PARLIAMENTARY DEBATE
Business Confidence - 15 October 2024 (Commons/Westminster Hall)

I beg to move,

That this House has considered business confidence.

It is a pleasure Mrs Harris, to serve under your chairmanship today.

“Sustained economic growth is the only route to improving the prosperity of our country, and the living standards of working people”—

so intoned the Labour manifesto published over 114 days ago, ahead of the general election. I am sure that most, if not all, of us across the House accept the basic and fundamental premise that such growth is what ultimately funds our vital public services, which are crucial to all our communities.

Reducing inflation, giving business confidence to invest and delivering growth was a hallmark of the outgoing Conservative Government. After a difficult few years affected by the pandemic, it remains important for all Members of Parliament to be business champions for our communities. I thank every business, in all our communities, for what they do every day—every business on our high streets, in industrial estates and in the rural economy. I am thinking of the self-employed: those taking a chance so that others can be employed, sectors can grow and families are supported.

Many businesses in the Mid Sussex, Wealden and Lewes districts are hidden—family businesses, start-ups in back bedrooms, future dreams and more opportunities. They are, above all, a way to connect our communities to a thriving local economy and an investment in our future. They are giving, truly, an opportunity to all. Very shortly, I will be hosting my “Taste of East Grinstead and Uckfield constituency” event in the House of Commons, a follow-up to my most recent business breakfast at the Highlands Inn in Uckfield. I am sure that many other MPs will be showcasing businesses in their constituencies and working with them in this way.

Despite lingering covid shocks and the devastating war in Ukraine, inflation reached 2% by May and economic growth rebounded strongly, reaching 0.5% in quarter 2. Our dominant services sector grew by 1.5% in the same quarter. Key to delivering economic growth is, of course, inspiring confidence—the so-called “animal spirits” in the oft remembered words of John Maynard Keynes. They are a vital pre-requisite. Indicators suggest that confidence was growing in the first half of this year.

Like many things, the new Labour Government have failed to live up to their own hype, let alone the aspirations of millions of working people or businesses who create those jobs and opportunities all across our land. I welcome the international investment summit and the £63 billion it raised, but I remind the House that almost half that investment had already been previously announced by the Conservative Government; I warn the Minister of the danger of double counting.

In a little over 100 days, the Institute of Directors economic confidence index has fallen to minus 38—the lowest since December 2022. The same index points out business investment intentions, showing the sharpest drop since the onset of the pandemic: it was plus 24 in July and minus six come September—the lowest since September 2020. CBI survey trends have shown that manufacturers thought that output would fall over the next year: minus seven compared with plus nine in August 2024. The latest purchasing managers index for the services sector is also, I am afraid, heading in the wrong direction, showing that our economic recovery is somewhat running out of steam under the new Government.

What is the cause of this reversal? Institute of Directors members cite ongoing concerns over tax changes and the cost of new Labour reforms. The British Chambers of Commerce stated:

“On the domestic front, many businesses are increasingly anxious about the direction of economic

policy, and taxation has now become their primary concern”.

Now, the biggest single concern for business leaders is tax. A survey undertaken by the Institute of Chartered Accountants in England and Wales cites tax as the chief concern—the highest ranking on the survey ever. Given the mood music emanating from the top of Government, how can that be a surprise? Both the Chancellor and the Prime Minister have repeatedly warned that further taxes are coming, but have repeatedly refused to tell us where—a hard winter, not just for pensioners but for business. We heard that clearly at the Dispatch Box, just last week. This is the result of a single structural decision to delay the Budget until October, which has simply allowed rumours in.

Already, the situation is changing the behaviour of businesses. A survey by Evelyn Partners shows that 29% of business owners are looking to sell, while hard data shows the Treasury pocketing the highest level of capital gains tax in 15 years as investors head to the exit door. That is hardly a recipe for the growth—let alone stability, which the Labour Party promised our constituents. Just last week in Prime Minister’s questions, and recently in the media, the Prime Minister refused to rule out a rise in employer national insurance. I remind hon. Members that the Labour manifesto was clear, stating that:

“Labour will not increase taxes on working people, which is why we will not increase National Insurance”.

The situation has created a falling away of job vacancies. I remind the Minister and his Government that local small business owners are clearly working people. This is a pure jobs tax. Labour’s position now seems to be that taxing working people is bad but taxing their jobs is good. It is no wonder that businesses are confused and concerned.

One agricultural business in my constituency recently wrote to me:

“I hear dark stories about the forthcoming budget and the possibility that the financial support for the agricultural sector of the economy is likely to be reduced or even slashed. If this were to happen the viability of my family’s enterprise would be at risk and the livelihoods of between 20 and 30 families would be threatened. Our business is focussed on producing milk, grain and timber for the nation and on caring for the environment in which we live and operate.”

