Finance (No. 2) Bill

Sarah Olney Excerpts

Committee of the whole House
Wednesday 8th May 2024 Commons Chamber

[Gareth Davies]

I was waiting for a four-hour speech and it never came—that was four minutes, but what a four minutes!

Let me thank hon. Members for their contributions to today’s debate. I will respond to some of the points that have been raised at the end of my remarks, but before doing so let me directly address some of the new clauses that have been tabled.

New clause 2 seeks the publication of a review into how the rate of corporation tax set by the Bill, as set out in clause 12, affects business investment and certainty, including what the effect would be of capping it at its current level over the next Parliament. I agree that it is important to regularly review and evaluate policy, and the Government keep all tax policy under review. The Office for Budget Responsibility produces regular forecasts, including of projected corporation tax receipts and business investment. These forecasts are based on the rates and thresholds that currently apply, and which clause 12 maintains from April 2025 to provide advance certainty to businesses. The latest of the forecasts already looks as far ahead as 2028-29 on the basis of the corporation tax rate, which currently stands at 25%, so no further action is required from the Government.

[Sarah Olney (Richmond Park) (LD)]

The Bill maintains the small profits rate of corporation tax at 19%, but does the Minister not agree that this is a drop in the ocean compared with spiralling costs in energy, staffing, borrowing and a host of other areas? The Chancellor could have used the opportunity to give small businesses a boost by reforming business rates, or by helping them with their energy bills through a proper windfall tax. Does the Minister support new clause 7, tabled by the Liberal Democrats, which would ensure that the Government must lay before the House a review of the impact of the small profits rate to look at whether it really helps small businesses to manage their costs.

[Gareth Davies]

I will give the hon. Lady the courtesy of addressing new clause 7 in due course. She is right to highlight that the new rate for small businesses will keep around 70% of businesses in the country at 19% when those that are most profitable move to 25%, but look at the entire package of support for small businesses. It shows that the Government are supportive of our high streets and small business entrepreneurs across the country, whether that is through the increase in VAT thresholds, the 75% rate relief for retail, hospitality and leisure businesses, or all the support that we provided during the covid pandemic and throughout the energy shock, including the energy bill relief scheme and the energy bills support scheme. I put it to her that we are behind our small businesses. We regard them as the engine of our growth, and we will continue to do everything we can to support them. I will come on to new clause 7 in a moment, if I may.

New clause 3 would require a review of the possible impacts of the energy security investment mechanism on energy profits levy revenues, and on investment decisions in the oil and gas sector. It would require this assessment to be made on the basis of the end date of the EPL falling before the end of the next Parliament.

The Government have already published the tax information and impact note, which sets out the anticipated impact of the energy security investment mechanism—the ESIM. This indicates clearly that the mechanism will give operators and lenders to the oil and gas industry confidence in the fiscal regime while the EPL remains over the next Parliament. Based on the OBR’s current price projections, the ESIM is not predicted to trigger before the end of the EPL in March 2029, and is therefore expected to have no impact on EPL revenues. In addition, should there be interest in calculating forgone revenue if the EPL were to end in a particular year, the OBR has published projected EPL revenues over the forecast period, and the impact of the EPL ending early can be calculated from this publicly available information that is there for all to see.

Finance (No. 2) Bill

Sarah Olney Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

After years of economic chaos, unfair tax hikes and millions of families suffering from the cost of living crisis, the Liberal Democrats will not be supporting the Bill today.

The Bill is yet more evidence that this Conservative Government have finally run out of ideas. For millions of families and pensioners facing soaring mortgage and rent payments, sky-rocketing energy bills and eye-watering food prices, the measures in the Bill will barely touch the sides. No real help with the cost of living, no plan for economic growth, no real support for our NHS and public services, and no end to this Conservative barrage of stealth taxes—is this really the best the Government have to offer? Thanks to this Government, the British public have endured the biggest fall in living standards since the 1950s. More and more people across the country are rightly saying that enough is enough. Instead of more empty promises, what they want is a general election as soon as possible, to get this tired Government out of Downing Street and our country back on track.

Recent weeks have seen desperate attempts from the Chancellor to convince people that he is cutting taxes, in a veiled attempt to deceive the British public, but everyone can see this for what it really is: a cynical deception that will be wiped out by frozen thresholds, the soaring cost of living and years of unfair Conservative tax hikes. Over this year and next, someone on average earnings will still be £383 worse off because of the Government’s freeze on the tax-free personal allowance. Despite that, the Conservatives now expect people to be grateful for their giving back just a small amount of what they have taken way. That shows that they are totally out of touch.

Meanwhile, the Government are completely failing to use their collected tax revenue in a fair way. For example, they have shown no interest in investing in the NHS. The economy cannot be fixed without fixing healthcare. We need to cut waiting times. We need to allow more of the 2.6 million people who are economically inactive due to ill health to return to work. On doorsteps across the country, people tell us time and again how they cannot get a GP appointment, expect an ambulance to arrive on time or see an NHS dentist. But instead of properly addressing this crisis, the Chancellor merely plugged a hole that he had blown in the NHS budget in the first place.

