debates/debates2025-07-01b conversation_10
Source: hansard.parliament.uk (2025-07-01)

UK Parliament Hansard data: debates/debates2025-07-01b conversation_10

Gagan Mohindra:What assessment she has made of the potential impact of the increase in employer national insurance contributions on businesses. \p Rachel Reeves: The Government protected the smallest businesses from changes to national insurance by increasing the employment allowance from £5,000 to £10,500. That means that this year 865,000 employers will pay no national insurance contributions at all, and more than half will either gain or see no change to their national insurance contributions. \p Gagan Mohindra: Given the recent trio of U-turns, this Government have demonstrated that they are keen to change their minds as well as to create new multibillion-pound black holes. Will the Chancellor do the right thing and U-turn on the increase in national insurance contributions, to provide businesses with a much-needed boost in the sluggish economy that she has created? \p Rachel Reeves: It is a bit rich for anyone in the Conservative party to mention black holes, after the one that they left for us to clear up. The hon. Gentleman will have seen the Lloyds business barometer, which has recently been published and shows that business confidence is now at a nine-year high, led by increases in confidence in retail and manufacturing. That report referenced the impact of the spending review on boosting business confidence—a recognition that this Government are backing Britain and backing Britain’s businesses. \p Bill Esterson: The Chancellor is quite right to mention that business confidence is at a nine-year high. Does that not go to show that not only were the announcements in the spending review right for business, but her emphasis on stability and certainty in the economy is exactly what is needed? Moreover, it is in sharp contrast to the chaos, constant changes of policy and complete disaster in economic policy that we saw from the Conservative Government. \p Rachel Reeves: The stability that this Government have returned to the economy has meant that the Bank of England has been able to cut interest rates four times in the last year, taking hundreds of pounds off people’s mortgages—there was such a big impact in that regard under the last Government. The reasons for the increase in business confidence also include the industrial strategy publication, the spending review and the three trade deals, all of which are boosting business confidence and have helped to create 385,000 new jobs in Britain since the last general election. \p Lindsay Hoyle: I call the shadow Minister. \p Richard Fuller: Labour’s jobs tax has really clobbered British businesses. The Office for National Statistics says that the number of available jobs is collapsing. Perhaps the Chancellor has not updated herself on how British business thinks about confidence: the Institute of Directors has said today that business confidence has plummeted; the Bank of England is warning of significant declines in wage growth; and the British Chambers of Commerce says that taxes on businesses cannot be increased. The Chancellor has bungled welfare changes, eviscerating confidence in the Prime Minister and blowing an even bigger hole in the public financing, meaning that she will raise taxes yet again this autumn. Will she avoid creating the same damaging uncertainty she did last summer by ruling out from the Dispatch Box today any further tax increases on British businesses? \p Rachel Reeves: I am not going to take lessons from the Conservatives: they increased taxes 25 times. When they increased taxes, it was always ordinary working people who paid the price. In our Budget last year, we protected the payslips of ordinary working people by not increasing their income tax, their national insurance or their VAT, and we did not go ahead with the increase  in fuel duty that the Conservatives had planned. Instead of talking down the British economy, why do the Conservatives not back the plans that are backed by British businesses to grow our economy and make working people better off? \p Lindsay Hoyle: I call the Liberal Democrat spokesperson. \p Daisy Cooper: Non-profit businesses and charities have been hit really hard by the jobs tax. Last week, my local meals on wheels service told me that businesses like theirs around the country are having to make redundancies and put up prices for vulnerable people. In the context of today’s welfare reforms that the Government are pursuing, can the Chancellor confirm whether the Treasury will conduct any assessment of the increased cost of essential and charitable services relied on by disabled people and their carers at a time when their welfare support could be cut? \p Rachel Reeves: As the hon. Lady knows, the changes we have made to the welfare Bill will mean that nobody who is currently receiving personal independence payments will have a cut, so I just do not think the premise of her question is correct. When we debate the welfare Bill today, we will be voting for the biggest increase in the universal credit standard allowance for a generation and protecting those people with the most severe conditions from having to be reassessed for their condition, which is degrading. We have got rid of the Tories’ work capability assessment changes, which the courts said were illegal, and we are putting £1 billion into back-to-work support. At the same time, we are investing £29 billion in the NHS. That is possible only because of the rise in national insurance increase on business, which the Liberal Democrats opposed—and yet that is how we are funding our NHS.