Employers

Rebecca Smith Excerpts

Wednesday 11th November 2026 Commons Chamber

[James Murray]

As the hon. Gentleman may know, the overnight visitor levy is a power that we are giving to strategic authorities across the country. It will be a decision for mayors or foundational strategic authorities to take about whether to introduce that levy, and if they do so, at what percentage to introduce it. Any proceeds will be reinvested in the local visitor economy and other infrastructure in the local area, and will support that area to get more visitors in future, thereby supporting economic growth—I hope that is something the hon. Gentleman would support.

Let me turn directly to the role of employers in our country, given the title of the motion. As I said in response to an earlier intervention, employers are working people and they are the backbone of our economy. As I also said, that is why the Budget gives businesses breathing space, with 70,000 retail, hospitality and leisure properties taken out of business rates altogether, and bills for others cut or frozen in real terms.

[Rebecca Smith (South West Devon) (Con)]

I thank the right hon. Member for giving way yet again. He is helpfully listing things from the Budget that are supposed to help businesses, but I wonder whether he has come across anyone in his constituency, or in his work at the Treasury who, like businesses I am aware of, have seen the standing charge for their business electricity double. We are talking four figures in the first place, so that is a significant increase. In one case a business invested in solar panels, which the Government would no doubt welcome, but ultimately the investment that it made will be completely wiped out by increased standing charges. Will the Minister address that specific point?

[James Murray]

I thank the hon. Lady for mentioning energy bills, because as MPs and Ministers we all recognise that energy costs are one of the primary concerns for households and businesses across the country. In the Budget two weeks ago, we offered breathing space for families and businesses, including with energy bills. Crucially, we also set out the work we will be doing in the years ahead to get those energy bills down for good, and ensure that we can invest in home-grown, renewable cleaner sources of energy, break the link between electricity and gas prices, and remove standing charges from gas bills and then electricity bills. All that is about reforming the way the energy market works, because while breathing space is what households and businesses need now, we know that longer-term reform is needed over time.

I was explaining the breathing space for businesses, and I mentioned the cuts to business rates announced in the Budget. I remind hon. Members that we are backing people who want to start and grow businesses by cutting red tape and unlocking billions of pounds of investment. We also introduced our new founders’ relief for founders of high-growth companies, and a new young entrepreneurs allowance to cover a year of living costs for young founders while they bring ideas alive. Employers and businesses drive growth, offer job opportunities and create wealth across our country.

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[Rebecca Smith (South West Devon) (Con)]

The Government are quick to lecture Conservative Members about how to care for the most vulnerable, but at the very moment that Ministers say they want more people getting into work—as we have heard time and again this afternoon—they have increased the cost of employment. We all know that work is the best form of welfare, and Labour’s job tax is shooting the Government in the foot.

Time and again, local businesses tell me that they can no longer afford to take on apprenticeships. The double whammy of higher employer national insurance contributions and the increase to the minimum wage has simply become too much to bear.

[Gareth Snell]

The Conservatives have made the argument that they would like to see a reduction in national insurance. Will the hon. Lady spell out, in pounds and pence, by how much the Tory party would like to see the minimum wage cut to achieve the outcomes that she is suggesting?

--- Later in debate ---

[Rebecca Smith]

I thank the hon. Member for his question, but many questions of that nature have not been answered this afternoon. That is not what I am here to talk about. I am here to talk about the fact that businesses are currently dealing with this situation. What happens in the future is irrelevant; we are talking about what is happening while this Government are in power.

We know that by next year the annual cost of employing a full-time worker on the minimum wage will have increased by more than £4,000 since 2024—a whopping 31% increase in just three years.

[Gareth Snell]

rose—

[Jayne Kirkham]

rose—

[Rebecca Smith]

I will continue.

It is little wonder that job opportunities have shrivelled up under Labour, as has been pointed out by Members on the Government Benches. Vacancies fell by 21,000 between July and September this year, and as we have heard, small firms are being hit the hardest. To get our economy moving again, the Conservatives would halve employer national insurance contributions for under-25s. We would help young people get a foot on the ladder by backing the businesses that are prepared to give them that first opportunity.

Madam Deputy Speaker, you might be pleased to hear that there are more than 3,700 small and medium-sized enterprises in South West Devon, much like in Cornwall, which has been mentioned already. The south-west is home to many SMEs. Each one represents somebody who took a risk, invested their savings, employed local people and worked many long hours to build something of their own. In fact, that was my own experience. My dad regularly went out to work before I had even had breakfast, then came home and fell asleep—I never got a story or anything like that. He was out working six days a week, running his small business. When he was asleep, he was worrying about how the business was going to survive.

For many sole traders and small business owners, there is no guaranteed safety net if their business fails. If they have no public sector pension waiting for them at retirement, they are in an even more precarious position. I was therefore genuinely astounded when a Labour Minister had the audacity to claim that employers are not working people. The employers I know work incredibly hard. They are, as we have heard many times today, the ones opening up before dawn and locking up long after everyone else has gone home. They are the ones managing staff, cash flow and contracts. They bear the ultimate responsibility when things go wrong. When a business goes under, the employees may be able to move on to another job—although given the examples this afternoon, that is perhaps less of a possibility—but for many business owners, it is not that simple. They are losing something they have devoted years of hard work to building.

The Labour Government seem to forget that 99% of businesses in the UK are small and medium-sized enterprises, meaning that they have fewer than 250 employees. Saddled with ever higher costs, these businesses are now faced with difficult choices to raise prices, cut trading hours or make redundancies. Indeed, one local café owner told me that they have been forced to cut back deliberately on younger staff to protect the jobs of their employees who have mortgages and rent to pay. Added to that, they breed poultry, and they have had to increase the mid-year price of chickens, which will go on and lay eggs for people, for the first time in 18 years, which is driven by rising prices of animal feed, gas and fuel.

One local electrician from Plympton has told me how he regularly sees about 10 other businesses at the wholesaler each morning. There was a time when the majority of them had an apprentice, but now it is just him, and he has one only because it is his son, so it is in his interest to keep the business going. Ministers seem to have forgotten that employers pay the apprentice when they are at college as well as when they are at work, and the costs are just too high.

I have 670 construction businesses in my constituency, and one of them used to participate in an innovative scheme to support recovering addicts back into work. It partnered with well-loved Shekinah, a Plymouth homelessness charity, which provides employment support for people undergoing treatment for drug or alcohol misuse. These people would work for the company on a flexible basis, starting at a few days per week and building up gradually. After a few months, the workers would go on to gain full-time employment with other businesses. However, the company’s founders, Aaron and Sarah, say that it is impossible to continue offering this scheme due to the increased labour costs. As Aaron has said:

“We are so sad about this, as it is something that we feel is vital. Everyone needs a second chance and the chance for work and purpose in life.”

I believe that that is a sad indictment of Labour’s damaging policies.

The couple have also made the difficult decision to stop taking on apprentices. The business simply cannot afford it, despite being regularly approached by local colleges. Aaron told me that the total employment cost per day for a 21-year-old with no experience is now over £100, but for twice the cost he could recruit and employ an experienced tradesperson, who would be three or four times more productive from day one and require no supervision.

Despite the changes at the top table, this is the same old Labour, with more taxes and higher costs. If the Government are serious about helping people off welfare, they should stop making it harder to hire them. Labour’s answer is to punish employers. Ours is to create more opportunities and more apprenticeships, and get more people into work.