Backing Business to Create Economic Growth

Ashley Fox Excerpts

Monday 18th May 2026 Commons Chamber

[Sir Mel Stride]

As I will come on to argue, our problems actually rest a little closer to home, rather than having anything to do with our relationship with the European Union.

The Labour party promised stability. It also—Members should try not to laugh too loudly—said that it would create the most pro-business Government in the history of our country. None of that has come to pass. It is not just the Prime Minister who is the problem; if this Prime Minister is replaced, whoever goes on to lead the Labour party will not do any better, because Labour had no plan at all for improving our economy. It had a plan for winning an election—keep as low a profile as possible, hold the Ming vase and tiptoe across the shiny floor towards that loveless landslide—but no plan for the people of our country. The Labour Government are in hock to their Back Benchers. Every time they try to do something that requires some backbone, they are stopped by their Back Benchers.

The record of this Government is appalling, and not just on growth. I notice that the Secretary of State did not mention unemployment once, and he certainly did not mention youth unemployment. Under this Government, we are seeing the highest unemployment in five years, and youth unemployment is nudging up towards 20%. Under the previous Labour Government, youth unemployment increased by more than 40%; under the previous Conservative Government, it reduced by more than 40%.

[Sir Ashley Fox (Bridgwater) (Con)]

Is it not shameful that the Government are having to subsidise employers who take on young people, when it is the Government’s actions—their imposing higher national insurance charges, a higher minimum wage, and a higher burden through the Employment Rights Act 2025—that caused the problem in the first place?

[Sir Mel Stride]

My hon. Friend is entirely right. It is like trying to apply the accelerator while having the brake on fully. That is what this Government are doing. That is the total illogicality of their approach.

Inflation is up on where it was under the Conservatives. It is about the highest in the G7; it certainly was last year. As we lean into the challenges of oil and gas price spikes, that is a weak position to be in. Most economists will make that point. The Labour Government will have borrowed a full quarter of a trillion pounds more across this Parliament than would have been borrowed under the plans that they inherited. It is no wonder that our borrowing costs are the highest in the G7—higher than those of Greece, and higher, even, than those of Morocco. Why? We know why: it is just what socialists do. Socialists believe that you can tax your way to prosperity, but I tell the Secretary of State: you cannot.

The £25 billion of additional tax on businesses—national insurance increases—has crucified business in this country. The burden has fallen predominantly on young people, because there was not just an increase in the rate, but a reduction to the threshold at which the tax cuts in, meaning that young people have borne the brunt of that tax increase. The sectors that rely predominantly on first-time jobbers and on young, part-time and female workers have been crucified, including the retail, hospitality and leisure sectors, in which more than 100,000 jobs have been destroyed by this Government.

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[Sir Ashley Fox (Bridgwater) (Con)]

Since being elected by the people of Bridgwater, I have sought to be a strong voice for local families, small businesses and community groups across my constituency. I am saddened that, during those two years, life has got more difficult for so many people. The cost of living is rising faster than two years ago, unemployment is higher and small businesses are struggling.

The reason for these problems is that this Government are making life harder for people who work hard and do the right thing, and too often they reward those who do not. Labour is taxing and spending and borrowing too much. It is taxing those who work, those who employ people, those who save, those who invest, those who create jobs, and those who build up a family farm or family business and want to pass it on to their children. It seems that the only people better off under Labour are train drivers and those on benefits.

Two years ago, my right hon. Friend the Member for Godalming and Ash (Sir Jeremy Hunt) set out the borrowing plans of the last Conservative Government. We planned to borrow £323 billion in the five years from April 2024. This Labour Chancellor is planning to borrow £583 billion over the same period, which is an 80% increase—an extra £260 billion borrowed over five years. All that extra borrowing must be paid for.

Poor economic management and chaos within the Labour party mean that Britain is now paying 5.1% to borrow money for 10 years.

[Sir John Hayes (South Holland and The Deepings) (Con)]

King’s Speeches are partly about what a Government do, and partly about what a Government do not do. The omission in this King’s Speech is exactly as my hon. Friend suggests: a macroeconomic approach, particularly to productivity. This is a huge drag on our economy, and one might have expected further measures to be announced dealing with that macroeconomic problem, for it relates closely to the problems that he has set out in his speech already.

[Sir Ashley Fox]

I am grateful to my right hon. Friend.

The rate that Britain is now paying is higher than at any time over the last 20 years—in fact, it is the highest rate since the last time Labour was in office. Britain’s finances are in a precarious position precisely because Labour is doing what it always does: spending other people’s money like there is no tomorrow.

The Government announced a holiday tax in the King’s Speech. This will enable councils to tax holidays taken in this country even more than at present. Most people who take their holiday in Britain are British. They already pay VAT at 20% on their holidays, and Labour wants to tax them further. This will hit local businesses in Burnham-on-Sea, Berrow and Brean in my constituency. Many families who holiday in Somerset are not wealthy. A tax of £2.50 per person per night will take £70 a week away from a family of four. That is money taken out of their pocket that they cannot spend with local businesses.

