PARLIAMENTARY DEBATE
Business and the Economy - 21 May 2025 (Commons/Commons Chamber)

I inform the House that I have not selected the amendment.

I call the shadow Secretary of State.

I beg to move,

That this House regrets that unemployment is rising and causing misery for young people in particular, that this Government has displayed a negligible understanding of business and that investors and entrepreneurs are being driven overseas; further regrets that over 200,000 businesses have closed since Labour took office, as a result of the Government’s policies to raise employers’ National Insurance contributions, in breach of the Labour Party manifesto commitment, to scrap Business Property Relief, to impose £4.5 billion of additional costs on businesses through the Employment Rights Bill and increases to business rates; and calls on the Government to urgently change course to support jobseekers, small and medium-sized enterprises, family businesses and entrepreneurs who take risks to create wealth and jobs that benefit people across the country.

Allow me to paint a picture. A small business owner navigates the early morning darkness to their high street shop. They twist the keys and lift the shutters. They turn on the lights, the card machine, the heater and the shop music. They open the door in time for their first customer of the day, putting to the back of their mind the question of how to meet the rising costs placed on them by this Government—the taxes they have to pay before they open that door and the unreformed business rates, with many more than doubling. How will they pay the jobs tax on their staff? How will they ever keep their business intact when they seek to pass it to their children after they have gone? Not one single person around the Cabinet table truly understands those pressures, yet this Labour Government have crossed the road to start a fight with Britain’s businesses.

When it comes to business, the Government have broken every one of their promises. Members on the Government Benches looked business owners in the eye at the election and told them that they would be on their side, but it took barely 100 days for this Labour Government to revert to type. At the autumn Budget, the Chancellor slapped a £25 billion jobs tax on business, meaning that employers will have to pay an additional £900 a year for an employee on the median wage, according to the Institute for Fiscal Studies.

Only a few weeks later, the Business Secretary tabled the now 300-page, trade union-dictated Employment Rights Bill, drowning employers in red tape. Helen Dickinson, the CEO of the British Retail Consortium, said that businesses are

“left with little choice but to increase prices”—

as we have seen today—“or to reduce investment.” The CEO of UKHospitality, Kate Nicholls, said that these measures

“will simply force businesses to cut jobs, freeze recruitment, cancel planned investment, reduce trading hours and, in the worst-case scenario, close their doors for good.”

I will give way.

My hon. Friend is so popular. I am interested by how he is starting this debate, because it chimes with what I am hearing in my constituency, where venues such as pubs, restaurants and cafes, which are such a vital part of the effort to regenerate our high streets and local community spaces, are seeing their margins slashed because of the cost of labour and the increase in business rates. Does he agree that Labour’s jobs tax and the ending of business rates relief is putting the regeneration of our town centres and community spaces at risk?

How tragic is it that from Gosport to Gloucester and everywhere between, businesses on our high streets are closing? This Government do not understand that. If they do understand, they do not care, and if they care, they have not acted. The message from this Government to anyone willing to put their capital, time and energy on the line by taking risk to create wealth as a business owner is abundantly clear.

Exactly to that point, is it not a shame that for the first time ever since records began in 2012, the number of new businesses registered at Companies House has fallen? The exact risk-taking behaviour that we need to grow the economy is not taking place; is that not a damning indictment of what this Government are doing?

My hon. Friend makes an incredibly important point. I believe that all of us come to this House to try to do our best and to grow the economy, but any Government faced with that terrible metric about the failure rate and formation rate of businesses would be acting immediately, with haste, and reversing so many of the measures. The choices this Government have made have delivered precisely the outcome my hon. Friend describes.

Pubs are the lifeblood of communities, particularly in rural constituencies such as mine in Broadland and Fakenham. People could perhaps make an argument for individual tax rises, but it is the combination of three in particular that are hitting pubs so badly. It is the increase in the minimum wage—the Government are very good at increasing prices for everyone else, but not themselves—as well as the removal of business rates relief for hospitality and leisure, and the rise in national insurance contributions for employers. The latter point is not so much about the overall percentage rise, but the reduction in the threshold from £9,200 to £5,000, which particularly impacts those who employ part-time staff and those on low wages. It is a triple whammy on pubs. Is that why so many are closing across the country?

My hon. Friend makes exactly the right point about that triple whammy, and about the cumulative effect of changes and the consequences—potentially unintended—that manifest themselves most acutely in industries such as UK hospitality and retail, which have the great virtue, among many others, of contributing to the character of the places in which we live and giving so many young people their first step on the ladder of opportunity and their first experience of work. Without those businesses, it will be inexorably harder for young people. That is one reason that it is of such great concern that the number of people employed on payrolls under this Government has already fallen by 100,000, with a faster rate of decline in the first quarter of this year. This Government are perfectly positioned to achieve the unbroken track record of every Labour Government in modern history of leaving office with unemployment higher than when they started.

Does my hon. Friend agree that another factor that will undermine job creation and employment under this Government is their approach to international wealth coming into this country? When other countries, such as the US, are granting golden visas, we are closing the door with these ideologically-driven non-dom reforms, which will not even raise any money. If the Government want to increase job opportunities, they should take the chance at the next Budget to reverse that foolhardy policy.

My right hon. Friend is exactly right. He will correct me if I am wrong, but as I understand it, one millionaire is leaving our wonderful country every 45 minutes. That is to say nothing of a generation of young people who are yet to have their opportunity. How tragic it would be to think that young people see greater opportunity—notwithstanding their birthright of being born in this wonderful country—in other parts of the world than is present on their doorstep, in their communities and in the heart of their families.

It has to be said that this Government’s combination of actions are sending a clear and regrettable message to those who seek to create wealth: “Don’t bother. Don’t even try.” This socialist Government do not want people to succeed. There could be no better example of that than the vindictive family business and family farm death tax, which will carve up successful businesses as and when they are handed down to the next generation.

Why do we think this vindictive policy exists? One of the more benign interpretations, to be charitable, is simply the dearth of business experience in the Labour Cabinet. It has to be said, though, that the Cabinet members are world-class in their understanding of, and potential avarice in relation to, trade unions. Perhaps that is why the Secretary of State, who has not deigned to be here with us today, is currently undertaking the most expensive work experience placement in history at taxpayers’ expense at British Steel in Scunthorpe.

It is not just that this Government do not understand the mechanics of business; they do not understand and value the principle of business. Running or investing in a business at its core is a profound act of human courage—the triumph of optimism over inertia, and a mindset of someone solving problems themselves rather than waiting for permission from others. It is about embracing risk knowing that there are no guarantees, no bail-outs and that no one is coming to the rescue. When enterprise succeeds, such people create the wealth that funds our public services.

Every time a Minister dispenses money and largesse in Whitehall, as this Government are doing at record velocity, they can do so only because a founder, an entrepreneur, or a businessman or businesswoman, took that leap. It should be the Government’s job to get out of their way and to help the business builders, not the blockers, but this Labour Government understand none of that. Instead of leaving business to get on and flourish, they have erected a blockade of bureaucracy and taxes that they promised would never come. They have declared war on employers across this land from the ramparts of Westminster.

My hon. Friend will know that business confidence has plummeted since Labour came to power. Does he agree that one of the reasons it has plummeted is the loss of faith in this Government? Businesses were promised that their plans were fully costed and fully funded in advance and there would be no increased business taxes, but within 90 days the Government went back on that. How can business ever trust this Government again?

My hon. Friend, who is himself a very distinguished and successful businessman, knows exactly the importance of that intangible quality of confidence that the Government have your back and you will not wake up in the morning and be hit with a £25 billion jobs tax—on which subject there was not one word, not one syllable, in the Labour party manifesto. We toured the studios jousting with Labour Members and issuing warnings, but we were met with a repeated barrage of denials in respect of their £25 billion jobs tax. [Interruption.] The Ministers are chuntering, and there is probably a fair amount of chuntering to do if they have to explain an inability to balance the public finances along with an attempt to do so by means of a set of vindictive and arithmetically incorrect taxes on business.

We can move on from tax. That is just one of the many barrages faced by businesses that are sapping confidence and producing some of the very worrying statistics that we are seeing. We could, for instance, move on to the “Unemployment Rights Bill”, which is an egregious example of red tape and state intervention and overreach. At this point Labour Members are normally uncharacteristically quiet, because they are aided and abetted to the tune of £31 million by the trade unions.

The Bill shackles the hands of employers in pubs, bars, garden centres, grocery stores, butchers, hairdressers —businesses rooted deep in our communities—with little clarity and no lead-in time. Seasonal work could be made impossible by the Bill. It is certain that compliance costs will rocket. There will be long delays for employment tribunal hearings; in some parts of the country, the wait for a hearing is already approaching 18 months. Even according to the Government’s own estimate, on top of every other measure, there will be a headwind cost for business of an unwanted £5 billion a year.

You have talked about the risk of seasonal jobs being lost as a consequence of the Employment Rights Bill. In my constituency it is a serious risk, as a number of businesses have told me. Would you say that the Minister should withdraw the Bill, or, at the very least, conduct a proper assessment of its impact?

Order. May I point out, to prevent any further errors, that the term “you” is not used in the Chamber, because it refers to me, in the Chair? Hopefully no one else will make the same mistake.

No one would believe, Madam Deputy Speaker, that you would implement such terrible measures without a proper impact assessment. More significant, however, is the fact that we have heard not just the voice of my hon. Friend the Member for Bognor Regis and Littlehampton (Alison Griffiths), representing those important seasonal industries, but the voice of employers across the country, who have pointed out that it will no longer be possible for seasonable and flexible work to deliver the economy that we need.

The problem with the Employment Rights Bill is not only its implied cost and the red tape it will introduce, but the fact that it is a poor piece of legislation in the first place. The Government’s own regulatory independent commission has said that eight of the 23 criteria are not fit for purpose. Does my hon. Friend not agree that if the Bill is to proceed, it should be reworked?

My hon. Friend is exactly right. If Labour Members were honest enough to do so, they would admit that the Bill is a rushed piece of legislation. It was introduced because of an arbitrary promise to do so within 100 days, and it was introduced at half its current length, which means that 50% of the words that it now contains—the red tape that our businesses will have to implement and wrestle with for years to come—did not even benefit from scrutiny in this place. Many of the powers in the Bill are not fleshed out or clarified. We will wreak great havoc and uncertainty on business if the Government are determined to proceed. It would be far better for them to shelve the Bill, to listen, to learn and then to come back so that we could use the proper mechanisms of this House to do our jobs for all our constituents to avoid the unintended consequences and the damage that I do not believe anyone would want.

In that spirit of listening and learning, I have been speaking to businesses in my constituency this week, and the chambers of commerce have signalled that the trade deal is a new start for British business because it is reducing red tape, giving certainty to businesses and allowing them to trade and do well, in my constituency and elsewhere. Do you think they are wrong?

Order. “Do you think they are wrong?” We have a long afternoon ahead of us—even longer for me in the Chair.

One has to celebrate small mercies, and I am delighted by the hon. Gentleman’s conversion to the cause of free trade. Free trade is what has lifted billions of people in the world out of poverty. It has made us the great country that we are today. The business in the hon. Gentleman’s constituency that has formed such a clear view has obviously benefited from considerably more detail than the House, so perhaps he will share its name. We would be very happy to hear about the details of the trade agreement that has been reached.

Perhaps, in having that conversation with his local business, the hon. Gentleman would like to engage in a discussion about its views on the Employment Rights Bill. Despite legion opportunities that I, and others, have given Ministers to name a single business that is in favour of all the measures in the Bill, answer still comes there none.

May I tell my hon. Friend why I think the hon. Member for Peterborough (Andrew Pakes) is wrong? Since the very inception of our negotiations to join what was then the common market—now the European Union—it has attached huge importance to fishing. We have just handed over the enormous leverage of an annual negotiation, and for what? Absolutely nothing.

Andrew Griffith, match that passion!

I hesitate to stray into the matter of fishing, which I suspect we will debate many times in the future, but I note that those on the other Government Benches next to us tabled an amendment, which has not been selected for debate but which seeks to shackle our small businesses further by having us reverse across a much broader range of topics than the pass that the Government already sold earlier this week, so that we become a taker of rules from Brussels, and our small businesses, entrepreneurs and founders are crushed by the red tape that would originate there.

Fishing is one sector, but there is a clause in the Employment Rights Bill that affects all businesses. At this point I should draw attention to my entry in the Register of Members’ Financial Interests, as a former entrepreneur who has employed well over 1,000 people in my time. The problem is that if day one employment rights are imposed for any hire, it will be a massive disincentive for businesses to take a chance and take on people who are more vulnerable: the young and the less well qualified. Why would a business take that chance if it risked being hauled up over day one employment rights?

Once again, my hon. Friend has demonstrated his deep and real knowledge of business, having himself, in a past life, employed more than 1,000 people. One rather suspects that taking that risk, having that responsibility and shouldering that burden, moral and financial, is greater than the entire aggregate responsibility of Labour Members for hiring anyone. My hon. Friend has made the right point about who will end up on the receiving end of the higher unemployment. It will be the young, looking for their first opportunities, and it will be excluded and vulnerable groups on whom a benign employer would today take a chance—but not if that chance is likely to lead immediately to being at the back of an 18-month-long queue for an employment tribunal hearing.

The point made by the hon. Member for Broadland and Fakenham (Jerome Mayhew) was about day one rights, but that right is to stop unfair dismissal from day one. Is it now the policy of the Conservative party to allow for unfair dismissal between the first and second days? If the shadow Minister is unhappy with that being a right from day one, presumably he is unhappy for people to have that right at all.

I am afraid that to make those points is to misconstrue wilfully what is actually in the Bill. We have a very settled and balanced position of employment rights that dates back to before previous Labour Governments as well as the Government in office before the election. It strikes what will always be a difficult balance between offering employees the chance to enter the workforce and the ability of businesses, and of the public sector and others, to hire and to operate in a way that is profitable. It does nobody any favours to think that we can, merely by passing words of statute, change the outcomes in a way that advantages the most vulnerable, who are the youngest employees. The failure to learn from that point will once again lead to exactly the same outcome, which is why every Labour Government have left office with unemployment higher than where it started. In his response, the Minister may wish to confirm that this time will be different and perhaps lay out exactly why it will be different, but he has a job of work to convince us and, more importantly, every employer in the land that that is the case.

The shadow Minister takes a casual swipe at the business acumen of Ministers, and I wonder whether I can encourage him to develop that point. When I speak to businesses in Angus and Perthshire Glens about the changes that have been instituted since July last year, they are incredulous that anybody with even a passing knowledge of business, enterprise or entrepreneurialism of any nature would put such roadblocks in the way of business and wealth creation. Would he like to expand on that?

I thank the hon. Gentleman for making that very perceptive observation. I hate to say this, but I was not making a casual point; it was a considered point. When we think about how this House continues to legislate and tax in a way that reduces economic growth, that does not celebrate a culture of entrepreneurialism and founders, and that is leading to higher employment, with 100,000 fewer people on payroll than there were a year ago, we should all look deep into our souls. What is the endemic failure in Parliament, and of this Government in particular, that is leading so quickly to precisely those outcomes?

It is sad to say that sometimes there is a lack of voice for business. Although one does not want every single sector to be represented in this place, the compensatory mechanism for that involves consultation and diligent impact assessments. In introducing legislation, this Government have been serially criticised for the way that they have casually discarded such measures, and the Treasury maths simply do not add up.

I think it goes wider than that across the top of Government, because Members on both sides of this House are grappling with what to do about people who are long-term unemployed. If we make it more likely that companies will not take a risk on getting someone back into work while increasing unemployment at the same time, we will create a toxic concoction at a time that we are trying to get people back into jobs because we know that that is better for the economy and better for them, their health and their family. Does my hon. Friend agree?

I do indeed agree. We ought to confront how we have got here—I acknowledge that it has happened over a period of time—with so many young people unable to work, get an education or be in productive training. That is a headwind on the economy, and a moral failure of us all. The question that we should confront ourselves with is this: what are we doing each and every day in this place to give opportunities to 1 million young people and the 9 million others of working age who remain stubbornly on welfare, while improving our public finances and making the maximum use of the wonderful resources, education and skills of the British people, so that we can grow our economy and be the prosperous nation that we once again deserve to be?

My hon. Friend talks about the message of this Government, and just last week I spoke to a first-generation immigrant, who talked about the message for entrepreneurs in this country. She said, “If you can’t hand on more to the next generation through your own hard work, what’s the point?” She is right, isn’t she?

She is right, and that is one of the chilling headwinds that anyone who wants to grow the economy, and anyone who serves in the wonderful Department for Business and Trade or our Treasury, should confront. We should be going back to officials and challenging exactly that. How can we achieve a culture vibe shift on growth and entrepreneurship? That is the best contribution that we could all make.

May I just take my hon. Friend back to what he was saying a moment ago about opportunities for young people? I recently met hair and beauty salons in my constituency. As he knows, they have historically been the most amazing employers of apprentices and have given such wonderful chances to young people. I was worried to hear that the rate at which they are taking on apprentices is dropping off. By 2027, there will be no apprentices left in the sector. It is not just hair and beauty saying that; other sectors in my constituency, such as adult social care and early years education, are saying the same. Is he as worried as I am about the lack of opportunities for our younger generation?

Yes, I am enormously worried. We have to understand and make the connection that it is only the private sector that truly creates sustainable jobs. We need people to work in our wonderful public services, but ultimately growth and opportunities come from the expansion of the private sector, which is most encapsulated by female-led businesses, such as those in the hair and beauty sector. They often survive on small margins, deal with lots of different pieces of regulation, and try to keep our high streets and communities alive—as well as performing, I suspect, rather a better service for my hon. Friend than for me and some other colleagues. It is a valuable and vital industry.

