Business and the Economy

Ashley Fox Excerpts

Wednesday 21st May 2025 Commons Chamber

[Andrew Griffith]

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?

[Sir Ashley Fox (Bridgwater) (Con)]

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?

[Andrew Griffith]

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.

--- Later in debate ---

[Chris Vince (Harlow) (Lab/Co-op)]

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.

[Sir Ashley Fox]

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?

[Chris Vince]

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.

--- Later in debate ---

[Dave Doogan]

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.

[Sir Ashley Fox (Bridgwater) (Con)]

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?

[Dave Doogan]

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.

--- Later in debate ---

[Sir Ashley Fox (Bridgwater) (Con)]

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.