Business and the Economy

Josh Fenton-Glynn Excerpts

Wednesday 21st May 2025 Commons Chamber

[Neil O’Brien (Harborough, Oadby and Wigston) (Con)]

The outlook for business and the economy is really not good, to be brutally honest. We learned today that inflation has gone shooting up to 3.5% in a surprise increase. The Chancellor said she is disappointed by that, but it is entirely the result of her own policies. She was warned by the OBR, among others, that if she increased taxation to record levels and increased borrowing to record levels, it would have an inflationary impact. We are now seeing that, and normal people are literally paying the price through higher inflation. That is more alarming because it is against a backdrop in which unemployment is up by 150,000 people and growth is stagnant, with the IMF downgrading its forecast for growth for both this year and the next.

Business confidence is down at levels last seen during the pandemic, when the entire world economy was brought to a stop. Businesses are clearly very anxious, and that is apparent from talking to businesses in my constituency. When business suffers, ultimately it is living standards that suffer. The brilliant Minister, the hon. Member for Swansea West (Torsten Bell), produced loads of good work when he was a think-tanker for the Resolution Foundation. He used to produce lots of wonderful charts—I am a great enjoyer of charts—about real household disposable income, and he was worried about that. Now the Government have come in, and the measures they took in their first Budget reduced the forecast for household disposable income. The post-measures forecast, in technical terms, was lower than the pre-measures forecast. The outlook for living standards in terms of disposable income is one of the worst for many decades, as shown in the OBR’s forecast for living standards; growth is a tiny fraction of what we have considered to be normal since 1945.

The outlook is bad, and it is not difficult to explain how we got here. The Government have taken the tax burden up to an all-time record high, and in lots of different ways. They increased national insurance and they cut agricultural property relief and business property relief. It is interesting to see how that is percolating out across the rural economy. People often think of the family farm tax as something that just hits farmers, but I have been struck by the multiplier effect. When I met local businesses, there was a whole group of people there—farmers, sure, but also suppliers of tractors, insurers, vets and those from the whole wider rural economy. It is all being dragged down. We have already heard from Welsh colleagues about the massive reduction in investment in their rural economies as a result of that unfair tax.

As has been noted by various Members, the family farm tax has been floated many times. It was certainly put in front of us when I was at the Treasury, and we said no. My right hon. Friend the Member for East Hampshire (Damian Hinds) said the same thing. This terrible idea has been produced many times, and I am afraid that there has been a mugging on Great George Street; naive, totally innocent young Ministers have come in and been mugged by wily civil servants, who have finally been able to have their way. We have all had that piece of paper on the winter fuel payment put in front of us, but we chose not to do it. Civil servants must not have believed their luck when these Ministers agreed to do it. The Government are now hastily trying to do a bit of a U-turn, but let us see what comes forth.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

I am enjoying the hon. Member’s peroration on the halcyon days of the last Conservative Government, but he knows, as I do, that had the last Conservative Government seen growth even close to what we had in the mid-2000s, everyone in this country would be £2,400 better off. However, what we saw was stagnation and Liz Truss.

[Neil O’Brien]

One of the things that happened during our time in government was a massive global pandemic that brought the entire world economy to a complete halt, but memories are short. Perhaps more importantly, every single thing that this Government are doing is bad for growth. That is the bottom line.

--- Later in debate ---

[Neil O’Brien]

We inherited a situation where unemployment had doubled. One of the great achievements of that Government was to halve it again. This is confidential, but the first time I met Nick Clegg, I was accompanied by a gentleman wearing a chicken suit—this is the kind of serious economic analysis I am famed for—but I have to say that Nick Clegg was not a chicken when it came to making difficult decisions to clean up that huge mess; the Liberal Democrats made some difficult decisions along with us to try to do that.

