Taxation: Small and Medium-sized Enterprises

Peter Fortune Excerpts

Tuesday 3rd February 2026 Westminster Hall

[Gregory Stafford (Farnham and Bordon) (Con)]

I beg to move,

That this House has considered the impact of taxation on small and medium-sized enterprises.

It is a pleasure as always to serve under your chairmanship, Mr Dowd, and I am grateful to colleagues for attending this debate. Small and medium sized-enterprises are the backbone of our economy. They create jobs, sustain local communities and keep our high streets alive. However, since the autumn Budget 2024, they have been met with higher taxes, higher costs and a Government who appear indifferent to whether they survive at all.

It is almost impossible to know where to start with this debate, given the Government’s complete failure on the economy and sustained neglect of business and enterprise. The Prime Minister speaks the language of growth, but lacks the backbone to take the decisions needed to achieve it. If the debate were simply an exercise in cataloguing failure, we would be here all day. Instead, I will focus on the real-world consequences of that incompetence for the small and medium-sized businesses that keep our economy moving.

In my constituency, I repeatedly hear the same message from business owners about staffing pressures, soaring energy bills and rising financial costs, which in many cases have more than trebled as a direct result of decisions taken by this Government. That is not anecdote; it is reflected clearly in the data. Research from Xero shows just how precarious the situation has become: two in five SMEs do not even know whether they were profitable last month. That is not confidence; that is business flying blind.

Since the 2024 Budget, Labour has made a deliberate political choice to increase the burden on retail, hospitality and leisure. Those are not marginal sectors—they are the lifeblood of our town centres, as major employers and key drivers of local economic activity.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

Last week I was lucky enough to host a roundtable with some SMEs from Bromley, including the excellent Martin from the Crown and Anchor. They said to me that this Government’s policies, including the jobs tax, are restricting their ability to grow and to hire young people. Would my hon. Friend agree that abolishing business rates would give small businesses the boost that they need to thrive?

[Gregory Stafford]

I entirely agree with my hon. Friend. Like him, I have held roundtables with hospitality businesses, which are saying the same thing as others: they want to see a cut in business rates. The Conservative pledge to entirely scrap business rates for businesses with bills under £110,000 is the right step and would be welcomed by business. I hope the Minister will take up that idea; good ideas should be taken up by the Government, but they seem to have a problem with doing that.

In mentioning business rates, my hon. Friend reminds me that the Labour party manifesto—which I am sure you read, Mr Dowd—pledged that

“Labour will replace the business rates system, so we can raise the same revenue but in a fairer way.”

That clearly has not happened, because businesses are being hammered.

--- Later in debate ---

[Gregory Stafford]

I thank the hon. Member for, as always, bringing his experience from Northern Ireland. That emphasises the point that I was making: this is a whole-country problem. He is absolutely right that we are on a knife edge. We are at a tipping point for our small and medium-sized enterprises, and if they go under, the consequences will be dire. If one wants to speak Treasury speak, that means the Treasury will actually raise less money. The only way that the Treasury will raise more money is by freeing up businesses to expand, grow and employ more people. That is how we will get our economy going, not by taxing every single business until the pips squeak.

I turn now to hospitality, which has been a focus of mine since I was elected. It underpins community life and provides work for young people and for those who rely on flexible hours. Yet the Government slashed retail, hospitality and leisure relief from 75% to 40%—an ideological and damaging decision—which will be followed by eye-watering increases in rateable values from April this year.

UKHospitality data shows that the average pub will see its business rates rise by 15% in the first year, climbing to a 76% increase by year three. At the same time, online and out-of-town competitors are being protected. Distribution warehouses used by online giants will see increases of just 9% in year one and 16% by year three. This is not a level playing field; it is actively tilted against the high street.

The Government’s so-called emergency pubs relief, announced this year, does little to address the scale of the problem. It is a sticking plaster, not a solution. Just one in 20 retail, hospitality and leisure businesses will benefit, and even then the average pub will still be paying £5,700 more in business rates than before.

Business rates are simply not being reduced, and those pressures are compounded by the changes to employer national insurance contributions introduced at the 2024 Budget. For the hospitality sector alone, that amounts to £1 billion every single year. More than 774,000 hospitality workers have been dragged into employer national insurance for the first time, disproportionately affecting part-time staff such as bar workers and waiting staff. Flexible work is being punished. Young workers are being hit hardest, and employing people is becoming more expensive at precisely the wrong moment. That is not pro-growth and it is not pro-work.