That is why the Liberal Democrats call on the Government to deliver serious investment for our NHS, recruit more GPs, fix our cancer services, bring down waiting lists and help people get the quality care they so desperately need. Unlike this Conservative Government, the Liberal Democrats will always stand for protecting our health services. The Chancellor either does not understand the damage done by his cruel cuts to public services or just does not care.

The Bill fails to introduce a proper windfall tax on the super-profits of oil and gas producers. That revenue could be used to fund energy support for the most vulnerable—to double the warm home discount or launch a proper home insulation scheme. It could be used to invest in British farming and bring down food prices for the long term. The legislation also fails to reverse tax cuts for big banks, a measure that could fund support for vulnerable mortgage-holders and renters. Worst of all, the Bill and the preceding Budget take none of the vital steps we need to grow the UK economy, such as launching an industrial strategy, reforming business rates and the apprenticeship levy, or reducing trade barriers for small businesses.

The Government have not just wrecked the economy; they have abandoned any strategy or plan for growth. Their lack of joined-up thinking has dire consequences for industry. Recently, we have seen the long and proud history of train manufacturing in the north-east jeopardised, with the Hitachi rail factory in County Durham put at risk of closure due to the Government not signing off an order from FirstGroup. That jeopardises some 800 jobs. The abandonment of the industrial strategy has real consequences for people across the country.

To conclude, although the Liberal Democrats welcome some measures in this Bill, such as changes to the high-income child benefit charge and the provision of tax reliefs for the creative industries, we simply cannot support a piece of legislation that fails to propose the solutions that we need to get our economy moving. In his spring Budget, the Chancellor could have proposed a fair deal for the British people and begun stimulating economic growth. Instead, he gave us more of the same: another underwhelming set of announcements from this Conservative Government, which is out of touch, out of ideas and nearly out of time. Right across the country, voters are sick and tired of this Conservative Government and are ready to vote for change at the next general election.

National Insurance Contributions (Reduction in Rates) (No.2) Bill

Sarah Olney Excerpts

2nd reading
Wednesday 13th March 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats support measures to reduce the tax burden on hard-hit households during the cost of living crisis, but the Bill is yet another deception from the Conservative Government. Everyone can see what this alleged tax cut really is: a badly executed swindle from this Chancellor in his desperate attempt to convince people he is cutting taxes. Yet the British people will not be fooled. It is clear that, despite his claims to the contrary, the Chancellor is continuing to stealth-tax millions of hard-working families and pensioners through the freeze on national insurance and income tax thresholds, which is subjecting them to the highest tax burden since the second world war.

Since last April, a typical household has already paid almost £1,500 extra because of the Chancellor’s stealth tax hit, while enduring higher mortgage or rental costs, sky-rocketing energy bills, and soaring food prices at the till—all as a result of decisions made by this Conservative Government. Despite all that, the Chancellor is still trying to pull the wool over our eyes. Even after the measures proposed in the Bill today are enacted, that same typical household will be paying an additional £366 next year, because the Chancellor has frozen their tax-free personal allowance. Worse still will be the hit to pensioners, who will see almost half the gains they receive from the basic state pension over the next four years wiped out by these Conservative stealth taxes. That is an £8 billion pensioner penalty, all as a result of this Conservative Chancellor effectively taking a bolt cutter to the triple lock. It is therefore clear that these deceptive Conservative claims to be cutting taxes simply are not worth the paper they are written on.

In his Budget last week the Chancellor could have given real support to hard-hit households suffering through the cost of living crisis, but instead he delivered yet more of the same from this out-of-touch and out-of-ideas Conservative party. The Liberal Democrats have called on the Government to give valuable support to those who are struggling to make ends meet, including a mortgage protection fund paid for by a reversal of the Conservative tax cuts for the big banks so that struggling families do not lose their homes, support for renters through the banning of no-fault evictions and the introduction of longer standard tenancies, and further help for all households with their energy bills through a doubling of the warm home discount.

Those steps would have made a real difference to families struggling in the middle of a Conservative recession. The Chancellor sat on his hands, opting instead for a last-ditch attempt to cling to power; but across the country, people will not be fooled. That is why I tabled new clause 2, which I will speak about in more detail in Committee, and to which I hope Members on both sides of the House will lend their support. The new clause, if accepted, would lay bare this Conservative Government’s stealth tax deception by shining a light on the millions of people who will be dragged into paying national insurance as a result of the freeze on tax thresholds.

The Liberal Democrats support measures to ease the tax burden on hard-working families during the cost of living crisis, but we will not be supporting this deceptive Conservative legislation today. For too long the Chancellor has claimed to be cutting taxes, seemingly giving with one hand while taking more with the other. That is why voters throughout the country are sick and tired of this out-of-touch Conservative Government and are switching to the Liberal Democrats. In seats all over the country, it is clear that the choice at the next election will be between an out-of-touch Conservative MP and a hard-working Liberal Democrat one.