I have talked about the increase to national insurance contributions, and I will return to that in a little more detail. We have also talked about APR and BPR. One of the most striking developments in my constituency, though, has been the effect of the doubling of business rates for the hospitality, leisure and retail sectors through the ending of the relief that we introduced—an effect that is very visible, particularly in the high streets such as the Parade in Oadby, and in Wigston and South Wigston. The situation is also bad in Market Harborough. The problem is compounded by some local decisions—the council has increased parking charges, which was a big mistake—but it is the ending of those reliefs and the huge increase in national insurance contributions that have been especially bad for our local high streets, and for pubs in particular.

When I was talking to a brilliant pub landlady who owns several pubs in my area, she said, “We hoped so much that this new Government would be a morale-lifter and there would be a boost and a feel-good factor, but now we have a feel-bad factor.” I often drive past a number of pubs that have recently closed because of the confluence of the ending of the reliefs, the higher energy costs, and a number of the tax measures that the Government have introduced. It is desperately sad to see all those closed pubs that used to be huge centres of community life. When people lose their local pub, they lose a piece of their social fabric as well. Pubs are important local businesses, especially in rural areas.

We have had the tax increases, and we have also had the increase in energy costs as a result of everything that the Secretary of State for Energy Security and Net Zero is doing. We were promised a £300 reduction in our energy bills but instead we have seen a £281 increase, and that can only rise as the Government do all sorts of ill-advised things to hit their ill-advised target of fully decarbonising electricity by the end of the Parliament—something that will massively increase the costs of going green in comparison with the counterfactual.

At the same time, we have seen a massive increase in employment red tape. One of the bright spots in the UK economy over the last 30 years has been a relatively liberal labour market, but there has now been an extraordinary moment when all the big five business groups in the country came together for the first time—they have never done this before—to criticise the Employment Rights Bill. A Member on the Government Benches said earlier that it was all right because some Cambridge professor had said it was fine; on the other hand, every single business in the UK is saying it is a disaster. The fact that Members are accepting that kind of donnish approach to managing the economy, rather than listening to the views of the people who actually create jobs and drive our economy, really says something about the contemporary Labour party. This is no joking matter, though; it is a serious issue and a major economic detriment.

At a higher level, the wealth creators have been affected: the non-dom changes, some of which have already been rowed back on and more of which may be rowed back on in future, have driven away people who have a great deal to give to our economy. There are plenty of reasons for this picture of economic underperformance and gloom.

I would not mind so much if all the tax increases, leading to a record tax burden, had been imposed against a backdrop where the Government were bringing our debt and deficit under control. Perhaps the Minister will be able to correct me, as his knowledge of fiscal factors may be greater than mine, but I cannot recall any fiscal event when the Government have presented a Budget and at the end of the forecast period, public sector net debt was still rising. There have been plenty of fiscal events when debt has risen, because of events such as the pandemic or the war in Ukraine, but they have all shown a path towards falling debt. This is the first time I have seen a chart—I think it is chart 7.3 in the Office for Budget Responsibility’s economic and fiscal outlook—that shows debt still ceaselessly rising even at the end of the forecast period. I cannot remember another Budget like that. We are seeing the confluence of a stalling, stagnating economy, rising unemployment, increasing tax and, as a result of all that, debt rising and storing up major problems for the future.

I want to go into a bit more detail about a couple of matters, the first of which is that national insurance increase. Labour in opposition promised that there would be no tax increase for working people, so I was stunned—jaw on the floor—when the biggest tax increase that they introduced fell squarely not just on working people, but on low-income working people. It is like a laser-guided, heat-seeking precision missile, targeting those low-income workers, particularly women, who graft hard and are not paid a lot. I find it incredible that a Labour Government—a Labour Government!—should have chosen, as their big tax increase, to lower the threshold for national insurance while increasing the rate. It hammers those on the lowest incomes. That is amazing.

