Backing Business to Create Economic Growth

Paula Barker Excerpts

Monday 18th May 2026 Commons Chamber

[Sir Mel Stride]

The current account went into a slight surplus just around 2015-16. [Interruption.] It did, actually. That was on the back of our inheriting a £160 billion deficit in 2010, which was over 10% of GDP—another example of the disasters of a Labour Government.

The Secretary of State rightly spoke of artificial intelligence and the opportunities that it presents, but what we know of artificial intelligence is that it will have a profound and very uncertain effect on the labour market. We need a flexible skills offer to deal with that, and flexible labour markets, but through the Employment Rights Act, the Government are making the labour market more rigid, and that will hurt younger people in particular, who do not have a track record in employment, so do not be surprised if youth unemployment continues to hover around 16% or 17% as a consequence of the actions of this Government.

When it comes to leaning into these challenges, we know that there is no plan. This Government are not going to do anything. They are just involved in internecine introspection—a civil war, now—within the Labour party. They said that they would tread lightly on our lives; in fact, they are now stampeding all over them. The rivals to the Prime Minister will be looking to double-down on the ruinous policies that I have just set out.

We have seen the real effects of this in recent days. On Friday, after the former Member for Makerfield said that he would step down in order to ease the passage of Andy Burnham to this place, what happened to gilt yields? They spiked up 18 basis points. I have done a little bit of research, and I can tell the House that, if sustained through the forecast period, that would mean over £5 billion of additional debt servicing costs. That is about £300 for every working family in this country. That is the effect of Andy Burnham, and he has not even arrived here yet.

We are on the edge of a precipice economically, leaning into a very turbulent time. These are the policies of the madhouse, yet we are told not to worry. The hon. Member for Liverpool Wavertree (Paula Barker), who I believe is an outrider for Andy Burnham, said of the bond markets that they would just have to “fall into line”. Andy Burnham himself said in the New Statesman:

“We’ve got to go beyond this thing”—

[Paula Barker (Liverpool Wavertree) (Lab)]

Will the right hon. Gentleman give way?

[Sir Mel Stride]

I will in a moment.

[Paula Barker]

On a point of order, Mr Speaker. My understanding is that if an hon. Member wishes to mention another hon. Member in the Chamber, they are supposed to give advance notice of that. I have received no such notice.

[Mr Speaker]

That is not the case. A Member should be informed if they are not here, but the hon. Lady is sitting here, quite rightly, and I am sure that the shadow Chancellor is ready to give way immediately.

[Sir Mel Stride]

I am always ready to give way, Mr Speaker, and to take your direction.

[Paula Barker]

Thank you, Mr Speaker, and I thank the shadow Minister for giving way. I agree that what I said might not have been the most eloquent of answers. However, I would say that people in this country are fed up of the bond markets dabbling in the democracy of our country.

[Sir Mel Stride]

That is a rather unfortunate example of doubling down or continuing to dig, if I may say so. Also, the hon. Lady’s comments pale in comparison with Andy Burnham’s comments in the New Statesman, where he said:

“We’ve got to go beyond this thing of being in hock to the bond markets”.

He also suggested that defence spending should lie outside the fiscal rules, as if spending and borrowing to defend our country were a different form of borrowing from any other borrowing that this Government might entertain. He is not so much the king of the north; he is more like King Canute, sitting in his chair on the sand, dressed in his football kit, trying to push back the tide of the bond markets and saying things like, “You’ve got to fall in line” as the waters lap at his ankles and we all ultimately get swept away. It is ludicrous.

The King’s Speech included a holiday tax that will increase the cost of the most budget holidays in this country, clobbering people who have saved up hard and just want to make some memories with their children. We also have the nationalisation of steel, which seems to be just some kind of political sop to the left on the Labour Benches.

The Government are also going to put a stop to new oil and gas exploration. This is lunacy, when we are importing gas from Norway that is extracted from the same basin. We are also importing liquefied natural gas, formerly from Qatar and now predominantly from the United States, which has four times the carbon footprint compared with if we had extracted it ourselves using our own resources. All that energy security blown, all those jobs destroyed and all that tax revenue forgone, simply because of the ideological madness of the Labour party.

--- Later in debate ---

[Paula Barker (Liverpool Wavertree) (Lab)]

I want to begin by focusing on young people and employment, which is a key aspect of economic growth. For growth with a purpose—to create a society that we can all feel part of and can all contribute to—it is vital that young people get the training to develop skills in the field they want to work in. It is often extremely hard for them just to get initial experience. Firing off job applications one after the other without success, it is easy to lose hope. They do not need the language of work incentives; they just need a chance.

The transition from school or college to work and adulthood can be difficult for anyone, and many people also start with disadvantages. Nobody should have to start their working life without support to find their first job. That is why I was very pleased to see the Government announcement earlier this spring of new investment in training and skills for young people, including the chance of a job for those who have been looking for work longest.

Given the closure of the UK shared prosperity fund, I would like to see the Government ensure continued funding for smaller community organisations that provide employment support for people facing the greatest challenges in finding work, such as disabled people or care leavers. I also urge the Government to take action to radically reform the student loan system, as when young people start work, they are often demoralised to find that their debt increases faster than they are able to pay it off.

I am very conscious of the role that small local businesses play in the economy and in the everyday lives of people in my constituency, but also of the challenges they face because of cost pressures and wider developments such as the growth of online shopping. Hair salons remain an important part of our high streets, largely run and staffed by women. They are a key source of apprenticeships and employment for young people under 35, and they generated an estimated £5.8 billion for the UK economy in 2023-24.

Victoria and Janet have owned Aura salon on Aigburth Road in my constituency for 24 years, and they have trained numerous young hairstylists over that time. Nevertheless, after weathering the financial crisis and the pandemic, they have—at least temporarily—stopped taking on new apprentices, like many other salons. I urge the Government to look again at how they can support small businesses like Aura salon.

In December, I visited another local small business in my constituency, the Motor Museum recording studio, which has always offered training and career opportunities for young people in record producing, mixing and engineering through its strong links with the Liverpool Institute for Performing Arts, Liverpool University and Liverpool John Moores University.

The success of Olivia Dean and Lola Young at the Grammys was a major stimulus for the UK music industry, and a reminder that the creative industries are a key part of the UK economy. The Motor Museum has played a significant role in the industry’s success story over the 37 years of its existence, playing host to recording sessions by major UK bands like Oasis and the Arctic Monkeys, as well as artists from all over the world.

However, recording studios are facing an uncertain future. They are assessed for business rates in the same way as other business premises, like offices, on the basis of square footage, but it is the sound that studios create, not the space, that makes them distinctive. I urge the Government to consider assessing recording studios separately from other businesses, just as film studios are.

In her Mais lecture, the Chancellor highlighted once again how important it is that growth is not confined to London and the south-east—and recording studios are certainly not. They are part of the essential infrastructure of the music industry, and they are where so many young musicians take the first steps in their career. Without them, there would be no albums and no tours. We must not lose them.

Labour was the first party to refer specifically in a manifesto to the concerns of small businesses when, in 1906, it highlighted:

“Shopkeepers and traders are overburdened with rates and taxation, whilst the increasing land values, which should relieve the ratepayers, go to people who have not earned them.”

In closing, I urge the Government to do all they can to support small businesses in our UK economy.