Business and the Economy
Gareth Davies Excerpts(3 weeks, 6 days ago)
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Gareth Davies (Grantham and Bourne) (Con)
I am grateful to close this debate on behalf of His Majesty’s Official Opposition. Let me start by thanking all those who contributed and from all sides of the House, but particularly my right hon. and hon. Friends, who have highlighted so clearly the devastating impact that job losses and business closures have on families, communities and our national economy.
I should also thank those on the Opposition Benches—sorry, I mean the Government Benches; it will not be too long. Is it not amazing that just three Labour Members were brave enough to speak? I pay tribute to them: the hon. Members for Harlow (Chris Vince) and for Loughborough (Dr Sandher), and the hon. Member for Earley and Woodley (Yuan Yang), who is not in her place. So proud are they of their economic performance that only 1% of the parliamentary Labour party actually bothered to show up to a debate on the economy—but then 1% is a pretty high figure for the Labour party.
The truth is that since last July we have all heard a story of someone who is struggling to figure out how they will pay their new tax bills, or struggling to find a new job or pay their energy bills, which just keep on rising, despite people being told that they would go down. Many of my right hon. and hon. Friends have made very good contributions in interventions and speeches today. I cannot mention them all, but in particular I pay tribute to my right hon. Friend the Member for East Hampshire (Damian Hinds), who highlighted that businesses are people. That is something I mentioned in my maiden speech. My dad set up a business; he took a risk and made it work. He made it happen, despite it being very difficult. My right hon. Friend is right; when we in this place tax businesses, we are taxing people. It is something that we understand and the Government do not.
My hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew) speaks with great authority, not least because he has employed so many people and driven so much growth. He is a proud colleague of mine. He highlighted right at the beginning the potent combination of taxation on businesses; it is not just one tax but a combination of taxes that are hitting retail businesses in particular, and there is also red tape being implemented.
My hon. Friend the Member for Dumfries and Galloway (John Cooper) spoke about his farmers. My right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) highlighted the impact of the NICs threshold increase, which is not always talked about—there was a two-pronged attack on businesses and people in that the rate changed and the threshold changed—as well as hospitality businesses in his constituency. My hon. Friend the Member for Mid Bedfordshire (Blake Stephenson) also did that—he talked about his pubs—and my hon. Friend the Member for South West Hertfordshire (Mr Mohindra) spoke about his personal experience from his previous career and his experience from his constituency. My hon. Friend the Member for Sleaford and North Hykeham (Dr Johnson) pointed out that if Ministers spent a bit more time listening and a little less time talking, perhaps the economy would not be in as bad a state as it is.
This time last year, the Prime Minister and the Chancellor were talking at people, telling anyone who would listen that the “growth lever” would be very first lever they would reach for in government, but the only economic lever they did manage to pull was the handbrake, otherwise known as the tax lever. Labour’s first Budget was the second-biggest tax raising fiscal event in the last 50 years, which, as my hon. Friend the Member for Harborough, Oadby and Wigston (Neil O'Brien) pointed out in an excellent speech, took the tax burden to the highest level on record. On growth, forecasts have been downgraded across the board by the OBR, the BOE, the OECD and the IMF—by this point, Labour’s economic performance has been panned by just about every letter in the alphabet.
Labour Members can crow all they want about growth data from the first quarter of this year, but it does not change the fact that growth was higher under the Conservatives during the same quarter of 2024. Debates about growth figures are not purely academic, as the Labour academics would have us believe; they have real-world consequences for workers and businesses up and down the country, most obviously when it comes to employment. As my hon. Friend the Member for Bridgwater (Sir Ashley Fox) pointed out, no Labour Government have ever left office with lower unemployment than they inherited. That is perhaps because in the last 60 years every Labour Government have left office with a higher tax burden than when they started.