It has been interesting to watch Liberal Democrats in Somerset squirming over their plans for a holiday tax. While their colleagues in Bristol and Bath have welcomed the tax, calling its introduction a victory for Liberal Democrats, those in Somerset do not quite know what to say. No doubt they will make their position clear before next year’s local elections.

[Helen Morgan]

I wonder whether it has occurred to the hon. Gentleman that the Liberal Democrats’ whole point is that local government should be able to decide on its own policies, because they will be appropriate in some cases and not in others.

[Sir Ashley Fox]

And I would like to know from the Liberal Democrats in Somerset whether they think it appropriate to take money from my constituents in Berrow, Brean and Burnham-on-Sea and spend it in Taunton and Yeovil. For some reason, they seem reluctant to say.

The King’s Speech confirmed the Government’s plans to curtail our constituents’ right to a jury trial. It is a tragedy that this Government are trampling on our ancient rights and liberties. They claim that it is because of the backlog of cases in the Crown courts, but that backlog was not caused by jury trials, and it will not be reduced by curtailing the right to a jury trial. Labour Ministers have failed to provide any evidence that this will increase court efficiency. It will not bring swifter justice, but it will undermine confidence in our whole justice system. It is a reform without any rational justification. I believe that the Government are wrong, and must reverse their course.

My constituents want secure borders, affordable energy, safer streets, economic growth and opportunities for their children, and that is why the Conservatives are setting out our alternative King’s Speech. At a time of international instability, the Government should be cutting welfare spending in order to spend more on defence, but instead we are stuck with a feeble Government who threaten both our economic and national security.

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[Neil Duncan-Jordan (Poole) (Lab)]

Growing Britain’s economy is vital if we are to raise living standards and improve our public services. However, we need to recognise that growth that fails to tackle social inequality will mean that all the economic gains remain at the top of our society. In fact, between 2010 and 2019, the UK’s GDP grew by 1.9% every year, but the wealth gap widened by nearly 50%. Very few of us felt better off during that time, despite the figures showing that the country’s wealth was growing.

Poverty is not just unfair; it is economically reckless as well. Reducing income inequality to the level of more equal OECD nations would save the UK up to £128 billion annually in reduced costs in areas such as crime and imprisonment rates, tackling poor mental health and improving healthy life expectancy. But none of that will be possible if we continue to use the same austerity-driven measures of the past. Put simply, we cannot cut our way to growth; it takes investment. In my view—I have mentioned this in the Chamber before—our pension funds offer one way to achieve that. We should remember that these funds represent the deferred wages of millions of workers. Directing pension funds toward socially beneficial projects is one way that our Labour Government can rewire our economic model so that it delivers for ordinary people.

[Sir Ashley Fox]

I am grateful to the hon. Member for giving way; he is one of my favourite socialists in the Chamber. Does he accept that were he to change the duty of trustees from getting the best return possible for their pensions, the result will be that future pensioners will enjoy a lesser income? Is that what he wants for future pensioners?

[Neil Duncan-Jordan]

The point that the hon. Gentleman makes assumes that investing in green technology and social housing will not give a decent return, but the evidence is to the contrary, so I think that he is wrong in his premise.

Workers’ money should be invested in things such as green technology and social housing because they are stable, reliable sectors that build a better future for the very people whose contributions fund them. I know that Ministers are looking to the AI revolution as another way to grow our economy. There is little doubt that AI is a transformational technology that will bring with it many benefits to our society, but in order to fully realise those benefits, it is important to put in place safeguards to ensure that the technologies are developed and deployed appropriately and in the interests of society as a whole—rather than simply being a vehicle by which large tech companies make even bigger profits. That is why we need the democratic shaping of technology. We need to work with innovators, workers and unions to steer UK research towards automation that creates or improves jobs.

Without robust regulation, we risk steering society towards an unpredictable and turbulent future that does not work for the public. I have already raised with the Government the prospect of considering some kind of employment levy on companies that replace large-scale workforces with AI, and I hope that they will give that some consideration. That links to my belief that we need to rebalance our entire taxation system. Capital gains could be taxed at the same marginal rate as wages. There are also windfall taxes that could be levied on banks, utilities and other corporations that are making excessive profits. We could also have a wealth tax on those with assets of more than £10 million.

Our economy needs to grow, because all the evidence shows that the more unequal a society is, the higher its risk of becoming dysfunctional. As income differences widen, people are less likely to trust one another, and we see a breakdown in social trust between our communities. Getting the right kind of growth in our economy is therefore essential—not just to make people better off but to create a more equal society that works in the interests of every one of us.