Why was that option chosen? It was chosen for all the wrong reasons. It was chosen because the Labour party hoped that it could say, “This isn’t a tax on the workers; this is a tax on businesses.” Of course, everyone can see through that. The problem for the Government is that the Office for Budget Responsibility immediately popped up and said, “No, three quarters of this will be passed through to people’s wages.” The OBR says that people on £13,000 a year will lose £500, which is a lot to lose for someone who is on only £13,000. People earning £9,000 a year are the biggest losers proportionately. According to the OBR, they will lose 5% of their income as a result of the huge tax increase being passed through into their wages. It is amazing that Labour Members are not up in arms about the fact that the Government have just implemented one of the biggest tax increases ever and have targeted it at lower-income workers. That is incredible for the Labour party—absolutely unbelievable.

On the other side of the ledger, what has happened to public services? Of course, they are all hit by the national insurance increase. We were promised in the autumn Budget that they would be looked after, but that is not what has happened in practice. First, we found out that lots of bits of the NHS would not be compensated, including primary care—that GPs, opticians and dentists were all going to have to suck up the increase in tax. We also found out that social care would not be protected and would have to suck it up.

Intriguingly, and as I pointed out at the time, there was a difference between the Budget document and the OBR’s EFO, which I am sure the Minister will remember. The EFO cited a different number for the cost of protection and it mentioned that social care would be included. One of the joys of having the OBR—although it is not a joy for those in the Treasury—is being able to see the Government’s handwriting and the last-minute changes; in this case, we can see that they were thinking very seriously about exempting social care from the big increase in tax, but that they chose not to do so at the last minute. That was the wrong decision.

[Josh Fenton-Glynn]

As a member of the Health and Social Care Committee, I welcome the hon. Gentleman’s conversion to the cause of social care. Could he point me to where in the record, between Dilnot reporting in 2011 and today, he mentioned it while his party was in government?

[Neil O’Brien]

The hon. Member was probably not here at the time, but I was actually Social Care Minister. He says I have been converted to the cause of social care, but I am quite passionate about it. In addition to the professionalisation of the profession and the investment in skills and technology, one of the things we chose to do—particularly in the wake of the pandemic—was to prioritise money going to the frontline, rather than towards the protection of people’s property income. I am not a social democrat, but occasionally we have to make tough choices; rather than protecting people’s property income, our choice was to protect and put money into the frontline of social care.

[Josh Fenton-Glynn]

Will the hon. Gentleman give way?

[Neil O’Brien]

In one moment.

I want to talk about some other public services that have been affected by the national insurance increase. There are a lot of examples in education. Nurseries have lost out, and they are screaming right now; they are in real difficulty. Lots will close and lots will fail to deliver the places that parents have been promised. If Ministers meet representatives of nurseries, they will hear a tale of incredible woe, because nurseries are caught by both the large increase in national insurance, which squarely hits their workforce, and the increase in the national living wage. I am not against the national living wage—in fact, I helped to give it its name—and I believe in fair pay for fair work, but we have to be conscious about what we are doing with tax, because we cannot have a big increase in the national living wage and then wallop those exact people with a massive tax increase. That way lies disaster for our public services and for our small businesses.

Nurseries have lost out, and schools are losing out. Schools were promised that they would be fully compensated. It is not us saying this; it is the Association of School and College Leaders, which is a trade union, and the Confederation of School Trusts. They have discovered that schools are losing out by up to 35%—that is how much they have been shortchanged by this Government. The Government have deliberately obfuscated the funding and they are not even attempting to compensate each individual school for however much money they are losing. The result is that schools might sack about 13,000 teachers.

In fact, I have been meeting representatives of schools and school trusts in recent weeks, and they are currently sacking teachers. The Harris Federation—one of the best trusts in the entire country, with an amazing and proud record of turning around London schools—is sacking people. The Synergy multi-academy trust is sacking people. Sir Jon Coles, who runs the largest school trust in the entire country, has said that schools are obviously going to have to sack people, because schools have been shortchanged over national insurance. It is pretty poor that they were promised something that has not been delivered.

