Supporting Small Business

Sarah Olney Excerpts

Tuesday 19th October 2021 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

I am extremely glad that the shadow Chancellor moved the motion before the House, because the support of our small businesses has to be one of the principal priorities of the Government at this time. I know that enormous challenges are crowding in from every side as we continue to tackle the covid crisis while dealing with fuel price rises, supply chain shortages, NHS backlogs and the work to decarbonise our economy, but a thriving economy built on private enterprise will do more to help us to solve all those problems than anything else, so it is imperative that the Chancellor does all he can to support and promote small businesses over the next few months.

Given its well-publicised proximity to Heathrow airport, my constituency plays host to many companies in the travel sector. I am particularly concerned about the future of the sector. Despite announcements in recent weeks, there are still considerable restrictions on people’s ability to travel that continue to limit the opportunities for trading in the sector, not least with continued uncertainty about the sector’s prospects as covid cases continue to soar.

The travel sector underpins so many other aspects of the UK economy, both in attracting visitors to our cultural and hospitality sectors and in enabling us to seek out new markets elsewhere, so it must be a strategic priority for the Government to provide it with support. Travel industries will not thrive after the end of the pandemic if they do not receive assistance now.

I call on the Government to extend furlough to all the sectors that are still trying to operate under restrictions, but particularly to the travel sector. They also need to redesign the furlough scheme to enable companies to use it to part-pay their employees. When I spoke to travel companies at a surgery in my constituency recently, they highlighted that at the moment they have enough trade to pay their previously full-time employees to come in for two or three days a week to man the phones, take bookings and research options. They would love to have furlough to be able to pay them for the remainder of their time, just to keep going while there are still so many restrictions and so much uncertainty. Furlough was conceived as an all-or-nothing system, but it really needs to change in order to continue to support businesses that are still affected as we come out of the pandemic.

The retail and hospitality sectors were badly hit by the pandemic. Many are now struggling to reopen fully, thanks to supply chain and labour market issues. The Government need to look again at their immigration policies and think about how they can be better designed to support our key high street industries as we emerge from the pandemic. More than that, they need to complete their promised review of business rates and think again about how they are levied on town centre businesses.

There has been a lot of discussion this afternoon about what might take the place of business rates—I think that there was some freelancing from some hon. Gentlemen on the Tory Back Benches about what might replace them. They are no longer in their place, which is a shame; I was very interested to hear about their suggestions to increase VAT, although I think I am right in saying that the Conservatives committed in their 2019 manifesto to not doing so.

[Peter Grant]

I fear that I may have anticipated the hon. Lady’s next line, but how much faith can we place in a Conservative manifesto promise not to increase tax these days?

[Sarah Olney]

The hon. Gentleman has indeed anticipated exactly what I was about to say, which is that, given that in their 2019 manifesto the Conservatives committed themselves to not raising VAT, we can surely expect it to be raised at some point before the end of this Parliament. Nevertheless, if the Government are not sure how to proceed on business rates, I can give the hon. Gentleman a fully fleshed-out policy from the Liberal Democrats. We believe that a commercial landowner levy would be a much fairer way of raising local revenue, by taxing landowners rather than business owners. We urge the Government to consider that option.

Small businesses provide about three fifths of the employment in the private sector, and it is vital that those jobs are supported. The Government’s recent announcement of a rise in national insurance payments will deter small businesses from creating the new jobs that are so badly needed and limit the expansion of companies seeking to offer new products and services, including those that offer the innovation we need for the green economy. The Government should limit the impact of this rise on the small business sector by quadrupling the employment allowance from £4,000 to £16,000. That would enable a small business to employ five full-time workers on the median UK salary without paying any national insurance contributions, and would incentivise and support new businesses as we make the transition towards a net zero carbon economy.

The UK faces a troubling few months. Covid is not over yet, and a return to normal patterns of life seems likely to be substantially delayed. However, problems create opportunities, and we need to help our entrepreneurs to find solutions and bring them to the people who need them. Small businesses support communities, provide employment and deliver a good society, and the Government need to support them for everyone’s benefit.