Business and the Economy
Debate between Andrew Griffith and Jerome Mayhew(2 weeks, 3 days ago)
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Andrew Griffith
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.
Jerome Mayhew (Broadland and Fakenham) (Con)
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?
Andrew Griffith
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.
Andrew Griffith
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.
Jerome Mayhew
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?
Andrew Griffith
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.
Andrew Griffith
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.
Jerome Mayhew
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?
Andrew Griffith
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.
Andrew Griffith
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?
Jerome Mayhew
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?
Andrew Griffith
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.
Andrew Griffith
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?
Andrew Griffith
My hon. Friend has made so many good points that I will of course give way again.
Jerome Mayhew
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.
Andrew Griffith
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.