I am sure that other hon. Members here will be bringing similar concerns from their own constituencies and reporting similar things.

I thank my hon. Friend for giving way and congratulate her on bringing this important and timely debate. Many farmers in my constituency of Maidstone and Malling are having a very tough, wet time, like the farmers in her own constituency. I believe that, for many, business confidence is pretty much at an all-time low. Does she agree that reducing red tape, regulation, bureaucracy and endless reporting, and having a slightly more light-touch approach in terms of planning and the re-diversification of farms, could boost business confidence and inspire and motivate farmers?

I thank my hon. Friend. She is absolutely right: I have had conversations in my own district of Mid Sussex about supporting diversification in the rural economy. If things were changing on the high street, they would be supported; if they are in a rural business, they are blocked. I absolutely agree with my hon. Friend. I hope that the Minister is listening, although it seems that his party is not here to listen. I thank hon. Members here from the other parties, who are keenly supporting their own constituents too.

As I said, this is hardly a recipe for growth, let alone stability. A farming conference is coming up shortly at the South of England showground in Ardingly in my constituency, and that will be vital to business. Sponsorship in support of that has been absolutely key. I take this opportunity to wish good luck to Fallow Meadow, a new event space in West Hoathly in my constituency—another rural business taking a chance to diversify in order to support the family farm.

I thank the hon. Lady for setting the scene so well. Does she agree that small businesses are the backbone of our communities—they certainly are in my constituency—yet were hardest hit post covid? Recovery has not been easy. Given the increase in the cost of living, small businesses are finding it increasingly difficult to stay competitive with the online monster. Does she agree that confidence can come only when the Government are working hard to regulate and tax online businesses effectively and support all businesses in this new tech age, so that the ones that have been there forever can still be there for the future?

I thank the hon. Gentleman for his intervention, about his community and the local economy in Northern Ireland. This matters so much. These people are stridently working to earn wages every week—not only for themselves, but for their sectors, families and communities.

I agree with the hon. Gentleman’s point about the online challenge, which is gargantuan. It is absolutely right for us to seek to future-proof many of these businesses, which have been going for decades. It is difficult to start a business, let alone maintain one. If we let businesses fail because we do not support them for the future, we will look back in real horror.

Senior businesses, let alone small businesses, are already warning that the employment package announced last week will limit investment and reduce growth and jobs in years to come. Of particular concern is the cost imposed on small businesses. The Federation of Small Businesses is leading the charge on that, warning that small businesses will be looking at the changes with trepidation. The Government have only just managed to meet their self-imposed target of 100 days. They have left 70 measures to come in for 2026, meaning that uncertainty for businesses involved will carry on. That is a real concern.

Comments from Ministers over the past few weeks have caused chaos. First, the Leader of the House stated that there would have been a real risk of a run on the pound if the Government had not withdrawn winter fuel support from our pensioners; in the meantime, the Prime Minister had to disavow the Transport Secretary’s comments, stating that she did not speak for the Government. I say to Ministers that they speak not only for their Departments but for industry and sectors. They would do well to stop walking around with placards and remember that they are, allegedly, running the country.

I appreciate that the Prime Minister is new, and collective responsibility among Ministers is a cornerstone of Cabinet government. I am sure that this Minister will be working diligently to do what he can to support that. I was a Minister for a number of years—I was Employment Minister during the covid years—and I know how difficult it is. I genuinely wish Ministers well. Holding this debate today and being really honest about businesses’ and our constituents’ concerns has meant that the issues have been aired and heard. The national interest demands that the Government get a grip so that they can unleash the investment through the summit, spur economic growth, deliver those local jobs and live up to the promises that they have made to the British people. Otherwise, we are in for a long and costly five years.

In closing, I ask the Minister to reassure my businesses and our communities that the Government truly understand the impact of instability. What action will the Government take about Crawley college, for example? Unfortunately, it is shutting down engineering places as we strive for the new future. That concerns me because many businesses in East Grinstead and beyond need such engineering and apprenticeship places to support their future. Ministers should be truly working across Government to make sure that the next five years are a success for all our communities and constituencies, so that we have the public services and local economies that we are all striving for and aspire to.

Order. I intend to call the Front-Bench speakers at 5.8 pm. All Members should take that into consideration and keep their remarks under five minutes.

