Luke Evans
Main Page: Luke Evans (Conservative - Hinckley and Bosworth)Department Debates - View all Luke Evans's debates with the Department for Business and Trade
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Nigel Huddleston (Droitwich and Evesham) (Con)
I beg to move,
That this House regrets Government policies that are making seasonal, flexible and part-time work more difficult; notes that these policies particularly impact young people who are likely to start their first job in the hospitality, leisure and retail sectors, and specifically regrets Government policy to increase business rates on the hospitality, leisure and retail sectors; further regrets the Employment Rights Bill, with its provisions on guaranteed hours, and late notice cancellation of shifts, which will effectively destroy seasonal, flexible and part-time work; also regrets raising the rate of employer National Insurance contributions; regrets that 84,000 jobs in the hospitality sector have therefore been lost; and calls on the Government to cut public expenditure in order to abolish business rates for thousands of high street businesses, and not to proceed with the Employment Rights Bill so that it is easier for young people to get their first job, and easier for people to move from receiving welfare into work.
Last year’s Budget, with its increases in national insurance contributions, increases in business rates and inflation-busting pay rises, led to more than 180,000 job losses, because it increased the cost of labour. Most economists, and indeed most sensible people, understand that when you increase the price of something, there is less demand for it. By increasing the cost of jobs, Labour caused unemployment—yet this year, fully aware of rising unemployment, the Chancellor remarkably came back for more. Along with her colleagues in the Cabinet, she is imposing even more costs on business through the unemployment Bill, with more regulations and a whole new set of taxes, like the tourism tax. These decisions will do even more damage, snatching the opportunity of a first job, a seasonal job or an entire career from young people—and, indeed, people of all ages.
Dr Luke Evans (Hinckley and Bosworth) (Con)
On the tourism tax, only a couple of months ago, in response to a question that I had posed, the then Minister for Creative Industries, Arts and Tourism, the hon. Member for Rhondda and Ogmore (Chris Bryant), said, “We think they have been taxed enough.” Is it a surprise to Opposition Members to see a tourism tax being brought forward?
Nigel Huddleston
Yes, indeed; my hon. Friend makes an important point. I was here when the Minister said that. He said that there were “no plans” to bring in a tax—although clearly there were, because a few weeks later, one was brought in—and that the sector had been “taxed enough”. Well, I agree with that Minister, and I therefore do not agree with the Chancellor.
Not content with the damage to businesses and jobs done in last year’s Budget, this year the Chancellor decided to go even further in her latest Budget, and went for the pockets of working people directly by making them pay more tax. That was a clear manifesto breach. Working people are paying the price for this Government’s inability to tackle the ballooning welfare bill, and to control the unions and their own Back Benchers. The Budget was not about the economy; it was all about internal party management. It is appalling that we have a Chancellor who appears to be willing to see thousands of our constituents lose their jobs, as long as she saves hers. In short, the Budget was a £26 billion tax hike on working people to pay for Labour's welfare spending. Last year’s Budget destroyed jobs; this latest one disincentivised work. It takes a special kind of incompetence to destabilise both the demand and the supply of labour simultaneously, but this Government have somehow managed to do just that.
Nigel Huddleston
The hon. Gentleman’s final words are key: how are public services paid for? The top 1% of income tax payers in this country pay 29% of all income tax. It is estimated that the Labour Government’s policies have led to 16,000 of the wealthiest people in this country leaving—equivalent to a third of a million to half a million average taxpayers. The burden, therefore, is spread on the others. Instead of demonising some of the wealthiest people, who make an incredible contribution to our public services, maybe the Government should thank them.
Dr Luke Evans
It is not just wealthy people who have left. We know from the Office for National Statistics data that 257,000 Brits have gone—it had been estimated at 70,000—of whom about two thirds to three quarters are under the age of 35. We are losing young people to the rest of the world because of the implications of not being able to get a job in this country.
Nigel Huddleston
Yet more common sense is coming from those on this side of the Chamber, and I agree with my hon. Friend. Of course, it is young people in particular who do not have confidence in this Government and are fleeing.
It is clear that I do not have particularly high regard for Labour’s economic competence, but even I did not expect the Government to be running out of money quite so quickly. I expected them to be bad, but I did not expect them to be this bad. It does not give me any political joy to say that, because my constituents and their constituents are paying the price for Labour’s incompetence through higher taxes and, in many cases, with their jobs and livelihoods. I genuinely wish that they were better at government, but that is wishful thinking, because here is another hard truth about Labour: despite the party’s name and the false advocacy for working people, every Labour Government since the second world war have left office with unemployment higher than when they started, leaving the Conservatives to clear up their mess.
