Business and the Economy

Dave Doogan Excerpts

Wednesday 21st May 2025 Commons Chamber

[Andrew Griffith]

I am afraid that to make those points is to misconstrue wilfully what is actually in the Bill. We have a very settled and balanced position of employment rights that dates back to before previous Labour Governments as well as the Government in office before the election. It strikes what will always be a difficult balance between offering employees the chance to enter the workforce and the ability of businesses, and of the public sector and others, to hire and to operate in a way that is profitable. It does nobody any favours to think that we can, merely by passing words of statute, change the outcomes in a way that advantages the most vulnerable, who are the youngest employees. The failure to learn from that point will once again lead to exactly the same outcome, which is why every Labour Government have left office with unemployment higher than where it started. In his response, the Minister may wish to confirm that this time will be different and perhaps lay out exactly why it will be different, but he has a job of work to convince us and, more importantly, every employer in the land that that is the case.

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

The shadow Minister takes a casual swipe at the business acumen of Ministers, and I wonder whether I can encourage him to develop that point. When I speak to businesses in Angus and Perthshire Glens about the changes that have been instituted since July last year, they are incredulous that anybody with even a passing knowledge of business, enterprise or entrepreneurialism of any nature would put such roadblocks in the way of business and wealth creation. Would he like to expand on that?

[Andrew Griffith]

I thank the hon. Gentleman for making that very perceptive observation. I hate to say this, but I was not making a casual point; it was a considered point. When we think about how this House continues to legislate and tax in a way that reduces economic growth, that does not celebrate a culture of entrepreneurialism and founders, and that is leading to higher employment, with 100,000 fewer people on payroll than there were a year ago, we should all look deep into our souls. What is the endemic failure in Parliament, and of this Government in particular, that is leading so quickly to precisely those outcomes?

It is sad to say that sometimes there is a lack of voice for business. Although one does not want every single sector to be represented in this place, the compensatory mechanism for that involves consultation and diligent impact assessments. In introducing legislation, this Government have been serially criticised for the way that they have casually discarded such measures, and the Treasury maths simply do not add up.

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[Gareth Thomas]

Well, I am grateful to the hon. Gentleman for confirming once again that he is against the India trade deal, against the deal with the US and against the deal with the European Union.

I turn now to business investment. The Opposition’s motion claims that

“investors and entrepreneurs are being driven overseas”.

I hate to break it to Opposition Members, but the facts tell a rather different story: business investment actually rose by 5.9% in the first quarter of this year, the fastest quarterly growth in two years. In other words, business investment is higher than when the Conservative party left office.

[Dave Doogan]

Is the Minister a little worried that the unexpected growth in the first quarter of this year was businesses making capital investment to get in ahead of tariffs?

[Gareth Thomas]

One way that the hon. Gentleman could help businesses in Scotland would be to call for the Scottish Government to do what we are doing in this country and extend business rates relief to hospitality and leisure.

Investors from across the globe are choosing to put their money in the UK. Our international investment summit last year saw £63 billion committed to the UK—double the amount secured by the previous Government, when the Leader of the Opposition was the Secretary of State for Business and Trade—which is set to generate 38,000 new jobs. Crucially, the leaders of companies that committed to invest in our country at our international investment summit have hailed our pro-business approach as a driving factor behind their decision.

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[Dr Jeevun Sandher (Loughborough) (Lab)]

We know that a nation in which every single one of us can earn a decent life is a stronger nation. That is exactly the kind of country that the Government are creating. In this country today, too many people cannot earn a decent life. Our nation is weaker as a result. The task before us is to create a stronger nation, not the weaker and more divided one that some Members would like to see and speak about time and again.

I take the Opposition’s motion in good faith, but each of its points, which I will come to in due course, is mistaken. We live in dangerous times. A third of us cannot earn a decent living, because the Conservatives left us with some of the highest energy, housing and childcare costs in the world. They left us a no-growth economy: wages did not grow for 14 years—the longest squeeze since Napoleon. Their hero Margaret Thatcher destroyed manufacturing in this country—the fastest deindustrialisation in western Europe. Non-graduates cannot get good jobs and are now turning away from democracy itself.

[Dave Doogan]

rose—

[Neil O’Brien (Harborough, Oadby and Wigston) (Con)]

rose—

[Dr Sandher]

I give way first to the hon. Member for Angus and Perthshire Glens (Dave Doogan).