Budget Resolutions

Sarah Olney Excerpts

Tuesday 12th March 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

After years of economic chaos, unfair tax hikes and now Rishi’s recession, this desperate Budget is yet more evidence that the Conservative Government—

[Mr Deputy Speaker]

Order. The ruling was made earlier: we must not make reference to anybody’s Christian name or surname if they are current, serving Members. The hon. Lady is incredibly intelligent and I am sure she will find another way of making the point that she wishes to make.

[Sarah Olney]

Thank you, Mr Deputy Speaker. I apologise.

For millions of families and pensioners facing soaring mortgage and rent payments, skyrocketing energy bills and eye-watering food prices, the proposals announced by the Chancellor last week will barely touch the sides: no real help with the cost of living; no plan for economic growth; no real support for our NHS and public services; and no end to this Conservative barrage of stealth taxes. Is this really the best the Government have to offer? Thanks to this Government, the British public have endured the biggest fall in living standards since the 1950s, and more and more people across the country, including in the Chancellor’s constituency, are rightly saying that enough is enough. Instead of more empty promises, what they want is a general election as soon as possible, to get this tired Government out of Downing Street and get our country back on track.

In a veiled attempt to deceive the British public, the Chancellor seems desperate to convince people that he is cutting taxes. However, over this year and next, someone on average earnings will still be £383 worse off due to the Government’s freeze on the tax-free personal allowance. On top of that, they are already enduring higher energy bills, food costs, and rent and mortgage payments, all thanks to this Conservative Government. Meanwhile, the Government have left our public services stretched to breaking point. The Liberal Democrats have been calling on the Chancellor to end this crisis, particularly in our NHS, which is on its knees.

On doorsteps across the country, people tell us time and again how they cannot get a GP appointment, an ambulance on time, or see an NHS dentist. This is clear in places such as Molesey and Thames Ditton, where people are increasingly concerned that they are unable to see a doctor, and with GPs saying they have been left in the lurch by the Government. Despite the hard work of local doctors, the situation in Surrey has become dire after the Government slashed funding for GPs in real-terms by £9.2 million. That is also putting a huge strain on local hospitals, including St Peter’s Hospital in Chertsey, and Kingston Hospital in my constituency, which are paying the price for this Conservative Government’s failure properly to fund our health service.

The crisis facing our hospitals is also being felt in south London, where St Helier Hospital has been left to crumble, with no sign of the investment promised by the Government. A&E and maternity services are now at risk of closure, which could see up to 50,000 residents displaced for healthcare should further funding not be given. The situation in our health service is so bad that it is now hurting our economy, with more than 2.8 million people unable to work due to a long-term health condition.

The increase in economic inactivity since the start of this Parliament is estimated to have cost the taxpayer around £3 billion this year alone, and all because this Conservative Government have failed to fund our NHS and social care properly. Instead of properly addressing the crisis, the Chancellor merely plugged a hole that he had blown in the NHS budget in the first place. That is why the Liberal Democrats have called on the Government to deliver serious investment for our NHS, recruit more GPs, fix our cancer services, bring down waiting lists, and help people get the quality care they so desperately need.

I was, however, glad that the Government made positive steps on the issue of child benefit—something of great importance to my constituents in Richmond Park. The raising of the threshold at which child benefit can be accessed is welcomed by the Liberal Democrats, as is the proposed consultation on introducing a household-based system to determine eligibility, rather than basing it on individual incomes. I pay tribute to the work of my colleague, my hon. Friend the Member for North East Fife (Wendy Chamberlain), who has campaigned tirelessly on this issue and introduced a Bill on that subject a couple of weeks ago. I encourage the Government to go further to review how the high-income child benefit charge works, to ensure that hard-working families do not continue to incur excessive fines through no fault of their own.

I was also glad that the Chancellor listened to the concerns of the theatre industry, particularly those of the Society of London Theatre and UK Theatre, regarding theatre tax relief. Current higher rates of theatre tax relief have played a pivotal role in enabling UK theatre to be world-leading and innovative, which will enable bigger, bolder programming that helps nurture talent pipelines and reach more audiences. I now urge the Government to keep working with our creative industries, both in theatre and in other sectors, to help enable them to grow and continue to display the outstanding talent that we have in the UK.

Liberal Democrats welcome some measures in the Budget, but it simply does not go far enough. The Chancellor could have stood up last week, proposed a fair deal for the British people and taken steps to get our economy growing again. Instead, he gave us more of the same: another underwhelming set of announcements from this Conservative Government, who are out of touch, out of ideas and nearly out of time. He could have cancelled this unfair stealth tax and raised the tax-free personal allowance; he could have reversed tax cuts for the big banks and put in place a proper windfall tax on fossil fuel giants to help fund our public services; and he could have presented a serious strategy to stimulate economic growth by reforming business rates and developing an industrial strategy, as was done by the Liberal Democrats in government. Instead, he chose to appease his Back Benchers in a desperate attempt to save his party and maybe even his own seat.

