International Investment Summit

Richard Quigley Excerpts

Thursday 17th October 2024 Commons Chamber

[Kevin Hollinrake]

I will come on to confidence in a second, if I may.

The reality is that the UK has always been a good place for foreign investors. For the past three years, it has been No. 3 in the world for foreign direct investment; the only countries ahead of us have been the US and China.

The Minister referred to the wonderful event at the Guildhall. We have wonderful places to host international events, and we support what they do to show the best of Britain to our international investors. I was pleased, but perhaps surprised, to see Elton John entertaining the audience; I was expecting Taylor Swift. Was that ever on the agenda? There is obviously a very strong relationship there. But when I thought about it, and when I heard about the reversal of position on the DP World investment, I thought, “Well, it’s obvious why they’ve done that: they’ve asked Elton and the Transport Secretary to join in a duet of ‘Sorry Seems to Be the Hardest Word’.” Interestingly, a No.10 press release on this mentioned a rogue operator—I was not sure whether that meant the Secretary of State or the company—so I am not sure where that all landed in the end, or whether that was just a rogue comment by the Secretary of State.

None the less, we welcome the investment and we will absolutely support any successes that the Government can achieve, but, as the Opposition, it is right that we challenge where challenge is due. We have many concerns about some of the things to which the Minister refers. She is absolutely right to say that stability is the key. It breeds confidence in investors, which breeds investment. That is why we are particularly concerned about the changes to business taxation. Some were floated months ago and have been left hanging in the air. We know that this is now affecting investment, particularly around capital gains tax and around business relief—it used to be called business property relief—which is very close to my heart.

Business relief gives private businesses and businesses listed on AIM the ability to pass on their assets to the next generation without inheritance tax. There are a number of questions around whether that relief will be continued. It is hugely important that the Government do continue it, because it affects some of this country’s fantastic family businesses, which generate around £200 billion of tax receipts every single year and employ nearly 14 million people. That business relief is there for a reason. It is not a tax loophole; it is an incentive for family and intergenerational businesses to pass on their assets from one generation to the next. Similarly, that happens with agricultural property relief.

We are also concerned about the Government’s unwillingness to confirm that there will be no rise in national insurance for employers. Members on both sides of the House have described that as a jobs tax, and that is exactly what it is. All the uncertainty around business taxation will mean a suspension of investment and a reduction in the amount of hiring, particularly when it is seen in conjunction with the potential workplace changes that the Government are making, which we will debate in the House on Monday and about which we have great concerns. In particular, those relating to union powers could take this country back to the 1970s. I know that many Members in this place will not remember the 1970s, but I do and it was not a good place to be.

In the Prime Minister’s statement, he talked about cutting red tape. If, as currently drafted, the 28 new regulations—particularly those for small and medium-sized enterprises—are added to the Employment Rights Bill, it would seriously damage growth, investment and SMEs. But the Minister does not need to take my word for that. Let me read out some of the comments about the changes that the Government are thinking of making that will damage investment. The Federation of Small Businesses said that its members are viewing the measures coming down the line with “trepidation”. Tina McKenzie described them as

“clumsy, chaotic and poorly planned.”

She said:

“There are already 65,000 fewer payroll jobs since Labour took power, and the new Government is sending out troubling signals to businesses and investors.”

Those are her words, not mine.

The Institute of Directors said that confidence is fizzling out. Its index in relation to investor appetite has gone from plus 30% in June 2024 to minus 7% in October 2024. That is in just four months. The CBI said that 62% of employers say that the UK will be a less attractive place in which to invest. Ernst & Young said that

“60% of asset management (private equity) clients have asked them to start work on moving abroad.”

[Mr Richard Quigley (Isle of Wight West) (Lab)]

Does the hon. Member agree that he is now guilty of talking down the entrepreneurial spirit and the ability of UK companies to cope with an exciting new Government?

[Kevin Hollinrake]

I am very keen not to do that. That is my point. It is gloom and doom from the Opposition —sorry, I mean the Government; I have to stop doing that—and it is brought on by these significant changes. These are not my comments, but the comments of sensible business representative organisations, which are representing their members. We should listen to the voices of business in this context. Even Richard Walker of Iceland Food, one of the Government’s supporters, says that the changes must happen slowly to avoid a “disastrous impact”.

I realise that we have a lot to get used to these days. I have to get used to calling those on the Labour Benches “the Government”, and I also have to get used to being a backseat driver. It is even more frustrating being a backseat driver when the learner driver in the driving seat does not know the difference between the brake and the accelerator.

Importantly, stability is one of the key levers that the Government have at their disposal. Winston Churchill once said that some people see “private enterprise as a predatory tiger to be shot. Some see it as a cow that they can milk. Few people see it for what it really is—the strong horse that pulls the whole cart”. It is hugely important that we get behind private enterprise in this country. It is hugely important that we get that stability in tax policy, workplace policy and the employment relationship. It is hugely important that we continue to level up this country. I note that levelling-up seems to have disappeared as a departmental aim, but that is still hugely important to all parts of this country, not least to the part of the country that I represent. It is also hugely important that we control energy costs. We know that that is a key concern to many businesses around the UK. Another key concern is that we cut the red tape for our larger companies.

The area that I focused most on as a business Minister was SMEs, which are the backbone of our economy. The No. 1 area that they struggle with is access to finance. I would really like to see some different measures in that area.