We ought to ram this point home so that the Minister understands. Before he stands up, he has plenty of time to think this through and provide us with a sensible answer, rather than something that is off the cuff, so here is a note of warning. This morning, I attended an event run by one of the national clearing banks, which is putting a huge amount of effort into trying to create, and helping its customers to create, opportunities for young people. The bank has come up with a raft of good ideas, but every single one of them—this point was made very clearly—will hit the roadblock of the Government’s employment legislation. Where is the sense in that? If my hon. Friend does not have the answer, the Minister no doubt will have.

Let us hope that the Minister does indeed have an answer. I am somebody who always travels optimistically, and though we have sparred on the important subject of the 300-page, 120,000-word Employment Rights Bill, it is never too late. That Bill is undergoing scrutiny in the other House as we speak, and the Opposition would welcome and support the Government’s shelving it until we have dealt with the cacophony of headwinds that my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) talked about earlier, including the changes to the tax system and other changes; the damage that has already been inflicted on the economy; the headwinds on costs that we saw this morning, with inflation 75% higher than the Bank of England’s target rate, which will mean that interest rates are higher for longer; and the failure to reform business rates. There is an opportunity to revisit bringing forward specific proposals on employment to enduringly reduce business rates, if the Government feel a burning desire to do so.

My right hon. Friend the Member for Herne Bay and Sandwich (Sir Roger Gale) is quite right: would it not be good if the Minister could use the ample time that we have this afternoon to consult, and to bring forward some sensible answers that will give us all confidence that we are going to see a Government who are properly on the side of business?

Does the shadow Secretary of State agree that the cumulative effect of all the Government’s measures over the past 12 months—a £25 billion jobs tax, the £5 billion burden of the Employment Rights Bill, the removal of business property relief, which is reducing the incentive to be an entrepreneur—will be to drive unemployment higher?

Of course, I agree with my hon. Friend, but it does not actually matter what I or others think, because the reality is that the data does not lie. As of now, we have 100,000 fewer people on payroll than we did 12 months ago, so the data is already telling us about the cumulative chilling effect of those measures.

That is perhaps unintended. We learn today that the Chancellor and the Deputy Prime Minister are at odds, and perhaps the Business Secretary is the third leg on that stool, with each of them bringing forward measures that are enormously damaging to business. They are perhaps not adding up the sums and seeing eye to eye to understand the lived experience of what it is like to be a business on the receiving end of all of those changes, cumulatively and all at the same time.

Many businesses will, from the start of April this year, not only face a payroll increase of around 10%—in an economy without such a level of topline growth, so that hits margins directly—but, because of the failure of the Government to maintain business rates relief at anything like the same level for our retail, hospitality and leisure, have seen their business rates double. Imagine that all hitting a business on 1 April this year.

I was a little startled to be described as sitting on the “other Government Bench”, but perhaps that is the shape of things to come—who knows? I do not have my crystal ball with me.

There has been a predictably negative barrage from the Opposition, which does not surprise me because that is how we work in this place, but thinking of businesses, there are businesses that from this year will get better in my constituency and, indeed, in that of the hon. Member for Angus and Perthshire Glens (Dave Doogan). I am talking about the seed potato industry. We have been crying out to get the best Scottish seed potatoes into European markets, and I therefore do thank the Government. It means a lot to farmers, and I have had very positive comments about it. I am being absolutely fair-minded about that.

I am enormously glad, and we should be balanced, that we have found something that goes the other way. I am not sure if one can subsist entirely on a seed potato—it may have been tried historically, and not with enormous success—but I congratulate the hon. Member on the success of his seed potato industry.

To be charitable, we have found a rare example of the Government actually having the back of a business and supporting it, but would it not be wonderful if they could extend that to much larger sectors of the economy, such as financial and professional services, retail and hospitality industries and even our manufacturing industries, as they wrestle under the cosh of uncompetitive energy costs, so that a business in Birmingham, west midlands, will face an industrial energy cost four times higher than that of a competitor in Birmingham, Alabama?

Will my hon. Friend give way?

My hon. Friend has made so many good points that I will of course give way again.

My hon. Friend is being enormously generous in giving way, and I am genuinely grateful. Labour parroted during Prime Minister’s questions that there has been growth of 0.7% in the first quarter of this year. Does my hon. Friend agree that, if we look into the figures, we see that a chunk of that is production rising by 1.1%? That is actually due to electricity, gas and water prices being raised, and the Government count that as economic growth.

Most of us would put higher energy costs into the liability rather than the asset column of our economy. We are debating business, unemployment and the economy, and I hope the Minister will devote an ample proportion of his response to the measures this Government will take to remove the yoke of uncompetitively high energy costs, which is simply crushing so many British manufacturing businesses.

When it comes to business and the economy, we want to ensure that every region in the United Kingdom of Great Britain and Northern Ireland can benefit. Northern Ireland is the UK’s smallest region by GDP, but it has higher GDP per head of the population than some regions. It is really important that Northern Ireland has the same advantages and opportunities, and to be fair, I think the Minister is committed to that. Would the hon. Gentleman agree that, when it comes to improving business and the economy, my young people in Strangford deserve the same opportunity as those in his constituency or, indeed, in Scotland, Wales or wherever it may be?

The hon. Member is exactly right. When I describe my constituency as “South Downs”, people occasionally assume that it is in Northern Ireland, but all of our young people deserve the best opportunities. We know that the best outcomes for young people are when they can enter the workforce, and that if, when they graduate from school, college or an apprenticeship, those young people cannot immediately find productive work, the scarring impact of that can run through the entirety of their adult life and they never catch up with their peers’ earnings. That is why it is so important that we have a healthy labour market, and a healthy labour market relies on the ability of employers to feel that they can take a chance, give people opportunities and benefit from that.

I want to make some progress, which I suspect may be popular. There are many Members on the Opposition side; sadly, there are disappointingly few on the Government side. Given the paucity of business experience on that side, it is probably appropriate for there to be more listening than talking on the Government Benches.

Let us imagine—and, Madam Deputy Speaker, you will know this from your wonderful constituency—that despite all the headwinds this Government have imposed on business, an entrepreneur does well, grows their business into a successful operation and wants to hand it down to the next generation after they are gone. Those people, who have taken risks to create something good for society, are now at a competitive disadvantage as a result of the family business death tax. They will be forced to carve up, slice up, or close up shop forever to meet the demands for business property relief and inheritance tax.

Analysis from CBI Economics for Family Business UK estimates that this measure alone will result in 208,000 job losses and a £2 billion net loss to the Treasury. Again, I hope the Minister will address that directly when he responds. Family Business UK’s chief executive, Neil Davy, says that “far from stimulating economic growth” this policy “will achieve exactly the opposite.” He is right. To illustrate just how ridiculously flawed this policy is, it applies to families here in the United Kingdom, but it does not apply to overseas businesses that operate here, or to those owned by private equity or foreign corporate owners.

Labour has stolen any incentive for success from a generation of home-grown entrepreneurs. We really cannot go on like this. The gulf between those who create wealth and those who govern us has never been larger. Only one Cabinet Minister, the Secretary of State for Scotland, has any real experience of running a business. Trying to find business experience among those on the Labour Benches is like trying to find a tax the Deputy Prime Minister does not think needs to be raised. It is no surprise that, according to the Institute of Directors, over two thirds of businesses are now pessimistic about the future of the economy.

I would argue that it is actually worse than that. A study by the Chartered Institute of Personnel and Development has said that business confidence is at the same level it was in the pandemic. In the pandemic, businesses shut up shop and were not sure they would ever open again, and that is the level of business confidence we are dealing with at the moment. A quarter of businesses say they will lay people off, and that is the reality out there. Does my hon. Friend agree that that is why the Government need to listen, and change course?

Our business community is ravaged; my hon. Friend is exactly right. We are plummeting to depths last reached only when the entire global economy was shut down due to an unknown pathogenic virus. If that is the bar the Government set themselves, I urge them to have a little bit more ambition and confidence in their ability to grow our economy.

No nation can spend its way to growth, or tax its way to success. I fear that we are about to see a case study showing exactly that this does not work. It has been tried before, and it did not work then. We cannot afford the ignorant short-sightedness of this Government. To achieve growth, we need a country in which everybody’s spark of ambition can find ignition. Not everyone needs to run a business, but for those who do, we want a country that values, cherishes and honours its wealth creators; where transforming a side hustle into a main hustle is straightforward; and where His Majesty’s Revenue and Customs is transformed from a predator to a partner, and the tax system goes out of its way to reflect the risk of investing, and of running a business. We want our regulators to think carefully before they intervene, and not to pounce on every perceived failure as another reason to try to eliminate risk.

May I give the House the news that ex-special forces soldiers, including the Minister for Veterans and People, have reached the top of Everest today? Congratulations to them. We also have a mountain to climb to create growth in this country. My hon. Friend mentioned HMRC; does it not reflect the Government? The Government’s attitude to business is that it is a dripping roast to be devoured and taxed to a standstill.

So many businesses feel like that, even when HMRC is doing its legitimate job of trying to balance the books and raise money for the public purse. That is because of how it goes about that job, its one-sided nature, and the uncertainty that it inflicts on small businesses, whose biggest asset is their time, and whose greatest opportunity cost is the need to comply with myriad regulations and taxes.

We want a Government with a philosophy of trust in business, and a Government who celebrate personal responsibility and clear the path for innovation. That requires the courage to champion risk-takers and elevate enterprise above sectional interests. As right hon. and hon. Members have said, it is sad that investors and employers clearly do not have faith in this Government to deliver the contract between the state and those who seek to run a business. Instead of this Government opening up investment for wonderful British businesses around the world, top investors are fleeing the country and taking their wealth, creativity and entrepreneurship elsewhere. What could be sadder?

The industries and business groups that are leaving the country quicker than any others are in the oil and gas sector. Investors in oil and gas—in the North sea, Aberdeenshire, and my Gordon and Buchan constituency—are fleeing the country at an astounding rate, taking investment, skills and jobs with them. We are losing a generation of investors, skills and skilled workers. What does the shadow Minister think we should do to keep those skills, that investment and those jobs in the UK?

One is tempted to say that we should try to remove this wretched Government as quickly as possible. That, of course, is part of the answer. We need a Government who listen to the points my hon. Friend makes so eloquently on behalf of her constituents and the industry; a Government who understand the reality of the energy situation and the high cost of energy for business, rather than pursuing a failed dogma and ideology that is not being pursued by the rest of the world; and a Government who listen to enterprise and businesses, many of which I have met. We could take that approach from a perspective of trying to grow the economy, in order to reduce energy costs to a competitive level, or because one believes in the climate transition but understands that special skills in dealing with the harsh offshore environment need to be nurtured, rather than squandered in a way that results in people with those skills fleeing elsewhere.

The shadow Minister is making a forensic case against the Government. May I ask him to focus on an issue that he will be familiar with from his prior ministerial experience? We had the banks before the Treasury Committee yesterday. The imminent outcome of the advice guidance boundary review will require the Government to work closely with the regulator to ensure absolute clarity, so that investors across the country can invest in the future of this country through equities, rather than just leaving their investments in cash. That will require action and direction from the Government. It is an issue on which there is probably consensus, but the Government need to step up to the mark.

I thank my right hon. Friend and predecessor in the role of City Minister. This is an important point: where we can, we will support the Government in continuing the work, which he and I started, of trying improve the investment outcomes for our economy. We want to increase equity investment to mobilise pension funds and, most importantly, deliver good returns for our investors: the constituents who send us here, and who want the best possible outcome for their pension. It is really important that the Treasury leans into that, and that we have abundant capital markets that are well regulated but not over-regulated. We must create the right culture when it comes to the advice guidance boundary, our tolerance of risk, and our financial literacy and education in our schools. That is a really big point. I hope we continue to work collaboratively and supportively with the Government, along with the excellent Select Committee of which my right hon. Friend is a Member.

None of that helps if wealth creators and global investors have left these shores due to vindictive measures that simply will not raise anything like the money needed. It is perfectly okay to admit when one makes a mistake, and in this case Treasury Ministers have made a mistake. The amount raised will be nothing like the amount expected. The Centre for Economics and Business Research has done important research on that, and found that the cost will be significant. Far from raising money for the Treasury, the country will, I am afraid, lose money.

It is a truism—one that we Conservative Members have to continually teach Labour Members, I regret to say—that we do not make the poor richer by making the rich poorer. Like all socialists, Labour Members are attracted to superficial measures that will ultimately make all of us poorer. Those of us who are left behind will have to pay more, or endure less well-funded public services, as a result of this Government shepherding the golden geese into a pen and then exiling them.

The Deputy Prime Minister was right in her memo, which we saw today: this Government are indeed coming for your job, your business, your pension and your savings. It is all very clear in black and white. Whether Members are Team Rayner or Team Reeves, when it comes to decisions on the economy, it is all bad for business. When the Minister responds, perhaps he will share with us whether he believes that the tax measures advocated by the Deputy Prime Minister, which will have a chilling effect on business, are the right way to proceed.

Whether they are stabbed by employment red tape or shot by higher taxes, the outcome for businesses is the same. The Government duck the difficult questions while the Chancellor fiddles the fiscal rules, making it up as she goes along. Families know that the cost of living is getting higher under Labour. [Interruption.] The Parliamentary Secretary to the Treasury is so animated that I feel I should keep going, rather than disappoint him. He should listen, rather than chunter.

The Conservative party has a clear vision. It understands business from first principles—[Interruption.] Conservative Members could usefully listen and learn. This could be an exercise in understanding what a proper strategy that is on the side of business looks like. We back the millions of entrepreneurs and businesses who create wealth and jobs across this country. We are unafraid to talk about the need for business, and celebrate private capital, international investors and risk taking.

It was the Conservatives who delivered the single biggest tax cut for business in modern history through the move to full expensing, and the Conservatives who slashed business rates when we introduced retail, hospitality and leisure relief, and during that terrible covid pandemic, it was the Conservatives who provided billions in finance to keep business and the economy going. That is what leadership looks like. That is what a party that is truly on the side of business looks like. I urge Government Members to do a little less talking and a little more listening. They should think of every business owner and employee whom they told, during the election campaign, that the Government would have their back, and ask themselves whether their actions, rather than their words, have proved that to be anything like the case. With employment falling, wealth creators leaving this country at a rate never before seen, businesses closing, investment crashing and inflation rising today, the Conservatives certainly do not believe so. I commend this motion to the House.

A substantial opening speech there. I call the Minister.

Although that felt like a very long 50 minutes, it is always nice to see the hon. Member for Arundel and South Downs (Andrew Griffith) taking centre stage for the Conservative party. As one of the authors of the Liz Truss Budget, he is a constant reminder of the fiscal mess the Conservatives very kindly left this Government to confront.

Once again, the Opposition are trying to make us all believe that we are living in an alternate reality where the economy is shrinking, not growing, and investment is low, not high. There is only one problem with that analysis: none of it is true. Figures published last week showed that the economy grew by 0.7% in the first quarter of this year—the fastest growth of any G7 economy. The Office for Budget Responsibility’s forecast for growth has been revised up for future years, and the latest forecast from the International Monetary Fund predicts that the UK will see the third highest growth in the G7 over the course of this year. This Government have a plan for change, and it is working.

I just wanted to clarify whether inflation at 3.5% is higher or lower than inflation at 2%, which is where it was last July.

I say gently to the hon. Lady that the current rate of inflation is an awful lot lower than the 11% it rose to under her party.

I was a bit surprised that there was nothing in the shadow Secretary of State’s lengthy speech on trade until my hon. Friend the Member for Peterborough (Andrew Pakes) provoked him. We have secured three massive trade deals: with India, the United States and, this week, the European Union. That will slash the cost of doing business abroad, reduce border checks, cut tariffs and axe red tape. Those trade deals will support jobs for British people, and create opportunities for Great British businesses in our biggest current markets, and in one of the world’s biggest future markets.

The Conservatives tried to do a deal with India, but could not; it has taken us just 10 months. They wanted a trade deal with the US—indeed, they had four years to do a trade deal with President Trump—but they could not; we have managed to do one in just four months. The deal they did with the EU was the worst trade deal in history; every opportunity they had to minimise red tape and border checks, they rejected. What was the result? Businesses stopped exporting to Europe in their thousands. Our deal with Europe sticks to our red lines, will save businesses thousands of pounds, will cut the cost of food in our supermarkets, and will help to get great British food products—from sausages to shellfish to seed potatoes—back into European markets.

Once upon a time, the Conservatives were in favour of free trade and trade deals. Now, they are against just about everything. Far be it from me to give advice to the Opposition, but the party in opposition is still allowed to support measures that are obviously in the national interest.

The key thing is, the Conservatives are in favour of free trade, just not at any cost. That has been the biggest problem with these deals. The Minister says that the previous Government did not sign off on them, and for jolly good reason—that is the point we are trying to get across. There will be people queuing up to come to the UK because they see us as a soft touch now and think they can get anything out of us. That is what we want to stop.

Well, I am grateful to the hon. Gentleman for confirming once again that he is against the India trade deal, against the deal with the US and against the deal with the European Union.

I turn now to business investment. The Opposition’s motion claims that

“investors and entrepreneurs are being driven overseas”.

I hate to break it to Opposition Members, but the facts tell a rather different story: business investment actually rose by 5.9% in the first quarter of this year, the fastest quarterly growth in two years. In other words, business investment is higher than when the Conservative party left office.

Is the Minister a little worried that the unexpected growth in the first quarter of this year was businesses making capital investment to get in ahead of tariffs?

One way that the hon. Gentleman could help businesses in Scotland would be to call for the Scottish Government to do what we are doing in this country and extend business rates relief to hospitality and leisure.

Investors from across the globe are choosing to put their money in the UK. Our international investment summit last year saw £63 billion committed to the UK—double the amount secured by the previous Government, when the Leader of the Opposition was the Secretary of State for Business and Trade—which is set to generate 38,000 new jobs. Crucially, the leaders of companies that committed to invest in our country at our international investment summit have hailed our pro-business approach as a driving factor behind their decision.