As the shadow Secretary of State, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), highlighted at the beginning of the debate, the ONS says that there are 150,000 fewer payrolled employees in our country than there were last July when Labour entered office. We have had significant falls in employment by that measure in seven of the last nine months. Let us put that into context: that follows 42 months of near unbroken payroll growth under the Conservatives as we exited the pandemic. In that time, we saw 2.2 million workers added to payrolls, leaving payroll employment 1.4 million higher than it was pre-pandemic.
That is the difference that a Labour Government make: they send job recovery into reverse. Hiring expectations for the next three months are at a record low. Unemployment is going up and up, with the Bank of England now forecasting 5% unemployment by 2027. Of course, it is in the most heavily taxed sectors that we see the greatest damage. Earlier this month, 250 jobs were cut by Harbour Energy in the North sea after Labour raised the tax on the sector to some 78%. In retail and hospitality, it is small businesses who are hardest hit by the national insurance increases and the business rates relief cut. Labour Ministers talk about difficult decisions, but they are not the ones who are having to reduce opening hours, close on weekends, freeze pay and make redundancies of family members—mums and dads who just want to get up and go to work—just to survive.
In too many cases, we are seeing local businesses close down for good. The country is witnessing the fastest growth of corporate closure since Labour was last in office. The great irony of the Chancellor’s much lauded securonomics is that it has created insecurity and business uncertainty. Entrepreneurship is being suppressed and jobs are being sacrificed on the altar of Labour’s sanctimony. They have the brass neck to go about claiming that this is all in order to restore stability and the public finances, when the independent National Institute of Economic and Social Research has predicted that the true size of the Chancellor’s black hole is £60 billion.
Let us talk about black holes. The stable geniuses on the Government Front Bench took pensioners’ winter fuel payment away for the winter, but now that summer is appearing they talk about restoring it. They are taking pensioners for fools. What’s next—lower fuel duty for cyclists? The damage is already done. Who is to say that Labour will not be back in the winter to cut fuel payments again, just in time for Christmas, especially as Downing Street cannot guarantee today that the proposed changes will be ready by then? We shall see.
In Labour’s fiscal funfair, the only ride is a merry-go-round. Round and round the vicious cycle goes, to the point where we no longer ask whether Labour’s next Budget will bring in more tax rises, but which taxes it will hike. We do not ask whether the next Budget will downgrade growth forecasts, but by how much. We do not ask whether the next Budget will support jobs, but how much higher unemployment can really go under Labour.
As we found out this morning, the Deputy Prime Minister has put in her first draft, briefed to the press, for the Chancellor’s next Budget. Raising taxes on pensioners—that will hurt growth. Raising taxes on retail investment—that is anti-growth. Raising taxes on incomes—that is definitely anti-growth. When in a hole, stop digging. Labour simply cannot tax its way to jobs and growth, but it seems utterly determined to learn that the hard way. Our motion calls on the Government to learn from their mistakes and urgently change course. On behalf of millions of British workers and businesses across this country, I commend this motion to the House.
Pub and Hospitality Sector
Gareth Davies Excerpts(7 months, 3 weeks ago)
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Gareth Davies (Grantham and Bourne) (Con)
I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on obtaining this important debate. We could talk about the economic contribution of our pubs—the £54 billion of tax revenue, the 3.5 million people employed—but ultimately, as many Members have outlined, their main contribution is the community benefits that our pubs bring to all our communities and constituencies. I have 79 pubs in my constituency, not just in our two towns of Grantham and Bourne, but across our postcard-picture villages, such as the Green Man in Ropsley, the Wishing Well in Dyke and very many others that I could go on to mention—possibly to my benefit when I write to them after this speech.
Those pubs are concerned about the environment that will ensue after the Halloween Budget. They are concerned about the potential national insurance increase, which will break not just Labour’s manifesto commitment but many of our pubs. They are concerned about last night’s Employment Rights Bill and the increased burdens it will place on them, and they are very concerned about the implications of the outdoor smoking ban. In government, we sought to support pubs as best we could with 75% rates relief. We increased the VAT threshold and did many things, such as the Brexit pubs guarantee, that changed the dynamic of alcohol duty to ensure that the pint in the pub always pays less duty than the can of beer in the supermarket.
