Thursday 23rd May 2024
(6 months ago)
Commons ChamberFinance Act (No. 2) 2024 2023-24 View all Finance Act (No. 2) 2024 2023-24 Debates Read Hansard Text Watch Debate Amendment Paper: Public Bill Committee Amendments as at 21 May 2024 - (21 May 2024)
15:14 - The House divided: - Ayes: 215 / Noes: 19 - Question accordingly agreed to.
The Financial Secretary to the Treasury (Nigel Huddleston)
I beg to move, That the Bill now be read the Third time.
May I take the opportunity to thank you, Madam Deputy Speaker, and the other Madam Deputy Speaker for your professionalism, kindness and robustness in this place? You will be sorely missed, and I express my appreciation to all those who have announced that they will be standing down at this election and thank them for their service in this House. I think I speak for everybody when I say that everybody who comes into this place does so with very positive motivations, because they want to make the world a better place for their children and grandchildren. That may sound trite, but it is a motivation we all share. We may disagree on the route to achieve that, but anybody who comes into this place does so with incredible professionalism, and we should all thank them for that service.
Moving on to the politics and policy of today, this Bill helps to deliver the priorities of the Prime Minister and the Government following the autumn statement and the spring Budget. The economy has vastly improved. It is growing again. Real wages are increasing and, as we found out this week, inflation is down to its lowest figure in nearly three years. The Finance Bill builds on that economic improvement by rewarding work, encouraging investment in our economy and boosting home ownership.
As the two recent fiscal events outlined, we have rewarded work by making national insurance tax cuts. Some 27 million employees will get an average tax cut of £900 a year, and 2 million self-employed people will get a tax cut averaging £700. That is the largest ever cut to employee and self-employed national insurance, and this Bill furthers the work done on rewarding work by increasing the high income child benefit charge threshold from £50,000 to £60,000. In addition, the rate of the charge will be halved, so that child benefit is not repaid in full until someone earns £80,000, taking 170,000 families out of paying this tax charge. Some 485,000 families will benefit by an average of £1,260 from these child benefit changes.
Jim Shannon (Strangford) (DUP)
I put on record my thanks to the Minister and the Government for that change. It is a policy that my party and I have pursued over a number of years. The Government took it on board and they are very kindly changing the law. I thank the Minister, but also the Government, because it is one of the things that we can put to our constituents, including my constituents in Strangford, and say, “Here is delivery of what you asked for. Here is what we did.”
Nigel Huddleston
I thank the hon. Gentleman for his gracious and pertinent intervention, as ever. I thank him and all those who have campaigned for this change, because we know it will make a difference to the budgets of many households across the country in what we recognise are still challenging times.
The Bill will drive investment in the economy through various measures, including additional support for our world-leading creative industries, and we are making tax reliefs for theatres, orchestras, museums and galleries permanent, at a rate of 45% for touring theatres, museums, galleries and touring productions, 40% for non-touring productions and 45% for orchestras. That will ensure that our creative industries have the support they need after the unprecedented economic shock of the pandemic.
We will further support the UK’s independent film sector through a new UK independent film tax credit, at a rate of 53% for films with lower budgets. That will support the production of UK independent films and the incubation of UK talent. Our creative sector is vital to our national life, and the Government are committed to supporting UK businesses in the sector.
This is also a Bill that will boost transactions in the housing market. It will cut the higher rate of capital gains tax on residential property from 28% to 24%, encouraging landlords and second home owners to sell their properties, which would in fact increase revenues because there would be more transactions. That will make more homes available to purchase for a variety of buyers, including, of course, first-time buyers.
We need to ensure that the property system is fit for purpose. The Government are clear that where policies are not meeting their objectives, we will take clear and decisive action. That is why we are abolishing multiple dwellings relief—a bulk purchase relief in the stamp duty land tax regime—from 1 June 2024. Abolition follows an external evaluation that found no strong evidence that the relief is meeting its original objective of supporting investment in the private rented sector. His Majesty’s Revenue and Customs has recorded many instances of abuse and attempted abuse.
We are amending the rules so that individuals buying a new lease over a leasehold residential property through a nominee or bare trustee will be able to claim first-time buyers’ relief on their stamp duty land tax bill. That change will ensure that, for example, victims of domestic abuse are not unfairly penalised if they wish to buy their first homes anonymously. It will ensure that those in difficult circumstances do not face additional barriers to purchasing homes.
The Bill will also make the tax system fairer by closing tax avoidance loopholes and making relevant changes to VAT.
I thank right hon. and hon. Members from across the House for their helpful and insightful contributions to the debates during the Bill’s quicker than expected passage. I thank the many stakeholders who have provided their views on the issues raised and provided evidence to the Public Bill Committee, as well as Treasury and HMRC officials and, of course, the House Clerks and officials who have supported us in getting the Bill to this point so quickly.
The Bill rewards work, encourages investment in our economy and boosts home ownership. It is part of the Government’s clear plan of action. For those reasons, I commend it to the House.
Nigel Huddleston
I thank those who contributed to the debate, and, of course, those who have contributed to debates on the Bill throughout its progress. I turn first to comments made by the hon. Member for Aberdeen North (Kirsty Blackman). I respect her views about scrutiny of Bills in this place. However, I hope that she recognises that finance Bills often contain many, many clauses, some of which have been developed over many years, been subject to multiple consultations, and had a huge amount of input. I appreciate that she acknowledged that a lot of written evidence, which is hugely valuable and very much appreciated, is also provided. The fact that she and her colleagues are pressing for a Division on the Bill this evening evidences that there is scrutiny, holding to account, and a diversity of opinion on these matters.