I am sure Members across the House agree on the need and desire to promote growth and business investment. However, small and mid-sized businesses in my constituency—especially those in the hospitality sector—have been particularly squeezed, not just through the change of rate of national insurance, but with the threshold lowering, as they employ a lot of younger people on sometimes part-time wages. Will he make representations to the Treasury for those hospitality businesses to be included in future fiscal considerations?

I can assure the right hon. Gentleman that we are always talking to businesses in the hospitality sector and across the economy. I say gently to him, though, that we had to take those difficult decisions in the Budget because of the mess that we inherited from his party. Businesses in the hospitality sector and beyond need to ensure that our schools, hospitals and police are properly funded.

I am happy to give way to the right hon. Gentleman one more time.

Could the Minister set out to the House how much his Government actually raised through additional taxes in the Budget, and how much the Government set out in terms of additional spending?

Those assessments were published in the Red Book at the time of the Budget. The right hon. Gentleman can do his own research and look those figures up.

Turning back to the international investment coming into our country and the support from business leaders for our measures, Iberdrola’s executive chairman said at the time of our international investment summit that

“the clear policy direction, stable regulatory frameworks and overall attractiveness of the UK”

have led the company to double its investments over the next few years, reaching up to £24 billion. We have seen more ringing endorsements of this Government’s approach since the summit. In April, the CEO of BlackRock, Larry Fink, praised our pro-growth agenda and said that investment in Britain is “undervalued”. He said that he has more confidence in the UK economy than he did a year ago. Meanwhile, the chief executive of JP Morgan, Jamie Dimon, has told the Financial Times that he backs this Government’s economic reforms, noting that there is much to like about the new Government’s pro-growth agenda. Our forthcoming industrial and trade strategies are further steps to support businesses and accelerate growth in the sectors of our economy with the most potential.

There has not been a strategy to help small businesses for more than a decade. The Conservatives cut support to small businesses to get into new markets. They cut support to help businesses to adopt new technologies and they failed to tackle the scandal of late payments from big businesses.

The Minister talks about growth and his pro-growth policy. In quarter 1, he had the unexpected growth of 0.7%. The UK Treasury’s April 2025 survey of independent forecasts assesses that the entire growth for the year is 0.8%. Does that mean that he is looking forward to 0.1% growth for the whole of the rest of the year? His policy is not working, is it?

With due respect, the hon. Member is wrong. The OECD says that we will have the second fastest growing economy in the G7.

Let me come back to small businesses. Since taking office, we have sought to hardwire the views of small businesses into everything that we do. Together with the Federation of Small Businesses, we have announced robust measures to tackle late payments. Large companies will soon have to include their payment performance in their annual reports—a massive incentive to pay their suppliers more quickly. We have also launched our new fair payment code, overseen by the Small Business Commissioner. We intend to go even further, developing a strong package on late payments, including stricter maximum payment terms and strengthened powers for the Small Business Commissioner.

Will the Minister give way?

Oh, go on then.

The Minister said that I was wrong. And, yes, it was the Treasury’s own survey, so perhaps it was wrong, but is the Bank of England wrong as well? It has a forecast of 0.75% growth for this year, and even the OBR has a forecast of just 1% growth. His growth policies are simply not working, are they?

With due respect to the hon. Gentleman, he needs to track these things over a period of time. The Bank of England has revised the growth numbers up for this year, as a result of the measures that we have been taking.

As I said earlier, we have had to take some difficult decisions in the Budget to fill the £22 billion black hole left to us by the previous Government to tackle record NHS waiting lists, to invest in schools and to invest in our police. But we have been making headway to deliver on our manifesto pledge to reform business rates. One reason the Conservatives lost the confidence of the business community is that, time after time, they promised to reform business rates and never actually did. We are delivering lower tax rates for retail, hospitality and leisure properties from 2026-27. We are also scrapping the Conservative party’s policy of immunity for low-value shoplifting, and providing additional funding to crack down on the organised gangs who target retailers. We know that this has plagued businesses for years, with both staff and store owners feeling powerless. That changes now.

At the same time, we are reforming the British Business Bank to free up precious capital for businesses to expand. This includes our start-up loans and the growth guarantee scheme, so that, if people want to set up a new shop or business, the support is there to help them. It is why my Department launched a call for evidence on access to finance for SMEs last month, as part of our work on our upcoming small business strategy. All of this work is having a positive, tangible impact: the newest ONS statistics revealed that the number of businesses set up in this first quarter is up 2.8%, compared with quarter 1 last year.

The Minister mentioned talking to businesses, but I would urge him to do a little bit more listening to them. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) asked how much in additional taxes and spending commitments was raised in the Budget, but I did not hear an answer. Can he please give the House an answer? If he does not know, will he agree to write to my right hon. Friend and leave a copy in the Library, so that we can all know the answer?

As I understand it, the hon. Lady actually supports the investment that those tax changes are delivering—she supports every penny of that investment coming into our economy. I wish the Conservative party—perhaps the hon. Lady has some influence with the shadow Chancellor—would set out its plans to raise a similar amount of money, if it does not like our spending plans.

I was reflecting on the newest ONS statistics, which show a 2.8% increase in the number of new businesses during this first quarter. Despite what Conservative Members have claimed, business closures are actually down 4.4%. The latest business confidence index of the Institute of Directors showed a significant rise in economic confidence, with their members stepping up recruitment and investment plans for a second month in a row.

Employment statistics are really important. In the Minister’s constituency, unemployment has risen by a staggering 31% in the past year. In my constituency, it has gone up by about 10%. That will have a real impact. Perhaps he will come on to how he will support people into work, because it looks like unemployment has gone up by 10% across the country. That is a real concern for people, as they need to work and look after their families.

The ONS numbers on employment show an extra 200,000 jobs in the economy since the general election, so I gently encourage the hon. Gentleman to look at a slightly wider range of statistics.

The shadow Secretary of State once again turned to the making work pay and Employment Rights Bill agenda of the Labour party. Let me remind the House that the reforms are about increasing job security for working people. They are about raising both the national minimum wage and the national living wage so that more than 3 million eligible workers receive a pay rise of up to £1,400; ending exploitative zero-hour contracts; and bringing an end to unscrupulous fire and rehire policies.

I hear what the Minister says about job security, but if businesses will not be providing jobs because of day one rights, as my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) has so eloquently laid out, there will not be more people in work—[Interruption.] As my hon. Friend says, that is what the figures already show.

With due respect to the hon. Lady, it is not one or the other: a pro-worker economy is a pro-business economy. That sentiment has been echoed by experts such as Simon Deakin, a professor of law at the University of Cambridge. He says that, on average, strengthening employment laws in this country has had pro-employment effects. He said that the consensus on the economic impacts of labour laws is that, far from being harmful to growth, they contribute positively to productivity. Right now, it is worth noting that optimism among business leaders is rising, with improved expectations for investment, hiring and costs. Employment has risen by nearly 200,000, as I have said, since we took office. Payroll employment remains near record highs at around 30.3 million, and wage growth has been consistently outpacing inflation. These indicators suggest a labour market that remains robust and responsive, not one being held back, as the Opposition contend.

Let there be no doubt: this Government are delivering on our plan for change with investment and reform to deliver growth, put more money in people’s pockets, rebuild Britain and realise a decade of national renewal. We are the party of entrepreneurs and wealth creation. We are the party of workers, the party for economic growth and the party of social justice. The Conservative party has no ideas, no imagination, just a dismal record that it does not have the courage to face up to. We are delivering for British workers and for British businesses, so I urge the House to reject the motion before us.

I call the Liberal Democrat spokesperson.

I share the bemusement of my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) that we on these Benches are being called the “other Government”. I puzzled over that for a little while, but perhaps, based on recent opinion polls, the shadow Minister was reflecting how the Liberal Democrats are now more likely to form the next Government than the Conservatives. The stones being thrown from the very fragile glasshouse of the Conservative party are astonishing, given its appalling mismanagement of the economy and the dismal inheritance that it left behind. Its record is a dispiriting picture of low growth, high interest rates and a record fall in living standards.

For years the Conservative party took people for granted. Our constituents saw this reflected in their mortgage payments, the hike in their energy bills, and the prices they paid for their weekly shop. Under the last Administration, public services were left crumbling, and the Tories’ pitiful Brexit negotiations saw reams of red tape introduced, causing untold damage to businesses across the country.

We know that the Labour Government have inherited a mess, and we know that the cause of that mess is a legacy of reckless economic mismanagement left behind by the previous Government. But that cannot be allowed to serve as cover for measures that damage business or cause suffering for the vulnerable in our society.

Labour’s autumn Budget has not worked. The national insurance jobs tax will damage small businesses and lower people’s living standards, and it undermines the Government’s own ambitions for growth. People endured years of Conservative mismanagement, which is why this new Government should be doing far more to grow our economy, create new jobs and improve living standards.

We know that the Government had tough decisions to make, but instead of hiking national insurance, cutting disability benefits and squeezing departmental budgets even more, they should be showing far more ambition in growing our economy, which is the best way to raise tax revenue and boost living standards. That is exactly why we have been urging Ministers to ignore the naysayers in the Conservative and Reform parties and to urgently negotiate a new, bespoke UK-EU customs union.

When it comes to taxation, the Government should look to raise revenue in much fairer ways, such as asking social media giants and online gambling firms to pay their fair share. That is the right way to repair our public finances and boost public services—not short-sighted cuts that make things worse for people.

My hon. Friend is right: there is no doubt that the Government have a really difficult job to clear up the mess left by the Conservative Government, but there have been far too many erroneous decisions and policy disasters already. For example, Matthew from North Brewham has run his small business for the last 28 years and is facing difficulties—

Order. An intervention cannot have examples; it is short and to the point. What is the question?

Excuse me, Madam Deputy Speaker. Does my hon. Friend agree that we need a fundamental overhaul of the harmful business rates system so that small businesses in rural areas can survive and succeed?

My hon. Friend is exactly right; there are so many things currently holding our small businesses back. The Conservatives failed to reform business rates. We are now looking to the Labour Government to bring forward measures that make it easier for people to set up businesses in their local communities.

Let me be clear: stripping support from many of the poorest pensioners while energy bills are still sky high was the wrong thing to do. I and my Liberal Democrat colleagues have listened to our constituents and have heard from countless pensioners who have been affected by the cut. We have heard warning calls from sector representatives including Age UK and Disability Rights UK, and indeed from many pensioners themselves, regarding the huge damage that the cuts have done. Some pensioners have been put in the position of having to choose between heating and eating.

Back in December last year, the Government admitted that their changes to the winter fuel payments will result in an additional 100,000 pensioners being pushed into poverty.

The hon. Lady is talking about the effect of the Government’s winter fuel payment cuts. Does she agree that the cuts were not just cruel and unpleasant for the elderly people who have suffered, but economically illiterate because of the increased cost to the NHS from individuals becoming sick as a result of being cold?

I am grateful to the hon. Lady for her intervention. I have engaged the Minister directly on this point and shown him examples of how the cuts have directly impacted on pensioners in my constituency very harshly.

The Liberal Democrats voted against the removal of the winter fuel payment to prevent millions of the most vulnerable in our society from losing out on vital support. Following the Prime Minister’s comments earlier today, we continue to call on the Government to reverse the cut in full, to guarantee that it will not be in place by next winter and to ensure that all pensioners who need support will receive it. I ask the Minister for full details of the proposed changes as soon as he is able to give them.

It is not just in their cuts that we hope to see a change of direction from the Government. After the last Government did so much damage to our high street businesses, the Labour Government’s national insurance jobs tax has made things even harder for businesses and their workers. The changes to employer national insurance contributions announced in the autumn Budget are an unfair jobs tax that will hit small businesses, social care providers and GPs. SMEs are the beating heart of our economy. They are at the centre of our local communities and create the jobs that we all rely on. Raising the employment allowance will shield only the very smallest employers, while thousands of local businesses will still feel the damaging impact of the changes. The Liberal Democrats voted against the changes to employer NICs at every opportunity, and I once again urge the Government to scrap these measures.

Even more damaging for our small businesses is our broken trading relationship with Europe. The Conservatives’ botched Brexit deal has been a complete disaster for our country, especially for small businesses, which are held back by reams of red tape and new barriers to trade, costing our economy billions in lost exports. The dismal picture of the financial impact of their terrible Brexit trade deal is becoming increasingly clear. While the Conservative party’s motion notes that

“over 200,000 businesses have closed since Labour took office”,

it was under its Administration, in the years 2020 to 2024, that the rate of small business closures in this country started to outpace the rate of new businesses starting up. Since 2019, there has been an average business closure rate of over 12%, outstripping the rate of businesses opening.

A recent survey of 10,000 UK businesses found that 33% of currently trading enterprises experienced

“extra costs directly related to changes in export regulations due to the end of the EU transition period”.

Small businesses have been particularly badly affected, with 20,000 small firms stopping all exports to the EU. Another recent study found that goods exports have fallen by 6.4% since the trade deal came into force in 2021.

I welcome the actions taken by the Government at Monday’s UK-EU summit—particularly the impact they will have on our seed potato trade—but I urge the Government to recognise that the deal should only be a first step toward negotiating a new UK-EU customs union, which would ease the pressure felt by so many businesses and boost the economy as a whole.

More broadly, we continue to call on the Government to introduce vital reform to the business rates system. Business rates are harmful for the economy because they directly tax capital investment in structures and equipment rather than profits or the fixed stock of land. Liberal Democrats would abolish the broken business rates system and replace it with a commercial landowner levy. We believe that we need to see a fundamental overhaul—not just tinkering around the edges or sticking-plaster solutions. We are disappointed that, yet again, serious reform of the system has been kicked down the road. We need fundamental reform of business rates if we wish to boost small businesses and high streets and to stop penalising productive investment.

The Liberal Democrats acknowledge that the Government inherited a dire economic landscape, compounded by the challenges posed by an aggressive Russia and an unreliable US Administration, but that cannot be an excuse for the mistakes they are making. People are still struggling with the cost of living crisis, just as small businesses are struggling with the cost of doing business, as energy prices soar, food costs keep going up and mortgage bills remain sky high. The Government must take bold action to boost our economy. We urge Ministers to U-turn on the winter fuel payment cut, scrap the national insurance jobs tax and row back on removing support for disabled people, many of whom need that support to stay in work.

My hon. Friend talks about U-turns. Does she agree that the Government should also reverse the family farm tax?

I thank my hon. Friend for making that point—her constituency is more rural than mine, I admit. She is right that we would also like to see the Government urgently U-turn on the family farm tax, because it is creating such difficulty in our rural communities.

We are calling for bolder, more ambitious and fairer measures. We want the Government to replace business rates with a fair new system to boost high streets and town centres, and to negotiate a new customs union with the EU, which would cut red tape for small business and boost our economy as a whole.

We now have the pleasure of hearing from Chris Vince.

Thank you, Madam Deputy Speaker—you are far too kind. Can I start by joining others in congratulating the Veterans Minister on his epic adventure to the peak of Everest? Before I get into the politics, I say anecdotally that I often see him in the gym, and he talks about his gym routine, which is considerably more thorough than mine. It is also a pleasure to speak so early in a debate—I am often compared to the hon. Member for Strangford (Jim Shannon) in that regard—so thank you for calling me, Madam Deputy Speaker.

It is a privilege to speak in the debate. As hon. Members across the House know, I will take any opportunity to talk about my town of Harlow and the greater constituency. As I told the Prime Minister yesterday, Harlow is home to some great businesses. It is ironic for me as a vegetarian that the first business that contacted me following my election was a bacon company called A1 Bacon, which raised legitimate concerns about the increasing costs of import from and export to the EU. From what the Prime Minister said yesterday, I am hopeful that the deal we have negotiated will help A1 Bacon and businesses like it in Harlow to continue to thrive and to trade with our EU neighbours.

Could the hon. Member tell us whether A1 Bacon—indeed, any business in Harlow—believes that the Employment Rights Bill will enable it to employ more people?

In all honesty, A1 Bacon has not contacted me about the Employment Rights Bill. As I said, it is concerned primarily with the increase in tariffs since we left the EU. I do not want to reopen that debate, as some hon. Members across the House seek to do, but I hope that the deal negotiated by the Prime Minister will help deal with that issue while ensuring that we maintain our sovereignty, which so many people who voted leave clearly want.

I want to recognise some other businesses in Harlow. What is brilliant when we are first elected as MPs is that we get to see many hidden treasures in our constituencies that perhaps we could not see before we were elected. One of my early visits was to Harlow Group, which makes components for Boeing aircraft that travel the globe. I understand that it is the only business in the UK that produces the boxes into which all the electrics go on a Boeing 747, which is pretty awesome. I also pay tribute to Wright’s Flour; New Ground café; Stort Valley Gifting, where I do my Christmas shopping, as did my predecessor; O-I Glass; and Ecco, which is a fantastic environmentally friendly charity that I will visit next week. Of course, the Minister would rightly criticise me if I did not mention our wonderful local Co-ops.

I would never criticise you.

Thank you very much. One thing I will raise with the Minister, which has been fed back from my local Co-op—I am sure it is the same at his as well—is the increase in retail crime. I hope that he will take that seriously. He is nodding appreciably. I look forward to hearing him talk about that in his wind-up.

Harlow is a great town. I have always said that it may not be the oldest new town, it may not be the newest new town, and it may not be the most successful economically, but it is absolutely the new town with the biggest heart. This morning, as a member of the all-party parliamentary group on new towns, I looked at some data produced by Visa on all the towns in the country and the challenges that many of them face. The challenges that Harlow faces, based on the metrics that Visa used, did not come as a big surprise to me. In relation to growth in particular, they were housing and productivity. The solutions that will increase Harlow’s productivity and that of the country as a whole come down to three key areas.

First, I will talk about skills. I pay tribute, as I have a number of times in the Chamber, to the fantastic work of Harlow college, which for many years has supported Harlow’s next generation of young people, giving them the skills they need not only for today, but for the jobs of tomorrow.

Equally, I want to talk about the importance of transport links. I will later do a little pitch for Harlow; I hope that the Minister does not mind. We are ideally located between London and an international airport, so there is lots of potential.

