Employers

Scott Arthur Excerpts

Wednesday 11th November 2026 Commons Chamber

[Danny Kruger (East Wiltshire) (Reform)]

I want to acknowledge the contributions made by Labour Members, because I think they have clearly articulated their philosophy of growth. In a sense, it is coherent and respectable, because what they believe is that the economic growth is driven by state action. It is true, and they often make this point, that we need the rule of law, infrastructure and proper investment in people, in places and in the sectors that need help. Those are legitimate arguments, but the fact is that our economy is built on businesses. It is built by businesses—particularly small businesses—being free to operate themselves. The prosperity of this country historically was created by free men and women trading with each other with minimal Government regulation. Yes, this took place in a safe and rule-bound world, but with rules that were light and predictable and without excessive taxation.

I think of Marlborough, in the heart of my constituency. This wonderful ancient town was given its charter 800 years ago, and it was a successful trading community on the road between London and Bristol. It was built on the textile trade, with amazing wool manufacture and processing. That is what made it rich. I was honoured to join the procession of the town council to the war memorial on Sunday—we love a procession in Marlborough—and to walk behind the robed councillors and mace bearers proclaiming the ancient wealth of the town.

The economy of Marlborough now largely involves retail, hospitality and tourism. As the procession walked into St Mary’s church, we passed Franklyn’s Bistro, a restaurant I know well—I was in only a month or two ago—and I saw that, to my great regret, it has now closed altogether. This happens in hospitality. Restaurants open and close, but there is something happening in Marlborough and across my constituency and across the country, which is that hospitality is absolutely on its knees.

Worst of all, Marlborough received the terrible news this week that the Polly Tea Rooms had closed down. It was an institution in the town, open for 114 years and surviving two world wars and all the economic ups and downs of the last century and more. This large shop front on the high street had been selling tea and cakes and lunch and dinner for all those decades.

I was very proud to be able to support the Polly during covid, and I was very proud that the owner said, “You have saved the Polly,” because I helped him with managing his application for a covid loan, but I am afraid to say that it is all over.

I want to quote the notice that the owner, David Clarke, put out:

“I have decided to close the Polly Tearooms with immediate effect.

I was hoping that the budget…would offer some help to businesses like ours, but the result was the same as every budget this Government has brought in, quite the opposite…Fuel costs and business rates have also been increasing all of the time, but with the cost of living crisis as it is, we simply can’t increase our prices to our customers and expect them to still come in as often as they did in the past.

The Chancellor John Healey spoke in his budget…of ‘hope’ for the future. He said the word so many times, I lost count. He sounded like Mr Micawber from David Copperfield, hoping something will turn up.

But that is all this government has—hope. No plan for growth, no idea what to do, just hoping something will turn up, rather than creating the environment and conditions to make the economy grow. They are spending far too much money on the wrong things, and then taxing the very people who would be able to create growth to the level that they have nothing left to achieve any of it. The measure for the government investing in anything should be how will this improve our economy. They should apply this test to every penny they spend—literally every penny. But this of course is not what…Labour…do.

So, along with literally hundreds of other businesses, I have no option but to give up trying to make it work.”

I could not put it better myself. I am the son of a restaurateur, so I know how people pour their hearts into these businesses. I am so sorry for the Polly, Franklyn’s Bistro and the other hospitality businesses in my constituency that are closing.

What should the Government do about it? My right hon. Friend the Member for Newark (Robert Jenrick) has set out a series of measures on behalf of my party: we would raise the VAT threshold from £90,000 to £150,000 to support those small businesses to grow, take on more work and take on more staff; we would end tax on overtime; and we would reverse the employer national insurance rise back to 13.8%. On hospitality, we would cut VAT to 10%, we would cut beer duty by 10%, we would progressively over time abolish business rates for pubs, and of course we would repeal the job-destroying Employment Rights Act 2025.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

I am really sad to hear about the Polly Tea Rooms in the hon. Gentleman’s constituency, but has he spoken to the IFS about cutting VAT? The IFS has said that cutting VAT would not generate the income that people promise, and I think the Treasury says the same. For businesses like the Polly Tea Rooms, I do understand the issue of the national insurance rise in the Budget of two years ago, but the other issue is the cost of living crisis, which is driven by something we have not spoken about in this debate at all: Trump’s war on Iran. Does he recognise those wider impacts on the economy as well?

[Danny Kruger]

I do not accept for a second that cutting VAT on hospitality would not be of great benefit to those businesses. I am astonished to hear that the IFS might have said such a thing. VAT is one of the major costs that businesses have to carry, so clearly a cut in what is essentially a sales tax for retail businesses would be helpful.

I will speak briefly about the challenge of the cost of living and energy costs in particular, because the issue for retail businesses like the Polly is not just about the costs that they have to carry; it is about the demand for their business being reduced because of the cost of living that customers are carrying, as Mr Clarke said in the statement I read out. What the Government should do is not simply give people more money to spend, but ensure a stable economy and a stable society, and then leave people with more of their own money that they can spend on our high streets.

That is why my party proposes raising the personal allowance for individual taxpayers to £15,000. That would be a tax cut of £500 per person for over 40 million people in this country. On the point made by the hon. Member for Edinburgh South West (Dr Arthur), I say that we would take £250 off household energy bills, which is the right response to the accelerating energy costs that have been caused not just by global instability but by Labour’s obsession with net zero.