It is the same for our universities, and I have to say that this was a masterclass in un-joined-up government. First, the Government broke their promise on fees. They said graduates would pay less, and they increased tuition fees instead. That was the first broken promise. Secondly, the universities did not even get the money; it was entirely wiped out by the increase in the national insurance rate. Thirdly, with industrial action looming across the sector because they had taken away all the money they had put in, the Government made it easier to strike through the Employment Rights Bill. It is now rumoured that the Office for Students are to bring in a new mechanism to make it easier for students to sue universities if there are strikes. This is a case of left hand, right hand—or of arse and elbow, if I am completely honest—and a masterclass in totally chaotic government.

The same is true in lots of other bits of our public services—public transport, culture, housing and local government. According to the Local Government Association, local authorities have been short-changed by £1.8 billion, which is an enormous hit. They were promised they would be compensated, but they have not been compensated.

However, the worst example for me is our charity and voluntary sector. As the Minister knows, at least 7,000 charity and voluntary sector leaders have written to the Chancellor asking her to change her mind and reverse the massive increase in national insurance on these small, vulnerable organisations. When I talk to charities and voluntary groups in my constituency, they tell me some pretty disturbing things about what they are having to do to their staff because of those big increases.

I pay tribute to organisations such as Helping Hands up in South Wigston, Voluntary Action South Leicestershire, Loros and Rainbows. I am afraid we were recently forced to use one of our brilliant local hospices, Loros, to help look after my mother-in-law, and it provided wonderful care. However, its job is not made easier by the fact that it has been hit by this enormous tax increase. If the Minister wants a really good measure for the next Budget, he should reverse that. It would be hugely popular, but more importantly, it would be the right thing to do. Public services have been short-changed, and low-income workers have been the hardest hit, which is a pretty bad combination.

I want to mention something that has not been much explored in recent days, which is a tax increase—a stealth tax increase—that has gone unrecognised. By linking the UK emissions trading scheme with the EU scheme, the Government have increased the tax on energy that firms face, because the ETS is of course a tax, albeit a traded one. Prices in the UK ETS have been driven upwards for the last couple of months not just by the final deal announced the other day, but by the prospect of a deal and the prospect of connecting those two different markets.

Two different things have become a bit muddled in the public discussion—one is about trading electricity and the other is about the actual ETS as a tax. In January, UK allowances were trading at about £36 a tonne for December 2025 delivery, and EU allowances were about £25 a tonne more expensive, so £36 plus £25. As of today, the UK ETS is £54 a tonne and the EU ETS is only £4 a tonne above that. We have seen a tremendous price convergence, with the UK tax rate—the UK carbon price—shooting up to match the EU one. Although the price had been ticking up on the prospect of connection to the EU scheme, it went shooting up on the announcement of the deal: it is up by a further 10% since Monday’s reset announcement. That is increasing the cost to businesses, and it will ultimately pass through to the wider economy and to the rest of us.

Looking at the EU ETS price movement so far, it seems to me that the UK Treasury will accrue about £1.2 billion extra as a result of these increased ETS costs, which would certainly outweigh the supposed benefits from the carbon border adjustment mechanism—not that that tax is necessarily paid by firms in the UK, because it is paid by importers in the EU—so the wider cost of this stealth tax could be more than that. I mentioned that the potential increase to the Exchequer is about £1.2 billion, but the overall cost could be higher at more like £2 billion or so. That is an immediate result of the deal announced on Monday, and it is in effect a stealth tax, because it has given us a higher carbon price immediately.

I thought it was ironic that the Draghi report—the EU’s own report into how it can become more competitive—was quite critical of the EU’s ETS. It said it had given the EU one of the highest carbon prices in the world—a high and volatile price. The Government were telling us what a wonderful benefit it was to be part of it, even as senior people in the EU were saying that it is a problematic scheme. That part of the deal has been a bit underappreciated so far.