The Minister will not be able to speculate on what is in the Halloween Budget, but he should know that we are united in this room today on the need to support our pub sector, not just for the economy but for the communities in our constituencies.
Autumn Statement Resolutions
Gareth Davies Excerpts(1 year, 6 months ago)
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The Exchequer Secretary to the Treasury (Gareth Davies)
I think this is my first opportunity to welcome the hon. Member for Slough (Mr Dhesi) to his position, and I wish him well in it, but obviously not too well.
I pay tribute to the Under-Secretary of State for Business and Trade, my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake), who opened this debate brilliantly. He is someone who knows business because he comes from business. I also want to thank all right hon. and hon. Members from across the House who have spoken for their very detailed and thoughtful contributions, and I will try to respond to as many points as I can.
Before I do that, I want to reflect on the measures that we are here to discuss and which were set out in the Chancellor’s autumn statement yesterday. I take the view that everyone in this House wants the best for their communities and the people of this country, and I think we broadly agree on several points in that regard. I think we agree that we want a thriving economy, with well-paid reliable work available in every corner of the country for years to come. We want households to be better off than they were in years gone by, and we want opportunities for everyone to progress in life and to provide for the people they care about. If we can agree on that, I would hope that we all agree that this is an autumn statement that delivers, and principally delivers growth.
This autumn statement announces a range of measures to grow the supply side of our economy by supporting increased business investment. Taken together, these measures will build over time to raise business investment by some £20 billion per year and reduce the business investment gap that has grown to what we have today. It is because we are backing business—British businesses—that our economy and our investment levels will rise. It is business that creates jobs, which raise household incomes. It is businesses that design and build the technologies of tomorrow, and level up our towns, our committee and our villages. It is businesses that contribute billions and billions in tax revenue, which pays for our public services. To back our businesses is to back our economy and our country’s prospects for the future.
Businesses are vital to our future technology and our future ambitions when it comes to net zero, as was mentioned by the hon. Member for Bath (Wera Hobhouse). The £4.5 billion we are making available to our strategic manufacturing sectors over five years will mean more zero-emission vehicles. It will mean more aerospace and life sciences technologies, and more green energy solutions built right here in this United Kingdom. We are providing £960 million for the green industries growth accelerator, pushing even further on our advantages in offshore wind, nuclear, CCUS and hydrogen. I just say to the hon. Member for Kilmarnock and Loudoun (Alan Brown), who is a long-standing campaigner on energy, that we do need a balanced mix in our energy provision, and that is key to our national security as part of our energy security.
Businesses are vital for our high streets, so we have extended the 75% business rates discount for retail, hospitality and leisure businesses for another year, saving the average pub more than £12,800 next year. I pay tribute to my hon. Friend the Member for Broxtowe (Darren Henry) not just for the speech he made, but for the campaign he led on that measure. Businesses are vital for spreading opportunities, so my right hon. Friend the Chancellor has extended the investment zones programme and the freeport tax reliefs from five years to 10 years. He announced plans to set up a new £150 million investment opportunity fund to capitalise further investment in that programme. That goes alongside the 13 new investment zones—in west Yorkshire, the east midlands, the west midlands, Greater Manchester, Wrexham and Flintshire and several other places—which will generate billions of pounds in investment and create thousands of jobs throughout the country.