VAT policy has also failed small businesses. The £90,000 VAT registration threshold actively discourages growth and creates perverse incentives for firms to cap expansion. The Government have ignored repeated calls for a reduced VAT rate of 12.5% for hospitality, a policy that would support growth, improve competitiveness and align the UK with many of our European neighbours. The refusal to act is holding back an entire sector.

The Parliamentary Private Secretary, the hon. Member for Hitchin (Alistair Strathern), is chuntering from his seat. I am sure he will be able to hold his own debate at some point to tell us all what is going on in his constituency. I suspect that, if he were honest, he would tell us about the impact that his Government’s policies have had on the sector, and how they are absolutely destroying his high street, as they are mine.

These pressures are not theoretical; they are being felt by real businesses across my constituency. For example, at Birdies café in Farnham Park, business rates have increased by 450%—from £290 to £1,600 a month—a change that has already cost the business a member of staff. Energy bills have risen from £300 to £400 a month to £3,500 a month, while rising wage costs and changes to employment law have forced the owner into rolling three-month contracts—a worse outcome for workers, driven entirely by the Government’s pressure and policies. At the Bat and Ball pub, business rates are doubling from £800 to £1,600 a month. Minimum wage changes have added £56,000 a year to its wage bill.

Across my constituency, community businesses such as the Antiques Warehouse, the Packhouse, the Bluebell pub, Serina, the Six Bells, the Healy Group, and Hamilton’s in Farnham; Acorns Coffee, the Dairy, Issaya and Smallworld IT in Bordon; Oliver’s café and wine bar and Davids menswear in Haslemere; Passfield Stores in Passfield; Little Latte in Tilford; the General Wine Company and Stedman Blower in Liphook; and the Greatham Inn in Greatham have all written or spoken to me and are facing the same relentless squeeze from Government tax and regulatory decisions. These are not failing businesses; they are community anchors being priced out by this Government’s policies.

These issues are not confined to hospitality. Yesterday I met representatives of Medicines UK to discuss the impact of Government policy on suppliers of generic medicines. They raised serious concerns about the extended producer responsibility packaging tax. Packaging is obviously mandated by the Medicines and Healthcare products Regulatory Agency for safety reasons, leaving companies with little ability to reduce their tax liability. As a result, costs are either absorbed or passed directly on to the NHS and therefore the taxpayer.

[Peter Fortune]

I know that my hon. Friend is talking specifically about businesses and enterprises, but on that last point, the decisions taken by the Government are also impacting charitable institutions. Indeed, I have met some in my constituency of Bromley and Biggin Hill that are having to let charitable staff go, which is having a further impact on the NHS.

[Gregory Stafford]

My hon. Friend is absolutely right. One perverse outcome of the many taxes that the Government have put on is that although the NHS is, rightly, exempt from some of these tax rises, those who operate around the NHS—for example, care homes, hospices and other charitable institutions—are being hit. Even GP surgeries are being hit. This is the nonsense that we are seeing from this Government: people taking policy off the shelf from Treasury civil servants without understanding the real-world impact that it will have on businesses, the charitable sector and, in general, our constituents.

As my hon. Friend suggests, these are taxes on the NHS by another name. Extended producer responsibility sits alongside the VPAG—voluntary scheme for branded medicines pricing, access and growth—levy, which takes 10% to 35% of NHS sales from manufacturers. If the measures are taken together, the Government are heavily taxing lifesaving medicine, often at higher rates than in comparable systems overseas, with clear implications for supply and sustainability.

In my November debate on alcohol duty—which I am sure you read in detail in Hansard, Mr Dowd—I was disappointed by the Exchequer Secretary’s dismissal of the impact of tax rises on hospitality. Since October 2024, 90,000 hospitality jobs have disappeared. If that many jobs had gone from a car plant or an oil refinery, the House would be in uproar, but because it is pubs and cafés, Ministers look the other way. That is a scandal.

