Employers

Dave Doogan Excerpts

Wednesday 11th November 2026 Commons Chamber

[Julia Lopez]

My hon. Friend is absolutely right to highlight that challenge in seasonal working, which creates an extra burden for employers, many of whom have to work to fill the shifts they would otherwise have used temporary staff for, creating enormous pressure.

People are writing to me in despair because their adult child simply cannot get a first break in the workplace, and it is not for want of trying. Businesses warned the Government that this would happen. The hospitality, retail and care sectors all raised the alarm about the impact of higher employer national insurance. What was Labour’s response? The unemployment Act, which makes it riskier to employ people as well as more expensive. The national insurance increase came into effect in April 2025. By April this year, there were 210,000 fewer payrolled employees than a year earlier. There are now 1 million young people not in education, employment or training, and the Government are in denial about the reasons why.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The shadow Minister talks about businesses having warned the Labour Government about the impact that Labour’s jobs tax was going to have. Does she, like me, think it is inconceivable that Treasury officials would not similarly have advised the Government that this would be a consequence of the jobs tax? Is it not particularly pernicious of Labour to have put the biggest barricade in front of younger workers, possibly accessing their first job in hospitality, which will have a lifelong damaging effect on their careers?

[Julia Lopez]

The hon. Gentleman is absolutely right to point that out. It is inconceivable that the Government would not have been told about the impact that this policy was likely to have.

Labour likes to point out that employers do not pay national insurance on workers under 21, but that misses the point. Employers are making decisions about their entire workforce, and when the cost of employing people rises and the risks associated with taking on a new starter increase, the first opportunity to disappear is the one that will no longer be created. Rather than take on an extra employee at junior level, employers are squeezing the staffing resource they have, but they are shedding younger workers, too. By 2027, employing a full-time minimum wage worker over the age of 21 will cost a business 20% more than it did when Labour entered office. For an 18 to 20-year-old, it is 31%.

Labour knows that there is a problem, but rather than tackle it at source, it offers up the youth guarantee, a bung to employers to take on a young person for six months. How about making it cheaper and easier to employ that young person in the first place? Soon we will get details of an unlimited youth mobility scheme with the EU to add to this mix, which will see young Britons competing for available work with peers from 27 other nations.

The cost of all this must be absorbed somewhere. Higher national insurance, soaring energy bills and a growing burden of regulation all feed through into the price of doing business and, ultimately, the price we all pay. The weekly shop costs more, a meal out costs more, getting your hair done costs more, activities with the kids cost more, as does going away for a few days. This is just one of the reasons that household finances are going backwards. Whether Labour is talking about employer national insurance or employee national insurance, everybody pays at the end of the day.

We Conservatives want more working people, because work is dignity, contribution, resilience and confidence, and we want that opportunity for as many young people as possible. We want to end the waste of a generation unable to showcase its talents, and we want to reduce the cost on a generation of workers that can bear no more tax on its shoulders. That means returning to some of the policies that are driving this destruction. Not only would we repeal the job-destroying provisions of the unemployment Act; we Conservatives would halve employer national insurance for under-25s. Our policy would permanently reduce the cost of employing young people and give businesses a real incentive to take them on. For an employer, it would be a saving of around £1,500.

This is part of a wider plan to tackle Labour’s youth jobs emergency. Our “Get to Work” scheme would stop young people leaving education and drifting straight on to welfare. It would create 100,000 new apprenticeships, cut red tape to save the Saturday job and reduce high street business rates to support the businesses that give young people their first step on the jobs ladder—a policy that would benefit not 70,000 high street businesses, as Labour’s policy would, but 250,000.

Aside from old prejudices about employers as the oppressors of workers, the reason that Labour contorts itself on the definition of working people is that it knows it has taxed them silly. In doing so, it has not just broken its manifesto commitment but completely undermined what Keir Starmer and his sparkling new Chancellor used to say was Labour’s No. 1 priority: growth. The consequences are there for all to see in the unemployment figures and the living despair of young people unable to secure a good job.

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[James Murray]

My hon. Friend is absolutely right that businesses want to make sure that the population—their employees or future employees—are healthy, are able to get to work and are able to access the support they need to get a job. That is as important for businesses as it is for the people themselves, and of course businesses want to see the investment in infrastructure that our adherence to our fiscal rules enables. That investment in rail, road and energy is so important to businesses, as it is to families across the country.

In their motion, the Conservatives propose halving employer national insurance contributions for under-25s. Apart from a brief mention in the shadow Secretary of State’s speech, they appear to have forgotten that employers already pay no employer national insurance on any earnings up to £50,270 for every employee under 21, and for all apprentices under 25. However, the bigger problem—one that goes to the very heart of why the Conservatives failed in government and why it is clear that they have learned nothing—is that they are very good at announcing tax cuts, yet always entirely fail to credibly say how they would pay for them. If they want a reduction in employer national insurance, what is the cost? Where does the money come from? Is it from higher borrowing, higher taxes on someone else or cuts to the NHS and other public services that working people rely on?