[Dave Doogan]

I am on dangerous territory here—it ill behoves me to defend the party to my extreme right—but does the hon. Gentleman not remember the note that was left by the Labour Chief Secretary to the Treasury in 2010 about all the money being gone?

[Dr Sandher]

I was a very young man then as it happens; it was rather a long time ago. I believe that the hon. Member for Harborough, Oadby and Wigston (Neil O’Brien) wanted to intervene too. [Interruption.] Or perhaps not any more—he is busy tweeting away. That is okay.

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

It is a pleasure to be speaking up for Scottish constituents on such an important issue. I see that one of my Conservative colleagues, the hon. Member for Dumfries and Galloway (John Cooper), will be speaking up for his Scottish constituents. Nobody on the Government Benches has turned up to speak for their Scottish constituents on this issue.

I want to start with the good bits. Now that we have got that done, we will get into the meat of this. As has been said, we see an incredibly wrong-headed brake on investment and enterprise in the jobs tax—the increase to employers’ national insurance. I do not think that measure is a sleight of hand; it goes beyond that. To say that employers’ national insurance is not a tax on working people stretches disingenuousness to its absolute limits. The measure is also counterproductive. The £22 billion or £23 billion—whatever the Government’s target amount was to take in from employers—has already been attrited to well below £10 billion. If they actually did the right thing by hospices, it would go down even further. The measure is a massive burden for a modest gain for the Treasury, and that does not take into account the consequential costs of imposing such a burden on businesses and employers. The impact has already been felt in care homes in Scotland, with five closing ahead of this disaster for enterprise.

The Office for National Statistics has predicted that 25,000 jobs will be lost across the United Kingdom as a result. When the policy was introduced, I ordered a pint at one of my local pubs and jokingly asked the barman if the penny was already off the pint. He said, “Yes it is, and I have stuck on another 20 for your national insurance increase.” Although that is anecdotal, it speaks to the gulf in understanding between UK Treasury Ministers and the real economy that makes things tick. The Scottish Government estimate that, on average, the policy will cost £850 per job per year in Scotland. Except for the Scottish living wage and the slight difference in the income tax regime in Scotland, I see no reason why that figure would not be broadly the same across the whole of the United Kingdom economy. It is utterly unrealistic.

The genesis of the measure is the UK Government’s insistence that they had no idea that there was a £22 billion black hole in public finances—there probably was, although they probably made about a third of that with what they decided to do when they came into government. There is a brazen willingness by the Labour party to reinvent reality—it is bare-faced. Despite being engaged on that repeatedly in debate during the election campaign, the say that they did not know there was a multibillion pound black hole in the UK public finances. What were they debating if they did not think it was real? It is totally disingenuous.

Inflation jumped again in April to 3.5%, up from 2.6% in March. That was not caused by an economy firing on all cylinders or by a rejuvenated consumer sector, high on the output from a new Government, full of ideas and creativity. No, it is driven by electricity and gas prices and by water bills that consumers can do little or nothing about, but which they are still having to fight to pay on top of higher interest rates, as the Bank of England tries to get on top of inflation in a deeply dysfunctional economy.

The Government should seek to address the actual drivers of inflation and take on those energy prices. Let us not forget that not that long ago, at the election, we were promised a £300 reduction in energy bills. It was not “maybe”, “around” or anything of that nature; the message was that if people voted Labour, they would get a £300 reduction in their energy bills. In less than a year, however, energy bills have gone up by £281, so they are now almost £600 higher, emptying consumers’ bank accounts and driving inflation.

What is Labour’s response? Labour Members say, “That is because of our reliance on gas.” Well, we were reliant on gas before the election as well, so there are two possible reasons for that to have happened: Labour was playing fast and loose with the truth; or it did not understand how energy in GB works. I know which one I think it is, but either way it does not reflect well on this Labour party. In under a year, business confidence is falling, job losses and unemployment are rising, borrowing costs are soaring, prices are rising, growth is sluggish and there is rampant inflation. When speaking about growth at the beginning of the year, the Chancellor said that she was pleased but that she had got more to do. Well, God help business if she has got more to do. We have seen quite enough damage in the first nine months of this Labour Government.