We Conservatives know that the best thing we can do for working people, and to lift people out of poverty, is to help them get a job, and we have a far better record than Labour in doing that. Between 2010 and 2024, Conservative-led Governments oversaw the creation of 4 million jobs—an average of 800 a day. This Government are destroying jobs by the tune of hundreds per day.
Sarah Olney
My hon. Friend is right; the hospitality sector has been disproportionately impacted by the hike in national insurance contributions because it generally employs people on lower wages for a shorter period of time. In particular, the decrease in the threshold has been damaging to many businesses that have that kind of employment pattern.
My hon. Friend is right that what we really need to do is boost growth and demand. We think that that could happen by introducing a 5% decrease in VAT for hospitality businesses. We need the Government to give hospitality the tools it needs to grow and help boost the wider economy. Thousands of venues are facing steep and unprecedented cost rises, making this a critical moment for the hospitality sector. I urge the Government to tackle the cost-of-doing-business crisis by adopting our proposal on VAT.
Sarah Olney
I believe, off the top of my head, that it is about £9 billion. We think that that could be met by the money that we have lost from leaving the European Union—from Brexit. As a result of leaving the European Union, £25 billion a year has been lost to the Treasury thanks to the Conservatives’ botched Brexit deal. There are so many better ways that we could have been spending the money that the Conservatives’ botched Brexit deal has cost us.
Pubs, bars, cafés and restaurants across the UK that rely on seasonal workers need all the support they can get, so I sincerely hope Ministers will listen. Today’s motion calls for the abolition of business rates, and the Liberal Democrats agree that we need to see a complete overhaul of that unfair and damaging system. In 2019, the Conservative Government promised a fundamental review of the business rates system, which they failed to deliver. In their recent Budget, the Government committed to rebalancing business rates, but we saw nothing of the sort. UKHospitality says that the average tax increase for hospitality will be 76% over the next three years. Meanwhile, warehouses, offices and large supermarkets will see bills go up by just 16%, 7% and 4% respectively. The Chancellor said that she is looking to introduce permanently lower business rate multipliers, but the painful reality is that the new higher valuations will wipe out any benefit that businesses might have seen.
The increase in the minimum wage announced by the Government in the recent Budget is welcome and will support millions of low-paid workers, but it is not just workers who need a boost; it is small businesses too. Unless businesses are able to grow, there is a danger that the long list of cost pressures they face will result in fewer jobs being available overall.
Dr Luke Evans (Hinckley and Bosworth) (Con)
As it comes towards Christmas, I tend to think of the shows I like to watch, and one is “Blackadder Goes Forth”. Near the end there is a famous quote. Blackadder is finally trying to get away, but he cannot. He knows he is going to go over the top and he says, “Well, it rhymes with clucking bell”. For me, that is what many in my constituency who run businesses are now feeling about not one but two Labour Budgets.
When I think about high streets in Earl Shilton, Barwell and Hinckley, I think about our little cafés and restaurants, the shops, and the pubs. They are really feeling the pressure. The Government came in on a mandate of raising taxes—that is true—but to the tune of £7 billion or perhaps £8 billion, not £40 billion in the first Budget, and £26 billion in the second. Every Government may need to raise taxes—the Conservatives did it when we were in government—but the problem with the current Government, and the issue hitting all my businesses, is the toxic concoction of everything changing at once. There is constriction around the whole idea of growth. We see that at micro level on the high streets of Hinckley and Burbage, and at macro level as a country, with ever tightening red tape and tax, all under the auspices that we are supposed to be growing as a country. We have seen inflation and unemployment go up, and growth stagnate. That is the reality that the country is facing, and so are my high streets.
Alison Hume
Under 14 years of the Conservatives, productivity and growth stagnated—the worst in the G7. Would the hon. Gentleman like to enlighten Members as to whether he thinks that helped or hindered businesses and their employees?
Dr Evans
I would love to elucidate, because if we go back to 2010, we had to deal with the financial crisis, and we had to borrow £158 billion to deal with that. Then we had to get the coffers back in the right position, and we were just about doing that before the pandemic hit and we had to borrow another £400 billion. The hon. Lady was not here under the previous Government, but every time we were here, the Opposition were asking us to spend more, and we are now feeling the pressures of having to deal with that.
