Reducing Costs for Businesses — House of Commons, 2022-01-11
Topic: Macroeconomics
Sarah Jane Olney (Liberal Democrats, Centre to centre-left): This pandemic is not yet over. The costs and risk of the continuing high rate of infections are being borne by the individuals forced into self-isolation, by the businesses that saw revenues fall off a cliff over the crucial Christmas period and by the frontline workers who are scrambling to deliver high-quality healthcare and education in the face of record infection rates. The Government have abdicated all responsibility for bearing those costs and risks and have gone missing when they should have provided leadership, as the Prime Minister demonstrated again earlier—although I am sure the hospitality industry, and particularly those in the business of supplying cheese and wine, appreciated his continued generous support during the lockdown Thanks to our vaccination programme, we are in a position to make plans again. The difference that makes is that entrepreneurs and investors can start to identify opportunities, employees and young people can invest in training and skills, and consumers can save up or borrow for new purchases. But the Government seem intent on putting barriers in the way of new opportunities. I think most particularly of the new customs checks that were implemented on our borders over the new year, which will make it more difficult and more expensive to import goods from the EU. They will increase prices in the short term while making a greater number of trades unviable in the medium term, thereby decreasing the choice and quality of goods available and denying opportunities to future entrepreneurs. The Office for Budget Responsibility estimates that the impact of Brexit will be a 4% hit to GDP in the long term, but our only new trade deal to date—with Australia—is projected to add only 0.02% to our GDP. That will not come near to addressing the gap. The Government’s deliberate policy is to pursue barriers to trade and a decline in GDP In the past few months, it has been striking how every employer I have spoken to in every sector has talked about a shortage of staff being their barrier to growth. That has been exacerbated by high levels of infection in every part of the country—and that is before businesses have had to absorb the increased energy costs that were debated at length in the preceding debate and the Government’s plans to increase national insurance contributions. The NI increases will not only reduce the amount of money people have available in their pockets to spend in the economy but increase the cost of employment for businesses, thereby reducing the number of new staff they can afford to take on. That will limit growth and opportunities for businesses and their employees alike It is clear that the Government must get a grip on their support for businesses as we emerge from the pandemic. We cannot deliver economic growth when we are reducing opportunities for trade, increasing costs and limiting employment. We must support the retail and hospitality sectors to recover from the pandemic. We should maintain the current 12.5% VAT level for the hospitality sector and continue the 100% business rates relief so that important town-centre businesses have the chance to re-establish themselves We must urgently focus on the needs of young people and deliver a strategy to get them into work. We owe our growing generation that much for the sacrifices they made to keep the older generation safe. We need a relaunched kickstart scheme and new apprenticeships Were the Government ambitious, they would set out a long-term strategy for the transition to a green economy and to ensure that opportunities for economic growth were being nurtured in every part of the country. Were they competent, they would put in place clear plans for how to achieve such a strategy, thereby enhancing investor confidence and encouraging training in the new skills we need.