However, what is most eye-catching for all businesses is that we have listened to the asks of the CBI, Make UK, Siemens and more than 200 business leaders and industry bodies who said that the single most transformational thing we could do for business and investment growth was make full expensing permanent, so that is exactly what we did. It is something we can only do because of the strong economic position we have built in this country, and I pay tribute to my right hon. Friend the Member for Suffolk Coastal (Dr Coffey) for her support for this measure. Every £1 million a company invests as a result of this measure means they will get £250,000 off their tax bill the very same year. This gives us the lowest headline corporation tax in the G7, as well as the most generous plant and machinery capital allowance anywhere. Again, the OBR says that this will make a huge contribution to our economy, increasing annual investment by £3 billion a year and a total of £14 billion in the forecast period.
While the United States, Canada and Australia are all dispensing with full expensing, we are making this a cornerstone of our economic approach, giving a clear welcome to international businesses that want to come here, set up and employ our people. Coupled with the headline recommendations of the Harrington review, this can make the UK a brilliant place for international investment—even more so than it already is today.
But our plans are not only for large businesses. By cutting class 4 national insurance by 1%—again, as referenced by my hon. Friend the Member for Broxtowe—and abolishing the class 2 national insurance entirely, we are saving some 2 million self-employed people an average of £350 a year from April. Together with our national insurance cut for 27 million workers, this is proof that, whether people work for themselves or for someone else, under this Government work will always be rewarded.
We on the Conservative side of the House believe in the dignity of work and the security of a regular pay cheque. That is why we did not just cut national insurance; we have increased the national living wage by a record amount. But we know that inflation has hit families hard. It has hit individuals and businesses throughout this country. Inflation makes everybody poorer. It was caused by a global pandemic and a global energy shock, and although we have seen it come down, we need to keep on going.
The hon. Member for Leeds East (Richard Burgon), the right hon. Member for Hayes and Harlington (John McDonnell), the hon. Member for Glenrothes (Peter Grant) and others have all raised concerns about living standards, and I share them. It is why we have increased pensions by 8.5%, as referenced by my hon. Friend the Member for Poole (Sir Robert Syms), it is why we have uprated benefits by 6.7%, and it is why we have uprated the local housing allowance. That is on top of the £94 billion on energy support and the £900 cost of living payments that are going out throughout the country.
Peter Grant
Is it correct that the prediction that we are going to see the biggest fall in living standards that most of us have ever lived through is after all the things in the autumn statement the Minister has just referred to, so even taking into account all the good measures he has mentioned today and his colleague the Chancellor outlined yesterday, people are going to be poorer, with the biggest drop in living standards that any of us has ever seen?
Gareth Davies
As I have said, we know that families have suffered through a period of dramatic inflation. It peaked at 11%. We made a commitment at the start of this year to cut it in half and we met that commitment last week. The No. 1 thing we can do to make people feel better is bring down inflation. The provisions in the autumn statement will undoubtedly put money in the pockets of the people who need it most, but ultimately on this side of the House we believe in the dignity of work; we believe that the best route out of poverty is through a job, and the growth that we will boost through these measures will help achieve that.
We have made inflation our top priority and we have delivered on that commitment, as I just mentioned to the hon. Gentleman. I want to pick up, however, on one point raised throughout the debate, not least from the Opposition, who implied that the Government had done nothing to bring down inflation and that was nothing to do with this Government. I want to stress that the International Monetary Fund disagrees with them. The IMF has said that we have taken decisive action to bring down inflation, complementing the Bank of England. The Bank of England has the primary monetary policy tool of interest rates, but we in the Treasury and across Government have taken incredibly difficult decisions to ensure that we do not exacerbate inflation. We have also introduced measures such as the energy price guarantee, which essentially paid for half of people’s energy bills across the country. That, by the way, was referenced by the OBR as knocking 2% off headline inflation.
Matt Western
I welcome the hon. Gentleman to his place. He was talking about the Government having a role in inflation and responsibility for it, but he must accept that the decisions made a year ago with that kamikaze Budget fuelled inflation. That is why we have an inflation premium compared with other nations.