It is clear that the British public will not be fooled by the Chancellor’s deception. Right across the country, voters are sick and tired of this Conservative Government, and are ready to vote for change at the next general election.

Finance Bill

Sarah Olney Excerpts

Report stage
Monday 5th February 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

On behalf of myself and my Liberal Democrat colleagues, I express our sympathies to the King and his family, and our hope that his treatment will prove to be successful.

I will speak to amendments 1, 2 and 3, in addition to new clause 5. To reiterate, the Liberal Democrats are not supportive of the Bill, which is a deception from the Government after years of cruel tax hikes on hard-working families. The legislation maintains the Government’s unfair tax rises on working families through the freezing of income tax thresholds, fails to invest properly in our public services, such as the NHS, and takes none of the vital steps needed to grow the UK economy. Some of the measures in the Bill have worthy aims, but the context is important from the outset.

Amendments 1, 2 and 3 make further changes to the new R&D regime defined in the Bill. While the changes may be necessary and sensible clarifications, just last week, colleagues in the other place, sitting on the Economic Affairs Committee, reported their concern

“that the number of significant R&D changes made in the last 5 years has led to a perception of instability in the UK’s R&D tax relief regime and undermined the intended incentive effect of the relief.”

What businesses need more than anything is certainty and stability. The Government’s chopping and changing on R&D is indicative of a wider failure to create a stable and settled environment in which business can flourish.

Perhaps the clearest example of that has been the scrapping of the UK’s industrial strategy and the disbanding of the independent body overseeing it. This short-sighted step has robbed businesses of the stability they need to grow. The constant changes to the R&D relief regime are a clear example of how that lack of foresight and stability can undermine the aim of economic growth. Once again, I urge the Government, even at this late stage, to relaunch an industrial strategy. A proper industrial strategy can create the conditions for sustainable growth, including through effective and clear incentives for R&D investment, especially among SMEs, and ensure that the UK’s regulatory, R&D and tax frameworks are geared towards fostering innovation.

New clause 5 introduces an exemption to the energy generator levy for new plant investments. The Liberal Democrats believe that, although this may help to strengthen investment in renewable energy and contribute towards our net zero targets, the Government’s own assessment of the measure notes that it is unlikely to affect the retail price of electricity for households as energy prices remain tied to gas prices.

The Bill, and the autumn statement from which it arose, does nothing to help families with soaring energy prices or to put a proper windfall tax on the oil and gas giants. The Government continue to sit on their hands as businesses and families struggle with energy price inflation. A windfall tax on the super-profits of oil and gas producers could raise significant revenue which could have paid for a targeted package of support for those worst affected by the energy crisis, by doubling the warm home discount and investing in an emergency home insulation scheme. It remains clear that November’s autumn statement and the Finance Bill both represent a missed opportunity to address the crisis in energy prices.

To conclude, while the Liberal Democrats are supportive of certain measures within the Bill, such as the extension of full expensing, we cannot support any legislation that arises from such a deceptive and unjust autumn statement. Ultimately, British households are seeing the biggest fall in living standards since the 1950s, and households across the country are crying out for real support from the Government, for action on the cost of living crisis and investment in our NHS, but all we have heard is more stale announcements from a Conservative Government who are completely out of touch.

[Jim Shannon (Strangford) (DUP)]

I concur with the comments made by others about King Charles, on my behalf and that of the Democratic Unionist party and his loyal subjects in the United Kingdom of Great Britain and Northern Ireland—especially Northern Ireland. I pray, as I know you do, Mr Deputy Speaker, as well as others in the Chamber, for King Charles and for the royal family. I pray for a speedy recovery to his health. I pray, as we all pray, to the great healer, omnipotent over all, that his family will know the peace of the Lord as they support him at this time.

I thank all those who have contributed to this Bill debate, and I thank you, Mr Deputy Speaker, for giving me the chance to participate. Understandably, much of the Bill focuses on the measures that are needed to deliver the autumn statement. The Minister understands that—I would like to welcome him to his place. As he knows, I hold him in great respect, and look forward to his responses at the end of this debate.

For every public sector pay rise that is rightly awarded, money must be raised, and therefore we all support the principle of this Bill in theory. However, in practice, not many of us want to sign off on a Bill that raises taxes for those who are struggling at present. Obviously, as prices have risen, obligations have gone up correspondingly. Northern Ireland has been seeking a complete removal of the air passenger duty as a way of enhancing our connectivity and our attractiveness to international business investment. As a result, the rise in APD is disappointing. I know what the Minister’s response will be. We are all aware of what the renewal of Stormont means: it means that we can look at this matter ourselves. None the less, the renewal of the Assembly has also highlighted the issue of the allocation of finances. It is clear that an overhaul of the funding formulas for Northern Ireland is necessary to meet the need in the long term.