Oral Answers to Questions

Peter Fortune Excerpts

Tuesday 27th January 2026 Commons Chamber

[Rachel Reeves]

Like many, I was staggered by reports that senior counsel appointed by Mr Abramovich in relation to proceedings in Jersey include the shadow Attorney General. I cannot speak for the Opposition—I had many years of doing that—but our focus remains ensuring that there is no further delay in proceeds from the sale of Chelsea football club reaching humanitarian causes in Ukraine. If Mr Abramovich fails to act quickly, this Government are fully prepared to pursue legal action to release the funds. We know whose side we are on: we are on the side of the Ukrainian people, and of Britain’s national interests.

[Peter Fortune (Bromley and Biggin Hill) (Con)]

More than 80% of households in Bromley and Biggin Hill have at least one car or van—a figure significantly higher than the average in Greater London—so the decision to remove the 5p fuel duty reduction hits them particularly hard. This is the latest in a slew of measures against motorists, including increased congestion charges and the ultra low emission zone charge, which is really hitting them in the pocket. Why does the Labour party continue to use motorists as a cash cow?

[Dan Tomlinson]

We have extended the temporary 5p fuel duty cut until the end of August 2026, and rates will then gradually return to early 2022 levels. The planned increase in line with inflation will also not take place. That will save the average driver £49 next year, compared with previous plans.

Property Taxes

Peter Fortune Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Peter Fortune (Bromley and Biggin Hill) (Con)]

After a summer of rumoured tax rises, my constituents are deeply concerned. They are already paying more, because Labour broke its promise to freeze council tax, broke its promise not to increase national insurance, and broke its promises to first-time buyers, small businesses and farmers. Thanks to the Chancellor’s anti-business policies, growth forecasts are collapsing, borrowing costs are sky-high, and our national finances are shot.

Instead of looking at its reckless decisions, Labour is now calculating the best way to raise taxes, and my constituents are worried that the Chancellor is eyeing up their family home. In Bromley and Biggin Hill, on the edge of Greater London, homes are expensive. The average house price is well over half a million pounds, and there are rumours that the Government may scrap the private residence relief, which would be devastating. It would slap my constituents with an average £33,000 tax bill when they sell their family home. If someone has scrimped and saved, and been lucky enough to see the value of their home go up, they should not be handed a punitive tax bill. It only serves to knock working people back down when they are trying to get ahead.

[Mr Louie French (Old Bexley and Sidcup) (Con)]

Residents in Bromley, like those in Bexley, have been hit by the Mayor of London’s 77% increase in his share of council tax since he took office, alongside various driving taxes. Does my hon. Friend agree that this increase in property taxes would be the straw that broke the camel’s back for many residents?

[Peter Fortune]

I agree that the Mayor of London, Sadiq Khan, is causing residents in Bromley and Bexley real financial hardship. However, I in no way believe that this will be the final straw—the final way that the Mayor of London can find to damage my constituents and those of my hon. Friend. I am sure that he has plenty more straws, and a lot more camel to lay them on.

As I was saying, scrapping private residence relief would be irresponsible and economically ruinous. Imagine if somebody bought a house in Bromley in 2010 for £350,000. Today, it would cost somewhere in the region of £550,000. If they wanted to move to a new area for work or to be closer to family, without that relief, the tax bill would be somewhere in the region of £50,000. That eye-watering bill would stop people moving and wreck the housing market. That is why I urge others to support the motion, which rules out any further reckless tax rises. Working people cannot afford to keep bailing out Labour.

--- Later in debate ---

[Peter Fortune]

My hon. Friend talks of pensioners. Does he agree that this is an extra pressure on them, following all the concern that was caused to them by the cut in winter fuel payments?

[Gregory Stafford]

My hon. Friend is entirely right. Once again, the Government are showing that they do not understand and do not value pensioners and the sacrifice that they have made. Everyone—pensioners, farmers and business owners—is seen as a cash cow for this Government.

Business Rates Relief: High-street Businesses

Peter Fortune Excerpts

Wednesday 4th June 2025 Westminster Hall

[Peter Fortune (Bromley and Biggin Hill) (Con)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) for securing the debate. I agree with nearly everything he said, with one notable exception: the constituency with the finest high streets is, of course, Bromley and Biggin Hill.

High streets matter. They are the economic heart of our cities, towns and villages, supporting local jobs and serving as a social hub for communities, as my right hon. Friend said. When they are in decline or struggling, communities feel it: not only are there fewer jobs and less cohesion locally, but there is a deep sense of loss. Shuttered shops and empty streets shatter civic pride. While too many communities have seen their local high streets decline, we avoided mass closure during the pandemic, thanks to generous public support.