Thank you for that direction, Mrs Harris; I will follow it directly. I want to focus solely on a small part of business confidence: the confidence of businesses across the United Kingdom in the UK’s internal market. As the hon. Member for Strangford (Jim Shannon) and the mover of the motion, the hon. Member for East Grinstead and Uckfield (Mims Davies), said, small and medium businesses are the backbone of our communities, and nowhere more so in Northern Ireland than in my constituency of South Antrim. We have a real challenge at the minute with the outworkings of the Windsor framework and how our small businesses can sell to, and purchase parts and other things they want to sell on from, the rest of the UK. They are having difficulty getting parts to sell and selling across the Irish sea.

Prior to this debate being called a small business wrote to me, which is why I thought it would be useful to come here. To survive, that small business went to online selling through Amazon. It was looking for some advice on what will happen after 13 December, when the EU’s general product safety regulation, which will apply to those selling online from Northern Ireland, will kick off. It said:

“As an online business this is starting to do us a lot of harm already. Places like Amazon where we do most of our business are making us do compliance reports for every item and we probably have over 60k items that have to be done one at a time.”

The GPSR is adding additional bureaucracy and cost to those small businesses to such an extent that suppliers are saying that they will no longer post to Northern Ireland, completely destroying business confidence across what should be our United Kingdom. I am meeting an English company later this week that tells me it wants to supply Northern Ireland, but, because of the introduction of the EU’s GPSR, it will look to cease trading into Northern Ireland. The GPSR comes into effect on 13 December: that is three weeks prior to the Christmas and new year sales, a crucial time for small businesses that rely on online sales.

Two bodies were recently created and announced by the Secretary of State for Northern Ireland: Intertrade UK and the Windsor framework independent monitoring panel. We thought that they could answer our questions and queries, but I have asked the Northern Ireland Office and we are still waiting for them to be appointed or established. All the while, the clock is ticking down on what our consumers, suppliers and sellers in Northern Ireland want to achieve. I hope the Minister can provide reassurance or guidance on that today, because I have asked the Department for Business and Trade and the Northern Ireland Office and still I can give no reassurance or guidance to the small and medium-sized companies in Northern Ireland who want it.

The hon. Member for East Grinstead and Uckfield referred to the international investment summit and the announcement of £63 billion of investment. I appreciate that she talked about double funding and the double announcement. I would have been happy if it had been indicated that any of that was coming to Northern Ireland. From what I see in the announcement that was made, England gets a fair share, Wales gets some and Scotland gets some, but nothing is coming to Northern Ireland. We would welcome any of the £63 billion or 38,000 jobs that were announced.

It is a real privilege to serve under your chairmanship, Mrs Harris. I congratulate my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) on securing this important debate in a very timely manner. It is so timely because the more I speak to businesses or business organisations, the more the phrase “holding pattern” comes up. That is down to of the uncertainty that has been created in the first 100 days of this Labour Government. Frankly, a lot of business organisations and businesses thought that the promise of change meant change for the better. Clearly, that was not the case, because, as we have just heard, the business confidence monitor of the Institute of Chartered Accountants in England and Wales—I am a chartered accountant by profession—has dipped. That is consistent with what we are seeing across the patch.

Politicians often refer to businesses and small businesses, which I used to cater for—when I was president of the Greater Birmingham chambers of commerce, the majority of our members were small businesses—as the lifeblood of our communities. That is a very easy phrase to put out there, but it has to be more than a slogan. They are the businesses that define what our communities stand for. They are the ones that create jobs, take risks and create the real wealth.

Like my hon. Friend the Member for East Grinstead and Uckfield, I welcome the investment, but I think the figures of the new and old money will be disputed— I am sure we will do that in the main Chamber and in here. As I have said before, the Government’s successes will be the country’s successes, so we welcome that level of investment, but investment only comes when businesses have confidence to invest.

It is about not just domestic investment but international investors. The Labour Government often talk about what they have inherited. As I was the Minister responsible for tech and the digital economy up until the election, I know that we had the third most valuable tech economy in the world. We had some of the highest levels of investment and were the fastest-growing in the G7. That was all defined by the fact that people felt confident enough to invest. Weeks before the general election was called, we had about £2.5 billion come in in one week.

I want to stress the importance of business confidence and economic confidence. Damage is done when the Prime Minister talks about there being worse to come. On the back of the political choices the Government are making, there may well be worse to come, but they will not be able to deliver on the economic growth and public sector investment they want if the private sector does not believe that they can do it.

There has been a lot of chatter about moving the goalposts on fiscal rules. There is no magic money tree, as has been said. There is no definite way of putting money out there without the chickens coming home to roost. There is always a price to be paid, and the burden will be borne by the businesses of the United Kingdom. They will be the ones that will be taxed. It is incredibly worrying that we have not had clarity on the capital gains issue. I think there was a report yesterday, but I will wait for the Chancellor to come to the Dispatch Box to confirm that capital gains will not rise, because that will affect investor sentiment.

