Priti Patel, the Member of Parliament for Witham, met recently with Prime Appointments managing director Robyn Holmes to discuss the severe damage that is being caused to businesses like hers across the country by the new Labour Government.
The family-owned business, started in 1992 and now employing on average 300 people across its sites in Witham and Bury St Edmunds, has been an industry leader in the recruitment field for decades, but its future is now under threat due to changes announced in the Budget to the business property relief scheme (BPR).
Previously, the BPR scheme had provided confidence and stability to family-owned businesses such as Prime Appointments, allowing them to plan the future investment and growth of the business whilst feeling secure that the business can be passed on to future generations without facing significant tax charges upon each transition.
Alongside the uncertainty following announced changes to the BPR scheme, Labour’s National Insurance jobs tax is also having a dramatic impact on small businesses, and especially those such as Prime Appointments which work in the recruitment sector, while significant new burdens and costs will soon by added to businesses as a result of Labour’s Employment Rights Bill.
Labour broke their manifesto commitment, imposing a £25 billion National Insurance Jobs Tax at the Budget that is deterring businesses from recruiting, pushing up prices, and ultimately forcing businesses to close.
The Office for Budget Responsibility estimate tax changes to National Insurance will cost an additional £800 per employee. Businesses warned that a Jobs Tax would inevitably lead to price rises, job cuts and threaten the financial viability of firms across the country, and their warnings are coming true. The number of business closures increased by 64 per cent following the Budget.1,022 businesses, an increase of 64 per cent, closed in the week following the Budget year on year. The costs and burdens of the Employment Rights Bill, which implements a number of policies Labour promised to their trade union paymasters, will add billions of pounds to firms and make it harder to recruit and train workers. These changes are causing local businesses to already slow down and stop recruitment, with firms also making people redundant.
Priti said following her meeting with Ms Holmes:
“Small to medium sized, family-owned and run businesses like Prime Appointments are the backbone of our economy. There are over 4.8 million family firms in the UK today, who collectively employ 13.8 million people and generate £1.7 trillion in turnover annually.
These firms have been built from the ground up through hard work, and the current generation running the businesses have developed plans to further grow and invest, secure in the knowledge that they are the current custodians of the family business which will be passed on to future generations.
The changes announced by Labour in the Halloween horror show Budget last October have put all this at risk. Many family firms, like Prime Appointments, are instead now facing significant liabilities upon the death of a shareholder. Without vast cash reserves or liquid assets at their disposal to cover an enormous inheritance tax bill, many will need to sell parts, or all the business, potentially to an overseas or corporate buyer who will not have the same interest in our long-term objectives, our purpose and passion for what we do, nor our people, our community, local jobs, or growth.
As well as punishing family firms, Labour’s policies are crippling businesses and causing jobs to be lost. Prime Appointments do great work getting people into employment, but I worry that the number of jobs available will drop considerably as a direct result of the incompetence and economic illiteracy of Keir Starmer and Rachel Reeves.
I have been clear and vocal in my opposition to the measures introduced in the Budget – we are already witnessing the collapse in confidence to invest in the UK, with our economy stagnating, and Labour need to urgently reverse course on these awful plans.”
