Business and the Economy

Debate between Luke Evans and Andrew Griffith

Wednesday 21st May 2025 Commons Chamber

[Andrew Griffith]

How tragic is it that from Gosport to Gloucester and everywhere between, businesses on our high streets are closing? This Government do not understand that. If they do understand, they do not care, and if they care, they have not acted. The message from this Government to anyone willing to put their capital, time and energy on the line by taking risk to create wealth as a business owner is abundantly clear.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Exactly to that point, is it not a shame that for the first time ever since records began in 2012, the number of new businesses registered at Companies House has fallen? The exact risk-taking behaviour that we need to grow the economy is not taking place; is that not a damning indictment of what this Government are doing?

[Andrew Griffith]

My hon. Friend makes an incredibly important point. I believe that all of us come to this House to try to do our best and to grow the economy, but any Government faced with that terrible metric about the failure rate and formation rate of businesses would be acting immediately, with haste, and reversing so many of the measures. The choices this Government have made have delivered precisely the outcome my hon. Friend describes.

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[Andrew Griffith]

No one would believe, Madam Deputy Speaker, that you would implement such terrible measures without a proper impact assessment. More significant, however, is the fact that we have heard not just the voice of my hon. Friend the Member for Bognor Regis and Littlehampton (Alison Griffiths), representing those important seasonal industries, but the voice of employers across the country, who have pointed out that it will no longer be possible for seasonable and flexible work to deliver the economy that we need.

[Dr Evans]

The problem with the Employment Rights Bill is not only its implied cost and the red tape it will introduce, but the fact that it is a poor piece of legislation in the first place. The Government’s own regulatory independent commission has said that eight of the 23 criteria are not fit for purpose. Does my hon. Friend not agree that if the Bill is to proceed, it should be reworked?

[Andrew Griffith]

My hon. Friend is exactly right. If Labour Members were honest enough to do so, they would admit that the Bill is a rushed piece of legislation. It was introduced because of an arbitrary promise to do so within 100 days, and it was introduced at half its current length, which means that 50% of the words that it now contains—the red tape that our businesses will have to implement and wrestle with for years to come—did not even benefit from scrutiny in this place. Many of the powers in the Bill are not fleshed out or clarified. We will wreak great havoc and uncertainty on business if the Government are determined to proceed. It would be far better for them to shelve the Bill, to listen, to learn and then to come back so that we could use the proper mechanisms of this House to do our jobs for all our constituents to avoid the unintended consequences and the damage that I do not believe anyone would want.

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[Andrew Griffith]

I thank the hon. Gentleman for making that very perceptive observation. I hate to say this, but I was not making a casual point; it was a considered point. When we think about how this House continues to legislate and tax in a way that reduces economic growth, that does not celebrate a culture of entrepreneurialism and founders, and that is leading to higher employment, with 100,000 fewer people on payroll than there were a year ago, we should all look deep into our souls. What is the endemic failure in Parliament, and of this Government in particular, that is leading so quickly to precisely those outcomes?

It is sad to say that sometimes there is a lack of voice for business. Although one does not want every single sector to be represented in this place, the compensatory mechanism for that involves consultation and diligent impact assessments. In introducing legislation, this Government have been serially criticised for the way that they have casually discarded such measures, and the Treasury maths simply do not add up.

[Dr Evans]

I think it goes wider than that across the top of Government, because Members on both sides of this House are grappling with what to do about people who are long-term unemployed. If we make it more likely that companies will not take a risk on getting someone back into work while increasing unemployment at the same time, we will create a toxic concoction at a time that we are trying to get people back into jobs because we know that that is better for the economy and better for them, their health and their family. Does my hon. Friend agree?