Before I left the office this morning, I heard the Secretary of State for Northern Ireland on the radio saying that he hoped that a new funding formula would be found for Northern Ireland. We on the Northern Ireland Affairs Committee have also put forward that view. It is matter that involves all parties. The hon. Members for Belfast South (Claire Hanna) and for North Down (Stephen Farry) join us in wanting the same. That is three of the political parties in Northern Ireland that want that formula. There are also labour Members who support the view, along with a number of Conservatives with some concerns. We are all pushing for a formula similar to the Welsh system. If that comes into place, we in Northern Ireland would benefit, and that is only fair and right. I am highlighting this because if we as a party wished to do something about air passenger duty in the Northern Ireland Assembly, or if a cross-party group were wishing to do the same, we would need to have that formula in place. As I say, we are looking for fair funding for the future.

The £3.3 billion that has been made available now is money that many of my constituents believe has been withheld, and that is welcomed. Ever mindful of the positivity that came out of the debate last week, I say let us be positive in looking forward—

Finance Bill

Sarah Olney Excerpts

Committee of the whole House
Wednesday 10th January 2024 Commons Chamber

Lastly, I commend the shadow Minister, the hon. Member for Ealing North (James Murray). I did not like his speech on the first group, but I thought that his speech on the present group was very good and very reasonable. He made a very important point, which I am sure the Government will want to look at, on failure to comply with stop notices, and the requirement—proposed, I think he said, by a third party—for some sort of judicial approval before a notice is issued. At the moment, the Bill basically says that HMRC, undefined, can issue such notices. That really is quite a significant further expansion of HMRC’s responsibilities. The shadow Minister referred to a good point: more protection is needed for those who might be caught by such notices. I am sure that those on the Government Front Bench always listen to points made on both sides of the House, but I thought that I would commend that point from the shadow Minister.

[Sarah Olney (Richmond Park) (LD)]

I will speak to new clauses 4 and 5, tabled in my name. I reiterate that the Liberal Democrats do not support the Bill, which is a deception from the Government after years of tax hikes on hard-working families. It arises from an autumn statement that contributed to a record fall in living standards by maintaining the Government’s stealth tax on working families through the freezing of income tax thresholds. Some of the measures under consideration today may have worthy aims, but that wider context must be noted.

New clause 5, tabled in my name, would require the Government to produce an assessment of the impact of the Bill’s tax evasion and avoidance measures. That assessment would specifically need to include a review of whether the staffing of the compliance functions of HMRC is sufficient to implement the new measures. That follows the revelation to me in answer to a parliamentary question last year that almost 2,300 HMRC tax compliance staff are still working on matters relating to our exit from the European Union and covid-19 schemes. That means that thousands of staff who would usually be working on recovering taxes or dealing with other issues are instead being redeployed to manage the Government’s mishandling of the pandemic and the Brexit deal.

It is alarming to see civil servants being moved from one crisis to another—an indication of a Government in non-stop firefighting mode. We have known for a long time that HMRC is an organisation beset by understaffing issues. Last year, the Institute of Chartered Accountants in England and Wales said that such chronic understaffing is not only causing unacceptable delays to businesses and families but hindering activity and actively hurting our economy. With that knowledge, can we have faith that HMRC will be properly equipped to put the measures in the Bill into action?

While the measures in clauses 31 to 34 and schedule 13 may have worthy aims of combating tax avoidance and fraud, the knowledge of those shortcomings makes it very difficult to have confidence in the capacity of HMRC, and in particular its compliance functions, to administer the measures effectively. I therefore urge the Government to accept new clause 5, and support the Liberal Democrats in ensuring that HMRC is fully equipped with sufficient staff to tackle tax avoidance properly.

New clause 4, also in my name, concerns the Bill’s pillar 2 measures, in clause 21 and schedule 12. It would require the Government to produce an assessment of the impact of those measures, examining whether they have been successful in achieving their policy aims. As Liberal Democrats, we strongly believe in the need for a fair international system that tackles corporate tax avoidance and evasion for the benefit of all countries. We welcome the pioneering work that has taken place under the auspices of the OECD for the formation of a fairer international tax system. The measures in clause 21 arise from that process and enable the UK’s adoption of the income inclusion rule and domestic minimum top-up tax rule. As such, they are to be welcomed; however, issues remain.

Most crucially, we believe that the global minimum corporation tax rate set at 15% under the deal remains too low. Liberal Democrats have called on the Government to help negotiate an increase to 21%, as originally proposed by the US under President Biden. Organisations such as Oxfam have highlighted that the 15% minimum rate still leaves many developing countries at a disadvantage, as they will continue to face unfair competition from tax havens. It is extremely disappointing to see the Government’s failure to back a rate of 21%, despite having raised UK corporation tax to 25%. The significant progress that has been made should not be obstructed or diluted, but if we are serious about pursuing the goal of a fairer global tax system, we must also take the time to ensure that the best path is being followed.

[Nigel Mills]

I understand the intent of what the hon. Member says. Could she explain how the review could be done within six months of the Act being passed, given that no business will have filed a tax return with any adjustments in until well after that period? Indeed, half the world probably will not have introduced the measure by that stage. Would that not be a bit of a premature assessment? Would we not risk that assessment showing no progress and then strengthening the arguments of those who would like to repeal it? It would probably be quite a bad assessment to do at that stage.