National insurance is very much in the media today, and that question is really hampering because if employers have to pay more national insurance, the cost will be borne by consumers. That will affect demand and recruitment and labour decisions—I say labour with a small l, but there might possibly be a big L involved at the next election if there is such an impact.

My community is very entrepreneurial and there are businesses there, as well as businesses in my business forum, which all hon. Members are welcome to join. Britain is a great place to do business, and it is a great place to invest and grow, but that is despite this Labour Government.

It is a privilege to serve under your chairmanship, Mrs Harris, particularly on this topic of business confidence. My constituency of South Basildon and East Thurrock is rich with potential. Basildon is the industrial powerhouse of Essex, and Thurrock commands a prime location on the Thames. That is not to say that both spots are without their challenges. Basildon faces a significant housing crisis, and the high street is suffering, as many high streets are. But with that comes a desire to improve things, and to improve things we need businesses to invest. It goes without saying that those businesses must have the confidence to do so.

Thurrock was unfortunately embroiled in an investment scandal to the tune of £1.5 billion and is in a very difficult situation. The interest servicing that debt alone is approximately 40% of its operating budget, so one can imagine the challenges it faces. That is exactly why we need investment and growth and business confidence. Some specific figures have been given on the dip in confidence, which I would say is—to put it lightly—unfortunate.

It would also be putting it lightly to say that I was somewhat dismayed to hear of decisions made in the past few weeks that will directly impact my constituency, such as the delaying—again—of the lower Thames crossing. I have spoken against the lower Thames crossing because I do not feel it is ambitious enough. Given the 15 years and £800 million spent on its planning, to be in approximately the same state of overextension in our road capacity in just a decade’s time—just five years after its completion—does not seem to be a good use of £9 billion of taxpayers’ money. That said, the decision taken was not to scrap the plan or not go ahead with it; the decision was to delay it, which I might consider to be uncertainty.

Furthermore, as we have seen in the papers, I was somewhat taken by surprise—that is also putting it gently—by the language used to respond to a business that does something legal, but which some people may not like, which was akin to language used in my university days. I am referring to the £1 billion project, relating to DP World, that was jeopardised. DP World is an extremely important business for not just my constituency but our country. It is the only operator with two deep-sea access area ports, and has direct freight to distribute goods across our country that come in from all over the world. It is essential. Whether people have workers’ rights in mind or not, for it to be treated with a slight lack of the professionalism that we might expect from those in high office was a shock to me, and to local businesses as well.

I conclude by saying that my constituency wants to enrich this country. My constituents want to work hard and to invest and they want their businesses to flourish, and they are willing to put in the time and effort to achieve that. We have all the ingredients to do those things. However, just this month alone, we have seen two projects totalling £10 billion very literally jeopardised. Does the Minister agree that that is not good enough, and that, going forward, more considered and professional language must be used when communicating with or about our major industries and businesses? Will the Minister also consider the approach to major infrastructure projects and how delaying them impacts not just residents but local businesses? There are knock-on effects of such delays—we have building projects right now that are literally dependent on the lower Thames crossing, which has been delayed.

It is a pleasure to serve under your chairmanship, Mrs Harris. I congratulate the hon. Member for East Grinstead and Uckfield (Mims Davies) on securing the debate. I am proud of my constituency of Wokingham, of Berkshire and of the Thames valley for being one of the UK’s centres for growth. The area is home to international investment that brings well-paying jobs and prosperity into our area, building an economy fit for the future.

In our small and medium-sized companies, we find innovation and sustainable local growth. The hope is that one day, those businesses will go on to rival the giants that dominate the scene today. The past has been prosperous, but the present is beginning to show some concerning cracks.

In Wokingham, between 2014 and 2022, the number of new business births per 10,000 people fell by 31%. The number of people of working age in Wokingham has decreased. In December 2022, the figure was 83%, but by December 2023 it had fallen to 78.6%. The regulatory burden on businesses to export is growing, with Santander UK’s trade barometer showing that only 22% of businesses say that it is easier to trade internationally than it was five years ago. Covid-19 will have had an effect on these figures, but businesses in my constituency tell me that the chaos and instability of the Conservative Government impacted their business just as much.

I will ask the Minister a few questions, to try to ensure that Wokingham, Berkshire and the Thames valley continue to have a prosperous future. First, will he back small businesses and empower them to create new local jobs, including by abolishing business rates and replacing them with a commercial landowner levy to help our high streets? Secondly, will he bring down trade barriers and enhance our relationship with our closest trading partners, including fixing our broken relationship with Europe? Thirdly, will he speak to Network Rail and the Secretary of State for Transport and convince them of the need for a western railway link to Heathrow airport? Finally, will the Minister for Investment meet me and the Thames valley chamber of commerce to understand what businesses need to attract further inward investment?

