Family Businesses

Debate between Mel Stride and Wendy Morton

Wednesday 26th February 2025 Commons Chamber

[Mel Stride (Central Devon) (Con)]

I beg to move,

That this House regrets the Government’s decision to introduce a cap on Business Property Relief, meaning that some family businesses passed down upon death will face Inheritance Tax for the first time in 50 years; further regrets the Government’s other economic policies that will damage family businesses, namely raising employers’ National Insurance contributions, reductions to business rates relief, making employers potentially liable for third-party harassment, the powers in the Product Regulation and Metrology Bill [Lords] that would allow the Government to ban pubs from selling pints, and the provisions in the Employment Rights Bill for guaranteed hours which will make flexible working harder to achieve; and therefore calls on the Government to support family businesses which provide employment for almost 14 million people, and contribute more than £200 billion in taxes each year, by lifting the cap on Business Property Relief, not implementing the increases to employers’ National Insurance contributions and business rates, and powers to change units of measurement, and to stop the progress of the damaging Employment Rights Bill.

At the last general election, the Labour party—now the Government—told us that it aspired to become the natural party of business, which is an absurd suggestion given what has happened over the past seven short months. It is as absurd perhaps as the Business Secretary claiming to be a qualified lawyer, as absurd perhaps as the Attorney General claiming to be a patriotic lawyer, or as absurd perhaps as the Prime Minister claiming to be anything other than a lawyer. The economy has tanked. Inflation recently spiked at 3%, and it is to go still higher; it was 2% on the day of the general election, a legacy that we bequeathed to the Labour party. Borrowing is up—substantially up—on the forecasts that the Office for Budget Responsibility produced at the last Budget, and growth has been killed stone dead. The Bank of England tells us that the economy will grow at half the rate it had originally suggested.

It is no wonder that all the business confidence surveys show confidence crashing through the floor as a result of what this Government are doing. Businesses are laying off jobs, businesses are putting up prices, businesses are reducing investment, and businesses are sometimes having to put themselves up for sale or, even worse, are going under.

[Wendy Morton (Aldridge-Brownhills) (Con)]

On that specific point, a local businessman wrote to me:

“I have spent over 50 years building my engineering business from the ground up, only to now face the possibility that my life’s work could be dismantled due to an unfair tax burden.”

Why on earth would anybody want to start a business in the current climate, which has been created by the Government?

Finance Bill

Debate between Mel Stride and Wendy Morton

2nd reading
Wednesday 27th November 2024 Commons Chamber

[Mel Stride]

I take it as a familiar mark of respect from the hon. Gentleman.

The fact of the matter is that the ONS’s figures for the third quarter of this year show growth of 0.1%. That is one seventh of what has been achieved in the United States. In September, the third month of the quarter, there was negative growth. The reason for that is very clear. When this Government came to office, the first thing that they did was talk down the economy, and talk about black holes and what a terrible mess everything was in, as cover for what they intended to do all along. That had an impact on purchasing managers’ index surveys. We can see the slump in business confidence in the data, and the Government are now reaping the whirlwind. We have now had a Budget that will do even more damage to growth.

What will happen to inflation? Let us go back to our friends at the OBR. In every single year of its forecast, inflation is higher than in every single year of the forecast based on our last Budget back in the spring—a fiscal splurge up front that will translate into higher prices and higher interest rates for longer, meaning higher mortgage rates. Before Labour Members start jumping up and down at the M-word, the Government now own mortgage interest rates, and they are being affected in the wrong direction as a result of their policies. What about living standards? They are down and flatlining. The Joseph Rowntree Foundation says that by October 2029 the average family will be £770 worse off in real terms than they are today.

[Wendy Morton (Aldridge-Brownhills) (Con)]

On the Government’s watch.

[Mel Stride]

On the Government’s watch. A number of measures in the Bill will further weigh on growth. Capital gains tax will go up, destroying wealth creation. The energy profits levy will destroy jobs, making us less secure when it comes to energy. Stamp duty will go up, and that is one of the worst taxes. The hon. Member for Swansea West (Torsten Bell) will accept that, as he shares that view—I think he makes the point in his recent book. The level of activity in the housing market will be dampened, people will be discouraged from downsizing, which will put pressure on the housing supply, and labour mobility—an important component of growth—will be impacted.