[Andrew Griffith]

I do indeed agree. We ought to confront how we have got here—I acknowledge that it has happened over a period of time—with so many young people unable to work, get an education or be in productive training. That is a headwind on the economy, and a moral failure of us all. The question that we should confront ourselves with is this: what are we doing each and every day in this place to give opportunities to 1 million young people and the 9 million others of working age who remain stubbornly on welfare, while improving our public finances and making the maximum use of the wonderful resources, education and skills of the British people, so that we can grow our economy and be the prosperous nation that we once again deserve to be?

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[Andrew Griffith]

The hon. Member is exactly right. When I describe my constituency as “South Downs”, people occasionally assume that it is in Northern Ireland, but all of our young people deserve the best opportunities. We know that the best outcomes for young people are when they can enter the workforce, and that if, when they graduate from school, college or an apprenticeship, those young people cannot immediately find productive work, the scarring impact of that can run through the entirety of their adult life and they never catch up with their peers’ earnings. That is why it is so important that we have a healthy labour market, and a healthy labour market relies on the ability of employers to feel that they can take a chance, give people opportunities and benefit from that.

I want to make some progress, which I suspect may be popular. There are many Members on the Opposition side; sadly, there are disappointingly few on the Government side. Given the paucity of business experience on that side, it is probably appropriate for there to be more listening than talking on the Government Benches.

Let us imagine—and, Madam Deputy Speaker, you will know this from your wonderful constituency—that despite all the headwinds this Government have imposed on business, an entrepreneur does well, grows their business into a successful operation and wants to hand it down to the next generation after they are gone. Those people, who have taken risks to create something good for society, are now at a competitive disadvantage as a result of the family business death tax. They will be forced to carve up, slice up, or close up shop forever to meet the demands for business property relief and inheritance tax.

Analysis from CBI Economics for Family Business UK estimates that this measure alone will result in 208,000 job losses and a £2 billion net loss to the Treasury. Again, I hope the Minister will address that directly when he responds. Family Business UK’s chief executive, Neil Davy, says that “far from stimulating economic growth” this policy “will achieve exactly the opposite.” He is right. To illustrate just how ridiculously flawed this policy is, it applies to families here in the United Kingdom, but it does not apply to overseas businesses that operate here, or to those owned by private equity or foreign corporate owners.

Labour has stolen any incentive for success from a generation of home-grown entrepreneurs. We really cannot go on like this. The gulf between those who create wealth and those who govern us has never been larger. Only one Cabinet Minister, the Secretary of State for Scotland, has any real experience of running a business. Trying to find business experience among those on the Labour Benches is like trying to find a tax the Deputy Prime Minister does not think needs to be raised. It is no surprise that, according to the Institute of Directors, over two thirds of businesses are now pessimistic about the future of the economy.

[Dr Luke Evans]

I would argue that it is actually worse than that. A study by the Chartered Institute of Personnel and Development has said that business confidence is at the same level it was in the pandemic. In the pandemic, businesses shut up shop and were not sure they would ever open again, and that is the level of business confidence we are dealing with at the moment. A quarter of businesses say they will lay people off, and that is the reality out there. Does my hon. Friend agree that that is why the Government need to listen, and change course?

[Andrew Griffith]

Our business community is ravaged; my hon. Friend is exactly right. We are plummeting to depths last reached only when the entire global economy was shut down due to an unknown pathogenic virus. If that is the bar the Government set themselves, I urge them to have a little bit more ambition and confidence in their ability to grow our economy.

No nation can spend its way to growth, or tax its way to success. I fear that we are about to see a case study showing exactly that this does not work. It has been tried before, and it did not work then. We cannot afford the ignorant short-sightedness of this Government. To achieve growth, we need a country in which everybody’s spark of ambition can find ignition. Not everyone needs to run a business, but for those who do, we want a country that values, cherishes and honours its wealth creators; where transforming a side hustle into a main hustle is straightforward; and where His Majesty’s Revenue and Customs is transformed from a predator to a partner, and the tax system goes out of its way to reflect the risk of investing, and of running a business. We want our regulators to think carefully before they intervene, and not to pounce on every perceived failure as another reason to try to eliminate risk.