I turn to agricultural property relief. In the garden of Scotland that is Angus and Perthshire Glens—I will take no dispute on that fact—we have some of the most productive agricultural land on these islands. As hon. Members would anticipate, with such productive agricultural land, we have extremely high-performing food producers who invest heavily in the latest technology and equipment, and ensure that there is a tremendous return on investment, so that they get the best yields possible so that they can drive down prices and deliver good-value food for tables across these islands and beyond.

What will happen now with agricultural property relief? What signal is being sent out to farms and farm businesses? Is it for those businesses to invest in their farms, so that they have to give it all away when somebody dies? Older farm owners in Angus and Perthshire Glens are now petrified of dying, and it will be the same everywhere else across the United Kingdom: what an ignominious, invidious position for any Government to put the people who produce our food into—it is incorrigible. I say to the Minister, with as much sincerity as I can muster, that quietly with his colleagues in the Treasury, at the spending review or some other opportunity—call it a review or whatever he likes—he should call off the dogs from our farming businesses up and down these islands. They deserve better.

Business property relief is not unrelated, and we have heard some of the testimony from other right hon. and hon. Members on the necrotic effect that has on investor confidence. There is good reason why large-scale family businesses are really good for economies, especially local economies. They employ local people, they headquarter locally, and they try, as much as possible, to establish and stand up their supply chains locally. They sell nationally and internationally. It is a virtuous conveyor of capital from outwith to within. It is excellent for the economy. It is far better than the same economic output from a public limited company, although of course PLCs have their role. But what large-scale businesses in Scotland and elsewhere are speaking to me about is that disincentive to invest.

[Llinos Medi (Ynys Môn) (PC)]

Family Business UK says that 55% of businesses have paused or even cancelled planned investments due to the Government’s plans to cap business property relief. Does the hon. Gentleman agree that the Government should delay the planned BPR changes and conduct a thorough consultation and an impact assessment?

[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.

[Jerome Mayhew]

I was going to point out to the hon. Member the size of the sum involved but he went on to mention it himself. This is translating a theoretical loss into a real one guaranteed by the Treasury with taxpayers’ money, so I think the hon. Member is definitely on to something.

[Dave Doogan]

I thank the hon. Gentleman for his reassurance, particularly as I actively did not anticipate any reassurance.

Total costs for quantitative tightening are predicted to be in the region of £130 billion, all borne by the taxpayer of the United Kingdom. The one relevant thing the Chancellor did say to me when I raised this with her during Treasury questions was that she highly values the operational independence of the Bank of England, and so do I, but that does not mean she cannot chat to them about what is patently unnecessary and extremely expensive to the public purse.

Finally, we see a very unsavoury lurch to the right from a Labour Government on immigration. I will not rake over those coals but it is clear that the Prime Minister regrets some of his more florid language on immigration, and the Chancellor has provided no costings and no analysis of this dangerous policy that has been dreamt up on the back of a fag packet. Scotland has a declining birth rate, as do many other parts of the United Kingdom. We actively need immigration. We need it for our care sector, for our hospitality sector, for our agricultural sector and for our energy sector. It is not just low skilled seasonal work that we require, but all manner of people to come and work in our broad and diverse economy. In Scotland we have no idea why we have been dragged down this route—actually we know fine well why we have been dragged down it—but it is hugely damaging, again, for a Government whose stated ambition is growth, and choking off the labour component from the economy is really not consensual.

This relates to the whole debacle on the EU. I heard the Chancellor say the other day that there is no going back on Brexit and there will be no regulatory alignment and no free movement of people and they will honour the vote of the people—not the vote of the Scottish people, let me add—and Brexit is water under the bridge. Well, it is not water under the bridge, or rather in so far as it is water under the bridge it is a pool of stagnant, rancid water that refuses to shift its acrid whiff from across society in Scotland and elsewhere.

I heard a Lib Dem getting all doe-eyed earlier about seed potatoes; and he was right. Seed potatoes are very important in my economy, but I remember when a Lib Dem would give a full-throated endorsement to membership of the European Union, rather than doffing their cap to a Labour Government for frittering around the edges. This is frittering around the edges, and it has come at a tremendous cost to the Scottish fishing industry. Some 70% of the revenue from aquaculture and fishing in the United Kingdom comes from Scotland, and the Scottish aquaculture and fishing industry is 50 times greater a part of the Scottish economy than it is of the UK economy, yet no discussion was had with the Scottish Government or sector ahead of that, just as no discussion was had in 1970 when the Scottish fishing industry was thrown under a bus at that stage as well.

