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Unemployment in the UK

Yes, but he is not in the Cabinet, as I have said. I fear that the prospects for employment are grim. We have seen institutional mayhem, and the concern is that even within a matter of weeks businesses, small, medium and large, will have their credit lines withdrawn and their overdrafts cancelled, that they will not be able to pay their bills, and that people who are paying them will take longer and longer to pay what they owe. The picture that we can therefore foresee of a credit squeeze going right to the high street, to households and into corporate Britain is potentially apocalyptic. If the bank problems that we face today are not addressed in short order, the mayhem in the business community will hit people in a way in which no one has been hit for nearly a century. We must address the matter carefully. The problem is that almost everything that the Government have done in the corporate sector over the past decade will make things worse. It is so easy to tax and put burdens on business as the economy is rising, but when the inevitable downturn comes, those burdens are like an albatross around its neck. The danger, therefore, is that those burdens on business will convert immediately into unemployment. People can pay £20,000 in stamp duty on housing when the market is going up. When the market is going down, that renders it immediately stagnant, driving out of work estate agents and people who do up houses, and the whole collateral of many small businesses is diminished. We have seen tax for businesses rise. Corporation tax, particularly for small businesses, was raised at just the time when it needed to go down. There has been messing around with capital gains tax. We have seen a challenge to income shifting, which is exactly the underpinning focus for families and couples who run a business. We have seen fuel duty interrupt the clear economics of business. We have seen regulation increasing. We have seen employment tribunals making it too intimidating for an employer to take on their first employee. We have seen business rates that are particularly punishing for small businesses and high street shops. The ports sector—some Members present may have one of the 56 ports in this country in their constituencies—is about to face national domestic rate demands backdated in an immoral way to April 2005. Perhaps most immoral of all, taxing something that generates no revenue does enormous damage. Removing the tax relief for empty property rates is bringing to a grinding halt any kind of activity for preparing business premises or developing wrecked premises for future use. It is taking money from people who have not got it to the point where they have to take the roof off or demolish what they have just built. If the Secretary of State and the Minister do not want to take my word for it, perhaps they will study early-day motion 2045 tabled by the hon. Member for Halifax (Mrs. Riordan), assisted by the hon. Member for Middlesbrough, South and East Cleveland (Dr. Kumar). In an e-mail to all Members, the hon. Lady states:"““In these difficult times, I know that we should not make things worse for employers.””" She lists all the damage that the tax is doing—early demolitions, shelved regeneration projects, loss of inward and overseas investment, bankruptcies and hence, unemployment and the loss of pensions. Perhaps the Minister can tell me whether he agrees with his own Back Benchers that the tax is but one of the measures that is making the future rise in unemployment higher than it would otherwise be, which is adding to the recession that the British Chambers of Commerce says is already upon us. We need financial stability. We need our proposed reduction in corporation tax. We need a higher threshold for stamp duty as advocated by the shadow Chancellor. We need a reduction in regulation. We need the effective implementation of the small business support fund promised at the EU meeting last week, and, yes, we need the reform of insolvency law, so that those who are on the edge of bankruptcy can be protected from their creditors. The lesson of this is that nothing has been set aside for a rainy day. Labour Governments always run out of money, and once this crisis is behind us the best prospects for an economic recovery will come only from a change of Government.