It is a pleasure to serve under your chairmanship, Mrs Harris, and I congratulate my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) on securing this important debate. She quite rightly pointed out that a strong private sector that is incentivised to invest is the foundation and cornerstone of the living standards and prosperity that we want all of our constituents to be able to enjoy.

Over the last four years, the UK has dealt with a financial crisis, a pandemic, and an energy shock caused by the war in Ukraine. Despite those changes, since 2010 growth has been higher in the UK than in every other large European economy, with unemployment halved and absolute poverty down. When the Conservatives left government, the UK’s was one of the fastest-growing economies in the G7. However, it is clear that the new Government’s policies and politics have hurt the confidence of businesses across the board; I hear that regularly across my Bromsgrove constituency.

I am amazed to hear the hon. Gentleman’s tone the day after the business investment summit. Anyone would think that this debate is happening in a different world or galaxy. What about the billions of pounds that were pledged yesterday? That is action and commitment from businesses that have confidence in this Labour Government, with their mandate and their deep commitment to a new partnership with business. Did he not read the newspaper this morning? Those record-breaking figures spell the truth about Labour’s record-breaking commitment to business investment.

In response, did the hon. Member not recognise the conditions that the Government inherited on their election in July? It has already been pointed out in this Chamber this afternoon that the Government have been rehashing billions of pounds’ worth of investment that the previous Government secured and are now passing it off as their own.

Returning to the points that I wish to make, the new Government have claimed that their election has positively impacted business confidence, but the Institute of Directors’ economic confidence index, which measures business leader optimism about the prospects for the UK economy, continued to fall in September to minus 38, having been minus 12 in August. According to the Office for National Statistics, 55% of respondents to a voluntary business survey about challenges facing the economy felt that their businesses’ performance would stay the same or decrease over the next year. The CBI’s industrial trends survey for September shows that more manufacturers think that output will fall over the next three months than think it will rise. Potentially most critically of all, GfK’s consumer confidence index fell to minus 20 in September, suggesting that consumers lack confidence in the vitality of our economy. In large part, that is due to concerns about tax rises—concerns shared by many businesses.

Instead of making the UK a hostile destination for investment, the Government should work to ensure that it is the most attractive destination possible for investment. To become an attractive destination for inward investment, we need to look urgently at the factors that will determine investment decisions. The tax burden, which rose following the global pandemic and the unprecedented level of support provided by the previous Government, is damaging business confidence through fear that there will be higher taxes after the Budget at the end of this month. We need to focus on incentives for businesses investing in large-scale capital projects, access to skills, a long-term industrial plan for the UK economy that will once again reward investment, and a concerted effort on skills development that will lead to a long-term uplift in industrial resilience. That is critical in a world in which our adversaries seek to gain advantage over us and blunt our economic edge.

We have a great opportunity to reduce our dependence on foreign imports and focus on the long term. That is particularly crucial to my constituency. I would like the Government to focus on small businesses and foster a greater sense of individual entrepreneurship at a grassroots level, which would be a massive benefit to constituencies across the country, town centres such as Bromsgrove’s, and rural businesses.

I will not, as I am about to wrap up.

My key asks are for the Government to be less ideological in their pursuit of investment in the UK, and to focus on the long term and on conditions that will ultimately drive businesses’ inward investment decisions. They should focus not just on the large corporates, although they are fundamental, but on promoting grass- roots entrepreneurship and cracking down on regulatory bureaucracy, which gets in the way of business investment decisions.

It is a pleasure to serve under your chairmanship, Mrs Harris, and to speak on behalf of the Liberal Democrats as their business spokesperson for the first time—I hope hon. Members will be nice to me.

I congratulate the hon. Member for East Grinstead and Uckfield (Mims Davies) on securing the debate. I share her concerns about the high street, retailers and microbusinesses—like her, I have many in my constituency. I welcome the international investment summit and the Government’s industrial strategy, which will give businesses certainty and incentivise them to invest in new technologies, grow the economy, create jobs and tackle the climate crisis. However, page 5 of the strategy makes it clear that the Government will focus on urban areas; there seems to be no strategy for growing the rural economy. The Government say that they will devolve significant powers to the mayoral combined authorities, but I must ask the Minister what their plans are for areas of rural England that are outside metro mayoral authorities, such as my constituency of Chippenham.

