Autumn Budget 2025

Lord de Clifford Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord de Clifford (CB)]

My Lords, on behalf of the veterinary sector, I thank the Government for confirming in the Budget the commitment to a consultation on reform of the Veterinary Surgeons Act 1966. This is sorely needed, as the sector has seen significant structural change in the last 15 years. I was asked to note my registered interest as the operations director and a shareholder of a large, independent veterinary practice, which is an SME.

I speak today with SMEs and employees in mind. I think that many who own and work in SMEs would accept a tax rise if the extra funds could be used to reduce the national debt and encourage growth. We recognise the need to support people in need, but continued growth of spending on benefits will not support growth within our economy. I also welcome today’s announcement by the Health Minister of a review into mental health overdiagnosis to encourage those on benefits back to work, and SMEs would welcome them.

This Government came in on a manifesto promise of change to support and encourage growth in the economy. There was an opportunity for the Chancellor to make significant changes to simplify the tax system, but these were not taken in this Budget, which certainly did not encourage or support SMEs in investment and growth.

The Budget added further tax burdens to both employees and SMEs. I have three requests for the Minister to take to the Treasury for possible future adjustment to reduce those burdens. The first is to reconsider the student loan freeze on plan 2. Surely this is not a tax; it is simply a repayment process for students who invest in their future. For an economy to grow, we need aspiring individuals who want to work hard and get rewarded by higher salaries. Freezing this limit will reduce their take-home pay further, at a time when they desperately need funds for high housing costs and possibly to raise a family. Will the Chancellor please reconsider this change and remove the freeze? This would help our younger generation to aspire to a working life and not to feel that they are just paying down the country’s debt, from which they have not benefited.

The second request is to take out pension payments from the change to the salary sacrifice scheme. Businesses’ employees are encouraged to sign up to the auto-enrolment scheme, and most do, to help save for the future and to help fund retirement and not be a burden on the state. This change will take a small amount of money away from individuals’ savings and their disposable income, as NIC will be charged on auto-enrolment at 5%, which they and employers cannot avoid. The majority will be above the median salary in the UK. It will bring an additional cost to SMEs employing skilled workers whose salaries are over £40,000. It will also stop employers supporting their staff in saving for the future and increase costs. This does not help productivity or growth.

My final request is for further consideration of the IHT changes to APR and BPR in last year’s Budget. Family businesses and farms welcome the small change for the allowance of £1 million to be kept and transferred to spouses in the future, but it does not go far enough. Further relief is needed to protect family businesses with high asset values, such as land and buildings, that generate low income. Could the Government look again at increasing the limit further or even at a transitional relief—for example, for five years—to allow families to move assets to the next generation or distribute them among family members to reduce the IHT tax burden on assets that do not generate significant income, so that an unsustainable tax bill for these marginally profit-making farms and small businesses that are vital to our economy is not incurred?