The other thing is transactions, and stimulating the economy through the transactions we make. I welcome the £20 million of Government investment in Harlow town centre, but I do want more for my town. I appreciate that the right hon. Member for Salisbury (John Glen), who is not in his place—I told him that I would mention this—has today’s Adjournment debate on this issue, but I will continue to lobby for the new site of the UK Health Security Agency to be in Harlow, which would mean 3,000 new high-tech jobs, providing Harlow’s next generation with the opportunity not only to aspire, but to really achieve in those jobs of the future. Economic inactivity rose in Harlow under the previous Government. My big ask of this Government is to invest in my town and my community.

Anyone who knows me will know that I am a pretty positive guy. [Hon. Members: “Hear, hear!”] Thank you. The Minister set out the reasons why we should be positive. The UK has the fastest growing economy in the G7, we have had four interest rate cuts in a row, and this week and last week we have signed three international deals to boost trade. For the first time in a long time, there is hope on the horizon for the people of Harlow. I know that under this Government, this country will have a great future on the world stage. My only ask of the Minister is to ensure that Harlow is part of that bright future.

It is a pleasure to follow the hon. Member for Harlow (Chris Vince). Harlow is quite close to my old stomping ground, so I know some of the areas to which he referred, although I am surprised that he did not mention the enterprise zone, which is a world-class area for business.

I will focus my comments on my constituency—Three Rivers district council is the main council area there—where we have seen business closures outpace new openings since July 2020. My local high streets in Rickmansworth, Chorleywood and South Oxhey are visibly suffering, with shuttered shops, rising costs and dwindling support. Historically, those high streets never had vacancies. As a former retailer, I am increasingly concerned about the volatility in our high streets. Whichever side of the House we are on, if we do not fix this problem, we will leave a poor legacy.

The small businesses that I speak to say that they feel abandoned by the Government. They are facing high energy bills and rent, and poor footfall. Part of that—things like parking charges and on-street parking—is not the Government’s responsibility but down to decisions made by Lib Dem local councils. I continue to have dialogue with those councils to ensure that high streets like Kings Langley’s can survive during these difficult economic times.

On an international basis, we need to recognise that a lot of wealth creators are leaving our country. Many years ago, I read a book called “Atlas Shrugged” by Ayn Rand, and I did not think at the time that it would have such an influence on my life. As many hon. Members will know, I was not politically active at school or university, so I never thought or dreamed of being in this place—let alone aimed to be here—at this stage of my life, but all of us come to this place with life experience and a journey, and part of that for me has been that Ayn Rand book. My overriding memory from that book was that, if the Government do not support wealth creators, those people will find a way to leave, to the detriment of the rest of society.

According to a New World Wealth report, 9,500 millionaires left the United Kingdom in 2024: the highest outflow in recent memory. [Interruption.] Is the hon. Member for Earley and Woodley (Yuan Yang) looking to intervene?

Yes.

Order. Just to help Members, let me say that those looking to intervene have to both stand and make a sound; otherwise, the Member who has the floor may not be aware. If requests for interventions are not taken, those looking to intervene must sit down. They may then stand up and try again.

I thank the hon. Member for giving way and apologise for not being louder. I wonder if he has a source of data on the so-called exodus that does not come from a firm that gives advice to the very wealthy to migrate abroad, and which therefore has a great economic interest in propagating such figures.

I am conscious that the hon. Member was a journalist for the Financial Times, so she will know the data source better than I do. I am not an economist and have never claimed to be—I have never claimed to be a lawyer, either. I come from a small business background and have local government experience. When I speak to people in my own limited social circle who are employers—people who I hope will inspire the next generation—I hear that a lot are looking to leave these shores. That causes me massive concern. Although our parliamentary system means that parties come and go, we rely on such businesses to grow, succeed and expand.

I am a second-generation Indian. When my parents came across in the 1970s, they had the aspiration and hope that, by being willing to work hard and being lucky enough to be in the right place and the right industry at the right time, the state would not intervene. I do not see that type of ambition now. I do not wish to get party political; it is an issue that we all need to be concerned about. Governments of all stripes will spend taxpayers’ money, but it is well worth remembering that Governments have no money.

That money comes out of the pockets of people who pay taxes, and we need to acknowledge that wealth creators pay a lot more tax than other parts of society. We live in a global world, and if those people choose to leave, it will mean that the Treasury—I look at the Parliamentary Secretary to the Treasury in his place—will not have the benefit of income in its coffers to spend on things that are vital to us and to our communities.

Business confidence was mentioned earlier. We need to recognise that there is significant volatility, both around aspiration and potential capital expenditure for small and large businesses. Businesses need certainty about the direction of travel.

The hon. Member is right that businesses need certainty. Does he agree that the thing that most undermined the certainty of businesses was the chaos that the Conservative party created through Liz Truss’s disastrous mini-Budget?

I will let the new Member make his political point. The only thing I will say in response is that in my first two years in Parliament, we dealt with a global pandemic, in which we spent more than £400 billion of taxpayers’ money. When I was elected in December 2019, as part of an 80-seat majority, we were looking to reform our tax base and the way we financed our Government spending, but we did not have that opportunity. With the Government’s current majority, I hope that they are ambitious.

Other Members have spoken about business rates reform. It is massively outdated to look at businesses based on bricks and mortar, and if I were a furniture retailer today, I would have an online presence only. However, that would mean that the vibrancy of our high streets would be lost, because they would end up with only bookmakers, hairdressers, charity shops and coffee shops. There is nothing wrong with those, but the high streets that I support and am honoured to be the Member of Parliament for offer significant diversity; we have not yet spoken about banking and the move away from on-street branches, but we are trying to deal with that issue locally through places such as post offices becoming banking hubs.

There was a reference earlier to HMRC—and my remarks in this regard are a pitch to the Minister. From my limited experience over the years, HMRC has become increasingly aggressive and not necessarily fair, including in regard to interest rates. If an employer or business makes an overpayment, the interest rate that they receive is different from that which HMRC takes. We should not regard businesses as a cash cow if they have done nothing wrong. I will leave that with the Minister. Further, I would prefer HMRC not to be an arm’s length body; I would be willing at least to investigate whether ministerial control and oversight was practical, on the full understanding that civil servants need to have the freedom to raise and collect revenue.

In Hertfordshire, the median weekly wage is £851, which is higher than the UK average of £728. However, with inflation rising—we heard overnight that it is now at 3.5%—and the rising cost of living, people are feeling poorer, which means that they are spending less on our high streets and are less likely to use capital expenditure on their homes, on a new car or on whatever else they would have spent it on if they felt more flush with cash.

The hon. Member makes a great point. I was contacted by Yoddi, who owns La Fish in my constituency of Chichester. He says that the rise in national insurance contributions will cost him £1,200 a month that he now has to find. He has two choices, one of which is passing on that cost to consumers. We already know that the price of fish and chips has risen exponentially over the years and the cost of living pressures continue to make that worse. Does the hon. Gentleman agree that small businesses like that one are at risk from the Government’s NICs rises?

That is an excellent point. I have a plea to Government. Perversely, reducing tax rates sometimes increases the amount of money received in the coffers. I say that as a retailer. When VAT was reduced to 15%, it allowed me the certainty to expand our furniture business; we secured another outlet, employed more people and paid more business rates. In effect, it was a win-win for both the state and for our small business.

We have spoken about NICs, but the Employment Rights Bill also causes me massive concerns. I would now think twice about the risks that I would have taken hiring a 16 to 18-year-old, because it would cost me the same to employ someone in their 30s or 40s as to employ a first-jobber. There is a ticking time bomb for people leaving university or college in the summer. Where are they going to work? We have spoken about the 100,000 fewer jobs over the last 12 months; that will only get worse when those people finish their degrees, A-levels, BTECs and so on, and cannot get into employment. That is going to affect the Minister’s workings.

We on the Conservative Benches will be fully supportive of the Government if they do the right thing. Our role in this place is to be critical friends because we all want—

Are the hon. Gentleman’s colleagues listening?

Well, I have been listening; I spend a lot of time in the Chamber. Yes, there is an element of Punch and Judy, but the reality is that there are 650 of us here who want great legislation to support our communities and make sure that people can get on with their daily lives without the burden of having to think about legislation. They want us to get on with it on their behalf.

On tax rises, we have seen the leak of the Deputy Prime Minister’s letter to the Chancellor. I remain concerned that any ambition to increase taxes is another death by a thousand cuts for our small businesses. We need certainty and support from this Government, saying to people, “Go and be ambitious.” If people are risk-averse, there will be a structural problem for us on our high streets and for our small businesses. That means that we will not create the world’s next unicorn because those ambitious people will already have left our country to generate their income in a better financial climate, typically in the middle east or other parts of Europe.

I was touched by the hon. Gentleman’s story of his father’s role in contributing to the economy. I hope that he will be present in the immigration debate later this afternoon to make the same points about the vital work of immigrants contributing to wealth creation in the UK.

The hon. Gentleman mentions NICs and the other headwinds facing small businesses. One small business in West Dorset has seen its business rates go from £8,000 to £27,000. If we want to help small businesses grow, surely we have to stop taxing them so much.

I have always thought that business rates were totally outdated. They generate a significant amount of money for the Treasury, so it is resistant to reform without knowing for certain how it will fill that significant black hole.

We have not spoken about hospices and the effects of NICs increases on the charity sector. Others have spoken about the winter fuel allowance. All these things affect our most vulnerable individuals, and the community groups and charities that fill a massive void that the state or the private individual do not. My worry, which is increasing, is that we are doing things that will have unintended but significant consequences.

We chose this subject for debate to ensure that the Government heard loud and clear from across the House that where they do the right thing, we will support them, and where they need to adjust their direction of travel—I will not say “U-turn”—we will support them. It benefits no one, and provides no benefit to our communities, if we just chuck political grenades.

I will end my remarks on the loss of business confidence. Small businesses are closing, investors are leaving, inflation is rising and confidence is collapsing. I know that there is a direct lack of business experience on the Treasury Bench, but that is neither here nor there. I know that there are various economists, think-tankers and so on in the Minister’s party, but I urge him to listen to those who run businesses of whatever shape or size, because that life experience brings them value in this place. My hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) created a business that employs 1,000 people. That is real life experience; he knows how the Government’s decisions would have influenced the projections and ambitions of his business. I know from my continuing conversations with businesses that they are looking to shrink and be secure rather than expand and be ambitious. That is not what the UK is about; we are outward-looking and globally ambitious. I wish the Government success in getting to that point.

We know that a nation in which every single one of us can earn a decent life is a stronger nation. That is exactly the kind of country that the Government are creating. In this country today, too many people cannot earn a decent life. Our nation is weaker as a result. The task before us is to create a stronger nation, not the weaker and more divided one that some Members would like to see and speak about time and again.

I take the Opposition’s motion in good faith, but each of its points, which I will come to in due course, is mistaken. We live in dangerous times. A third of us cannot earn a decent living, because the Conservatives left us with some of the highest energy, housing and childcare costs in the world. They left us a no-growth economy: wages did not grow for 14 years—the longest squeeze since Napoleon. Their hero Margaret Thatcher destroyed manufacturing in this country—the fastest deindustrialisation in western Europe. Non-graduates cannot get good jobs and are now turning away from democracy itself.

I give way first to the hon. Member for Angus and Perthshire Glens (Dave Doogan).

I am on dangerous territory here—it ill behoves me to defend the party to my extreme right—but does the hon. Gentleman not remember the note that was left by the Labour Chief Secretary to the Treasury in 2010 about all the money being gone?

I was a very young man then as it happens; it was rather a long time ago. I believe that the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) wanted to intervene too. [Interruption.] Or perhaps not any more—he is busy tweeting away. That is okay.

Oh, go on then.

The hon. Member talks about deindustrialisation. Can he remind me what happened to the manufacturing share of the economy under the previous Labour Government? Did it go up?

Manufacturing has been falling in this country since Margaret Thatcher came to this place. The lack of manufacturing jobs, and the inability of graduates to get a decent job in this country, is precisely why they are turning away from democracy itself. More than that, the UK has suffered the fastest deindustrialisation in western Europe.

In a moment. On top of that, young people cannot move out: some 40% of 18 to 35-year-olds live at home with mum and dad. Each of them is now turning away from democracy.

I want to continue on the subject of deindustrialisation. Is it not the case that the manufacturing share of the economy dramatically fell under the previous Labour Government and then stayed the same under the last Conservative Government?

Luckily, I will come back to reindustrialising the economy and what the Labour Government are doing right now, but let me turn to the motion at hand, which does not really add up, taking each point in turn.

The motion speaks of employment. Employment, including youth employment, is higher than it was at the July election. More people are entering the labour market, and fewer people are off sick. That is because we are getting waiting lists down.

The motion speaks of business closing down. Over 230,000 businesses have been created—a net increase of 10,000. We have made a permanent 40% reduction in business rates for high street shops. Page 4 of the impact assessment of the Employment Rights Bill, of which we Labour Members are incredibly proud, states:

“The package will be significantly positive for society (i.e., the benefits will outweigh the costs)”.

It goes on to mention

“a direct and positive impact on economic growth”.

Pro-worker, pro-business, pro-growth—that is the record and legacy of this Labour Government.

Where we differ entirely and fundamentally from the Conservative party is that we do not believe that it is simply business owners and entrepreneurs who create wealth and growth in this country. Every worker—ever nurse, doctor or teacher—creates wealth in this nation. It is a joint enterprise between capital and labour to produce more. That is where we are. A stronger nation is one where each person does well, and that is the country that we are creating—in stark contrast with what the Conservative party left us.

To get everyone to live a decent life, we need to get costs down. Opposition Members have spoken about inflation. A third of today’s price increases come from energy costs. Why? It is because we depend on natural gas, which sets our price 98% of the time and is 50% to 75% more expensive than wind and solar. That is why we are investing in clean energy—cheaper and secure energy in the long run, not just for the next five or 10 years. We also have some of the highest childcare costs in the world. The Chancellor has put more money into childcare so that everyone can get the care they need and get their bills down.

We are creating good jobs for non-graduates—that goes to the point made by the hon. Member for South West Hertfordshire (Mr Mohindra)—as well as building 1.5 million homes, establishing Great British Energy and implementing the warm homes plan. For young people—our generation—we are building homes so that they can move out of mum and dad’s. That is how we create a better and stronger nation in which each of us can do well—stronger because we produce more, stronger because we have a stake in each other’s wellbeing, and stronger because we have a shared sense of purpose.

These are some of the most dangerous times in our country for almost a century. A third of people cannot earn enough to live, and non-graduates and the young see no prospect of being able to earn a decent life and are turning away from democracy. What was despair and despondency is now becoming anger. We are now up against those whose only answer is to tear everything down, to blame someone else for all our problems. They seek to create division, and a divided nation is a weaker one. That division leads to anger and sometimes, as we saw last summer, to violence. We meet this moment with decency and determination. We meet it by creating a stronger nation, in which every single one of us can earn a decent life.

It is a pleasure to join this lively debate. Small businesses are the backbone of the economy in my constituency. In fact, 99.9% of businesses in East Hampshire are small or medium-sized enterprises. We over-index in professional services, retail, information and communications, and, of course, agriculture. [Interruption.] I thought there were few Labour Members present before I stood to speak! The biggest sectors for employment are retail, health and care, and manufacturing. [Interruption.] I am starting to get a complex!

I have heard from all those sectors, which are worried about the prospects for their businesses and the economy under this Government. We must always remember two things about business. First, contrary to what the hon. Member for Loughborough (Dr Sandher) said—he is no longer in his place but I know he will return—only business can create the wealth and jobs, make the livelihoods and generate the tax that, in turn, makes the high-quality and brilliant public services that we all so value and on which we rely.

There is a second thing that we should always remember about business, and I encourage Ministers to remember it. Accountants talk about the entity principle and describe a business as an entity that is separate from the people who run it. That might be true in an accounting sense, but in a broader sense, businesses are people. They are collections of people coming together to achieve something. The joint stock company was created to share risk among different people, and the way that organisations work within companies is a way of increasing efficiency and productivity, compared with everybody doing their own thing as a sole trader. So, because businesses are ultimately people, there is ultimately no such thing as a tax on a business. Taxes can only ever fall on people. A so-called business tax falls on one or more of three groups of people: the business’s customers, the business’s employees or the business’s owners.

The hon. Gentleman talks about the impact on people. A small business in Fifehead in my constituency has recently had to reduce its staff by four—small business, real impact. Small businesses create so much for our rural economy. Does he agree that the Government should scrap the national insurance contributions rise and replace the broken business rates with a new, fairer funding system to boost our rural economies and jobs in our rural areas?

The hon. Lady makes a good point about small businesses, particularly rural small businesses, and I will talk about national insurance contributions and business rates, but let me come back to how taxes on businesses are ultimately taxes on people.

Some Labour Members might say that they do not mind a tax on business owners, because they are the capitalists and they can afford it, but we need to remember that the owners of businesses are a mixture of institutional owners—which, by the way, includes your mum’s pension fund—small business owners, who are quite often sole traders, and family businesses. If the owners are not affected, either the customers or the employees will be affected, and I am afraid the effect of the national insurance contributions rise will ultimately be felt by those two groups of people, and particularly by employees, through a mixture of wage suppression over time and possibly some job losses. The bigger effect will not be about job losses; it will be about jobs that are never created in the first place, particularly among the youngest people and those furthest from the labour market.

My right hon. Friend is making a good point. When the Government brought in the increased national insurance contribution for employers, they used sleight of hand, saying that it was not a tax on working people, but does he agree that the Office for Budget Responsibility’s assessment of the impact concluded that the overwhelming majority of that cost will be borne by the employees and not by this notional employer?

It will, and I repeat that it can only be one of those three groups. There will be some price increases, and those costs will be felt by customers and consumers, but all the indications are that the big effects will be felt in wage suppression and in employment, which will ultimately mean slower economic growth.