Gareth Davies
I am grateful that the hon. Gentleman raises that point, as I looked into it, and there is zero evidence for what he suggests. If he has evidence, he should provide it. We know that inflation was caused by two major factors, and I am happy to go through that in detail at another time. Global inflation was caused by global factors caused by the impact of a global pandemic. Supply chain shortages have caused prices to rise across the world, and then we had the war in mainland Europe, caused by Putin’s invasion of Ukraine, which caused energy prices to spike, and gas prices went up around the world. We in the UK are particularly dependent on gas, which is why inflation increased. It is also why we stepped in with the energy price guarantee to cut every constituent’s bills in half.
Gareth Davies
I do not know how they want to fight it out. I will take the hon. Member for Glenrothes (Peter Grant).
Peter Grant
On the question of dependency on gas, the Minister’s country might be dependent on imported gas, but can he explain to constituents in Scotland how a country that has more energy than it needs should be so badly affected when the price of that energy increases?
Gareth Davies
I simply point out that that did not stop the Scottish Government accepting our energy price guarantee for Scottish households, where we paid half of energy Bills. However, the hon. Member makes a broader point about energy supply. We on the Government Benches fully support the Scottish oil and gas industry. We believe that we will need oil and gas for years to come, and we will support the 200,000 jobs that the industry supports.
Gareth Davies
I will make a bit more progress, if that is all right.
I also want to address the comments of the hon. Member for Warwick and Leamington (Matt Western) on France. It is a great country, but I have to tell him that since 2010 the UK has grown faster than France. Indeed, the IMF has forecast that the UK will grow faster than Germany, France and Japan by 2028, so I do not recognise his comparisons. However, he is right that productivity is a problem in this country, which is why we are investing in our businesses to grow and improve productivity, but in order to boost growth sustainably we need to focus on business investment, and that is what this statement does.
This statement backs business to create jobs, to innovate and to ensure that as a country we can go from strength to strength. That is why I will be proud to vote for its many measures to support the entire country.
Ordered, That the debate be now adjourned.—(Joy Morrissey.)
Debate to be resumed on Monday 27 November.
Children's Mental Health Services: Lincolnshire
Gareth Davies Excerpts(2 years, 4 months ago)
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Gareth Davies (Grantham and Stamford) (Con)
I beg to move,
That this House has considered children’s mental health services in Lincolnshire.
As a parent, I know how strong and how special the bond that connects us to our children is. We give our time, our energy, resources and a hell of a lot of sleep without a second thought to nurture, guide and raise them. It is a love that knows no limit, and we all want our children to have the best opportunities in life and for those opportunities to be just as limitless. That is why I can only imagine the distress and heartache felt by some families in Lincolnshire and across the country when a child is suffering from mental ill health.
As parents, we feel a deep sense of responsibility and a duty to get help for our children whenever it is needed, and we will do anything we can to get it, so it is vital for families to know that they have access to a network of support and to professionals dedicated to providing the best help and treatment available. Over the last decade, our country has made great strides in recognising the importance of mental health, placing it in parity with physical health both in law and in practice. There has also been a notable cultural shift, with more and more young people reaching out and seeking support with their mental health.
To be fair, Government have recognised and actively encouraged this change. Since 2015, the mental health investment standard has mandated that mental health spending at least match any overall increase in NHS funding. The Government also commissioned the independent mental health taskforce, accepted its recommendations in full and put an extra £1 billion towards introducing the first ever mental health waiting time standard, committing to providing 70,000 more children with mental health care and guaranteeing access to a 24/7 community-based crisis response. That has had an impact and it is a vast improvement on what has gone before, but those national numbers will mean very little if they do not translate into positive experiences where help is most needed.
In Lincolnshire, children and young people have access to a broad range of support. Lincolnshire has a strategy centred around care at home. While hospital care is lifesaving for those in most need, the majority of children with mental health problems can and should be seen in a familiar and comfortable setting at home. That is why I welcome Lincolnshire’s early help strategy. The mental health, learning disability and autism alliance, which includes NHS leaders, Lincolnshire County Council and district councils, and the police and crime commissioner, has developed the plan to promote early intervention and support. That ultimately means that more children are provided with help before their illness requires hospital support, and Lincolnshire has far fewer in-patient stays than the regional and national averages.