“Chapter 4A

Josh Fenton-Glynn Excerpts

Tuesday 11th March 2025 Commons Chamber

[Louise Haigh]

I am very grateful for that point of order. I am, of course, very happy to declare my interests, as set out in the Register of Members’ Financial Interests, just as I am in the process of criticising a trade union.

Trade unions have been accused of using confidentiality clauses in settlements, which have the same chilling effect as NDAs. I have been told stories that should be on the front pages of newspapers, such as the man who was accused of rape, signed an NDA and was paid off. His alleged victim only found out years later that that had been the case while she was still working in the same workplace.

Media organisations such as ITN have come under recent criticism. As former employee Daisy Ayliffe said:

“Women who work for ITN have tried to report harassment and discrimination, but soon after doing so found themselves suddenly out of a job and bound by non-disclosure agreements.”

Another former employee of ITN, on seeing Daisy speak out, realised that his experience was far from unique and asked that I use parliamentary privilege today to speak about the confidentiality clause he was required to sign. He has asked that I do not use his name, so I will call him Mr B.

Mr B joined ITN in 2008 on a scheme called Enabling Talent, which aimed to recruit more disabled people into the organisation. He suffers from a condition called functional neurological disorder, which has a number of symptoms, including non-epileptic seizures or dissociate seizures, which he describes as zone-outs or blackouts. In 2008, ITN made a number of reasonable adjustments for him, including help with note taking, a key to the first aid room, and disability leave when required in order to avoid stress and fatigue-induced seizures. He states that at the time he could not fault his employer for the support it gave him.

Mr B left ITN to pursue his career elsewhere and returned in 2017, when he again declared his disability and made a request for similar adjustments. Despite multiple requests for the kind of help he had received before, none were forthcoming. Instead, he suffered severe bullying and discrimination, including pressure to disclose his disability widely to his colleagues. The situation got so bad that his zone-outs and blackouts became increasingly frequent. After suffering one seizure at work, he was required to apologise to those who had witnessed it. He was repeatedly accused of lying about his disability and told that his issues were nothing to do with his disability, despite having joined ITN on a disability inclusion scheme.

Mr B took ITN to tribunal, incurring tens of thousands of pounds in legal costs. He settled but was required to sign a confidentiality clause. His health has deteriorated so badly that he now uses a wheelchair 50% of the time and, following the loss of his job, he was, for a period, made homeless.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

Does my right hon. Friend agree that in such cases there is no public interest and no interest for anyone, apart from guilty parties, to keep these things secret, and that that is why it is important NDAs are not used to hide problems that employers should sort out?

[Louise Haigh]

I am grateful to my hon. Friend for that intervention; he is absolutely right. There are many organisations, including the BBC, that as a policy do not use NDAs.

Imagine suffering that kind of treatment at work: losing your job, losing your health, and then being banned from explaining to another potential employer, or even your closest friends, what has happened to you. It makes it next to impossible to recover from the experience, very difficult to find work again and vanishingly unlikely that the organisation will face up to its wrongdoing and enact change.

For Mr B, for survivors of monsters such as Mohamed Al-Fayed, and for the thousands of victims across our society who have been legally required to suffer in silence, I hope the House can agree that such agreements have no place in modern society. And if it can happen in organisations such as ITN, whose job is literally to expose injustice, or in trade unions, whose job is to protect workers, then it can happen anywhere. Organisations in these instances, no matter who they are, will circle the wagons and protect themselves rather than the victim. By doing so, they protect abusers. That is why we must simply remove the tools of their abuse and end the use of NDAs in these circumstances.

I am very grateful to the Minister for his earlier response and for confirming that the issue warrants further consideration, but may I press him a little further on exactly how we can see progress? And we must see progress. It is sickening that across the country women and men will have suffered abuse in their workplace and that, instead of action against the perpetrator, they are the ones who are shamed and silenced, ganged up on by lawyers and sentenced to a lifetime of regret.

