Business Confidence

The Government were forced to make difficult choices in the Budget, but the fundamentals of doing business in the UK remain strong. The Government’s agenda of creating an industrial strategy, getting people back to work, reforming our planning system, rebuilding our relationship with the EU, pensions reform and more, is entirely focused on improving the long-term business environment across the UK.

In the aftermath of the Budget, I spoke with many business leaders in my constituency of Solihull West and Shirley. Invariably, they told me that they are pausing recruitment and freezing their growth plans as a direct consequence of the decisions made around taxation and the Employment Rights Bill. What does the Secretary of State say to those businesses in my constituency that no longer have confidence in the Government and feel abandoned by their policies?

I say that the Budget was seven weeks ago, so if the Conservative party, which did not tell us how it would pay for the promises it made when it was in government, now has a plan to pay for those promises, I would welcome receiving it in writing, or hearing it here at oral questions or in a statement. The raw reality is that the Conservative party made promises that it had no intention of keeping. We are not going to do that; we will fix the foundations and do what we say. The reason this Government will succeed on growth and business investment in a way that the previous Government did not has to do with the fundamentals: the return to political stability in the UK; an openness to the rest of the world, including the EU—a difficult subject for Conservative Members, I know—which is still our major trading partner; and the willingness of this Government to use their mandate to improve the business and investor environment. Those fundamentals mean that the future of the UK is very promising.

Steel manufacturing is a vital west midlands industry, but business confidence is being dented by retrospective charging of steel safeguarding duties by His Majesty’s Revenue and Customs. Companies that are affected in my constituency and elsewhere feel that such duties were unfairly and wrongly imposed on them during the chaotic Brexit transition period. They tried to work with the last Government, but got nowhere. Given the importance of the steel sector to British industry, will the Minister work with the Treasury to resolve the issue, and ensure that these vital businesses are protected from hefty bills that they should never have been sent in the first place?

I thank my hon. Friend for raising that important matter. Given the sums of money involved, I can understand why that is a substantial issue for businesses in her constituency. It relates to the duties that were charged at a time of significant political uncertainty. This is a Treasury issue relating to taxation, but I promise we will get her the meeting she needs, and work with her to ensure that she gets the answers she requests for her constituents.

I call the shadow Minister.

There is no clearer pointer on business confidence than the Bank of England’s recent survey on employers’ responses to the Budget. Some 59% expect lower profit margins; 54% expect to raise prices; 54% expect lower employment; and 38% expect to pay lower wages than they otherwise would have. Now City AM reports that Labour has carelessly lost all its business backers. Will the Secretary of State show any contrition, admit that business confidence is through the floor, and start standing up for business, rather than the Treasury?

Well, what can I say? Was it the Conservative party that increased corporation tax from 19% to 25% in one Budget, and that crashed business investment and confidence because of the way it mishandled Brexit, failing to prepare for either outcome of a yes/no referendum? And which Opposition Front Benchers played a role in the mini-Budget? Frankly, it was all of them. With respect to the hon. Gentleman, I will not take advice from him. Since the Budget, I have heard repeatedly from Conservative colleagues that they want to lower taxes and increase spending, even though they cannot account for the promises that they made when in government. That is not credible unless they engage with reality, as this Government are doing. Whether it is the response to the Chancellor’s speech at Mansion House or finally sorting out Marks & Spencer this week, this Government are getting on with the job and looking to the future.

Sorry seems to be the hardest word. [Interruption.] I am talking about the Government’s Budget. Further proof of how low business confidence is getting under this Government was given in evidence to the Employment Rights Bill Committee. Jane Gratton of the British Chamber of Commerce predicted “a reduced hiring appetite were this legislation to come in, and that” their members “would be less likely to recruit new employees due to the risk and difficulty, particularly under the day one rights”.––[Official Report, Employment Rights Public Bill Committee, 26 November 2024; c. 8, Q2.] If business confidence is low, employment goes down. We already know that every Labour Government leave unemployment higher than when they took office, but is it not a bit extreme for this Labour Government to legislate for that outcome?

If the hon. Gentleman googles that statistic, he will find that it is not actually true, but I appreciate that it is demanding being in opposition, and that there may not always be the capacity and resources required. As we heard on the excellent Second Reading of that legislation, the vast majority of employers in the UK already operate to a higher standard than the level to which the floor is being raised in the Employment Rights Bill. I do not in any way pull back from saying that some of the most vulnerable, insecure and low paid members of our society will benefit from the Bill; that is exactly what it is about. Those people may have given up on politics or think that the mainstream political system will not deliver for them. I reject the claim that certain industries require a supply of labour from jobs that do not give people the security and dignity that they need. This is a set of proportionate, reasonable reforms that will make a difference—

Order. I have a list of speakers here. I call Munira Wilson.