Why would you bother setting up a business in Labour’s Britain?
In 1981, facing a deficit not unlike the one confronting today’s Chancellor, Margaret Thatcher was urged by advisers to raise income tax by 2p.
She refused.
Why? Because she understood the impact that this would have had on business morale throughout the UK.
Despite this, Rachel Reeves looks likely to ignore that lesson. A decision that leads me to ask, why would you bother setting up a business in Labour’s Britain?
Since their election last July, there has been bad news after bad news for businesses, from higher business rates and soaring staffing costs, to sky-high energy bills.
Is it any wonder that businesses are closing at the highest level since the pandemic? Or that nearly three-quarters of young people say they would seriously consider leaving the country? Or, finally, that more than 10,000 millionaires have already fled the UK? And this is all before the Chancellor’s “Nightmare Before Christmas” Budget.
So, what will we see next?
Higher Income Tax rates to eat into hard working families' disposable incomes? A continuation of the Business Rate hike that threatens up to 60,000 small shops? Or heaven forbid, an increase in alcohol duty that calls last orders for our hospitality sector?
One thing is clear. Whatever Budget the Chancellor delivers on the 26th of November, it will not be good news for businesses.
This is at a time when business needs a shot in the arm, not a Chancellor willing to place greater taxes and regulation on them. In fact, I have recently surveyed small business owners across my constituency and morale could not be lower. When I asked what the Chancellor could do to lift their spirits, the most common answer was, “resign.” I of course agree with them, but I would actually go further.
We need a Conservative alternative. An alternative that will restore our high streets and reignite that entrepreneurial spirit that we saw in the 1980s.
At our Party Conference, just last month, the Shadow Chancellor and the Shadow Business and Trade Secretary gave the Government a plan to do just that.
We Conservatives know that at the heart of all thriving high streets are our hospitality and retail businesses. That is why throughout the pandemic we supported them with Eat Out to Help Out and brought in the Retail, Hospitality and Leisure Rate Relief. Now, we would go further and introduce a permanent 100% rate relief for these businesses. This would allow much-loved businesses in Mid Leicestershire such as the Royal Oak and the Nook Corner Coffee Shop to continue serving communities.
It’s also vital that aspiration and entrepreneurialism be instilled in people at an early age.
We should be encouraging the young wheeler dealer, the young White van Man and the young beauty salon owner to set up shop. We should not be confining them to a life of Public Sector lanyard classes.
Therefore, a future Conservative Government will expand business coaching for young people, simplify HMRC regulations to ensure wealth creators are not tied down with compliance, and cut red tape for the self-employed.
Finally, as Conservatives, we know that taxing businesses to the hilt simply does not work. This is why we will call quits on the pernicious and immensely damaging increase to employer National Insurance that the Chancellor introduced in the last Budget.
Rachel Reeves’ Jobs Tax, coupled with the un-Employment Rights Bill has led firms to cancel hiring plans and sent unemployment to increasingly dangerous levels; we would back job creation and not punish it.
Unfortunately, the Chancellor seems determined to ignore this common sense, and I am afraid to say that we will continue to see businesses closing and deserting the UK, while her and the rest of the Government continue to fail young people.
If the Chancellor carries on her path of high tax and high spend, Britain is well on its way to becoming the sick man of Europe once more.
Mr Peter Bedford is the Conservative MP for Mid Leicestershire.