The Minister might say, “Well, you can’t have it both ways, you SNP type: you can’t say you want to be back in the EU and then lament the loss of your fishing rights to EU boats”—the Minister can score that point out now. Although of course we want to be back in the European Union with all our other European nations, and we would have to take some of that pain on fishing, we would get the gain to go with it. What Labour have foisted on Scotland is all the pain of conceding our fishing grounds to European boats and none of the gain of being in the European Union, and nothing they have agreed this week is remotely like being back in the European Union.

There is an ill wind blowing through the political landscape on these islands, and the actions of this Labour Government are simply making matters worse.

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[John Cooper]

The hon. Lady is a doughty campaigner on the Business and Trade Committee. Unquestionably, mistakes were made. We know that and we have been through it before, but this Government have been in charge for 10 months now, and we see inflation rising and jobs slipping away.

As I said, we are through the looking glass: trade deals are bad, except when they are good. The Secretary of State for Environment, Food and Rural Affairs last week criticised the Conservatives’ Australia and New Zealand deals for hitting farmers, while saying that his Government’s US deal protects farmers. The US deal put the welly boot into beef farmers, who face cheap imports here and US quotas over there that they just cannot fulfil.

[Dave Doogan]

I wonder what the hon. Member thinks about a couple of points. When is a trade deal not a trade deal? It seems that what has been agreed with the United States is a tariff deal and what has been agreed with the European Union is a modification to our pre-existing arrangement. What does he think the US trade deal will mean for beef farmers in his part of Scotland?

[John Cooper]

The hon. Gentleman is right. These are not free trade agreements in the normal sense of the words: they are frittering around the edges, as he said himself. The difficulty for beef farmers in Dumfries and Galloway is that prices are rising, which is partly down to a drop in stock because of costs and things like that, so they are unable to fulfil this idea of sending beef to America. That is unlikely—it is more likely that we will see cheap American beef coming here.

Again, we go back through the looking glass. Up is down when the Employment Rights Bill makes strikes more likely, yet is touted as a boost to productivity. It is incredible. The minimum wage is up, which is no bad thing, but let us not pretend that that is Government money: hard-pressed businesses have to find that extra cash, again. In short, Labour is not working and, terrifyingly, neither are increasing numbers of our constituents.

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[Torsten Bell]

What the Office for Budget Responsibility has said is that disposable incomes will grow during this Parliament at twice the rate that they grew during the last Parliament. The hon. Gentleman has just given me another excuse to repeat my favourite fact, which is this: forget what anybody is forecasting, because in the real world, wages have risen more in the first 10 months of this Government than in an entire 10 years under the Conservatives.

We are going to stick to our promise not to raise working people’s rates of income tax, national insurance or VAT, and we are maintaining an internationally competitive tax system with the lowest rate of corporation tax in the G7. Nobody on this side of the House is pretending that these were easy decisions, but they were the right ones and the responsible ones, yet each and every decision has been opposed by the Opposition parties. It is no surprise to hear SNP Members joining with the Conservatives, as they do on almost everything these days.

[Dave Doogan]

The Minister is making great play of the way in which his new Government have increased wages across the United Kingdom since the election, but will he concede that 91% of earners and workers in Scotland were already earning more than the living wage level that his Government have recently set?

[Torsten Bell]

I will, and that is why I am celebrating the fact that average wage rises are happening. If the hon. Member does not want to be in favour of wage rises in Scotland, that says everything about today’s SNP.

We are all used to the Liberal Democrats’ fantasy economics, but the Conservatives used to believe in sound public finances. They used to understand that it is only on that basis that the Bank of England can sustainably cut interest rates, as it has done on four occasions since the general election. The shadow Secretary of State, in his very long speech, claimed that these choices were not pro-business choices. I tell him that these are pro-business choices because it is pro-business to deliver functioning public services. Was it pro-business when the Conservatives left shops up and down the country paying a retail tax, forced to employ their own security guards because the Tories took the police off the beat? Was it pro-business when employers everywhere faced a health tax under the Conservatives because the NHS was not functioning and their staff were off sick? As I said earlier, growth is key. Of course, the shadow Secretary of State is such a champion of the British economy that he predicted there would not be any. Back in December, he claimed with glee that Britain would start 2025 in recession—