The hon. Lady talks about what Labour inherited, but it also inherited the fastest growing economy in the G7. We also had inflation at target and very little unemployment, but all those things are now changing under this Government, because of their polices. It is easy to see why. In the first Budget, there was an increase in the national living wage and in national insurance contributions, and business rates relief for the hospitality sector was cut from 75% to 40%. If we fast forward to this Budget, the national living wage has been raised again and the business rates relief has been cut again.
Now the Government have come forward to say, “We are putting transition measures in place”, but those measures will mean a 15% increase for the vast majority of businesses. That increase is capped—I give the Government credit for that—but for the vast majority of businesses, the increase is 15% this year, and then up to 30%, 40% or 70% over three years. That is the prospect for hospitality businesses. They were already struggling because of the very nature of the pandemic as well as high inflation because of the war in Ukraine, so the situation is difficult for those businesses—they are the most vulnerable ones—yet the toxic concoction put in place by this Government is making things worse.
I will go down my high streets this Christmas to speak to those businesses, but I fear what lies in prospect for them as a result of this Government’s actions. How will the measures that the Government have put in place encourage those businesses and help them to move forward? I do not think that Labour Members are anti-business and I agree that they want to support workers, but they are blinkered and naive to think about giving extra rights and pay to workers without taking into consideration the consequences of what may well happen. It is all very well having increased pay, but for people who do not have a job, that is an increase in nothing. That is the heart of the problem.
We want to see more secure pay. The previous Prime Minister, the former Member for Uxbridge and South Ruislip, talked about high productivity and high-value jobs, which all hon. Members want to see. The question is how we get there. We do not get there by tying a tight noose around the businesses that will drive those jobs, which is a real concern for me. Why would anyone take the risk of setting up a restaurant in Market Bosworth or a new pub in Donisthorpe? Why would they take on the responsibility of the livelihood of their employees? Most employers are good employers and care deeply about their workforce.
Alison Griffiths
To reflect on my hon. Friend’s point about risk, employers are taking personal risk when they set up businesses and employ people. When they have so much cost piled on them, that risk-benefit equation evaporates, and with it the jobs that they deliver to other people in their communities.
Dr Evans
My hon. Friend is entirely right, and I bow to her experience as I know that she has run and been involved with many businesses. She speaks the truth about what businesses and risk-takers are looking at in this country. They are saying, “Why would I take that risk? Why would I take on that responsibility if there is not any reward?” I would have had more truck with the Government if they set out what they were trying to achieve over the next three or four Budgets sequentially. They could then have increased national insurance contributions, for example, as a one-off, and built around that. However, the problem is that there is a toxic concoction of measures all coming in one go.
John Slinger
The hon. Gentleman is making an interesting speech. On his point about risk, Conservative Members always look at that through the lens of the employer. There are, of course, risks—I spent most of my career in the private sector, so I have some experience of this—but does he accept that employees also take risks? When they take up a job, they need to be paid sufficiently so that they can live their lives with dignity, look after their children, and so on. Does he accept that a balance must be struck between people seeking jobs and employers providing jobs?
Dr Evans
The hon. Gentleman is right. As an MP, he will be an employer. No doubt, he is a good employer who offers the members of his team good terms and he cares deeply about the staff who he is looking after. However, we have taxpayer-funded jobs, but the private sector has to generate the funding to employ people, so those businesses have to take the risk and work out whether there will be a job in the first place. Worse still, because of the Government’s Budget choices, many cafés and pubs are looking to reduce the hours that they open, to reduce their staffing hours or even to close because they cannot make the numbers add up. We are seeing a cumulative effect, which is having an impact at a micro level on the likes of Twycross and at a macro level on the whole country, with every industry speaking out and saying that it is having problems.
I had hoped that the Government might listen to those ideas. The Government’s mantra has always been that their No.1 mission is growth, but all the measures that they have put in place are anti-growth. We are seeing the results of that, with inflation being higher.
Lincoln Jopp
The Conservatives are often accused by Labour Members of talking down the economy, but from my recollection, over its 14 years the Conservative party set the conditions for the creation of 800 jobs per day, on average. I have just checked the recent statistics and the number is running at about 373 under the current Government. In addition, net inflation has risen every month that the Government have been in power, since July last year. Will my hon. Friend take an intervention from any one of the very few Members present on the Government Benches who is prepared to say when they think that unemployment might start to fall from the record levels of low unemployment that they inherited from the last Government?
Dr Evans
I will take an intervention on that point, if any Labour Member would like to make one. More importantly, my hon. Friend correctly makes the point that it is the Government’s job to set the framework. There is no such thing as Government money: it is taxpayers’ money, earned by those who create the wealth. It is businesses and the associated workforce that provide the public sector with the money it needs to do its job—it is that simple.
