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Small Businesses’ Rising Costs

Volume 711: debated on Tuesday 29 March 2022

The Government are cutting fuel duty, at a cost of £5 billion over the next 12 months; raising the employment allowance to £5,000; and zero-rating VAT on energy-saving materials. That builds on existing support, including business rates relief worth £7 billion over five years.

Businesses such as Sidhu’s chippies in my constituency had pinned their hopes on the Chancellor reducing VAT to 12.5%. They are now going to be pushed to the brink as energy costs are set to almost triple this financial year. What hope can the Minister offer Sidhu’s and other businesses that have served their local communities for decades but now cannot guarantee jobs and services into the future?

Our hospitality strategy, which includes fish and chip shops and other restaurants around the country, has a number of workstreams to co-create solutions with businesses rather than the Government having all the answers. The hon. Lady needs to consider the issue in the round, including the business rates relief and other support that we have given of £408 billion over the past two years.

Supporting businesses to manage their costs must not come at the expense of employment rights. The P&O ferry scandal is not about fire and rehire, but it puts the issue back in the spotlight because it exposes how vulnerable workers can be when faced with an exploitative employer who is willing to trample over their statutory rights to slash wages. At the Dispatch Box last week, my hon. Friend the Minister intimated that the Government would make further announcements on the issue. May I press him to tell the House today whether the Government are prepared to act definitively on fire and rehire?

I thank my hon. Friend, who has been a doughty champion on the issue. The Government have always been clear that it is completely unacceptable for any sized business to use threats of fire and rehire simply as a negotiation tactic. We have already taken action. In November last year, we commissioned ACAS, which published guidance. I promised to take further steps, as she rightly said, and I am pleased to announce that we will bring forward a statutory code later this year under section 203 of the Trade Union and Labour Relations (Consolidation) Act 1992. We will introduce that as soon as parliamentary time allows. The code will have legal teeth; it will be admissible in evidence before courts and employment tribunals in England, Scotland and Wales.

Businesses face a barrage of rising costs: inflation at a 30-year high, taxation at an 80-year high, and rocketing prices for materials, energy, food and fuel that are hitting businesses and consumers hard. This is a Government of photo ops but shuttered shops, with no clear plan to support businesses and workers, and their spring statement does not go far enough. Does that not make Labour’s call for an increase to the small business rates relief threshold even more urgent? Or is the truth not plain to see that small businesses can no longer afford the Conservatives?

Nobody—whether in a domestic or business setting—can afford Labour. We have put £408 billion of support into wrapping our arms around jobs, livelihoods and businesses. We have 408 billion reasons to get this next bit right. The Labour party can talk about scrapping business rates, but it has not made any suggestion of what to replace them with. Fine words, but we will act.