Business Confidence

Jerome Mayhew Excerpts

Tuesday 15th October 2024 Westminster Hall

[Jerome Mayhew (Broadland and Fakenham) (Con)]

Thank you, Mrs Harris, for chairing the debate, and well done to my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) for securing it. What a good debate it has been. It has been a debate of two halves. From this half of the room—the Opposition half—we have heard lots of interventions and lots of thoughts about business confidence, while the other half of the Chamber was entirely empty for the majority of the debate.

There have been some very interesting contributions. My hon. Friend the Member for East Grinstead and Uckfield rightly thanked businesses in all of our constituencies. She focused in particular on the role of family businesses as the thriving local hubs of our communities, as well on as the economic growth that they provide. She correctly identified the importance of animal spirits, which are vital for growing an economy. In the first half of this year, confidence was growing in our business community, but what a disastrous change we have had, with business confidence now falling as a result of tax fears.

[David Pinto-Duschinsky]

Will the hon. Member give way?

[Jerome Mayhew]

No, I am not going to take an intervention. I feel quite strongly that if an hon. Gentleman cannot make it to the start of a debate, wanders in halfway through and then seeks to make an intervention to ask a question—

[Carolyn Harris (in the Chair)]

Order. Can we keep it to the debate, please?

[Jerome Mayhew]

I will, but I would just like to refute this. Perhaps if the hon. Gentleman takes out Hansard, he will find the answer to his question in the first half of the debate.

My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) is right that business is in an uncertain holding pattern and that SMEs are the lifeblood of our community. The hon. Member for South Basildon and East Thurrock (James McMurdock) is quite right to say that his community is rich with potential. He expressed concerns, however, over the delay of the decision on the lower Thames crossing, and said that he thought the Government should have taken a more professional approach towards DP World. I agree with him. Finally, my hon. Friend the Member for Bromsgrove (Bradley Thomas) rightly pointed out that between 2010 and 2024, growth was higher in the UK economy than in all the main EU economies, and that there is opportunity if we focus on entrepreneurship and on rural businesses.

Throughout this debate we have highlighted the slump in confidence since Labour came to power—and not just in business confidence, but in consumer confidence. Why is that? Well, do not take my word for it. The ex-chief economist of the Bank of England, Andy Haldane, said that the Government’s approach has generated

“fear and foreboding and uncertainty among consumers, among businesses, among investors”.

Labour’s plan appears to have been, “We’ll come into power, we’ll say it’s all terrible and so much worse than we thought it was, we’ll say that there’s this black hole”—a black hole, by the way, that Treasury officials were unable to find when the Financial Times asked to see the data behind it—“and this will give us political cover for long-planned tax increases.”

The problem is that political games in this case have been paid for in lost jobs and futures. After nearly four months of inaction, this inept political vacuum has been filled by speculation, rumour, kite flying and denial. The “So what?” is that Government incompetence has cost jobs. The CBI has just said that it is clear that firms are holding back from employment because of Budget fears. The consultancy AJ Bell has said that directors of listed companies have doubled sales of shares since the general election—that is businesses voting with their feet. Evelyn Partners has said that a third of private business owners with turnovers in excess of £5 million have accelerated their exit strategies. Why? Because of fears about capital gains tax and inheritance tax relief. This is our entrepreneurial future being destroyed by the inaction of the Government.

It does not matter whether the rumours are true or false; the fact that they are rumours is having devastating impacts in its own right. Now the direction is clear, and it appears that the Government will increase employer national insurance contributions. As Paul Johnson of the Institute for Fiscal Studies said, that is a clear breach of the manifesto promise. When considering the issue previously, the Chancellor of the Exchequer said that an increase was an anti-business measure—I agree. The Office for Budget Responsibility has told us that an increase in employer national insurance contributions will lower wages.

Labour is pulling off the triple: misleading the public, harming business and lowering wages—all with the same policy. The more business sees of this Government, the less it likes them. When will this party of opposition that finds itself in government get a grip?