In my trade as a doctor, we talk about A-B-C-D-E when it comes to a patient. There is no use dealing with the circulation—the heart—if the person does not have a clear airway. The same applies here: we need to have an economy that is growing and thriving to be able to give the foundation to the funding for the likes of the NHS or education. This is where the Government might be slightly wrong and where they have got the balance wrong, about which we heard from the hon. Member for Rugby (John Slinger). If the system is tilted too far and made too tight for people ever to take a risk, we are not going to have the tax inflow in the first place. Worse still, we have seen 16,000 millionaires and counting leave the country.
Mr Adnan Hussain (Blackburn) (Ind)
I had the pleasure of meeting two risk-takers in my constituency this weekend: Habbak Watches and AutoLab. They are run by people who are simply wanting to grow their businesses and offer chances and opportunities to young people in my town. I have also met many micro and small businesses, all of whom felt neglected and that they were not being offered the support that they deserve. I support the Employment Rights Bill and I support the rights of employees, but I am beginning wonder and worry: are we pitting employers against employees, and vice versa?
Dr Evans
I very much welcome the hon. Gentleman’s intervention. There is a risk of doing that, but we have to remember that it does not need to be like that. There are many good employees and many good employers, far more than hon. Members like to talk about. Our job is to protect those margins. If we make the margins too tight, we hinder the very people who are doing a good job, which I think is his inference and what I hear in my constituency. That is why I am asking the Government to rethink this balance and to reconsider the toxic concoction of legislation, red tape and taxation all at once causing such a big problem. At the end of the day, we can have as many employment rights as we want, but if we do not have businesses driving growth and providing jobs, they will not apply—it is as simple as that.
In conclusion, at the end of “Blackadder Goes Forth”, Blackadder resigns himself to going over the top, but Baldrick taps him on the shoulder and says, “Sir, I have a cunning plan.” I hope that the Chancellor has a cunning plan to deal with this situation, but I will not wait with bated breath.
Dame Caroline Dinenage
It is all very well supporting the status of workers if there are jobs to offer people. If you have the status, but no job to attach it to, you feel like a bit of a lemon—as I am sure the hon. Lady might do after that question. She should listen to businesses in her constituency, because what businesses are saying is that they do not feel the Government are supporting them. Given her track record in her previous life, she should understand that the hair and beauty industry is one that disproportionately employs young people and women, and the businesses in that industry are very often women-owned. This Government are not friendly to women-owned businesses, either.
Retail, hospitality, and hair and beauty—taken together, the failure of those sectors will prove to be the death knell for our high street. The hon. Member for Harlow (Chris Vince) spoke about how important it is to see his high street regenerated. If we are going to regenerate our high streets and see them as living, breathing, vibrant things, we need to reimagine them as places where we not only shop, but live, work, socialise and engage in leisure activity. The only way that is going to be delivered is if our high streets are filled with small independent traders, but since the Budget, over 1,000 pubs and restaurants have closed—the equivalent of two every day.
We on the Culture, Media and Sport Committee are seeing a similar trend in our work on grassroots music venues, which are still closing at the rate of two a week. Like my hon. Friend the Member for Hinckley and Bosworth (Dr Evans) said, those venues say that the outcome of the small business rates review is nothing short of a disaster for them. A cap of 15% this year is going up to a 40% cap in 2028-29—that is what they are getting after transitional relief, and that still will not be the end of it.
Dr Luke Evans
When the Chancellor stood up and said that the Government would be changing business rates, there was some relief across the industry, but now businesses are realising that because the temporary relief that has been in place for five years since the pandemic is being stripped away, even though they are getting these new business rates, they are much worse than what they had before. It is the cumulative effect of both those things crossing over that is causing the problem—that is why bills will go up, rather than come down. Does my hon. Friend agree?
Dame Caroline Dinenage
I agree 100%—my hon. Friend has hit the nail on the head. The grassroots Music Venue Trust says that despite multiple Ministers saying on the record that business rates would go down for the live music sector, it cannot find a single venue in the country whose bills will be lower.
Kate Dearden
I have heard lots of Conservative Members reflect on unemployment. What they fail to mention is that the average unemployment rate over their 14 years in government was 5.4%, which is substantially higher than the current unemployment rate. As the right hon. Gentleman knows from Monday’s debate, we have committed to consult on seasonal work. We will work with businesses, trade unions and all other stakeholders to get the legislation right—I will continue to listen and to work with them on the details. It is so important that we pass the Employment Rights Bill, so that we can consult and stick to our road map for implementing it. Many working people and businesses across this country want that certainty; they want us to crack on.
