Supporting Small Business

Debate between Naz Shah and Chris Evans

Tuesday 19th October 2021 Commons Chamber

[Naz Shah (Bradford West) (Lab)]

I thank the shadow Chancellor, my hon. Friend the Member for Leeds West (Rachel Reeves), for ensuring that we are having this debate on our Opposition day, as it is important to my constituents and certainly to the businesses in my constituency.

Supporting local businesses means supporting the workers, families and people in our communities. Local businesses are not just the backbone of our economy; they are also often the depictions and representations of many towns and cities across the country. In Bradford, we are incredibly fortunate to have a rich profusion of local businesses, especially in the hospitality industry, which not only caters for the locals in Bradford, but brings in so many others from afar. However, during the pandemic businesses have struggled, and those in Bradford West struggled extensively due to a longer period of local lockdowns. Their compassion, even in the toughest of times, did not wither away, and I witnessed that at first hand. While businesses were closing their doors, they were also opening their hearts by supporting those who were most in need, especially our NHS. I want to put on record my gratitude to them during those times.

But gratitude is not enough. Those businesses need the Government to support them during times of uncertainty. Although we are grateful for the support that has been forthcoming, it does not cut far enough for the businesses that are struggling now. The pandemic and the gradual effects of Brexit are signs of the pressures that local businesses are facing every day. We have heard about the queues of lorries that we expected at Dover following Brexit, but what this Government’s poor planning did not assess was the lorries without drivers that would have an impact on food and fuel shortages. This afternoon, I spoke to Regal Foods, a medium-sized business in my constituency, which really was affected by the situation.

Although a long-term strategy is needed to support local businesses to help to rebuild our economy, we can help sooner by freezing business rates. Labour plans to freeze business rates until the next revaluation. That will benefit sectors such as retail and hospitality that are hit the most by this tax. Hospitality businesses that are struggling to find workers and have only recently had to endure the increase in VAT to 12.5%, while barely being able to remain afloat, need such support. Labour also plans to cut business rates and increase the threshold for small business rates relief from the current threshold of £15,000 to £25,000.

[Chris Evans]

During the last financial crash, the Labour Government actually cut VAT to reinvigorate the high street, by ensuring that people went there and that money started to flow through the shops again. We hear from this Government yet again about raising value-added tax, as the Conservatives have always done whenever they have been in power. Does my hon. Friend believe that a VAT cut, rather than an increase, would help the high streets?

[Naz Shah]

I absolutely agree. The Government have gone back on their manifesto pledge not to raise taxes. Giving small businesses a discount on their business rates for 2022-23 would be a much-needed lifeline.

As I said at the start of my speech, supporting local businesses is about not just business, but the entire community. There are lots of wedding halls in my constituency. During the pandemic, I recall inviting the Prime Minister up to visit some of them. A wedding hall in my constituency is not just about the wedding hall itself and the people running it. It creates other jobs: the waiters, the florist, the photographer, the caterer—the list goes on. The pandemic really has had an impact on the local economies of these places. The Madisson, the Rio Grande and the Mirage in my constituency—those are the big ones, but there are lots of small ones too—have really borne the brunt of what happened during the pandemic. Those wedding halls are huge. Anybody who has been to an Asian wedding will know that we do weddings really well, with a large amount of people in attendance. Despite being able to put social distancing measures in place, the venues were not allowed to open and they really suffered.

In the same way, cutting business rates for SMEs will not only support the local economy, but counteract deprivation, poverty and regional inequality. I have the fastest growing rate of child poverty in the whole of Yorkshire and Humber. These measures go a long way in helping people to keep the bread on the table and keep their household going. We already know how much the universal tax credit cut will impact on my constituency.

A report from WPI Strategy in 2020 found that constituencies like mine are ranked third highest in the need for levelling up, as a direct result of a regional inequality impacting on business rates. The report found that it was even justified to refer to this regional inequality as a “northern shop tax”, as hard-working businesses in these areas, from SMEs to multinationals, were more likely to struggle with setting up shop because of business rates. More worryingly, analysis by Labour using the latest Office for National Statistics business impact survey reveals that 332,000 businesses are at risk of closure in the next three months, accounting for 828,000 jobs. In my constituency of Bradford West, 232 businesses are at risk, which will have a devastating impact on so many families who are already struggling.