Retail, hospitality and leisure relief, under which firms were initially offered 100% relief on business rates with a cap of up to £110,000, was one such pivotal measure. It was a lifeline for many businesses, and it remained a lifeline through the energy crisis and the subsequent inflation. Although it was intended as a temporary measure, that tax break remains crucial to the recovery of high streets and to local growth. It is not yet time to rapidly reduce it. That is why the Government’s decision to reduce the relief from 75% to 40% is a huge blow. The change effectively doubles the business rates bill for retail, hospitality and leisure firms, and it comes on top of the high energy costs and above-target inflation that are squeezing businesses.

In my constituency we are fortunate to have successful high streets, from Bromley town centre, which is home to more than 700 businesses and supports 20,000 jobs, to the smaller parades in Hayes, Biggin Hill, Coney Hall, Bickley and Keston. However, they remain under pressure from rising costs, inflation and high energy prices, and the same challenges are squeezing consumer spending. It is precisely the wrong time to rapidly reduce the business rates relief. For an independent pub in my constituency with a rateable value of £98,000, the changes to the relief and the increase in the standard multiplier will mean an increase of nearly £20,000 in its tax bill.

It is especially reckless because this is not the only Government policy with an impact on our high streets. In one swoop, Ministers have also hiked the minimum wage, created swathes of new employment red tape and introduced a substantial increase in national insurance contributions. The Government have mixed an expensive, anti-business cocktail for our high streets that few businesses can afford. It will mean fewer jobs, less investment and closures, at a time when we want to grow our local economies.

The Government’s boast at last year’s tax-hiking Budget was

“a penny off the pint”.—[Official Report, 30 October 2024; Vol. 755, c. 820.]

But behind that lacklustre announcement, they have not been honest about the collective impact of their policies, which are costing high street businesses an absolute fortune. If the Government are serious about securing investment and growing the economy, they need to rethink their decision to rapidly reduce this critical relief, before they hollow out Britain’s high streets and pull down the shutters for good.

Family Businesses

Peter Fortune Excerpts

Wednesday 26th February 2025 Commons Chamber

[Peter Fortune (Bromley and Biggin Hill) (Con)]

Like many Conservative Members who have started a small business, I draw the House’s attention to my entry in the Register of Members’ Financial Interests. It has been fascinating to listen to stories about businesses from across the country during the debate. I was particularly moved by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) who talked about the pressure facing a local gym. It made me feel better as I am contributing to my local gym by paying the membership fees and not using any of the facilities.

Seven months ago, when Labour came to power, the new Government proclaimed that economic growth was their first mission. For all the doom-mongering, Labour inherited an economy that had turned a corner, following the pandemic and the energy crisis. The economy was growing, energy bills were falling, inflation was back on target and employment was high. However, in seven short months, economic growth has stalled, the Bank of England has halved its growth forecasts, the cost of living is rising again, with high inflation and energy bills, and unemployment is increasing, as businesses brace for tax rises.

Britain’s economy is stuttering because of this Government’s failing policies: a family business tax to break up thriving enterprises, a jobs tax to make it more expensive for businesses to employ people, a business rate hike to squeeze the already struggling British high street and more employment red tape to tie businesses’ hands. But Labour is not content with cutting jobs and closing businesses—it is giving Ministers the power to shrink the great British pint. While they say they will never do it, who could trust a word this Government say? Not pensioners, not working people and certainly not farmers. On an issue of such vital national importance, can we take that risk?

Every employer I speak to in my constituency tells me that they have no choice but to cut jobs, wages and investment. That is true whether the employer is a nursery in Bromley Common, a large franchisee on Bromley High Street or a charity serving our borough. That is what an anti-business Government look like, not a pro-growth Government.

The policies are all the more bizarre as the Prime Minister once said:

“Wealth creation is our number one priority.”

In reality, he does not know how to create wealth, only tax it. The Government are taxing family farmers who will be forced to sell off their land, family businesses that will be forced to sell and high street businesses that will be forced to close, taking jobs so that working people face redundancy.

It is not too late for Labour to spare family businesses. Those businesses employ 14 million people and contribute £575 billion to the economy. Labour’s decision to cap and cut the business property relief risks breaking up long-running family businesses. Instead of continuing those businesses, the next generation will be forced to sell. The Government’s policies will not grow the economy, but hollow it out. Britain simply cannot afford Labour’s assault on our nation’s economic future.