I will try to make some progress, as we are pressed for time. Several hon. Members—including the hon. Members for North Dorset (Simon Hoare), for Hinckley and Bosworth (Dr Evans) and for Gosport (Dame Caroline Dinenage)—raised the subject of business rates reform, as did the shadow Secretary of State. This Government are determined to remove barriers to investment, helping our businesses to succeed, our high streets to thrive and our economy to grow. We are introducing permanently lower tax rates for retail, hospitality and leisure properties with rateable values below £500,000 from April next year. This will give long-term certainty and support to the high street, in marked contrast to the previous form of relief, which created a yearly cliff edge and had to end entirely in April next year. We know that this tax cut must be sustainably funded, which is why from April next year, we are applying a higher rate to the most valuable properties—those with rateable values of £500,000 and above. Let me be clear: those properties represent less than 1% of all properties, but they include the majority of large distribution warehouses, including those used by online giants.
Some Members have spoken about the raising of employer national insurance contributions in last year’s Budget. I have already mentioned the state of the finances we inherited from the Conservative party. That meant that we had to take difficult decisions to get the nation back on track, and one of the toughest decisions was to raise the rate of employer national insurance contributions, but we are protecting the smallest businesses from these changes, including many of those in the hospitality, leisure and retail sectors. These difficult but necessary steps will protect our public finances and ensure that we can to continue to fund our essential services, such as the NHS and social care, and to invest in the economy.
Moving swiftly on, many Members have mentioned the visitor levy. Our mission is to kick-start economic growth and to devolve fiscal powers, and the levy is critical to that. Introducing a visitor levy provides mayors with a new lever that they can use to raise funds for reinvestment locally. We launched a consultation at the Budget so that the public, businesses and local government can shape the design of the power to introduce the levy that will be devolved to local leaders. They will decide how to introduce the levy and how it will be used to drive growth in their region. That is a historic step for English devolution.
I will reflect on some of the comments of the hon. Members for Hinckley and Bosworth (Dr Evans), and for South Northamptonshire (Sarah Bool). I do not share their lack of enthusiasm for continued investment in this country under this Government.
Dr Luke Evans
The Minister’s amendment to the motion refers to
“a comprehensive vision for productivity and success”
for small businesses. It is incredibly similar to the amendment that the Government tabled in the high streets debate, but interestingly, what has gone is a reference to a 25% cut in administrative burden. The Minister raised the issue, but did not comment on whether the Government are committed to that 25% cut. Where does that figure come from, and why has it disappeared from this amendment, when it was in a previous one?
Kate Dearden
The Under-Secretary of State for Business and Trade, my hon. Friend the Member for East Renfrewshire (Blair McDougall), mentioned in his opening remarks all the steps that we are taking to reduce those burdens, and all the policies that we are introducing to back our small businesses across the country. On the point that the hon. Member for Hinckley and Bosworth made on investment, just last month J.P. Morgan announced its £3 billion tower. That is one of the largest financial services investments in recent years. Scottish Power has announced a £24 billion clean energy investment, which will create 2,000 jobs up to 2028. We are proud of that investment.
I will finish on the subject of the youth guarantee. Many Members have stressed the importance of employment for young people. There are more 18 to 24-year-olds in employment than a year ago. The Tories left the NEET rate rising and saw a colossal rise of almost a quarter of a million in young people out of work. We are determined to turn that around. NEET numbers are still too high, and lots of Members have rightly reflected on that. We want to give young people a brighter future, and that will be the impact of our youth guarantee. Our measures supporting young people to earn and learn are backed up by the evidence on what works. There is a national crisis of opportunity, and we are taking action in response —through the youth guarantee, the growth and skills levy, and, more widely, by interrogating the root causes of the issues, with the support of Alan Milburn.
To summarise, this Labour Government are on the side of working people and our brilliant businesses. We have boosted pay for millions of the lowest earners, and we are putting money back into people’s pockets. We are making work pay again in a way that suits the 21st century, and that will create security and opportunity for everyone, no matter their background. Most of all, we have a commitment to a core British value: those who work should be rewarded. As we put it in Yorkshire, this is about a fair day’s pay for a fair day’s work. We are getting on with the job. We are focused on fixing the long-term damage to our economy, and setting Britain on the path to renewal. That is why I call on the House to support our amendment.
Question put (Standing Order No. 31(2)), That the original words stand part of the Question.