Reducing Costs for Businesses

Stephen Flynn Excerpts

Tuesday 11th January 2022 Commons Chamber

[Stephen Flynn (Aberdeen South) (SNP)]

It is a pleasure to take part in this important debate, and, of course, to see so many Members on the Government Front Bench. That contrasts starkly with what we saw earlier today, when the Conservatives were seeking to defend their Prime Minister—or not, as it so happens.

Given that this is such an important debate, I for one am a bit surprised by its content so far. We heard from the Minister that the Government had done everything that they possibly could to assist businesses throughout the pandemic, but what the Minister did not say—and what the shadow Minister, the hon. Member for Stalybridge and Hyde (Jonathan Reynolds), did not seem to reflect on either—was that at the height of the pandemic, what the UK Government chose to do was leave the world’s biggest single market.

What we have not heard about at any point during the debate so far is the impact of Brexit on businesses in Scotland and, indeed, throughout the United Kingdom. It is the proverbial elephant in this Chamber. All of us, every single one of us, will have businesses in our constituencies that are facing challenges, and the vast bulk of those challenges emanate from Brexit. We all know that the headline will be our figures relating to the 4% hit to the UK’s economy. We all know about the trade deficits that we have seen, the impact on exports and imports, the problems caused by labour shortages. The right hon. Member for Epsom and Ewell (Chris Grayling) shakes his head, but that is the reality of the situation.

[Chris Grayling (Epsom and Ewell) (Con)]

rose—

[Stephen Flynn]

I am more than happy to give way to the right hon. Member.

[Chris Grayling]

May I ask the hon. Gentleman to point out to the House that this country’s trade deficit in the last few months has narrowed, not widened, as he has just suggested?

[Stephen Flynn]

I hoped that the right hon. Member was going to rise to defend Brexit, but unfortunately he chose not to do so, because the fact is that it cannot be defended. It cannot be fixed, as the Labour party seems to think it possibly can.

I talk to businesses in my constituency regularly, and hear about the challenges that they face. Goods that took a couple of days to ship to the continent now take a couple of weeks, if not a couple of months. The order book is not there. The impact is huge. Those businesses’ ability to grow has been constrained and, in exchange for that, the Government tell them they can perhaps have a trade deal with Australia instead, which will do a fraction of good in comparison to the damage being done by leaving the EU. And that is of course before we get on to the labour shortages I mentioned earlier, which are enormous. Businesses seeking to function and to grow simply cannot get the employees they were able to get before. We see some puzzled expressions on the faces of Conservative Members; perhaps that is because they have not been engaging with the hospitality sector. Would the hon. Member for Stourbridge (Suzanne Webb) like to clarify whether she is disagreeing with the fact that businesses have difficulties in terms of labour shortages? I will happily give way to her. No? Of course not, because the reality is that labour shortages are damaging businesses exponentially. She continues to shake her head, but that is the reality on the ground in hospitality, food processing, agriculture, right across the board, and that is before we get to the public sector challenges, including in recruiting staff to our care homes and hospitals.

So Brexit should be at the forefront of our debate and, frankly, I am a little disappointed that the Labour party seems to be trying to walk away from that. Notwithstanding that, a lot in the Labour motion is somewhat difficult to disagree with. It seeks to raise various topics, including businesses. I think all of us across the Chamber realise there are challenges in relation to business rates; it does not take a genius to figure that out. However, I have some concerns with Labour’s proposals, albeit not necessarily with the motion. What comes next? What does Labour want to replace this with? Coming from a local authority background, I know the huge role business rates play in funding local authorities. Unless you can say, “This is what we are going to replace it with” it is inevitable that the public will say “Where is the detail?” Without seeking to do the Conservative party’s job for it, that is a fair question to ask and Labour is going to have to answer it in due course. We in Scotland have done things slightly differently from the UK Government because in Scotland there is currently 100% rate relief for retail and hospitality, which does not exist in England at present. That is a phenomenal benefit to businesses—[Interruption.]—irrespective of what the chuntering Member, the hon. Member for Peterborough (Paul Bristow), is saying.

Beyond business rates, important though that is, the energy situation is of great concern to businesses throughout this United Kingdom and the Government are offering no solutions to that. The easier choice today would of course have been to back the earlier motion in relation VAT, but as I see it the Government have not offered any support for businesses with their energy costs. That is a wrong that needs to be righted as soon as possible, otherwise businesses, not just households, are going to face an unenviable position.

[Jamie Stone]

I can think of examples of families I know personally where the budgeting is so tight that just a pound or two either way gets them into a bad situation. If the fuel bill, or the diesel bill for the car, goes up, they spend less money shopping, and that in turn hits wee businesses in Aberdeen South, in the highlands or wherever. It is a vicious spiral in the wrong direction.

[Stephen Flynn]

Absolutely. My hon. Friend makes an excellent point illustrating the knock-on impact the economy will face as a result of the crisis before us. Before finishing, I want to reflect on two further points.

[Kevin Hollinrake]

rose—

[Stephen Flynn]

As always, I am happy to give way to the hon. Member.

[Kevin Hollinrake]

If I were running a business in Scotland, I would want to know what the hon. Member is going to do in the future, because annual economic growth in Scotland between 2013 and 2019—pre-pandemic —was 1.2%, versus the rest of the UK’s 2%. That is bad for business. What is he going to do in Scotland to grow the economy more rapidly, even to the rate of the rest of the United Kingdom?

[Stephen Flynn]

Join the single market.

I shall move on to the two biggest outstanding issues that I have not touched on. The pandemic is an enormous challenge that is still with us and we need to be cognisant of that as we move forward, but we cannot reflect on the challenge posed by the pandemic without reflecting on the fact that there are still businesses up and down this land that have not had support from the Government throughout the pandemic—those among the excluded. I spoke to one earlier today—Puls8 in Aberdeen, an innovative company that is trying to do remarkable things, working alongside some of the biggest players in the North sea oil and gas sector, but which has not had the support that it needed from the UK Government. That is deeply regrettable. We should not have a discussion about businesses without remembering that important fact.

That leads me on nicely to my final point, on perhaps one of the biggest sectors in Scotland that needs support from the UK Government—our renewables sector. Scotland has 25% of Europe’s offshore wind capacity. Scotland can be a world leader in renewable technologies, but as I said—and I am sure the Minister heard—Scotland still faces the highest level of grid charging in the entirety of Europe. We have a natural resource on our shores—and off our shores—that we should be exploiting, and this UK Government are erecting barriers to business in terms of capitalising on that.

To conclude, it is important to reflect on the fact that much of what I have spoken about is a reflection upon the failures of this UK Government. When we look at it from a Scottish perspective, certainly when I look at it from my perspective, I see the shortcomings of this UK Government and I see what more Scotland could do if it had the powers of an independent nation.

[Several hon. Members rose—]