A recent report by the Department for Environment, Food and Rural Affairs stated that about 14% of manufacturing happens in rural locations, and a considerable amount of that is significant to those regional economies. Many of those small and medium-sized enterprises specialise in areas such as food processing and equipment manufacturing, a lot of which comes from the diversification of farming families. Rural areas are at the forefront of the UK’s renewable energy production: 70% of wind energy, and a lot of solar energy, is produced in rural areas. Chippenham has a large number of rural solar farms, which are important, up-and-coming local businesses.

Planning takes twice as long in the UK as it takes most of our EU friends and neighbours, which is a barrier to investment. I share hon. Members’ concerns about planning delays for farming families trying to diversify; our complicated planning structure creates unnecessary cost for lots of small businesses in rural areas. Dave Ricks of drug manufacturer Eli Lilly stated that planning processes are an “impediment” to opening businesses in the UK, unlike in the US, Ireland and Norway. Johnson Matthey, which manufactures hydrogen fuel cells in my constituency and is the UK’s biggest investor in research and development in that area, said that it is really concerned that we will lose out to China, just as we did with battery technology, if we do not support infrastructure for hydrogen networks—it too faces planning delays. A recent DEFRA report highlights that 18% of rural businesses cite poor infrastructure, particularly digital and transport networks, as a significant barrier to growth. Again, the rural infrastructure simply is not there.

I am sure that many Members agree that, although the Conservative Government failed business and workers on stability over the last few years, the need for stability could never be stronger. If we expect businesses to commit to promoting skills, equality and good governance, and to supporting their local communities, we need to create a stable business environment, with smart regulation and investment in infrastructure, research and innovation.

Like the hon. Member for Meriden and Solihull East (Saqib Bhatti), I ask the Minister to take SMEs seriously given their importance to our rural economy. A serious issue that has come up time and again in my constituency is unfair tax hikes, especially hikes to business rates. I share the hon. Member’s concern about national insurance rises for small businesses, and especially for employers. I share the pain expressed by the hon. Member for South Antrim (Robin Swann) about the red tape suffered by businesses in Northern Ireland; businesses in my constituency that export to the EU are suffering from similar red tape, and my hon. Friend the Member for Wokingham (Clive Jones) expressed his concern on behalf of small businesses doing the same in his constituency.

Thank you, Mrs Harris, for chairing the debate, and well done to my hon. Friend the Member for East Grinstead and Uckfield (Mims Davies) for securing it. What a good debate it has been. It has been a debate of two halves. From this half of the room—the Opposition half—we have heard lots of interventions and lots of thoughts about business confidence, while the other half of the Chamber was entirely empty for the majority of the debate.

There have been some very interesting contributions. My hon. Friend the Member for East Grinstead and Uckfield rightly thanked businesses in all of our constituencies. She focused in particular on the role of family businesses as the thriving local hubs of our communities, as well on as the economic growth that they provide. She correctly identified the importance of animal spirits, which are vital for growing an economy. In the first half of this year, confidence was growing in our business community, but what a disastrous change we have had, with business confidence now falling as a result of tax fears.

No, I am not going to take an intervention. I feel quite strongly that if an hon. Gentleman cannot make it to the start of a debate, wanders in halfway through and then seeks to make an intervention to ask a question—

Order. Can we keep it to the debate, please?

I will, but I would just like to refute this. Perhaps if the hon. Gentleman takes out Hansard, he will find the answer to his question in the first half of the debate.

My hon. Friend the Member for Meriden and Solihull East (Saqib Bhatti) is right that business is in an uncertain holding pattern and that SMEs are the lifeblood of our community. The hon. Member for South Basildon and East Thurrock (James McMurdock) is quite right to say that his community is rich with potential. He expressed concerns, however, over the delay of the decision on the lower Thames crossing, and said that he thought the Government should have taken a more professional approach towards DP World. I agree with him. Finally, my hon. Friend the Member for Bromsgrove (Bradley Thomas) rightly pointed out that between 2010 and 2024, growth was higher in the UK economy than in all the main EU economies, and that there is opportunity if we focus on entrepreneurship and on rural businesses.

Throughout this debate we have highlighted the slump in confidence since Labour came to power—and not just in business confidence, but in consumer confidence. Why is that? Well, do not take my word for it. The ex-chief economist of the Bank of England, Andy Haldane, said that the Government’s approach has generated

“fear and foreboding and uncertainty among consumers, among businesses, among investors”.

Labour’s plan appears to have been, “We’ll come into power, we’ll say it’s all terrible and so much worse than we thought it was, we’ll say that there’s this black hole”—a black hole, by the way, that Treasury officials were unable to find when the Financial Times asked to see the data behind it—“and this will give us political cover for long-planned tax increases.”