In the same way that taxes on business ultimately land on people, taxes that look like they are on people can sometimes have an effect on business. I want to talk briefly about two examples. The first is the family farm tax. This is clearly a desperately ill-conceived measure, although, to be fair to Labour Ministers, they probably did not realise at the time quite what they were doing. However, their Members of Parliament representing rural seats found out very quickly exactly what they were doing and the effect it would have.

There is an alternative proposal on the table, which we know has been put to the Treasury by representatives of the sector. As this brilliant Treasury Minister the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell) will be winding up, I am sure—at least I hope—he will find it possible to share with the House the Treasury’s critique of that alternative proposal, the so-called clawback proposal, which would be much fairer, and tell us why the Government are rejecting it.

There has been quite a lot of debate in the House on the family farm tax, but somewhat less on the business property relief situation, which is not quite as acute in some ways, but there are a number of parallels and similarities. Business property relief was put in place to level the playing field for family-owned businesses and others, so that people could invest in their family-owned businesses, confident that they could pass it on, within the family, without incurring a tax that applies to no other business ownership model.

Typically, these businesses will not have large amounts of net cash or liquid assets that will allow them to settle the tax bill upon the demise of the owner, and there are no listed shares, so there is typically no market for those. There has to be a theoretical valuation, because the shares cannot be valued, and that figure is likely to be considerably higher than the amount that could be realised in the event of a sale. The relief was created specifically to stop family firms having to be broken up; however, the net effect of the changes is that a substantial number of firms in this situation will be bought up, either in whole or in part, by foreign owners or private equity. Is that really what a new Labour Government had in mind?

Labour used to agree with the point that my right hon. Friend makes. Am I right in saying that it was a Labour Government in 1976 that generated the policy of having a relief in the first place?

Forgive me, but I do not have the history at my fingertips. The relief has been recognised over the years, and has been looked at in the past by Treasury officials. I have been a Treasury Minister, and I know that they get presented with various things that could be done, but generally speaking, when many Ministers before you have found good reasons to keep a measure, it is a good idea to wonder what those reasons might be.

Overall, this Government’s changes to the business taxation regime will affect many sectors, but particularly those that are labour intensive. We can all name hospitality, retail and care as the three really big-volume employers in the country. In my constituency, I would also mention nurseries, pubs and hair and beauty businesses. Of course, there are sector-specific pressures. For nurseries, for example, the issue is whether the unit rate per child per hour is sufficient. Many of my nurseries say that it is simply not sufficient to cover their costs, at a time when entitlement to nursery care is increasing. In the hair sector, there has long been an issue about those who have created a business that has employees, and their ability to compete with others who are below the VAT threshold.

The confluence of four things that the new Government have done is creating a big headache. First of all, the national living wage going up to £12.21 is a good thing in and of itself. We absolutely support a rise in wages for people on lower wages; it is the fact that it is happening at the same time as all the other things that is causing the problem. I will not talk in detail about the national insurance contributions increase, because others have done so, but that will have an effect, particularly on part-time employees, and the Government ought also to acknowledge the gender differential effect of that, which we have heard little about.

Today I have heard two Labour MPs say that business rates have gone down for retail and hospitality businesses. One was the Minister. Try telling that to those businesses—

Perhaps the hon. Gentleman is going to tell me that he has told that to his local retailers and pubs.

You brought in a temporary reduction of business rates during covid, but as with so much else, you did not fund that beyond those years, so you made a permanent reduction of 40% for the future.

Order. It is good etiquette to speak through the Chair, and to not use the word “you”; it just dampens the tone of the debate a little bit.

I shall suitably dampen. At a time when the Government are changing the relief from 75% to 40%, try telling those businesses already facing the national insurance contributions increase and all the other cost increases that their bill is being reduced. Clearly, it is going up.

Will my right hon. Friend give way?

I am conscious that I have gone on for quite a while, and I want to wind up.

Fourthly, there is the Employment Rights Bill. On the face of it, who would not like something with that name? It sounds like a positive thing, but the point is the effect that it will have, particularly on seasonal businesses, which might otherwise take somebody on at Christmas or in the summer. Hospitality, travel and events businesses rely on doing that. The Bill will affect the national health service, which will have to deal for the first time with some of those considerations. It turns out that the national health service is a considerable user of zero-hour contracts—by the way, not for someone’s first job, but usually for their second—so that staffing can vary according to the demands of a hospital or clinic. The Minister is a labour—and a Labour—economist, so I would be interested to hear his comments on the shift that we are likely to see from permanent to temporary contracts, and the shift that we are already starting to see in companies that are moving from relying on contracted, salaried employees to relying on agency workers.

Will my right hon. Friend give way?

Forgive me; I will not. Finally, there is the effect that the measures will have on the removal of job opportunities for those further from the labour market—perhaps those who have been out of work for a long time; ex-offenders, who it feels like more of a risk for an employer to take on; and, most of all, young people. That is the concern with this package of measures: the effect on unemployment, especially youth unemployment.

Today we heard the Government make the first of what I hope is a series of U-turns over the winter fuel payment. I ask the Government to look at what is happening, and what will happen to our small businesses and the unemployment statistics, and to please think again.

The hon. Member for South West Hertfordshire (Mr Mohindra) mentioned my work before I came to this place. In my work at the Financial Times, I spoke to business leaders every day. Since my election to this place, I have had the honour of speaking to many businesses in my constituency. In the last month, that has ranged from the small shopkeepers in Whitley in south Reading to the leaders of Sanofi, a pharmaceutical company that is one of the biggest listed companies in the world, also headquartered in my constituency. The topics they want to talk about again and again are threefold: trade and prices; industrial strategy; and infrastructure. Those are the areas that come up time and again when I speak to my local businesses and the Thames Valley chamber of commerce, because businesses—unlike the Conservative party—have to be forward looking. They have to have a vision of the future and where they will fit into it. I will concentrate on those three areas.

First, on trade, many of my constituents have thoroughly welcomed the trade deals that the Government have done over the last two weeks—not just with the EU, but with the US and India. Small businesses in Reading and across the UK have suffered from the previous Government’s bungled Brexit of 2019. They have suffered from increased trade frictions, red tape and bureaucracy. For smaller companies, those are an increasingly large part of their overheads, and they are more difficult for small retailers doing import-export business to handle. I heard that again and again on the doorstep during the general election campaign from the many entrepreneurs in my constituency. I know already from speaking to residents last weekend how deeply the trade deal with the EU is welcomed. It will decrease the inflation of food prices in the UK and give opportunities to those exporting to the EU. That is also true for the deals with the US and India, which will create and save many jobs across the country.

Secondly, on industrial strategy, the Thames Valley is one of the biggest destinations in Europe for life sciences foreign direct investment. I am proud to say that the life sciences companies that I have spoken to are tremendously excited about the opportunities brought by the life sciences White Paper and the industrial strategy, which will be unveiled next month. In an age when countries across the world, from the US to India to Japan, are unveiling their industrial strategies, we cannot afford not to compete on the same stage. We have to decide as a country where we fit into the global supply chain, what our comparative advantages are, and what we will invest in. I am glad that our Government are doing that, and that is what the multinationals headquartered in my constituency want to hear.

Finally, on infrastructure, I am proud that my constituency in the Thames Valley is the fastest growing region in the UK outside of London. That is the case not because there is something in the water—though these days, with Thames Water, you can never tell—but because of the infrastructure. We are close to Heathrow and, via the M4, to many major cities and London. We have the Elizabeth line, and rail links that connect us with so many ports and cities across the UK. That infrastructure is paid for and funded by the Government. There is not just physical infrastructure; there are services, schools and hospitals that mean that families want to move to our area, build their lives there and bring their professional skills there. That is why I continue to press for the investment in the NHS that we sorely need, and for investment in our local hospital, the Royal Berkshire.

I know the hon. Member was about to conclude, but it is notable that she decided not to talk about hospitality, leisure and retail businesses, private schools or all sorts of other industries in her constituency. Businesses talking to me are deeply worried about the policies of this Government. Will she reflect on the impact on smaller businesses in retail and hospitality?

The first businesses I mentioned in my speech were the small shopkeepers in Whitley—the retail businesses that want to keep their food prices low, that are dependent on imports, predominately from the EU, and that want to ensure that their customers get a good deal, and I very much support them.

Those are the three areas that businesses speak to me about regularly, and I hope that our Government’s agenda will continue to reflect those interests. I cannot help but touch on one final issue that the shadow Minister, the hon. Member for Arundel and South Downs (Andrew Griffith), brought up: employment. It is when we talk about employment rights that the Conservatives sadly show whose side they are really on. They talk about the benefits to young people; it is young people in my constituency at the University of Reading who stand to benefit from the increase in the minimum wage, and who are the most glad about that policy, and about the employment rights that they will benefit from, through the Employment Rights Bill.

Will the hon. Member give way?

No, thanks; I am about to draw to a close. Young people are the future, and they need a rise in their wages because of the living standards crisis that we face across this country. The University of Reading employs those young people and is a source of education for them. As an employer, it sees that it is better if all employers lift their standards, so that it is not undercut by other employers seeking a race to the bottom.

Will the hon. Member give way?

I will finish now. In conclusion, I am proud to talk about businesses and the real issues on their agenda, and I do not see those reflected in the Conservative party’s Opposition day motion.

Will the hon. Member give way?

Order. It is known that the hon. Lady is not giving way, and is about to conclude.

I hope that this Government will continue to make progress on living standards, and on growth that benefits all parts of our economy.

It is a pleasure to be speaking up for Scottish constituents on such an important issue. I see that one of my Conservative colleagues, the hon. Member for Dumfries and Galloway (John Cooper), will be speaking up for his Scottish constituents. Nobody on the Government Benches has turned up to speak for their Scottish constituents on this issue.

I want to start with the good bits. Now that we have got that done, we will get into the meat of this. As has been said, we see an incredibly wrong-headed brake on investment and enterprise in the jobs tax—the increase to employers’ national insurance. I do not think that measure is a sleight of hand; it goes beyond that. To say that employers’ national insurance is not a tax on working people stretches disingenuousness to its absolute limits. The measure is also counterproductive. The £22 billion or £23 billion—whatever the Government’s target amount was to take in from employers—has already been attrited to well below £10 billion. If they actually did the right thing by hospices, it would go down even further. The measure is a massive burden for a modest gain for the Treasury, and that does not take into account the consequential costs of imposing such a burden on businesses and employers. The impact has already been felt in care homes in Scotland, with five closing ahead of this disaster for enterprise.

The Office for National Statistics has predicted that 25,000 jobs will be lost across the United Kingdom as a result. When the policy was introduced, I ordered a pint at one of my local pubs and jokingly asked the barman if the penny was already off the pint. He said, “Yes it is, and I have stuck on another 20 for your national insurance increase.” Although that is anecdotal, it speaks to the gulf in understanding between UK Treasury Ministers and the real economy that makes things tick. The Scottish Government estimate that, on average, the policy will cost £850 per job per year in Scotland. Except for the Scottish living wage and the slight difference in the income tax regime in Scotland, I see no reason why that figure would not be broadly the same across the whole of the United Kingdom economy. It is utterly unrealistic.

The genesis of the measure is the UK Government’s insistence that they had no idea that there was a £22 billion black hole in public finances—there probably was, although they probably made about a third of that with what they decided to do when they came into government. There is a brazen willingness by the Labour party to reinvent reality—it is bare-faced. Despite being engaged on that repeatedly in debate during the election campaign, the say that they did not know there was a multibillion pound black hole in the UK public finances. What were they debating if they did not think it was real? It is totally disingenuous.

Inflation jumped again in April to 3.5%, up from 2.6% in March. That was not caused by an economy firing on all cylinders or by a rejuvenated consumer sector, high on the output from a new Government, full of ideas and creativity. No, it is driven by electricity and gas prices and by water bills that consumers can do little or nothing about, but which they are still having to fight to pay on top of higher interest rates, as the Bank of England tries to get on top of inflation in a deeply dysfunctional economy.

The Government should seek to address the actual drivers of inflation and take on those energy prices. Let us not forget that not that long ago, at the election, we were promised a £300 reduction in energy bills. It was not “maybe”, “around” or anything of that nature; the message was that if people voted Labour, they would get a £300 reduction in their energy bills. In less than a year, however, energy bills have gone up by £281, so they are now almost £600 higher, emptying consumers’ bank accounts and driving inflation.

What is Labour’s response? Labour Members say, “That is because of our reliance on gas.” Well, we were reliant on gas before the election as well, so there are two possible reasons for that to have happened: Labour was playing fast and loose with the truth; or it did not understand how energy in GB works. I know which one I think it is, but either way it does not reflect well on this Labour party. In under a year, business confidence is falling, job losses and unemployment are rising, borrowing costs are soaring, prices are rising, growth is sluggish and there is rampant inflation. When speaking about growth at the beginning of the year, the Chancellor said that she was pleased but that she had got more to do. Well, God help business if she has got more to do. We have seen quite enough damage in the first nine months of this Labour Government.

I turn to agricultural property relief. In the garden of Scotland that is Angus and Perthshire Glens—I will take no dispute on that fact—we have some of the most productive agricultural land on these islands. As hon. Members would anticipate, with such productive agricultural land, we have extremely high-performing food producers who invest heavily in the latest technology and equipment, and ensure that there is a tremendous return on investment, so that they get the best yields possible so that they can drive down prices and deliver good-value food for tables across these islands and beyond.

What will happen now with agricultural property relief? What signal is being sent out to farms and farm businesses? Is it for those businesses to invest in their farms, so that they have to give it all away when somebody dies? Older farm owners in Angus and Perthshire Glens are now petrified of dying, and it will be the same everywhere else across the United Kingdom: what an ignominious, invidious position for any Government to put the people who produce our food into—it is incorrigible. I say to the Minister, with as much sincerity as I can muster, that quietly with his colleagues in the Treasury, at the spending review or some other opportunity—call it a review or whatever he likes—he should call off the dogs from our farming businesses up and down these islands. They deserve better.

Business property relief is not unrelated, and we have heard some of the testimony from other right hon. and hon. Members on the necrotic effect that has on investor confidence. There is good reason why large-scale family businesses are really good for economies, especially local economies. They employ local people, they headquarter locally, and they try, as much as possible, to establish and stand up their supply chains locally. They sell nationally and internationally. It is a virtuous conveyor of capital from outwith to within. It is excellent for the economy. It is far better than the same economic output from a public limited company, although of course PLCs have their role. But what large-scale businesses in Scotland and elsewhere are speaking to me about is that disincentive to invest.

Family Business UK says that 55% of businesses have paused or even cancelled planned investments due to the Government’s plans to cap business property relief. Does the hon. Gentleman agree that the Government should delay the planned BPR changes and conduct a thorough consultation and an impact assessment?

I cannot help but agree with the hon. Lady. At the very least, that is what the Government should do, and other hon. Members have suggested that too. To be fair, it cannot be easy to form a new Government—it certainly does not look easy. Any new Government must come in, make decisions and quietly think, “Och, I wish we had not done that.” I am certain that APR was put under the nose of a Minister by a civil servant, in the full expectation that the Minister would have the wit to say, “We are not going there—we are absolutely not doing that.” And blooming heck, they have gone and done it. I am sure that when the civil servants walked away they were saying, “Oh God, we never expected that.” And so it is with business property relief, because of the consequences. The cost-benefit relationship between what they are doing to enterprise and business and what they will accrue to the Treasury is out of all kilter. The damage is way in excess of the potential accrual, and that is before behavioural changes are brought into effect.

I recently spoke to a large-scale potato farmer near Kirriemuir, in my constituency, who has massive cold storage, a vital element of potato production, so that farmers can keep the potatoes in tip-top condition and ensure that the supermarkets are supplied as and when, just in time. I sometimes think that the Government think that farmers are trotting around in their tractors, chewing on a bit of straw, but these are really switched-on businesses that are doing the utmost to keep food prices down. We have some of the lowest food prices in Europe, and that does not happen by not investing seriously massive sums in capital and equipment. At a stroke, the Government have catastrophically disincentivised the very behaviour that helps keep food prices down and is anti-inflationary. Look what is going to happen with that.

Does the hon. Gentleman agree that the changes to agricultural property relief and business property relief will raise relatively small amounts for the Treasury, but they will have a devastating effect on those businesses, and the reason they are being brought in is that Government Ministers have no idea how small businesses and farmers operate?

I do agree; I would rather not agree, but I do agree. That is why I implore the Treasury Minister, who is in his place, to have whatever private conversations Ministers have in their Departments about things that they may have got wrong. They cannot U-turn or row back on everything, but honestly, agricultural property relief and business property relief is an absolute landmine for businesses to be pulled across by this Government. He does not even have to address it in his summing up; he can just go back and quietly look at it again and have a review—kick it into the long grass at least.

I want to speak briefly on quantitative tightening by the Bank of England; I probably will not have too many supporters in the Chamber on this issue, but no change there. I have raised this matter a couple of times with the Chancellor and she talks about all manner of things in response, none of which are quantitative tightening. The over-zealous nature of the Bank of England’s disposing of Government bonds is hugely costly to the Exchequer. There is no need for the rate of quantitative tightening that the central bank of the UK is undertaking. It is not replicated by other central banks. Even if the Bank was to go to a passive model of quantitative tightening that would have substantial, multibillion-pound savings for the Exchequer, at a time when the Chancellor returning from China was getting excited about £600 million for the whole UK economy over five years; £600 million is not even the annual budget of my local health board in Angus and Perthshire Glens. If those types of numbers are important to the Chancellor, the total quantitative tightening cost of £45 billion since 2022 should really be nearer the top of her red box for her attention.

I was going to point out to the hon. Member the size of the sum involved but he went on to mention it himself. This is translating a theoretical loss into a real one guaranteed by the Treasury with taxpayers’ money, so I think the hon. Member is definitely on to something.

I thank the hon. Gentleman for his reassurance, particularly as I actively did not anticipate any reassurance.

