On 11 January, MPs held a timely debate on reducing cost pressures on businesses during an Opposition Day debate.
Opposition Day debates are opportunities for the main opposition party (Labour) to bring forward topics for discussion in the Commons chamber, allowing pressing issues to be debated between MPs. This motion is particularly important given the web of pressures currently hitting UK businesses including retailers, and because it included discussion on business rates and Labour’s proposal to scrap the system should they enter government. The BRC engaged with several MPs ahead of the debate to set out the current cost pressures on retailers.
Shadow Business Secretary Jonathan Reynolds brought the motion that, “this House recognises the strain that businesses are under following a difficult Christmas period and two years of disruption during the Covid-19 outbreak; notes challenges are more severe in some sectors; regrets that businesses are struggling with increasing energy costs, high inflation, low growth and higher taxes as a result of the Government’s long-term failures and lack of adequate support; and therefore calls on the Government to reform business rates, to alleviate the debt burden by allowing businesses flexibility on Government loans and to implement a contingency fund to support businesses with high energy costs.”
MPs from all parties rose a range of concerns on behalf of businesses in their constituencies. The main focus was on rising energy costs and the impact this is having on supply chains and inflation. Several Labour MPs raised the idea of a windfall tax on North Sea oil and gas producers, which have seen huge profits during the pandemic, with the monies raised used for a contingency fund to support businesses facing higher energy costs this year.
Business rates were a common theme throughout the debate, with the Shadow Business Secretary setting out Labour’s intention to scrap the system in their first term in government before replacing it with a new system. A sixfold increase in the digital services tax (from 2% to 12%) would be brought in to cover the shortfall. Conservative MPs including BEIS Minister Lee Rowley asked for the detail on the new tax Labour would instate to replace business rates, although Members from all sides agreed that the system was holding back high streets, while Shadow Education Minister Toby Perkins noted that rates are “one of the biggest barriers to growth and survival” for retail businesses.
Other areas of debate included supply chains, with Minister Rowley reiterating to MPs that the Chancellor is in regular contact with G7 partners to monitor global disruption; access to labour; National Insurance increases from April 2022; and how inflationary pressures will diminish consumer spending power this year.
The motion was unanimously agreed with 220 ‘Ayes’ across Labour, the Lib Dems, SNPs – and one Conservative vote from Anne-Marie Morris MP. Although motions brought forward at Opposition Day debates aren’t binding on the Government, it is still welcome to see so many MPs acknowledge the pressures facing businesses and the need for support.
The MIA will continue to engage with partners such as the BRC or directly with the main parties to ensure that members experiences & views are represented.
