform business rates more substantially, with a permanently lower multiplier in 2026 that, while it clearly will not help the Crusty Cob and its employees, will help other businesses on the high street.

I am slightly surprised that the hon. Gentleman should be so opposed to an increase in the living wage—I do not know whether that is his party’s policy. I also gently remind him of the data from the Office for National Statistics, which my right hon. Friend the Secretary of State pointed out, showing more people in jobs this year compared with last year.

[David Davis (Goole and Pocklington) (Con)]

11. What steps he is taking to ensure that compensation is paid to people impacted by the Post Office Horizon scandal in a timely manner.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

In the past eight months we have trebled the total amount of compensation paid and ensured that more than 2,300 victims who had as yet received nothing have now had some financial redress. We are making up-front, fixed-sum offers and interim payments where possible to speed up the delivery of redress. There is still a lot more to do, though, and we remain committed to ensuring swift and fair redress for every postmaster affected by the Horizon scandal.

[David Davis]

I thank the Minister for that answer. He and I will agree that the Post Office Horizon scandal is one of the greatest miscarriages of justice in modern times, but the problems with the Post Office and its injustice extend far beyond that. Some 21 cases relating to the precursor system, Capture, which bear the same hallmarks as those in the Horizon scandal, have been referred to the Criminal Cases Review Commission. I am afraid that the CCRC is famous for taking years to come to obvious decisions, so can the Minister tell me that it will deal with this in months? If not, will his Department intervene directly?

[Gareth Thomas]

The right hon. Gentleman is absolutely right to raise the issue of Capture. As he will know, we have published our response to the independent Kroll report on the Capture software issue and the way in which the Post Office responded to the data that came out of it. We have been meeting sub-postmasters who used the Capture system and who were the victims in that regard to talk through a redress scheme with them. We are also working closely with the Criminal Cases Review Commission and have made it clear to the Post Office that it must co-operate with requests from the CCRC so that we can speed up its deliberations on the 21 cases.

[Harpreet Uppal (Huddersfield) (Lab)]

I recently met a constituent who is a former postmaster affected by the Horizon scandal. He has applied for compensation but feels that the process is taking too long, with unreasonable asks. Given the legal ruling that postmasters should be afforded the benefit of the doubt, what steps is the Department taking to ensure that compensation claims are processed fairly and without delays that could further affect the victims?

[Gareth Thomas]

As my hon. Friend will know, we inherited a compensation process that was perceived by many sub-postmasters as being slow, legalistic and adversarial, so we have already taken a series of steps to try to speed things up, particularly in trying to get out more fixed-sum payments—for example, we are moving in more staff to support work on the compensation process. If she would like me to look in more detail at her constituency case, I am very happy to do so.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

The Business Secretary met recently in Japan with Fujitsu, which developed the Horizon system and has offered to contribute to the compensation for victims. Can the Minister tell the House how much the Secretary of State has asked it to contribute, so that taxpayers are not on the hook for £1 billion?

[Gareth Thomas]

The hon. Lady is right to reference the discussions that my right hon. Friend had with the chief executive officer of Fujitsu. That company has agreed to begin talks about its contribution to the costs of compensation. She will understand that we also need to wait for Sir Wyn Williams’ inquiry to conclude, and for his recommendations regarding compensation from Fujitsu to be heard and understood. I am sure she will also understand that I am not going to give a running commentary on the discussions with Fujitsu, but I welcome the fact that it has agreed to begin talks.

[Alex Baker (Aldershot) (Lab)]

12. What steps his Department is taking to support small businesses.

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[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

13. What recent assessment he has made of the potential impact of changes to employer national insurance contributions on small and medium-sized enterprises.

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

The Treasury published a tax information and impact note in November 2024, alongside the introduction of the Bill containing the employer national insurance contribution changes. It sets out the impact of the policy on the Exchequer and the impacts on business, and that approach is consistent with previous tax changes.

[Mr Carmichael]

The impact I hear from SMEs in my constituency, predominantly in the visitor economy, is that they are anticipating cutting the hours of part-time staff or laying them off and reducing the number of seasonal employees that they will take on. Will the Minister take those concerns seriously and work with Ministers in the Scottish Government to ensure that the legitimate concerns of SMEs in my constituency do not blossom into a full blown crisis of confidence?

[Gareth Thomas]

I am always happy to work with the Scottish Government and other devolved Governments on how we can improve the business environment. I am sure the right hon. Member will join me in encouraging the Government in Scotland to mirror the changes we have made to business rates relief. Given the sizeable increase in the Scottish budget, it is somewhat surprising that the SNP has not been willing to support the retail sector through an extension of retail hospitality relief.

[Frank McNally (Coatbridge and Bellshill) (Lab)]

18. What steps he is taking to help increase levels of international investment in Scotland.

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[Jo Platt (Leigh and Atherton) (Lab/Co-op)]

T4. Social enterprises contribute 3.4% of GDP, and towns such as Leigh and Atherton benefit greatly from them. Will the Minister outline what the Department is doing to support social enterprise and co-operatives so they can contribute to the growth agenda in the UK?

[The Parliamentary Under-Secretary of State for Business and Trade (Gareth Thomas)]

My hon. Friend is a great champion of the social enterprise sector. She will know that we are committed to doubling the size of the co-op and mutuals sector. We recently met the recently launched mutuals and co-op business council to begin working with businesses on our plans to expand the co-op and mutuals sector. She may also be aware that our social enterprise boost fund is currently spending some £4 million on helping to support social enterprises that are already up and running.

[Mr Speaker]

I call the Liberal Democrats spokesperson.

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[Mike Wood (Kingswinford and South Staffordshire) (Con)]

T3.   I draw the House’s attention to my entry in the Register of Members’ Financial Interests. Some 66% of hospitality firms say they will have to cut staff or staff hours, 75% say they will cut investment, and 97% say they will increase prices because of the Chancellor’s manifesto-breaking national insurance increases. What assessment has the Minister made of the number of workers being dragged into national insurance contributions for the first time, and if the Government must continue with this disastrous policy, will they at least delay it for 12 months to bring it into line with the introduction of business rates reforms?

[Gareth Thomas]

We have had one or two questions on this topic, and the hon. Member will therefore not be surprised by my answer. I gently point out that the difficult decisions we took on employer’s national insurance contributions in the Budget were a direct result of the mess the Conservative party, which he supported so enthusiastically, left for this Government.

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[Amanda Hack (North West Leicestershire) (Lab)]

T8. Rural businesses in North West Leicestershire highlight the lack of accessible public transport, including having no passenger rail, as a barrier to attracting new employees and to growth. What conversations has the Minister had with the Department for Transport about the barriers that rural businesses are facing?

[Gareth Thomas]

We know that rural businesses want to see more investment in bus services and better transport infrastructure. My hon. Friend will appreciate that the Chancellor announced in the Budget some £650 million-plus in funding for local transport, which is designed to support everyday journeys and improve transport connections. I am sure, too, that she will welcome the better buses Bill, which is coming in to give local authorities—

[Mr Speaker]

Order. I call Seamus Logan.

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[Gareth Thomas]

One of the big issues that small businesses wanting to scale up face is access to finance. We are actively working across Government on what else we can do to support businesses to get access to the finance they need, including through the British Business Bank.

[Ellie Chowns (North Herefordshire) (Green)]

In my constituency, a planning moratorium has been in place for more than five years due to water pollution, with an estimated effect on the local construction industry of half a billion pounds, despite the fact that new house building is a minute proportion of the problem. Will the Secretary of State meet me and representatives of the Herefordshire construction industry to try to find a solution to this devastating problem?