Total costs for quantitative tightening are predicted to be in the region of £130 billion, all borne by the taxpayer of the United Kingdom. The one relevant thing the Chancellor did say to me when I raised this with her during Treasury questions was that she highly values the operational independence of the Bank of England, and so do I, but that does not mean she cannot chat to them about what is patently unnecessary and extremely expensive to the public purse.

Finally, we see a very unsavoury lurch to the right from a Labour Government on immigration. I will not rake over those coals but it is clear that the Prime Minister regrets some of his more florid language on immigration, and the Chancellor has provided no costings and no analysis of this dangerous policy that has been dreamt up on the back of a fag packet. Scotland has a declining birth rate, as do many other parts of the United Kingdom. We actively need immigration. We need it for our care sector, for our hospitality sector, for our agricultural sector and for our energy sector. It is not just low skilled seasonal work that we require, but all manner of people to come and work in our broad and diverse economy. In Scotland we have no idea why we have been dragged down this route—actually we know fine well why we have been dragged down it—but it is hugely damaging, again, for a Government whose stated ambition is growth, and choking off the labour component from the economy is really not consensual.

This relates to the whole debacle on the EU. I heard the Chancellor say the other day that there is no going back on Brexit and there will be no regulatory alignment and no free movement of people and they will honour the vote of the people—not the vote of the Scottish people, let me add—and Brexit is water under the bridge. Well, it is not water under the bridge, or rather in so far as it is water under the bridge it is a pool of stagnant, rancid water that refuses to shift its acrid whiff from across society in Scotland and elsewhere.

I heard a Lib Dem getting all doe-eyed earlier about seed potatoes; and he was right. Seed potatoes are very important in my economy, but I remember when a Lib Dem would give a full-throated endorsement to membership of the European Union, rather than doffing their cap to a Labour Government for frittering around the edges. This is frittering around the edges, and it has come at a tremendous cost to the Scottish fishing industry. Some 70% of the revenue from aquaculture and fishing in the United Kingdom comes from Scotland, and the Scottish aquaculture and fishing industry is 50 times greater a part of the Scottish economy than it is of the UK economy, yet no discussion was had with the Scottish Government or sector ahead of that, just as no discussion was had in 1970 when the Scottish fishing industry was thrown under a bus at that stage as well.

The Minister might say, “Well, you can’t have it both ways, you SNP type: you can’t say you want to be back in the EU and then lament the loss of your fishing rights to EU boats”—the Minister can score that point out now. Although of course we want to be back in the European Union with all our other European nations, and we would have to take some of that pain on fishing, we would get the gain to go with it. What Labour have foisted on Scotland is all the pain of conceding our fishing grounds to European boats and none of the gain of being in the European Union, and nothing they have agreed this week is remotely like being back in the European Union.

There is an ill wind blowing through the political landscape on these islands, and the actions of this Labour Government are simply making matters worse.

As a member of the Business and Trade Committee, it has been a privilege to traverse this land from Exeter to Belfast and from Glasgow to Cardiff to speak with people on the frontline of business. They are a doughty, resilient lot, doing amazing things; Britain’s got talent, but heads are going down. The barrage of red tape is taking a toll. Costs are up, and I must reference the speech from the hon. Member for Loughborough (Dr Sandher), which probably owed more to the boards of the Globe theatre further along the Thames than to this place. In his highly colourful speech, I was not quite sure whether he was blaming Mrs Thatcher or gas prices for high energy bills, but he should really look towards his own Secretary of State for Energy Security and Net Zero, because much of the increase in energy prices, which hammer businesses right across this country, comes from carbon taxes applied by this Government.

Critically, all this leads to expansion plans being shelved, as confidence slides. That means fewer jobs, especially for young people and those chasing that all-important first job. This Government’s boast is that they are putting money into working people’s pockets. Setting aside the questionable veracity of that claim, there is no doubt that if someone loses their job, or if they do not have a job in the first place, there is no extra money in their pocket.

What this Government are creating is a hostile environment for some sectors. Yes, there are millions of pounds—maybe billions—for steel, plenty for unionised train drivers and no-strings pay boosts for NHS staff, but what about agriculture, which is the key driver of the economy in rural Dumfries and Galloway, my constituency? Farmers and many associated businesses might just about survive Labour’s urban-centric indifference, but the active harm it is doing by taking steps such as the upping of inheritance tax and the driving down of agricultural property relief is a disaster.

The consequences of Labour’s avaricious increase in employer national insurance contributions are all too real. The Usual Place is a Dumfries charity that does amazing work helping young people with a host of mental and physical issues move into real jobs in catering. It is cutting back on those jobs because extra national insurance contributions put a bounty on each employee’s head, meaning jobs gone and life chances maimed. I hope the charity will celebrate its 10th anniversary next month, but Labour is doing nothing to help it get there.

At the other end of the spectrum, I spoke this week with a major firm whose payroll supports a five-figure number of employees. It has a strong social conscience and tries to tap into the huge cohort of economically inactive Britons and get them into the world of work, with all that that means for their pay packets but also for the intangibles such as the self-esteem and dignity that work affords. It calls itself a gateway employer, proud to be the first rung on the jobs ladder for thousands, but it is aghast at Labour’s anti-business approach. Its increased bill for extra national insurance contributions is eye-watering, and now it faces the thicket of rules and regulations that is the Employment Rights Bill—the Deputy Prime Minister’s love letter to the unions. The imposition of day one rights means that a taking a chance on employees with poor qualifications and a poor employment history, or perhaps ex-offenders, is much more risky for the firm. It knows—as do myriad other businesses, large and small—that it is less likely to recruit, while elements of the legislation are designed instead to swell the ranks of the increasingly restive trade unions.

We are through the looking-glass with this Government’s unbalanced approach to business. Black is now white.

Will the hon. Gentleman give way?

Order. Has the hon. Member just arrived in the Chamber?

You cannot waft into the Chamber and make an intervention; you have to listen to the contributions. What time did you arrive in the Chamber?

About twenty-five minutes ago.

Marvellous—we will check the record. You may continue.

The hon. Member for Dumfries and Galloway (John Cooper) is talking about the feedback that we heard on the Business and Trade Committee. Does he recognise that businesses also fed back about the political uncertainty under the previous Government and how that made it very difficult to create an environment in which they could expand?

The hon. Lady is a doughty campaigner on the Business and Trade Committee. Unquestionably, mistakes were made. We know that and we have been through it before, but this Government have been in charge for 10 months now, and we see inflation rising and jobs slipping away.

As I said, we are through the looking glass: trade deals are bad, except when they are good. The Secretary of State for Environment, Food and Rural Affairs last week criticised the Conservatives’ Australia and New Zealand deals for hitting farmers, while saying that his Government’s US deal protects farmers. The US deal put the welly boot into beef farmers, who face cheap imports here and US quotas over there that they just cannot fulfil.

I wonder what the hon. Member thinks about a couple of points. When is a trade deal not a trade deal? It seems that what has been agreed with the United States is a tariff deal and what has been agreed with the European Union is a modification to our pre-existing arrangement. What does he think the US trade deal will mean for beef farmers in his part of Scotland?

The hon. Gentleman is right. These are not free trade agreements in the normal sense of the words: they are frittering around the edges, as he said himself. The difficulty for beef farmers in Dumfries and Galloway is that prices are rising, which is partly down to a drop in stock because of costs and things like that, so they are unable to fulfil this idea of sending beef to America. That is unlikely—it is more likely that we will see cheap American beef coming here.

Again, we go back through the looking glass. Up is down when the Employment Rights Bill makes strikes more likely, yet is touted as a boost to productivity. It is incredible. The minimum wage is up, which is no bad thing, but let us not pretend that that is Government money: hard-pressed businesses have to find that extra cash, again. In short, Labour is not working and, terrifyingly, neither are increasing numbers of our constituents.

This Government were elected on a promise to go for growth. They said that they had a costed programme and that everything else they wanted to spend money on could be paid for by increasing growth. Despite those promises, almost every single action that Labour has taken since entering office has been to stifle growth, not to improve it.

Before the election, many businesses backed the new Government. They believed their promises on tax, stability and growth. Many of those businesses have now lost confidence in the Government, and who can blame them? The impact of the hikes in national insurance contributions and business rates, combined with the red tape of the Employment Rights Bill and the removal of business property relief, has totally undermined business.

I had the pleasure of serving on the Employment Rights Public Bill Committee for more than 20 sittings to go through the legislation line by line. It is 300 pages of additional regulations and costs on our businesses. It is a pay-off to the trade unions for giving their support to the Labour party before the election. That is why the Bill was introduced within 100 days, basically unfinished, and why so many amendments had to be made to it in Committee and on Report. The Bill was written by the trade unions, which explains why the Government show no willingness to compromise on its most damaging parts.

The Deputy Prime Minister is using the Bill to burnish her credentials with the left of her party, for the same reason that she and her team briefed the press yesterday on why she wants another £4 billion of tax rises: it is all in order to be ready for a tilt at the top job. That is why one part of the Government are not listening to businesses when they say how badly they will be impacted by this legislation. However, there is another significant contingent: those who simply do not understand business at all. Vanishingly few Labour Members have experience in small businesses, and practically nobody in the Cabinet has any experience of business at all.

Who is going to be hit the hardest by the cumulative effect of this Government’s punitive attack on business? It will not be Amazon, Tesco or Shell; it will be the people at the margins—those who are looking for a job in their local family-run business. The real impact will be on those who are looking for work, because everything that this Government have done is an attack on jobs. Members must ask themselves: why would a small business, as an employer, take a risk on taking on an additional member of staff in this environment? It will be taxed more and it will be opened up to litigation from day one if it fails to follow the complicated legal processes in dismissing them.

Day one rights will have a disproportionate effect on those people who we most want to help into work: young people without qualifications, those who have taken long-term sick leave, those with disabilities who need reasonable adjustments, and former criminals. Right now, if a small business gives someone a chance, it can let them go easily if it does not work out for either the employee or the business. Why on earth would it take that risk in future?

It is deeply regrettable that unemployment is already on the rise. We know that every Labour Government leave office with unemployment higher than when they started. It is regrettable that business confidence is at an all-time low after this Government have been in office for only 10 months. That is all caused by their disastrous business policies. I urge the Minister that it is not too late to change course, but if the Government do not do so, they will create a whole new generation of people who are locked out of the job market altogether.

The outlook for business and the economy is really not good, to be brutally honest. We learned today that inflation has gone shooting up to 3.5% in a surprise increase. The Chancellor said she is disappointed by that, but it is entirely the result of her own policies. She was warned by the OBR, among others, that if she increased taxation to record levels and increased borrowing to record levels, it would have an inflationary impact. We are now seeing that, and normal people are literally paying the price through higher inflation. That is more alarming because it is against a backdrop in which unemployment is up by 150,000 people and growth is stagnant, with the IMF downgrading its forecast for growth for both this year and the next.

Business confidence is down at levels last seen during the pandemic, when the entire world economy was brought to a stop. Businesses are clearly very anxious, and that is apparent from talking to businesses in my constituency. When business suffers, ultimately it is living standards that suffer. The brilliant Minister, the hon. Member for Swansea West (Torsten Bell), produced loads of good work when he was a think-tanker for the Resolution Foundation. He used to produce lots of wonderful charts—I am a great enjoyer of charts—about real household disposable income, and he was worried about that. Now the Government have come in, and the measures they took in their first Budget reduced the forecast for household disposable income. The post-measures forecast, in technical terms, was lower than the pre-measures forecast. The outlook for living standards in terms of disposable income is one of the worst for many decades, as shown in the OBR’s forecast for living standards; growth is a tiny fraction of what we have considered to be normal since 1945.

The outlook is bad, and it is not difficult to explain how we got here. The Government have taken the tax burden up to an all-time record high, and in lots of different ways. They increased national insurance and they cut agricultural property relief and business property relief. It is interesting to see how that is percolating out across the rural economy. People often think of the family farm tax as something that just hits farmers, but I have been struck by the multiplier effect. When I met local businesses, there was a whole group of people there—farmers, sure, but also suppliers of tractors, insurers, vets and those from the whole wider rural economy. It is all being dragged down. We have already heard from Welsh colleagues about the massive reduction in investment in their rural economies as a result of that unfair tax.

As has been noted by various Members, the family farm tax has been floated many times. It was certainly put in front of us when I was at the Treasury, and we said no. My right hon. Friend the Member for East Hampshire (Damian Hinds) said the same thing. This terrible idea has been produced many times, and I am afraid that there has been a mugging on Great George Street; naive, totally innocent young Ministers have come in and been mugged by wily civil servants, who have finally been able to have their way. We have all had that piece of paper on the winter fuel payment put in front of us, but we chose not to do it. Civil servants must not have believed their luck when these Ministers agreed to do it. The Government are now hastily trying to do a bit of a U-turn, but let us see what comes forth.

I am enjoying the hon. Member’s peroration on the halcyon days of the last Conservative Government, but he knows, as I do, that had the last Conservative Government seen growth even close to what we had in the mid-2000s, everyone in this country would be £2,400 better off. However, what we saw was stagnation and Liz Truss.

One of the things that happened during our time in government was a massive global pandemic that brought the entire world economy to a complete halt, but memories are short. Perhaps more importantly, every single thing that this Government are doing is bad for growth. That is the bottom line.

Perhaps the hon. Member has not had a chance to see the piece of work produced by a former shadow Chancellor that sets out the relative recovery rates of different world economies in the developed world since the pandemic. It shows that the United Kingdom is right at the bottom of the pile thanks to the mess left to us by Liz Truss crashing the UK economy.

Labour Members who were not in the House at the time—it is before their time—will not remember that the deficit we inherited in 2010 was twice the size of the one that Labour has inherited, and the structural deficit was twice as big. Indeed, we went into the global recession—the financial crisis—with the largest structural deficit in our peacetime history. That is the record of the last Labour Government.

We had had a recession that was the size of the 1980s recession and the 1990s recession put together, and when I say we were cleaning up the mess—I am afraid I am going to use a generation X metaphor—I mean it was like one of those enormous brontosaurus poops in the film “Jurassic Park”. We were cleaning up a big mess, and it took us a long time. We had to make some difficult decisions, particularly during the coalition years, to clean that up. Members have referred to my peroration, but I am afraid I am only getting started. [Interruption.] The House groans at the prospect.

My hon. Friend talks about the mess that the coalition Government, as it then was, inherited in 2010. Does he recall that youth unemployment was running at about 10%? The coalition and then the Conservative Government were successful in rebuilding the nation’s finances. Painful as those decisions were, at the same time that Government created 800 jobs every single day from 2010 to 2024.

We inherited a situation where unemployment had doubled. One of the great achievements of that Government was to halve it again. This is confidential, but the first time I met Nick Clegg, I was accompanied by a gentleman wearing a chicken suit—this is the kind of serious economic analysis I am famed for—but I have to say that Nick Clegg was not a chicken when it came to making difficult decisions to clean up that huge mess; the Liberal Democrats made some difficult decisions along with us to try to do that.

I have talked about the increase to national insurance contributions, and I will return to that in a little more detail. We have also talked about APR and BPR. One of the most striking developments in my constituency, though, has been the effect of the doubling of business rates for the hospitality, leisure and retail sectors through the ending of the relief that we introduced—an effect that is very visible, particularly in the high streets such as the Parade in Oadby, and in Wigston and South Wigston. The situation is also bad in Market Harborough. The problem is compounded by some local decisions—the council has increased parking charges, which was a big mistake—but it is the ending of those reliefs and the huge increase in national insurance contributions that have been especially bad for our local high streets, and for pubs in particular.

When I was talking to a brilliant pub landlady who owns several pubs in my area, she said, “We hoped so much that this new Government would be a morale-lifter and there would be a boost and a feel-good factor, but now we have a feel-bad factor.” I often drive past a number of pubs that have recently closed because of the confluence of the ending of the reliefs, the higher energy costs, and a number of the tax measures that the Government have introduced. It is desperately sad to see all those closed pubs that used to be huge centres of community life. When people lose their local pub, they lose a piece of their social fabric as well. Pubs are important local businesses, especially in rural areas.

We have had the tax increases, and we have also had the increase in energy costs as a result of everything that the Secretary of State for Energy Security and Net Zero is doing. We were promised a £300 reduction in our energy bills but instead we have seen a £281 increase, and that can only rise as the Government do all sorts of ill-advised things to hit their ill-advised target of fully decarbonising electricity by the end of the Parliament—something that will massively increase the costs of going green in comparison with the counterfactual.

At the same time, we have seen a massive increase in employment red tape. One of the bright spots in the UK economy over the last 30 years has been a relatively liberal labour market, but there has now been an extraordinary moment when all the big five business groups in the country came together for the first time—they have never done this before—to criticise the Employment Rights Bill. A Member on the Government Benches said earlier that it was all right because some Cambridge professor had said it was fine; on the other hand, every single business in the UK is saying it is a disaster. The fact that Members are accepting that kind of donnish approach to managing the economy, rather than listening to the views of the people who actually create jobs and drive our economy, really says something about the contemporary Labour party. This is no joking matter, though; it is a serious issue and a major economic detriment.

At a higher level, the wealth creators have been affected: the non-dom changes, some of which have already been rowed back on and more of which may be rowed back on in future, have driven away people who have a great deal to give to our economy. There are plenty of reasons for this picture of economic underperformance and gloom.

I would not mind so much if all the tax increases, leading to a record tax burden, had been imposed against a backdrop where the Government were bringing our debt and deficit under control. Perhaps the Minister will be able to correct me, as his knowledge of fiscal factors may be greater than mine, but I cannot recall any fiscal event when the Government have presented a Budget and at the end of the forecast period, public sector net debt was still rising. There have been plenty of fiscal events when debt has risen, because of events such as the pandemic or the war in Ukraine, but they have all shown a path towards falling debt. This is the first time I have seen a chart—I think it is chart 7.3 in the Office for Budget Responsibility’s economic and fiscal outlook—that shows debt still ceaselessly rising even at the end of the forecast period. I cannot remember another Budget like that. We are seeing the confluence of a stalling, stagnating economy, rising unemployment, increasing tax and, as a result of all that, debt rising and storing up major problems for the future.