[Sarah Olney]

I welcome the hon. Member’s intervention, and—dare I say it—I completely agree with him. Of course, one is constrained by what one can amend in legislation, but I would like to see that as the start of an ongoing process of review. Let us be honest, it is an innovative proposal, not just because it requires an international co-operative effort, but because that very effort is innovative. It is therefore something that we as a sovereign Parliament should be keeping very much under review as the work continues.

I briefly note that the Finance Bill has implications for theatre tax relief, which plays a crucial role in enabling the development of new theatre productions in the UK. UK Theatre and the Society of London Theatre have raised concerns with the Treasury about those implications, which could damage how that essential relief operates. I therefore urge Ministers to liaise with those groups and particularly to provide assurance that international touring will not be hampered due to the Bill’s definition of UK expenditure. That is certainly an area that would benefit from scrutiny in Public Bill Committee.

Although the Liberal Democrats support certain measures in the Bill, such as the extension of full expensing, the Bill as a whole does not have our support, arising, as it does, from an unjust and deceptive autumn statement. I urge hon. Members to support the amendments tabled in my name, in particular new clause 5, which would hold the Government to account to ensure that HMRC is properly resourced to allow it to implement the measures in the Bill.

[Gareth Davies]

I thank hon. Members from across the House for their contributions. I will speak relatively briefly but will try to address some of the points raised. I will deal last with the new clauses, and in the meantime address some of the questions from the hon. Member for Ealing North (James Murray) from the official Opposition. He asked about pillar 1 and the progress being made. This Government fully support pillar 1 and are keen to maintain momentum on its progress as soon as possible. He should take comfort from the recent publication of the substantially agreed text of the multilateral convention. That demonstrates progress, but as I say, we are not complacent on that and are keen to see further progress as soon as possible.

The hon. Gentleman very reasonably asked for more information on sentencing and the action taken by HMRC. I will give him some data. Last year, there were 240 prosecutions. Within that, there were 218 convictions, and 130 of those were custodial sentences and 110 were suspended sentences. That equates to a 90% success rate for HMRC. The hon. Gentleman is right that the average length of a custodial sentence is 24 months. We want to extend a maximum sentence for two reasons: first, to make it clear that we consider fraud and all fraudulent activity some of the most serious crime possible because of its impact on public finances; and secondly, because if the maximum sentence increases, we expect all sentences to rise, as sentences are judged relative to the maximum sentence. However, I stress that it is the Sentencing Council that issues the guidance to judges and it is ultimately judges and the courts who rightly decide what sentences are given to those found guilty.

The hon. Gentleman asked about safeguards for stop notices, and he is right to highlight that that is an important measure for HMRC. I can tell him there have already been 20 stop notices issued since HMRC started issuing them just a year ago, but there are robust governance processes and safeguards in place, including review and appeal rights. However, any criminal sentences are decided by the courts and it is the Sentencing Council that will decide on that. I will look carefully at the other questions he has raised and ask for a written response. If we have that data, I commit to writing to him with that information.

My hon. Friend the Member for North East Bedfordshire (Richard Fuller) has rightly and consistently raised his questions and concerns on pillar 2. I can tell him that the UK is implementing pillar 2 in time and alongside EU member states, Japan and Canada, which I think he would agree are all peers. He asked about China. China has not announced implementation plans for pillar 2, but it is a member of the inclusive framework of countries that are in negotiations right now on pillar 2 and we are monitoring that very carefully, as he would expect. The US Administration have always supported both pillars 1 and 2 and have been one of the strongest advocates for them; as he will know, in 2017, the United States introduced its own domestic version of pillar 2, requiring those companies with foreign income to pay a minimum level of taxation.

The punchline, to answer my hon. Friend’s ultimate question, is that already the agreement has been put in place to ensure that, by 2025, 90% of multinationals will be in play, so we are confident in the robustness of that agreement. He asked about the loan charge; I do not believe that is in scope for this debate, but the Financial Secretary to the Treasury will follow up with him and engage with him and the loan charge and taxpayer fairness all-party parliamentary group in due course.

I will briefly address the new clauses that have been laid down. I will deal with new clauses 2, 5 and 7 together, as they all relate to tax avoidance and evasion, and then I will address new clause 4. New clause 2 would require the Chancellor to provide a report on the average sentence and range of sentences given to offences being amended in clause 31, the number of stop notices issued that clause 33 would apply to and the impact of those clauses on tax revenues. New clause 5 would require the Chancellor to carry out an assessment of the impact of clauses 31 to 34 and schedule 13 on HMRC’s compliance activities and new clause 7 would require the Chancellor to review the effectiveness of the provisions of clause 31 in combating fraud involving taxpayers money.