The problem is that political games in this case have been paid for in lost jobs and futures. After nearly four months of inaction, this inept political vacuum has been filled by speculation, rumour, kite flying and denial. The “So what?” is that Government incompetence has cost jobs. The CBI has just said that it is clear that firms are holding back from employment because of Budget fears. The consultancy AJ Bell has said that directors of listed companies have doubled sales of shares since the general election—that is businesses voting with their feet. Evelyn Partners has said that a third of private business owners with turnovers in excess of £5 million have accelerated their exit strategies. Why? Because of fears about capital gains tax and inheritance tax relief. This is our entrepreneurial future being destroyed by the inaction of the Government.

It does not matter whether the rumours are true or false; the fact that they are rumours is having devastating impacts in its own right. Now the direction is clear, and it appears that the Government will increase employer national insurance contributions. As Paul Johnson of the Institute for Fiscal Studies said, that is a clear breach of the manifesto promise. When considering the issue previously, the Chancellor of the Exchequer said that an increase was an anti-business measure—I agree. The Office for Budget Responsibility has told us that an increase in employer national insurance contributions will lower wages.

Labour is pulling off the triple: misleading the public, harming business and lowering wages—all with the same policy. The more business sees of this Government, the less it likes them. When will this party of opposition that finds itself in government get a grip?

I too take the opportunity in the usual way to thank the hon. Member for East Grinstead and Uckfield (Mims Davies) for securing this important debate. At the outset, let me echo her thanks to businesses across the country for the wealth they create, the better communities they help promote and, crucially, the good jobs they offer. I do not know where her “Taste of East Grinstead” event is taking place, but if it is in the House, I will happily come along if I can. If not, I would be happy to hear from her separately about the particular businesses that turn up to that event.

As a number of interventions from hon. Members have made clear, small businesses, in particular, are the backbone of our economy. I feel particularly privileged to be the Minister for Small Businesses and to hear some of the remarkable stories about how those small businesses came into being and the successes they have had in each of our communities. That is why I am pleased that we have been making progress in government on following through on the commitments we made in opposition in our nine-point plan to back small businesses. If time allows, I hope to touch on some of those points.

I welcome the support of all hon. Members who have spoken for their business communities, even if I did not quite agree with the tone of all their remarks. All of us need the businesses in our communities to succeed, and it is great to hear so many Opposition and Government Members wanting to back them to succeed.

The Prime Minister could not have been any clearer about this Government’s guiding mission: we will go for growth at every opportunity. Growth and backing business is the surest path to prosperity and to improving the living standards of working people. We have made it clear that our goal is to deliver the highest sustained growth in the G7, more secure jobs, better wages and, as a result, much greater funding for our public services, including our brilliant NHS. It surely goes without saying that investment is key to driving that growth.

I gently say to Conservative Members that the problem is that the Administrations of the past 14 years sadly starved our economy of the investment it needed. Whether it is the fall-out from the poor-quality deal the Conservatives negotiated with the European Union after the Brexit referendum, the revolving door of Prime Ministers— I think every Conservative Member here backed Liz Truss’s disastrous mini-Budget—the seven separate growth strategies since 2010 or the 11 different Business Secretaries in as many years, I say to Opposition Members that all of that might help to explain why they lost the confidence of business at the last general election.

If Opposition Members are not convinced by that, I would underline that there was also no plan to help small businesses grow, export or get into new markets. Support in that area was cut back and, in some cases, axed completely. There was no delivery on repeated promises to comprehensively reform business rates and no serious plan to tackle the scourge of late payments, which many small businesses face at the moment. Vital infrastructure projects that were fundamental to growth in many communities were cancelled, sensible measures to open up opportunities for investment in green energy projects were blocked, there was no obvious plan to back the high street—a point made by the hon. Member for South Basildon and East Thurrock (James McMurdock) —and, in particular, there was no serious plan to tackle retail crime going forward.

The result is that British firms have not felt that investing domestically was an attractive enough proposition. There has been much reluctance to adopt new technology, to upskill employees or to plough money into research and development. Sadly, that is why the UK has sat right at the bottom of global rankings for business investment for quite some time—27th out of 30 in the OECD last year, behind Mexico, Slovenia and the Slovak Republic.

I thank the Minister for that point, which goes back to my contribution. This is about seeing what the Government can do in the next few weeks to give small businesses in my community in South Antrim the assurance they need to continue their online presence and sell into the UK.

I thank the hon. Member for his earlier remarks and his intervention. Let me be clear that my Department will continue to work with local partners in Northern Ireland, including InterTradeIreland, to develop and deliver our trade and industrial strategies. If the hon. Member wants to speak to me, I would be happy to help the small businesses that have written to him to join up with the support available in Northern Ireland.