I disagree with many of the hon. Lady’s other comments. On who is better off, 27 million workers are better off because of the national insurance cut, and 2 million self-employed people are better off. If she does not believe that, I suggest that she looks at her payslips; she will see that national insurance is going down. That makes a meaningful difference. She may be sniffy about it, but £900 is a meaningful difference for an average worker—for many of my constituents, and constituents across the country. For those not in work, of course, we also increased benefits by 6.7%, and pensions by 8.5%. We Conservatives always make sure that all people in society are looked after.
The hon. Lady made comments about support with the cost of living. The Opposition consistently seem to have a collective sense of amnesia, and have completely forgotten the last five years and the global challenges that all economies faced, with the pandemic followed by the global cost of living crisis. This Government have had to intervene in a way that nobody anticipated. It meant that taxes had to be higher, but as soon as we get the opportunity—as soon as we have the choice—to bring them down, that is exactly what we will do, because we know how difficult this has been for people and want to put more money in their pockets as soon as we can. We have a plan, and it is working.
I always respect the opinions and views of my hon. Friend the Member for Waveney (Peter Aldous), and I am never alarmed or disturbed by his frequently holding me, and the Government, to account for policy decisions. I can give him some reassurance, though. The multiple dwellings relief is being abolished for very good reason: it is not working as intended. Of course, a considerable amount of money is involved. When we spend taxpayers’ money or allow a relief, we need to make sure that it has the intended impact. The relief was not working as intended, and was subject to considerable abuse, so we are abolishing it.
However, I can give my hon. Friend some assurance, particularly on certain issues that he mentioned. For example, large investors, including those in the build-to-rent sector who purchased six or more properties in a single transaction, can still continue to benefit from the non-residential rates of stamp duty land tax, which can be quite beneficial. We are engaged in discussions with stakeholders, including some of the bodies that he has mentioned, because we do not want there to be unintended consequences. We appreciate their input on this Bill, as always. I thank my hon. Friend for his fantastic interventions, as always. He is an amazing MP for his constituents, and I always appreciate his contributions.
I thank the hon. Member for Ealing North (James Murray) for his gracious comments. He is correct that what is written in Hansard and what the public see of our sometimes rather robust debates is not always a reflection of our generally positive relationships on a personal level. However, that does not mean we do not have robust disagreements on policy, and I am afraid that I will have to raise quite a few points of disagreement today.
Every single time I have appeared at the Dispatch Box, the hon. Gentleman has complained about the Government not calling a general election, and now that we have called a general election, he is still complaining. That really takes the biscuit. He continued with his familiar refrain; he never misses an opportunity to talk Britain down. I refer him to my earlier comments about our interventions during the pandemic and their immense £400 billion cost to the UK economy. I do not believe the Opposition opposed a single one of our interventions at the time, so it is a bit rich to complain about the obvious impact on taxation. If he had an alternative plan, I would have loved to have heard it then, and I would love to hear it now, but it is non-existent. The hon. Gentleman is hoping to alarm, disturb and depress the British public into voting Labour, which is not a particularly bright strategy. The British public deserve better, and we need to hear confidence and optimism, not pessimism, about the UK economy.
I will not repeat the comments I have made on many occasions about Labour’s ridiculous scaremongering on the national insurance cuts and the impact they could have on pensions. He knows that the cuts will not have a negative impact on pensions, for the obvious reason that I had hoped he would now understand. National insurance does not wholly pay for pensions, welfare or the NHS, so why on earth is Labour going around the country trying to scaremonger old people and people who rely on the NHS into believing otherwise? I do not know. It is not an admirable way to try to win an election.
The hon. Gentleman and his colleagues keep repeating the mantra of “a changed Labour party”. Maybe in some ways that is true. Labour has certainly gone from embracing the hard left of British politics to embracing the hard right. That unbelievable journey speaks volumes about Labour’s values: it has none. Or, as the old saying goes, “These are our values. If you don’t like them, don’t worry: we have others.” On policy, too, there is a constant string of flip-flops, U-turns and uncertainty, which I am sure we will see during the general election. We will be holding Labour to account.
For example, Labour has abolished its £28 billion green spending commitment, but it seems to have retained the policy. Is Labour abolishing tuition fees? Maybe not. Will it abolish the House of Lords? Maybe not. Will it return to free movement and the single market? Maybe not. Will it abolish universal credit? Maybe not. Will it increase income tax on top earners? Maybe not. Rent caps, the ultra low emission zone, bankers’ bonuses and zero-hours contracts—we have had constant flip-flops from the Opposition. Not even they know what their actual policy is. It completely lacks credibility. As I said, they cannot expect the British public to be taken for such a ride.
The British public know where they stand with the Conservatives, because we have a plan. They can see it in the recent autumn statement, the spring Budget and this Bill. No matter what stage of life they are at, they can be confident that the Conservatives are there to support them. With our childcare measures and the child benefit changes in this Bill, it is clear that when they bring children into this world, we are there for them. Through our national insurance cuts and our measures to support businesses, it is clear that we are there for those in work or running a business. If they have finished work and have retired, we have shown through the triple lock and other measures that we are always there for them.
We can have strong public services and a strong welfare system that helps the most vulnerable in society only if we also have a strong economy to generate the taxes to pay for them. A strong recovery is vital for both the public and the private sector. That means that we on this side of the House are unapologetically pro-business.
Despite the challenges of the past few years, we are now on a clear path to recovery: the economy is growing again; inflation is falling; real wages are increasing; and people who look at their pay packet will see that their national insurance taxes have been cut too. That is more money in people’s pockets because of the actions and decisions of this Government—we have a plan, whereas the Opposition do not. We cannot put that at risk, so stick with the Conservatives for a brighter future. I commend this Bill to the House.
Question put, That the Bill be now read the Third time.