Let me say straight out of the gate that I agree it is important that we regularly review and evaluate policy. However, the new clauses are unnecessary, as HMRC already publishes detailed information about its compliance and performance on a regular basis. As I have said, the UK tax gap is already at an all-time low of 4.8% and will remain low and stable, given the measures that we are implementing. Every year, HMRC publishes information on the number of custodial sentences received for tax compliance offences and the average sentence length in HMRC’s annual report and accounts. The 2023-24 annual report and accounts will be published this summer, providing a full overview of HMRC’s performance. As most of that information is already publicly available in routine HMRC publications, the assessments legislated for by the new clauses are unnecessary, in our humble view.

New clause 4 would require the Government to report an assessment of the technical changes to pillar 2 introduced in clause 21 and schedule 12. It would consider the efficacy of the technical changes and their impact on multinational profit shifting and tax competition between jurisdictions. The Government consider that such a report is not necessary because the amendments in the Bill are technical changes to enhance the pillar 2 legislation that received Royal Assent just last year. Those amendments simply help to ensure that the policy objectives of the legislation are met fairly and effectively, reflecting both new international guidance and stakeholder comments. Ultimately, it is about avoiding unintended consequences in legislation that has already been passed. Of course, the Government will monitor pillar 2’s overall impact as businesses begin to respond to its implementation around the world—130 countries are privy to it.

I hope to have reassured Members that the additions in new clauses 2, 4, 5 and 7 are not necessary. For the reasons that I have set out, I urge the Committee to reject them. I commend clauses 21 and 31 to 34, and schedules 12 and 13, to the Committee.

Question put and agreed to.

Clause 21 accordingly ordered to stand part of the Bill.

Schedule 12 agreed to.

Clauses 31 and 32 ordered to stand part of the Bill.

Schedule 13 agreed to.

Clauses 33 and 34 ordered to stand part of the Bill.

New Clause 2

Review of measures to tackle evasion and avoidance

“(1) The Chancellor of the Exchequer must, within three months of this Act being passed, publish a review of the measures in sections 31 to 33 to tackle evasion and avoidance.

(2) The review under subsection (1) must include details of—

(a) the average sentence handed down in each of the last five years for the offences listed in section 31;

(b) the range of sentences handed down in each of the last five years for the offences listed in section 31;

(c) the number of stop notices issued in each of the last five years to which the measures in section 33 would apply; and

(d) the estimated impact on revenue collected in each of the next five financial years resulting from the introduction of the measures in sections 31 to 33.”—(James Murray.)

This new clause would require the Chancellor to publish details of the sentences given and stop notices issued in each of the last five years to tackle evasion and avoidance, as well as the revenue expected to be generated from the measures to tackle evasion and avoidance in this Act in each of the next five years.

Brought up and read the First time.

Question put, That the clause be read a Second time.

Finance Bill

Sarah Olney Excerpts

2nd reading
Wednesday 13th December 2023 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

The Liberal Democrats do not support the Bill. It is a deception from the Government after years of unfair tax hikes on hard-working families.

The Conservatives talk about tax cuts, but there are no tax cuts. The autumn statement maintains the Government’s unfair stealth taxes through the freezing of tax thresholds, dragging millions of people into a higher band or into paying tax for the first time. Changes to national insurance rates will not even touch the sides after years of tax hikes and spiralling mortgages. Thanks to the Conservatives’ decision to freeze tax thresholds, next year someone on a typical salary of £35,000 will pay an extra £400 in tax, and someone earning a middle income of £65,000 will pay an additional £1,200. Meanwhile, the typical mortgage will go up by £220 per month. Nobody is better off after years of this Conservative Government.

Worse still was the deafening silence on health in the autumn statement. The Government should be using any additional tax revenue to tackle the crisis in our NHS, to give people the quality of care they deserve and to let more people return to work to grow our economy. We cannot fix the economy without fixing the NHS. OBR growth forecasts have been halved, largely because people are waiting for NHS treatment. It is a no-brainer that we need to treat the millions of people on NHS waiting lists and allow them to return to work, but this Conservative Government simply do not care.

The Bill offers nothing to households struggling amid the cost of living crisis. It fails to introduce a proper windfall tax on the super-profits of oil and gas producers. That revenue could be used to fund energy support for the most vulnerable, such as doubling the warm home discount and launching a proper home insulation scheme. It could also be used to invest in British farmers, to bring down food prices for the long term.

The Bill fails to reverse tax cuts for big banks, a measure that could fund support for vulnerable mortgage holders and renters. Worst of all, it takes none of the vital steps we need to grow the UK economy, such as launching an industrial strategy, reforming business rates and the apprenticeship levy, and reducing trade barriers for small businesses.

As other hon. Members have highlighted, the creative industries are a major driver of the UK economy and the Liberal Democrats are committed to ensuring their continued success. The Finance Bill has some implications for theatre tax relief, which plays a crucial role in enabling the development of new theatre productions. UK Theatre and the Society of London Theatre have raised concerns to the Treasury about these implications, which could damage how this essential relief operates. I urge the Treasury to work with representatives from the creative sectors to address these concerns and provide clear guidance on changes to the administration of theatre tax relief introduced in this Bill.