I want to go into a bit more detail about a couple of matters, the first of which is that national insurance increase. Labour in opposition promised that there would be no tax increase for working people, so I was stunned—jaw on the floor—when the biggest tax increase that they introduced fell squarely not just on working people, but on low-income working people. It is like a laser-guided, heat-seeking precision missile, targeting those low-income workers, particularly women, who graft hard and are not paid a lot. I find it incredible that a Labour Government—a Labour Government!—should have chosen, as their big tax increase, to lower the threshold for national insurance while increasing the rate. It hammers those on the lowest incomes. That is amazing.

Why was that option chosen? It was chosen for all the wrong reasons. It was chosen because the Labour party hoped that it could say, “This isn’t a tax on the workers; this is a tax on businesses.” Of course, everyone can see through that. The problem for the Government is that the Office for Budget Responsibility immediately popped up and said, “No, three quarters of this will be passed through to people’s wages.” The OBR says that people on £13,000 a year will lose £500, which is a lot to lose for someone who is on only £13,000. People earning £9,000 a year are the biggest losers proportionately. According to the OBR, they will lose 5% of their income as a result of the huge tax increase being passed through into their wages. It is amazing that Labour Members are not up in arms about the fact that the Government have just implemented one of the biggest tax increases ever and have targeted it at lower-income workers. That is incredible for the Labour party—absolutely unbelievable.

On the other side of the ledger, what has happened to public services? Of course, they are all hit by the national insurance increase. We were promised in the autumn Budget that they would be looked after, but that is not what has happened in practice. First, we found out that lots of bits of the NHS would not be compensated, including primary care—that GPs, opticians and dentists were all going to have to suck up the increase in tax. We also found out that social care would not be protected and would have to suck it up.

Intriguingly, and as I pointed out at the time, there was a difference between the Budget document and the OBR’s EFO, which I am sure the Minister will remember. The EFO cited a different number for the cost of protection and it mentioned that social care would be included. One of the joys of having the OBR—although it is not a joy for those in the Treasury—is being able to see the Government’s handwriting and the last-minute changes; in this case, we can see that they were thinking very seriously about exempting social care from the big increase in tax, but that they chose not to do so at the last minute. That was the wrong decision.

As a member of the Health and Social Care Committee, I welcome the hon. Gentleman’s conversion to the cause of social care. Could he point me to where in the record, between Dilnot reporting in 2011 and today, he mentioned it while his party was in government?

The hon. Member was probably not here at the time, but I was actually Social Care Minister. He says I have been converted to the cause of social care, but I am quite passionate about it. In addition to the professionalisation of the profession and the investment in skills and technology, one of the things we chose to do—particularly in the wake of the pandemic—was to prioritise money going to the frontline, rather than towards the protection of people’s property income. I am not a social democrat, but occasionally we have to make tough choices; rather than protecting people’s property income, our choice was to protect and put money into the frontline of social care.

Will the hon. Gentleman give way?

In one moment.

I want to talk about some other public services that have been affected by the national insurance increase. There are a lot of examples in education. Nurseries have lost out, and they are screaming right now; they are in real difficulty. Lots will close and lots will fail to deliver the places that parents have been promised. If Ministers meet representatives of nurseries, they will hear a tale of incredible woe, because nurseries are caught by both the large increase in national insurance, which squarely hits their workforce, and the increase in the national living wage. I am not against the national living wage—in fact, I helped to give it its name—and I believe in fair pay for fair work, but we have to be conscious about what we are doing with tax, because we cannot have a big increase in the national living wage and then wallop those exact people with a massive tax increase. That way lies disaster for our public services and for our small businesses.

Nurseries have lost out, and schools are losing out. Schools were promised that they would be fully compensated. It is not us saying this; it is the Association of School and College Leaders, which is a trade union, and the Confederation of School Trusts. They have discovered that schools are losing out by up to 35%—that is how much they have been shortchanged by this Government. The Government have deliberately obfuscated the funding and they are not even attempting to compensate each individual school for however much money they are losing. The result is that schools might sack about 13,000 teachers.

In fact, I have been meeting representatives of schools and school trusts in recent weeks, and they are currently sacking teachers. The Harris Federation—one of the best trusts in the entire country, with an amazing and proud record of turning around London schools—is sacking people. The Synergy multi-academy trust is sacking people. Sir Jon Coles, who runs the largest school trust in the entire country, has said that schools are obviously going to have to sack people, because schools have been shortchanged over national insurance. It is pretty poor that they were promised something that has not been delivered.

It is the same for our universities, and I have to say that this was a masterclass in un-joined-up government. First, the Government broke their promise on fees. They said graduates would pay less, and they increased tuition fees instead. That was the first broken promise. Secondly, the universities did not even get the money; it was entirely wiped out by the increase in the national insurance rate. Thirdly, with industrial action looming across the sector because they had taken away all the money they had put in, the Government made it easier to strike through the Employment Rights Bill. It is now rumoured that the Office for Students are to bring in a new mechanism to make it easier for students to sue universities if there are strikes. This is a case of left hand, right hand—or of arse and elbow, if I am completely honest—and a masterclass in totally chaotic government.

The same is true in lots of other bits of our public services—public transport, culture, housing and local government. According to the Local Government Association, local authorities have been short-changed by £1.8 billion, which is an enormous hit. They were promised they would be compensated, but they have not been compensated.

However, the worst example for me is our charity and voluntary sector. As the Minister knows, at least 7,000 charity and voluntary sector leaders have written to the Chancellor asking her to change her mind and reverse the massive increase in national insurance on these small, vulnerable organisations. When I talk to charities and voluntary groups in my constituency, they tell me some pretty disturbing things about what they are having to do to their staff because of those big increases.

I pay tribute to organisations such as Helping Hands up in South Wigston, Voluntary Action South Leicestershire, Loros and Rainbows. I am afraid we were recently forced to use one of our brilliant local hospices, Loros, to help look after my mother-in-law, and it provided wonderful care. However, its job is not made easier by the fact that it has been hit by this enormous tax increase. If the Minister wants a really good measure for the next Budget, he should reverse that. It would be hugely popular, but more importantly, it would be the right thing to do. Public services have been short-changed, and low-income workers have been the hardest hit, which is a pretty bad combination.

I want to mention something that has not been much explored in recent days, which is a tax increase—a stealth tax increase—that has gone unrecognised. By linking the UK emissions trading scheme with the EU scheme, the Government have increased the tax on energy that firms face, because the ETS is of course a tax, albeit a traded one. Prices in the UK ETS have been driven upwards for the last couple of months not just by the final deal announced the other day, but by the prospect of a deal and the prospect of connecting those two different markets.

Two different things have become a bit muddled in the public discussion—one is about trading electricity and the other is about the actual ETS as a tax. In January, UK allowances were trading at about £36 a tonne for December 2025 delivery, and EU allowances were about £25 a tonne more expensive, so £36 plus £25. As of today, the UK ETS is £54 a tonne and the EU ETS is only £4 a tonne above that. We have seen a tremendous price convergence, with the UK tax rate—the UK carbon price—shooting up to match the EU one. Although the price had been ticking up on the prospect of connection to the EU scheme, it went shooting up on the announcement of the deal: it is up by a further 10% since Monday’s reset announcement. That is increasing the cost to businesses, and it will ultimately pass through to the wider economy and to the rest of us.

Looking at the EU ETS price movement so far, it seems to me that the UK Treasury will accrue about £1.2 billion extra as a result of these increased ETS costs, which would certainly outweigh the supposed benefits from the carbon border adjustment mechanism—not that that tax is necessarily paid by firms in the UK, because it is paid by importers in the EU—so the wider cost of this stealth tax could be more than that. I mentioned that the potential increase to the Exchequer is about £1.2 billion, but the overall cost could be higher at more like £2 billion or so. That is an immediate result of the deal announced on Monday, and it is in effect a stealth tax, because it has given us a higher carbon price immediately.

I thought it was ironic that the Draghi report—the EU’s own report into how it can become more competitive—was quite critical of the EU’s ETS. It said it had given the EU one of the highest carbon prices in the world—a high and volatile price. The Government were telling us what a wonderful benefit it was to be part of it, even as senior people in the EU were saying that it is a problematic scheme. That part of the deal has been a bit underappreciated so far.

The hon. Gentleman has spoken now for, I think, 23 minutes. He has criticised on many fronts the decisions the Labour Government have made to fix the foundations of the economy and clear up the mess that his Government left. Would he mind spending maybe 30 seconds on what decisions his party would take to put police back on our streets, fix our public services and put money in people’s pockets?

I had not realised I had spoken so long. Even I, at 23 minutes, have probably had enough O’Brien at this point, never mind the rest of you poor souls! The hon. Lady talks about police. In the last Parliament, the previous Government added 20,000 extra police officers to our streets. I was not going to raise it, but national insurance hits the police as well. I see TV footage of prisoners released from jail by this Government popping champagne corks. I am not going to widen this out into a debate about criminal justice, but if I did so it would be more enjoyable for Conservative Members than for the current Government.

We have a pretty bleak picture: inflation up, unemployment up, growth stagnant and being revised down by international bodies such as the IMF, business confidence at its lowest level since the global pandemic, and an outlook for living standards that is absolutely miserable. Something has to change, and I hope the Government are having a rethink on the economy, as well as on other subjects such as migration. The Prime Minister used to be madly in favour of it, signing letters saying, “Don’t deport anybody.” I do not really think the policy has changed hugely, but at least the rhetoric has changed. On the winter fuel payment, let us see how far the policy goes. What we really need, above all else, is a change in economic policy to one that is more about getting growth moving. Until we do that, we will not get anywhere.

The Minister, being brilliant, will remember the economist who said:

“Once you start thinking about”—

economic—

“growth, it is difficult to think about anything else.”

I am sure he is thinking about economic growth, but we need to move from the wonking and the thinking to the changing of policy in a more growth-oriented direction if we are to get unemployment down and give people a chance of having better living standards and a better future.

What a great speech to follow. I have an ambition to reach 25 minutes, so here we go. I should start by making reference to my entry in the Register of Members’ Financial Interests. I was challenged by a Labour Member—I am not quite sure which one—and I should declare my background in entrepreneurialism. I ran an SME and then created something called an employee ownership trust, having employed well over 1,000 people. I am also a director of a farming company, which will perhaps have some relevance to my later comments.

This has been a very lively, interesting and well-informed debate—I have certainly enjoyed it so far—and it has been interesting in what it has revealed about Labour Members and Opposition Members. We have had no fewer than three academic economists speaking from the Labour Benches and we have had businesspeople with real-life experience of the economy speaking from the Opposition Benches. One might think, “Well, surely economists know lots about the economy.” You would have thought so, Madam Deputy Speaker, but if we look at how the Government have responded since 4 July, with their obvious surprise at business confidence going through the floor, we begin to see how out of touch academic economists can be when faced with the facts of the real economy.

It is undoubtedly the case that business confidence has collapsed. The BDO optimism index has now sunk—this is the latest figure—to 91.36%. What does that mean? What it really means is that it is the lowest since the entire world economy was shut down by covid. Looking at any one of a number of indices, both business confidence and consumer confidence have gone down massively as a result of Labour’s election. That prompts the question why there has been such surprise on the Government Benches that their actions have been so ill received by the people who drive the economy. One of the reasons is that the country as a whole—and businesses in particular—was actively misled by Labour in the run-up to the general election. We were all told that Labour had no plans for tax rises beyond those that had already been announced. We were all told that Labour’s plans were fully funded and fully costed and that they did not require tax rises above those set out in the manifesto.

As someone with a business background and who worked in a large international business before coming to Parliament, I think the previous Conservative Government misled businesses when they promised them a Brexit that was going to remove red tape, but which actually created barriers. Does the hon. Gentleman agree?

I am grateful for that intervention. I joined this House in 2019, but the original Brexit debate had hyperbole on both sides. We had Project Fear saying we would need an immediate fiscal event as soon as we had the referendum, but that did not take place. Growth has actually continued since the referendum back in 2016. In fact, growth in the United Kingdom has outpaced that of Germany, France and Italy, and, for that matter, Japan. There were a lot of arguments, both one way and the other, over the likely consequences of Brexit. My takeaway is that, overwhelmingly, it has not made that much difference to the world economy or to Britain’s relationship with the world. There have, undoubtedly, been some trade frictions, and those have been particularly acute for SME import/export—I recognise that. But overall, trade has continued, and we have actually outperformed our European big economy neighbours.

The hon. Gentleman suggests that there was no damage done to businesses, yet I have been chairing business roundtables recently with industry representatives—people who run billion-pound businesses; significant businesses—and every single business recognises the impacts of Brexit as a principal drag on their profitability and growth.

As I said, we had a huge change to how our country was governed, which was dictated to us by the people, because we are a democracy. One of the reasons I entered Parliament was that, despite voting remain in 2016, I was outraged as a democrat by the failure of Parliament between 2016 and 2019 to effect the will of the people, as clearly expressed in a referendum. That pushed me from being an activist to being a politician in order to effect the will of the people.

Since then, there have been pros and cons. There are a lot of pros, and over the past five years I have seen for myself how important some of our Brexit freedoms have been. If there were a plebiscite today on whether to leave or rejoin the European Union, I would vote without hesitation to leave, because I have seen some of the benefits. In my area, the common agricultural policy was a disaster, both economically and socially, and had a hugely negative impact on the environment, farms and countryside of Broadland and right across the country. With our Brexit freedoms, we replaced that with the environmental land management scheme, a wholly beneficial policy change—imperfect though it was; it was part of an iterative process to learn from our experience with farmers. That would have been impossible without Brexit.

Similarly, some of the trade deals we have done would have been impossible without Brexit, as would myriad regulations that have been improved just a little in all those Delegated Legislation Committees we have all enjoyed so much over the years. Much of that could not have been achieved without Brexit. None of those regulations will reach the front pages of the newspapers, but iteratively, over the years, they have the opportunity to make our economy and our society stronger.

That is one of the main reasons I was so disappointed by the Government’s capitulation to the European Union on dynamic alignment just a couple of days ago. We have taken on the disadvantages of non-membership of the European Union—we become rule takers—without any of the benefits of dynamic divergence of our regulatory system, which would allow us to bend our rules most accurately to reflect the opportunities of our own economy.

That was an interesting divergence, but I will now come back to the main argument of my speech, which is that Labour misled the people in the run-up to the general election. It said that its policies would be fully funded and fully costed. It said that there would be no taxes on working people, and it expressly said in its manifesto that there would be no increased tax on national insurance contributions. What is reality? Labour chose to use a fig leaf, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) might have said, which is this fabricated £22 billion black hole in the economy—the black hole, by the way, that the OBR failed to find. The former Financial Times journalist, the hon. Member for Earley and Woodley (Yuan Yang), who is no longer in her place, might recall that the Financial Times also failed to find the £22 billion black hole in the economy.

Labour uses that figure as a fig leaf not to raise £22 billion—no, that would be sufficiently unambitious—but to raise £40 billion of tax and another £32 billion of debt. It has done that by focusing the tax on jobs. National insurance contributions are focused on young people, part-time workers, and women in particular. The Employment Rights Bill put another £5 billion on taxation—on the Government’s own impact assessment. The increase in high street business rates is inexplicable in a period of such strain on our businesses, and that is not to mention the effect of agricultural property relief. What is the result? Some 200,000 businesses have closed, which is a 20-year high—a high only beaten by the previous Labour Government.

In January 2025, corporate insolvencies were up 10.7%. That is the highest since the financial crisis when Labour was last in power. Unemployment was up 10% to 4.5%. The Bank of England forecasts that it will go up further to 5%. Youth unemployment was up 11%. This feeds into the well-worn war narrative that Labour always leaves government with unemployment higher than when it arrived. The Government must stop and think again. I know that they were new to government; they had been out of power for 14 years, and they have made some really profound, rookie mistakes, but we must not let our businesses and those employed pay the price for that. The Government should look again and seek to recover their economic reputation.

I am being closely supervised by the Whips, as I have been told to keep this speech quite short, so there will be no 25 minutes from me.

Hard-working British people are losing their jobs. Is it any wonder when every policy that this Government announce seems designed to make it harder for British people to do the right thing—create jobs and grow our economy. We have a tax on job creation; billions of pounds in extra costs through the Employment Rights Bill; and a family business tax, which pushes entrepreneurs and job creators elsewhere. We cannot grow an economy through sheer force of will alone; we need to give the people who build the businesses that employ the workers who power the economy the best possible environment in which to thrive.

We have seen what happens to hard-working people under this Government in my constituency of Mid Bedfordshire. Constituents who were part of a 120-year proud manufacturing history at the Stellantis plant in Luton now find themselves out of work, just a few months after the imposition of this Government’s policies.

Hard-working publicans in my constituency are now, sadly, closing their doors, because higher costs and crippling regulatory burdens are being applied by this Government. I note that not many Members have spoken about pubs, but they are an essential part to many of our communities, and pubs in my community are closing their doors. That means fewer opportunities for younger people to get their first job in our rural areas, which was exactly my experience growing up in north-west Hampshire. There will be less money for our local farmers and producers in the supply chain, damaging our rural economy, and it means the heart of two rural communities in my constituency being ripped out. This is happening up and down the country, with UKHospitality confirming that 70% of hospitality businesses expect to reduce employment and that one in seven are planning to close at least one site.

Worst of all, this Government’s economic policy is hammering our hospices and charities. Conservative Members have spoken passionately not just today but in previous months about the importance of this sector. Hospices and charities have relied on the British public’s unending good will and generosity to keep going through some tough years over the pandemic, but they can no longer rely on the good will of their Government.

The only jobs that seem to be safe from Labour’s tax hikes are in the new quangos being rapidly established to run our energy, railways and the rest of our country—all while the Government announce review after review into who is spending all their money.