Members across the House will be pleased that there is good news on growth. I welcome the generous support of the hon. Member for East Grinstead and Uckfield for the work done yesterday at the international investment summit and in the run-up to it. A raft of measures were announced to help boost business confidence going forward and to spur growth, and I will recap on some of them. We are determined to make it simpler for companies to relocate to the UK through a new corporate re-domiciliation regime, which I am sure will strengthen our position as a global business hub. We have announced a business-boosting lift to the thresholds on company sizes, which means we will have new legislation by the end of the year reducing the burdens on start-ups and SMEs, saving them nearly a quarter of a billion pounds. We will be consulting next year on our ambitious modernisation programme for the UK’s entire non-financial reporting regime. We are seeking to make shareholder communication easier, and we are clarifying the law on virtual annual general meetings.

Those improvements, helping to reduce red tape, could be worth up to £16 billion a year to investment going forward. As a result of the pro-innovation, pro-business, pro-wealth creation policies we are pursuing, big-hitting global businesses are confidently investing in the UK. The total investment pledged by international and British firms, both in the run-up to and during the summit yesterday, now stands at an estimated £63 billion, which will help ensure that 38,000 jobs are created. I would gently suggest that that is a resounding vote of confidence in both the UK’s economy and the Government’s growth mission.

The Minister is making a powerful and clear argument for this Government’s commitment to a new partnership with business. Does he agree that although the sum of investment yesterday is important, grabs the headlines and gets people confident about the future, part of the brief he is responsible for is small businesses, and seeing that they get part of the large investment that was committed to? Will he explore in his final remarks how important that is to small business?

If I may, I will come to that in one second.

One of the measures announced yesterday that will strengthen business confidence further, and which many businesses have been crying out for, as they told us when we were in opposition and as they have been telling us since we came into government, is an industrial strategy. All Governments have an industrial strategy, consciously or not, through act or omission. This Government are choosing actively to have and implement an industrial strategy to help businesses plan, not just for the next year but for the next 10 years and beyond. That strategy will not just help large businesses or ones in urban areas, which is something the hon. Member for Chippenham (Sarah Gibson) asked about—I congratulate her on making her first speech as an Opposition spokesperson—but benefit all parts of the country and businesses large and small.

Our industrial strategy will inject capital into eight high-productivity, high-export, high-investment sectors in which the UK has a significant competitive advantage: financial services, professional and business services, clean energy industries, digital and technologies, advanced manufacturing, life sciences, creative industries and defence. Above all, our industrial strategy will show that we are listening and responding to the needs of businesses.

To that end, we will engage on those more complex issues that we know are barriers to investment: skills, data, finance, regulation, energy prices, grid connections, infrastructure and planning, which a couple of hon. Members rightly referenced. We want to view every single one of those measures through the lens of investment promotion. That is how we will continue to build long-term confidence, ensuring that our policies are made with business, for business.

Hon. Members raised questions about our Make Work Pay plan, and the number of businesses backing that plan is striking. On flexibility for employees, over 60% of UK managers surveyed by the University of Birmingham a couple of years ago said that home working improved their teams’ motivation, and a staggering 75% said flexible working boosted their teams’ productivity —something Opposition Members have complained about in the past. It is a similar story on pay. Research by the Institute for Public Policy Research shows that 70% of managers believe that raising the national minimum wage to reflect living costs would help, not hinder, their businesses. The hon. Member for East Grinstead and Uckfield referenced the fact that many of the measures announced as part of our package will come in in 2026. That will enable us to continue to talk to businesses and employee representatives to ensure that we get the details right.

I have no doubt that the Budget on the 30th of this month will be a Budget for growth. We face a very difficult inheritance as a Government, and we have to fix the fundamentals of our economy. I gently say to the hon. Member for Broadland and Fakenham (Jerome Mayhew) that he may not be comfortable with the mess his party left us, but figures released last month show that there was another month of record Government borrowing, with debt at 100% of GDP. That is the inheritance that the previous Government left us. We have to fix those fundamentals, and we will do. It will be a Budget for growth, and I have no doubt that our economy and British business will continue to grow from strength to strength.

I thank the Minister for his response and will welcome him with gusto to the “Taste of East Grinstead and Uckfield” event. I will forgive his amnesia about the national insurance contribution cuts, the changes that the Conservative Government made to VAT registration, the support that we gave SMEs, and the Help to Grow portal.

I thank all hon. Members for their support in this debate about business confidence, and I implore this Government, in their Budget, to give the country the stability that we need, because if there is a further jobs tax, it will have to be matched by people paying it in the public sector.

Question put and agreed to.

Resolved,

That this House has considered business confidence.