VAT: Independent Schools

Peter Fortune Excerpts

Tuesday 8th October 2024 Commons Chamber

[Peter Fortune (Bromley and Biggin Hill) (Con)]

My children have been educated in both the state and independent sectors. I spoke earlier in the Westminster Hall debate about how Labour’s plan to impose VAT on independent schools is a tax on aspiration, but it is also something else: a lack of understanding of how to govern. The Government’s education tax is not just a lousy decision; it is a lousy plan.

As has already been said, imposing the VAT in January—the middle of the school year—risks disrupting children’s education and forcing mainstream schools to accept mid-year students. It denies parents time to prepare and does not allow independent schools time to register for VAT. Families of more than 5,000 pupils studying at independent schools in the London borough of Bromley and my constituency must find up to £4,345 more per year to protect their children’s education, or take the gruesome decision to remove their child from their friends and the school they enjoy, even at crucial moments such as GCSE and A-level years. Is that really what the Government want? One concerned parent told me that, with their children just two terms away from their GCSEs and A-levels, finding a local state school with the capacity to take them on and that is studying exactly the same exam boards would be impossible.

In truth, the Government have no idea how many pupils might leave. The Institute for Fiscal Studies, which the Government rely on, estimated that up to 40,000 people would leave independent schools, but it admits that there is too little evidence to be sure and that the situation is uncertain. In 2018, the Independent Schools Council estimated that, if this change were imposed, pupil numbers would drop by more than 134,000 over five years. Whatever the number, it is a safe bet that this will be a slow burner, with some pupils forced out immediately, others leaving after exams, and those who will never enrol, resulting in years of uncertainty for schools, their staff, students and teachers, as many smaller schools will simply wither away.

Even a moderate number of exits threatens to close small independent schools. The likely result will be fewer pupils, fewer schools and more significant pressure on mainstream schools. This is a reckless recipe that will disrupt the education of pupils with special educational needs, pitch parents against councils and burden mainstream schools. When the Labour party said that it would not tax working people, we had no idea that its targets were children and pensioners. This is ideological, not practical, and it will impact far more pupils than the Government will admit to or recognise. Let us be clear: in a few short weeks, when children up and down the country will be saying goodbye to their friends, when they will be struggling with the anxiety of being forced to go to a strange new school, and when, through no fault of their own, they will be suffering academic pressure in an exam year, it will be the result of Government policy. As one headteacher said to me, this policy is nothing short of cruel.

Independent Schools: VAT and Business Rates Exemptions

Peter Fortune Excerpts

Tuesday 8th October 2024 Westminster Hall

[Peter Fortune (Bromley and Biggin Hill) (Con)]

I should be clear that both my children attend independent schools. Like many parents who make the same choice, my wife and I, with the support of our families, made sacrifices to enrol them. We did so because, with that support, we could.

Make no mistake: I recognise it is a privilege to have that opportunity. Like many parents, I want to give my children something I did not have growing up—an excellent education. My schooling in Lambeth, where I grew up on a council estate, left a lot to be desired. As I grew older, I realised that an excellent education was the way out. With my children, I spent what I had to give them the best possible education. Crucially, our decision for our family did not impact anyone else.

Sending children to independent school—a personal and privileged choice—is not a bad thing that should be taxed and regulated out of existence, as Labour also want to do with smoking or by introducing a two thirds of a pint measure. It does not mean that state schools are poorer. In fact, we pay our taxes and opt out, leaving more space and school resources for others. Independent schools also offer bursaries and donate the use of their facilities to other local schools. Those who think differently have an ideological obsession, and I am afraid that this new Labour Government share it. They are not thinking about lifting schools up, but tearing some down. Remember, in 2019, it was the Labour party that voted to abolish independent schools.

Instead of the complete destruction they desire, the Government have settled, for now, on taxing these schools to the brink by imposing VAT on fees and removing their charitable status. What they picture are Eton schoolkids fresh from the family estate, high on their parents’ aspirations. They do not picture the kid done good from a council estate who also has high aspirations, the shopworker doing the extra shifts to give her kids the chance she never had or the parents giving up everything to get the extra SEN care they want to provide for their child.

This is ideological, not practical. It is knocking people down, not lifting our country up. Worst of all, it is ill-considered. As one local headteacher told me, this policy is nothing short of cruel.