I said that I would keep my speech short, so I will wind up. The tax rises that we all know are coming to pay for the expanding state and the debt that the Government are now running up will strangle any meagre growth that they plan to nurture. Their plans for growth are a mirage. Huge Government spending will only supplant private investment.

We have not spoken about it today, but the National Wealth Fund investment will not create any wealth. So far, the average National Wealth Fund investment since July 2024 has cost nearly £1.5 million per job created. It is a sad state of affairs. This Government talk up their plans for growth but fail to back the people who grow the economy. We can see from economic history that the larger the Government, the smaller the economic growth. The Government are putting big government over job creators and entrepreneurs. Confidence is being undermined, and that is resulting in rising unemployment, especially for our young people.

It is time for something to change. The Government need to urgently change course to support the aspiration, hard work and risk taking that is needed to create the jobs and prosperity that working people throughout Britain deserve.

I call the shadow Minister.

I am grateful to close this debate on behalf of His Majesty’s Official Opposition. Let me start by thanking all those who contributed and from all sides of the House, but particularly my right hon. and hon. Friends, who have highlighted so clearly the devastating impact that job losses and business closures have on families, communities and our national economy.

I should also thank those on the Opposition Benches—sorry, I mean the Government Benches; it will not be too long. Is it not amazing that just three Labour Members were brave enough to speak? I pay tribute to them: the hon. Members for Harlow (Chris Vince) and for Loughborough (Dr Sandher), and the hon. Member for Earley and Woodley (Yuan Yang), who is not in her place. So proud are they of their economic performance that only 1% of the parliamentary Labour party actually bothered to show up to a debate on the economy—but then 1% is a pretty high figure for the Labour party.

The truth is that since last July we have all heard a story of someone who is struggling to figure out how they will pay their new tax bills, or struggling to find a new job or pay their energy bills, which just keep on rising, despite people being told that they would go down. Many of my right hon. and hon. Friends have made very good contributions in interventions and speeches today. I cannot mention them all, but in particular I pay tribute to my right hon. Friend the Member for East Hampshire (Damian Hinds), who highlighted that businesses are people. That is something I mentioned in my maiden speech. My dad set up a business; he took a risk and made it work. He made it happen, despite it being very difficult. My right hon. Friend is right; when we in this place tax businesses, we are taxing people. It is something that we understand and the Government do not.

My hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) speaks with great authority, not least because he has employed so many people and driven so much growth. He is a proud colleague of mine. He highlighted right at the beginning the potent combination of taxation on businesses; it is not just one tax but a combination of taxes that are hitting retail businesses in particular, and there is also red tape being implemented.

My hon. Friend the Member for Dumfries and Galloway (John Cooper) spoke about his farmers. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) highlighted the impact of the NICs threshold increase, which is not always talked about—there was a two-pronged attack on businesses and people in that the rate changed and the threshold changed—as well as hospitality businesses in his constituency. My hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) also did that—he talked about his pubs—and my hon. Friend the Member for South West Hertfordshire (Mr Mohindra) spoke about his personal experience from his previous career and his experience from his constituency. My hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) pointed out that if Ministers spent a bit more time listening and a little less time talking, perhaps the economy would not be in as bad a state as it is.

This time last year, the Prime Minister and the Chancellor were talking at people, telling anyone who would listen that the “growth lever” would be very first lever they would reach for in government, but the only economic lever they did manage to pull was the handbrake, otherwise known as the tax lever. Labour’s first Budget was the second-biggest tax raising fiscal event in the last 50 years, which, as my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O'Brien) pointed out in an excellent speech, took the tax burden to the highest level on record. On growth, forecasts have been downgraded across the board by the OBR, the BOE, the OECD and the IMF—by this point, Labour’s economic performance has been panned by just about every letter in the alphabet.

Labour Members can crow all they want about growth data from the first quarter of this year, but it does not change the fact that growth was higher under the Conservatives during the same quarter of 2024. Debates about growth figures are not purely academic, as the Labour academics would have us believe; they have real-world consequences for workers and businesses up and down the country, most obviously when it comes to employment. As my hon. Friend the Member for Bridgwater (Sir Ashley Fox) pointed out, no Labour Government have ever left office with lower unemployment than they inherited. That is perhaps because in the last 60 years every Labour Government have left office with a higher tax burden than when they started.

As the shadow Secretary of State, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), highlighted at the beginning of the debate, the ONS says that there are 150,000 fewer payrolled employees in our country than there were last July when Labour entered office. We have had significant falls in employment by that measure in seven of the last nine months. Let us put that into context: that follows 42 months of near unbroken payroll growth under the Conservatives as we exited the pandemic. In that time, we saw 2.2 million workers added to payrolls, leaving payroll employment 1.4 million higher than it was pre-pandemic.

That is the difference that a Labour Government make: they send job recovery into reverse. Hiring expectations for the next three months are at a record low. Unemployment is going up and up, with the Bank of England now forecasting 5% unemployment by 2027. Of course, it is in the most heavily taxed sectors that we see the greatest damage. Earlier this month, 250 jobs were cut by Harbour Energy in the North sea after Labour raised the tax on the sector to some 78%. In retail and hospitality, it is small businesses who are hardest hit by the national insurance increases and the business rates relief cut. Labour Ministers talk about difficult decisions, but they are not the ones who are having to reduce opening hours, close on weekends, freeze pay and make redundancies of family members—mums and dads who just want to get up and go to work—just to survive.

In too many cases, we are seeing local businesses close down for good. The country is witnessing the fastest growth of corporate closure since Labour was last in office. The great irony of the Chancellor’s much lauded securonomics is that it has created insecurity and business uncertainty. Entrepreneurship is being suppressed and jobs are being sacrificed on the altar of Labour’s sanctimony. They have the brass neck to go about claiming that this is all in order to restore stability and the public finances, when the independent National Institute of Economic and Social Research has predicted that the true size of the Chancellor’s black hole is £60 billion.

Let us talk about black holes. The stable geniuses on the Government Front Bench took pensioners’ winter fuel payment away for the winter, but now that summer is appearing they talk about restoring it. They are taking pensioners for fools. What’s next—lower fuel duty for cyclists? The damage is already done. Who is to say that Labour will not be back in the winter to cut fuel payments again, just in time for Christmas, especially as Downing Street cannot guarantee today that the proposed changes will be ready by then? We shall see.

In Labour’s fiscal funfair, the only ride is a merry-go-round. Round and round the vicious cycle goes, to the point where we no longer ask whether Labour’s next Budget will bring in more tax rises, but which taxes it will hike. We do not ask whether the next Budget will downgrade growth forecasts, but by how much. We do not ask whether the next Budget will support jobs, but how much higher unemployment can really go under Labour.

As we found out this morning, the Deputy Prime Minister has put in her first draft, briefed to the press, for the Chancellor’s next Budget. Raising taxes on pensioners—that will hurt growth. Raising taxes on retail investment—that is anti-growth. Raising taxes on incomes—that is definitely anti-growth. When in a hole, stop digging. Labour simply cannot tax its way to jobs and growth, but it seems utterly determined to learn that the hard way. Our motion calls on the Government to learn from their mistakes and urgently change course. On behalf of millions of British workers and businesses across this country, I commend this motion to the House.

This is hopefully one thing on which all Members and definitely those on both Front Benches agree: “It’s the economy, stupid.” It is a growing economy that raises living standards and that sustains public services and eases public finances. Perhaps most importantly, it is a growing economy that proves to people that tomorrow can be better than today.

I welcome it that the Conservative party has called this debate. It is an important topic, it is deserving of our time and I thank all hon. Members for their contributions, even if I cannot thank them all for the duration of those contributions. Fifty minutes to deliver one speech is Britain’s productivity crisis right there. [Interruption.] The hon. Member for Arundel and South Downs (Andrew Griffith) is still talking. The productivity crisis rolls on.

Given how important this topic is, it will be a surprise to hon. Members, probably those on both sides of the House, that this is the one and only time that the Conservative party has wanted to talk about the economy in the year since the election. It is the first Opposition day on the economy. I initially thought that that could not be true. I am a new Minister and I have a lot to learn, so I said to my office, “Go and check. They can’t have got through a whole year with no Opposition day on the economy.” My office checked and it found that it has been 10 months with not one debate on the economy. Private schools? Oh yes, the Conservatives want a debate on that. But investment, growth, jobs and the economy? Not one debate. It is no surprise that they do not want to talk about the economy, because their economic legacy was one of entirely unprecedented failure, as my hon. Friend the Member for Loughborough (Dr Sandher) set out.

Will the Minister give way?

I will in a second.

It is a legacy of stagnation not seen in living memory, with the lowest business investment in the G7; wages, which used to grow at a consistent 2% a year, flatlining for their entire period in office; the worst Parliament on record for living standards; and the public finances trashed as debt soared. It is no surprise that the Conservatives have nothing to say about the past—the Leader of the Opposition said that it was true that they had no plan for growth—and it is staggering that they still have nothing to say about the future.

Will the Minister give way?

I said that I would give way first to the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien), but I will come to my hon. Friend.

That is not just my view, but the view of George Osborne. He says that the Tory party has no “credible economic plan”. I always enjoy listening to the hon. Member for Grantham and Bourne (Gareth Davies), so I listened extra carefully just now, and there is still no plan, credible or otherwise.

I was just observing and enjoying the way in which the Minister was lecturing us about not wanting to talk about the economy, when at one point during the debate, literally only three Labour Members were in the Chamber—it is extraordinary. If they are so wonderfully proud of their record of higher unemployment, higher inflation and slower growth, why are none of them here?

Because Labour Back Benchers support and have total trust in their Front Benchers. All they would have said is everything that I am about to say about the record of this Government, of which we are very proud.

I will come on to the labour market, which the hon. Member for Harborough, Oadby and Wigston raised. The hon. Member for Richmond Park (Sarah Olney) asked about employment and changes to national insurance, and several Members claimed that there is a direct relationship between changes to national insurance and changes in vacancies in the labour market. Let us introduce some facts to the debate—[Interruption.] While the shadow Secretary of State chunters, here are some facts: vacancies in Britain have been falling for 34 months, there has been a Labour Government for 10 months, and there has been a national insurance change for one month. Those are the facts. We cannot let the Conservative party escape from their disastrous record by reinventing history.

One fact is that the claimant count and unemployment rate in Swansea West have gone up by 4% on the previous year. What does the Minister say to his constituents when they confront him because they are losing their jobs and the unemployment rate has gone up?

The most important fact for my Swansea West constituents is that wages at the end of the Conservatives’ period in office were stuck at the same level as when they came into office in 2010—14 wasted years for my constituents. To respond to the hon. Gentleman’s question about unemployment, I would not use the claimant count at that level because the data is not as robust as it should be. Several hon. Members have, over the course of the debate, talked about increases in the unemployment rate in recent months. Why has the unemployment rate gone up? It is not because employment has come down, but because the inactivity that shot up on the Conservatives’ watch has started to decline. That is what is going on beneath the numbers.

Why do Conservative Members not want to talk about their disastrous record on the labour market? It is because they left us as the only G7 economy whose employment rate still had not returned to pre-pandemic levels. They left us with 2.8 million people out of work through long-term sickness, and 1 million young people not in education, employment or training—more than one in eight young people were left on the scrapheap by the Conservatives.

Let me turn to the labour market today, which hon. Members have mentioned. Some 200,000 jobs have been created since the Government took office. Pay has outstripped prices, with the strongest real pay growth for years. Let me pause on the question of wages, because for many people, what they get paid is the economy. Here is a fact so staggering that it tells us all we need to know about the failure of the previous Government and the progress made under this one: wages have grown faster in the first 10 months of this Government than they did in the first 10 years of Tory Governments from 2010. That is what a country turning a corner looks like.

Boom and bust!

It is not boom and bust. Wages for workers need to rise in Britain once again. We also need to turn the corner on an economy that is far too unequal. That is what our Employment Rights Bill will do.

The Minister is being incredibly generous with his time. He is saying what a wonderful outlook there is for wages. Why, then, is the OBR’s forecast for real household disposable income to be lower than in the 1950s, the 1960s, the 1970s, the 1980s, the 1990s, the noughties and the 2010s?

Real household disposable income per capita is growing quite fast, according to the latest measure at the end of the fourth quarter of 2024. The OBR says that the legacy of the previous Government has shown it that productivity and growth in this economy have been too slow. Our job is to turn around their record, so that the forecasts and real wages start to rise.

I thank the Minister for giving way on that point. He is making an excellent speech, contrasting the 14 years of utter failure by the Conservatives with the quick start by Labour. He has been quoting statistics for the period since Labour was elected, but will he say more about the potential benefits of the three trade deals for growth and investment?

What is great about my hon. Friend is that he has a forecasting ability that is significantly above that of many economic forecasters. He has predicted exactly where I shall be turning shortly.

I want to dwell on a few points about the unequal economy. Three million workers have benefited from the introduction of a higher minimum wage last month. That is worth £1,400 to a full-time worker. Just today, the Trussell Trust provided an update on the painful symbol of modern Britain that is food banks. Far too many food parcels were provided over the last 12 months: 2.9 million. That is up by nearly a half over five years, which is an absolute disgrace, but it is down 8% on the past year and we need to keep it falling.

Several hon. Members have raised the question of tax. The right hon. Member for East Hampshire (Damian Hinds) and the shadow Minister sounded as if they were opposed to all taxes and made it the core of their argument that a higher tax level is a problem that this Government have put in place. Neither of them mentioned that the increase in taxes under the Tories in the last Parliament was significantly higher than any change in taxes under this Government—[Interruption.] It is true.

The hon. Member for South West Hertfordshire (Mr Mohindra) raised the question of non-doms, but also asked whether HMRC was behaving more aggressively. He favoured direct control of HMRC by Government Ministers. The Exchequer Secretary to the Treasury now chairs HMRC, and I am sure he will have heard the hon. Gentleman’s points. On the idea that HMRC has become more aggressive, one of my first jobs in government was being involved in merging what was then the Inland Revenue and the Customs department, and I promise Members that nobody is as aggressive as the Customs department was in the olden days. There were guns involved.

This Government had to take difficult but fair choices on tax in the autumn Budget—

I am grateful to the Minister for giving way. A moment ago he told the House that real household disposable incomes were rising as a result of this Government, but does he not accept that the OBR, when critiquing the Budget last October, found that during the forecast period real household disposable incomes would fall as a result of the Budget proposals?

What the Office for Budget Responsibility has said is that disposable incomes will grow during this Parliament at twice the rate that they grew during the last Parliament. The hon. Gentleman has just given me another excuse to repeat my favourite fact, which is this: forget what anybody is forecasting, because in the real world, wages have risen more in the first 10 months of this Government than in an entire 10 years under the Conservatives.

We are going to stick to our promise not to raise working people’s rates of income tax, national insurance or VAT, and we are maintaining an internationally competitive tax system with the lowest rate of corporation tax in the G7. Nobody on this side of the House is pretending that these were easy decisions, but they were the right ones and the responsible ones, yet each and every decision has been opposed by the Opposition parties. It is no surprise to hear SNP Members joining with the Conservatives, as they do on almost everything these days.

The Minister is making great play of the way in which his new Government have increased wages across the United Kingdom since the election, but will he concede that 91% of earners and workers in Scotland were already earning more than the living wage level that his Government have recently set?

I will, and that is why I am celebrating the fact that average wage rises are happening. If the hon. Member does not want to be in favour of wage rises in Scotland, that says everything about today’s SNP.

We are all used to the Liberal Democrats’ fantasy economics, but the Conservatives used to believe in sound public finances. They used to understand that it is only on that basis that the Bank of England can sustainably cut interest rates, as it has done on four occasions since the general election. The shadow Secretary of State, in his very long speech, claimed that these choices were not pro-business choices. I tell him that these are pro-business choices because it is pro-business to deliver functioning public services. Was it pro-business when the Conservatives left shops up and down the country paying a retail tax, forced to employ their own security guards because the Tories took the police off the beat? Was it pro-business when employers everywhere faced a health tax under the Conservatives because the NHS was not functioning and their staff were off sick? As I said earlier, growth is key. Of course, the shadow Secretary of State is such a champion of the British economy that he predicted there would not be any. Back in December, he claimed with glee that Britain would start 2025 in recession—

I didn’t say that.

I will quote the hon. Member. He said,

“‘could we be in recession’? Yes we could.”

He talked the economy down—he knows exactly what he did—and British business has proved him wrong: no recession and the fastest growth in the G7.

Although the economy is beginning to turn a corner, the Government recognise that there are big challenges ahead. There is no shortcut if we want to get the economy growing again; we have to start investing once again. That is why we have raised public investment by £113 billion over this Parliament. Compare that with the deep cuts planned by the Conservatives. It is why Britain’s pension funds—my day job is as Pensions Minister—are looking to invest more in productive assets and more in the UK. It is also why we are approving infrastructure projects from wind farms to reservoirs that were previously blocked for years. When firms decide to invest, they have to actually be able to build something. That is why Labour is the party of the builders, not the blockers.

Let me turn to trade. The Prime Minister has in quick succession secured three significant trade deals. Every single one has been opposed by the Conservatives—opposing our whisky industry exporting and opposing lower food prices in the shops. It is increasingly clear that they say they support free trade in principle, but there is no actual existing trade deal that they would ever support. They used to be the party of Robert Peel, and now they are just the party of plonkers.

We are under no illusions as to the challenges ahead. We all know, on both sides of the House, the deep cost of living squeeze that has left far too many British families suffering, but we are getting on with the job: stability in the public finances, investing at home, trade agreements abroad, interest rates down and wages up. After a long decade and a half of stagnation, Britain is growing at the fastest rate in the G7.

We have heard a lot from Conservative Members, but not a single word of apology has crossed their lips for the mess they left—no humility for the unprecedented economic damage they inflicted, no apology to businesses or workers, and not even a sign of an alternative plan to drive growth and investment in our economy. The British public learned a very long time ago: when Tories govern, Britain loses.

Question put.