I want to use the rest of my time today to speak directly, in this Children’s Mental Health Week, as a voice for a number of my constituents who have reached out and contacted me over the past year to share their experiences and highlight particular issues that we face in the county of Lincolnshire. On early intervention, the earlier mental health issues are reported, the stronger the chance of recovery. There are two ways in particular in which we need to focus more attention to achieve these early interventions.
The first is through schools. School is where many children feel most comfortable, familiar and safe. As such, school is exactly where children are not only supported, but can be taught how to better look after their own mental health and recognise when classmates are struggling. The Department for Education has, therefore, rightly committed to providing mental health training to a lead member of staff in all eligible schools and colleges by 2025. Lincolnshire County Council has rightly commissioned four mental health support teams in various educational settings in Lincoln, Gainsborough, Boston and Skegness. Obviously, my constituency is missing from that list. I hope that Grantham, Bourne or Stamford will be included in the months and years ahead.
The second area of focus for early intervention is about training for medical professionals. Although some training is available, some of my constituents feel that it should be mandatory for all medical staff on paediatric wards, in A&E, for GPs and for GP nurses, so that issues can be identified earlier and faster. I am interested to learn the Minister’s views on that point, because it has been raised a number of times.
There is another big issue that I would like to highlight. Although we have some excellent people involved in mental health services in Lincolnshire, there are frankly not enough of them. We have to recognise that we struggle to recruit specialist staff to operate mental health services in Lincolnshire, because of the rural nature of our county. It also means that attracting specialists, such as psychiatrists, from more populated towns and cities is difficult. I know the Government are fully aware of the issue but, without more specialist staff, local providers find it difficult to expand services and provide a more immediate response to the children who are in most need.
That staffing issue creates a need for local providers to make occasional use of agency cover. Not only is that expensive, but it brings a significant churn of personnel into the system, when children and families need a consistent and familiar touch point they can get to know and who can get to know them. Another main workforce concern is that, after covid, a significantly higher number of people need help. It is estimated that across the UK, 1.5 million children might need new or additional mental health support as a result of the pandemic. Before the pandemic, one in nine children in the UK suffered with their mental health. That figure was high enough, but it has since risen to one in six children. With more children to treat, Lincolnshire needs more specialist staff to go alongside the clear increases in monetary investment.
My final point is about the important third area of after-hours care. In Lincolnshire, we have a crisis and enhanced treatment team. It is targeted at helping children, through assessments and home treatment, aiming to avoid the need for hospital admission. The full extent of that in-person service is available from 8.45 in the morning to 7 pm. As we know from many cases, the greatest need is during the night. For that, there is a telephone number for parents to call for advice, and they might be referred to an A&E department, if it is deemed necessary.
Although that is, of course, welcome, some families have not been aware of the out-of-hours service and have presented to A&E, sometimes without calling the crisis team, only to struggle to find any specific mental health support at the hospital when they arrive. Locally, I know that those responsible are aware of that, and improvements are on the way. For example, a new mental health liaison post has been appointed and will start soon to offer routine face-to-face support at A&E. Going forward, there is a review of the entire crisis model. Plans are currently being explored, including for a child and young person crisis assessment centre. I will definitely follow that closely.
Providing for our children is the driving force in parents’ lives. We love, care for and protect them as best we can with whatever means we have. I hope that, in some small way, my speech today has helped highlight the challenges that children’s mental health services in Lincolnshire face. Some are similar to those faced by other areas across the country; some are perhaps more unique to us in our county. I thank all who work so hard to deliver mental health services in Lincolnshire. I pay particular tribute and send my thanks to the families who have shared their stories with me—they know who they are. I look forward to the Minister’s response.