--- Later in debate ---

[Josh Fenton-Glynn]

The hon. Member is making a powerful speech. I pay tribute to the people who have shared their experiences. Does she agree that the people we are talking about have means and support networks, and that without these protections the most vulnerable in society will be affected, which is why getting the laws right is so important?

[Layla Moran]

I thank the hon. Member very much; these people are indeed incredibly brave. What we are trying to show is that it happens to men and women, it is discrimination, it is sexual harassment, and it is ubiquitous—it is happening everywhere and it is happening now. We are not seeking to silence people. In fact, new clause 74 says that if a victim wants an NDA for whatever reason, they would be allowed one. The new clause simply seeks to redress the gap.

How can it be right that, sometime soon, in some establishments, workers will be protected and that in others they will not? It is time for the Government to sort this out. The new clause does not say exactly how they should do that, but that the protections afforded to all workers anywhere should be the same as those afforded in universities. It would give the Government six months from the Bill’s enactment to sort it out, which should be plenty of time. Arguably, they should be able to tackle this with something in the Lords, which would give them a bit of extra time.

I urge the Minister not to wait for some other Bill or some other time. I welcome the meaningful words that we have heard from the Dispatch Box. However, I also urge him to look back—I appreciate that that is not to this Government but another one—because we have heard this before. The campaign has transcended parties and transcended years—it has transcended Parliaments. We are making slow progress; meanwhile, victims continue to be hurt day after day. Every day that these NDAs—often made in perpetuity—endure, that hurt and trauma continues. Please, let this be the Government who put the abuses of non-disclosure agreements where they belong—in the trash can—so that we finally afford the protections that we are about to give to all university workers to every single employee.

Budget Resolutions

Josh Fenton-Glynn Excerpts

Wednesday 6th November 2024 Commons Chamber

[Josh Fenton-Glynn (Calder Valley) (Lab)]

I am proud to stand up on behalf of my constituents in Calder Valley and thank this Government for the Budget delivered by our Chancellor—a Budget that rebuilds the country and protects the NHS. As someone who spent eight years in local government before coming to this place, I recognise some of the huge steps that this Budget takes to cement local government, guaranteeing funding for high street projects like those in Calder Valley, and ending the beauty contests that see communities pitted against one another for meagre funding. There was £600 million guaranteed for social care and a commitment to longer-term, proper funding for our highways and the scourge of potholes. Most importantly, we get three-year funding settlements—no more annual scrabble in December to work out how to make a budget fit. Local authorities and businesses can plan long-term, which is what they want, and it is the stability that we need.

It has been quite something to sit through this Budget debate for the past few days, because it seems like there have been two Budgets. One was delivered by my right hon. Friend the Chancellor of the Exchequer, which fixed our foundations, supported hospitality and the high street, provided billions for the NHS, found funding for SEND and opened breakfast clubs. Then, there has been the Budget that exists in the imagination of Opposition Members. Today, the Leader of the Opposition claimed that it did not mention the word “defence”. The speech mentions it six times, and the Budget has a whole section in the funding settlement for defence.

Today, we heard from the hon. Members for Solihull West and Shirley (Dr Shastri-Hurst) and for Sleaford and North Hykeham (Dr Johnson) about the problems of social care. That should not be a new concern for Conservative Members. Andrew Dilnot released his report in 2011. We were then promised that we would get some kind of proposal in 2014. In 2017, the Conservative Government released their proposal, but then withdrew it because they had an election. They then delayed it in 2018. It came back in 2021 and was delayed again in 2022. Then they said that they would deliver it in 2024, but did not find the funding.

Throughout all that, there has not been a shred of contrition or acknowledgment from the Conservatives that they left the country on its knees. They have no idea yet why the public rejected them so resoundingly at the last election. I hope that as they sum up, they will perhaps show some contrition and answer the Budget as it is, not the one that exists only in their imagination.