Just look at the Conservatives’ announcements on tax more widely. They have promised billions of pounds-worth of unfunded and poorly targeted tax cuts for the very wealthiest—exactly the same irresponsibility that led to the disastrous Liz Truss mini-Budget that crashed the economy and sent mortgages skyrocketing. That is the difference between us as a responsible Government and them as a discredited Opposition.

[Dave Doogan]

There is a constant tension in that those who criticise Government fiscal policy must say where they would get the money from. On that basis, could the Minister advise the House what progress the Government have made over the past two years on closing the tax gap, and say what size it currently is?

[James Murray]

If the hon. Gentleman wants to have a conversation about the tax gap, I am very happy to pick that up. When we came into office in 2024, one of our first priorities was to close the tax gap before asking for any further tax contributions from any other sources. That was an essential part of our wider plan to restore public services and the public finances and to create the conditions for economic growth. That work continues, and I am very pleased to be playing a role in the Treasury, continuing that work to close the tax gap and modernise the service His Majesty’s Revenue and Customs provides, so that more people pay the right tax first time and can pay it automatically without mistakes or errors creeping into the system.

Because of the decisions we have taken as a Government—including closing the tax gap, as the hon. Member for Angus and Perthshire Glens (Dave Doogan) mentioned— we are providing certainty and stability. Meanwhile, the Conservative party cannot resist playing games with the public finances, irrespective of the fact that whenever it has done so in the past, it is working people who have suffered the most. Britain is a country of entrepreneurs, shopkeepers, manufacturers, publicans, start-ups, family firms and growing businesses, and I am proud of the people across our country who take on risk and put in every hour they can to start and grow businesses. Above all, they need—and they have—a Government who are prepared to do the hard work of building a stable economy in which businesses can prosper. Employers need stability in order to plan for the future, create good jobs, invest and innovate, and providing that foundation is our responsibility as a Government. That is why, in the face of global storms, fiscal discipline will always underwrite every promise this Government make. The opposite is true of the Conservative party.

Government is about making choices, not pretending that choices do not exist. We in this Government are choosing to back working people. We are choosing to back the employers who create jobs. We are choosing to back young people into work, and we will always choose, with fiscal discipline as our lodestar, to maintain the economic stability on which our success as a country depends. For all those reasons, I urge Members to reject the motion.

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[Daisy Cooper]

The right hon. Gentleman will perhaps remember more correctly that during that time we called for a lockdown initially, but the public had already decided to go into lockdown. He will also remember that the then Prime Minister announced that pubs, high streets and a whole load of businesses should be closing down, without covering their insurance. The right hon. Gentleman will remember that.

Following covid, we had the mini-Budget, which I am sure the Conservatives will deny, too. The mini-Budget was incredibly painful and unleashed huge panic in the financial markets. It drove up the cost of living and the cost of commercial loans. On top of all that, we then had two anti-growth Budgets from the Labour Government that have pushed up costs on businesses. For many, it is too much to bear. Small businesses, the backbone of our high streets and our communities, have borne the brunt. It is the cumulative impact that small businesses have expressed concern about. They tell me that if it had been just one tax, they might just have been able to manage it, but they have had the national insurance contributions rise, the business rates changes and the Employment Rights Act 2025, which got the balance wrong between protections for workers and the burden on business. Businesses that have put in blood, sweat and tears and financial investment are now struggling and do not know whether they can survive.

[Dave Doogan]

The hon. Lady has given a comprehensive list of the impediments that this Government have put the way of business in just 24 months, but I hope she will not forget that we have the highest commercial energy prices anywhere in the developed world under this Labour Government. Those are similarly threatening to put businesses under.

[Daisy Cooper]

The hon. Gentleman is right to raise the fact that we have some of the highest energy costs for business. We have called on the Government to extend their scheme for energy-intensive businesses. We have made it clear that we want to see further action on decoupling the link between gas and electricity. I have had meetings with Ofgem about making sure that there is better regulation for small businesses, particularly when they are looking to brokers for their energy deals. There needs to be far more action, not just for energy-intensive businesses, but for the small businesses on our high streets.

As I was saying, the impact on businesses of all these higher taxes has exacerbated the youth unemployment problem. That is why we now see vacancies at a five-year low. It is wrong to blame young people for not applying for or getting jobs when there simply are not jobs for them to apply for. That is why we Liberal Democrats have talked about growing our economy and pulling the biggest single growth lever that we can by joining the single market, which would reduce costs for businesses.

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[Dave Doogan]

In the last Parliament, the SNP was a substantially bigger party than the Liberal Democrats, and we fought tooth and nail to maintain membership of the EU as well. I am sure the hon. Lady will acknowledge that.

[Daisy Cooper]

I do indeed acknowledge that. It was a slip of the tongue. Many parties were fighting tooth and nail to stop the damage of the Conservatives’ botched Brexit deal. I hope very much that at the EU summit, the Labour Government will move a great deal further than the timid approach they appear to be taking now.