While the Liberal Democrats support of certain measures within the Bill, such as the extension of full expensing, we cannot support any legislation that arises from such a deceptive and unjust autumn statement. Ultimately, the Office for Budget Responsibility says living standards are forecast to be 3.5% lower in 2024-25 than their pre-pandemic level, which is the largest reduction in real living standards since official records began in the 1950s. Households across the country are crying out for real support from this Government, as well as action on the cost of living crisis and investment in our NHS, but all we have heard is more stale announcements that show just how out of touch the Conservative Government are.

[Mr Deputy Speaker (Mr Nigel Evans)]

I now have to announce the results of today’s deferred Divisions.

On the draft Representation of the People (Overseas Electors etc.) (Amendment) (Northern Ireland) Regulations 2023, the Ayes were 325 and the Noes were 154, so the Ayes have it.

On the draft Equality Act 2010 (Amendment) Regulations 2023, the Ayes were 464 and the Noes were 11, so the Ayes have it.

On the draft Representation of the People (Overseas Electors etc.) (Amendment) Regulations 2023, the Ayes were 324 and the Noes were 186, so the Ayes have it.

[The Division lists are published at the end of today’s debates.]

Autumn Statement

Sarah Olney Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

This statement is a deception from the Chancellor after years of unfair tax hikes. Under this Conservative Government, economic growth is flatlining and public services are on their knees. This year, 400,000 people are still on NHS waiting lists, having been on them when the Chancellor made last year’s autumn statement. These people have been cruelly let down. In his statement last year, the Chancellor said:

“you do not need to choose either a strong economy or good public services.”—[Official Report, 17 November 2022; Vol. 722, c. 856.]

Will he look the British people in the eye and admit that he has given them neither?

[Jeremy Hunt]

I think that the hon. Lady should be careful with her language when she is saying things like that. I am very clear when it comes to growth. We have grown faster than any major European economy since 2010. Yes, while interest rates are higher—as they need to be, because we are bringing down inflation—growth is more subdued, but if the hon. Lady listens to, for example, those in the International Monetary Fund, who are independent commentators, she will hear them say that when we have got inflation back down to target, we will have higher growth than France, Italy and Germany. When it comes to the NHS, we put an extra £3.3 billion into the NHS budget in the autumn statement last year. With doctors’ strikes happening in most of the period since then, it has been difficult to make progress on waiting lists, and I hope that the hon. Lady will address her comments to those doctors if she is going to be consistent.

Economic Growth

Sarah Olney Excerpts

Tuesday 14th November 2023 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

It is a pleasure to speak in this King’s Speech debate on securing economic growth; I only wish the Government had offered us something in His Majesty’s Gracious Speech that would turn that vision into a reality. This Conservative Government have wrecked the economy, and they continue to make everyone else pay for it. They have given tax breaks to big banks and the oil and gas giants while the rest of us have suffered higher taxes, higher mortgage bills and spiralling inflation. The King’s Speech revealed a Government with absolutely no interest in tackling the cost of living crisis. There was nothing to address food price inflation, nor to support struggling households with their soaring mortgage payments, and it ignored the need to protect the most vulnerable from high energy bills this winter.

If there is one thing that all parts of the political spectrum can agree on, it is that the UK needs to grow its economy. Under the Conservatives, so much of the UK’s potential is going untapped, with anaemic growth, weaker investment and falling living standards. Years of stagnating growth look set to persist, with the most recent figures showing that our economy has flatlined, as household budgets are squeezed by higher interest rates. It could not be clearer that the Government’s approach has failed.

Unprecedented economic challenges have only been compounded by a Conservative Government who have no cohesive economic strategy, and who have chopped and changed time after time. A perfect example is the Prime Minister’s decision to row back on crucial green commitments—a decision that not only jeopardises our fight against climate change and keeps families stuck in draughty homes paying higher energy bills, but destroys the certainty that businesses need to invest in a greener future. It moves the goalposts, throwing into question carefully crafted business plans. What a colossal wasted opportunity for the climate, green growth and new jobs, and this is yet more proof that this Government do not have a plan—not for our planet or for our economy.

If the UK is to keep up with our international partners, we urgently need to restore business confidence and boost investment in growth industries. At the heart of the Liberal Democrat plan to achieve this is an ambitious industrial strategy, which would co-ordinate policy across key areas and set strategic objectives, such as supercharging green technologies, creating good local jobs and boosting international trade. It would create stability, give the private sector clear investment signals and revitalise business conditions by equipping our workforce with the skills it needs, investing in key infrastructure, encouraging the adoption of digital technology and creating financial markets that truly work for all businesses. Yet at every opportunity, the Government refuse to set a clear direction of travel or to implement a cohesive long-term industrial strategy, and this King’s Speech was no different.

One piece of legislation I was pleased to see is the Pedicabs (London) Bill, and I congratulate the hon. Member for Cities of London and Westminster (Nickie Aiken) on all her work in securing this commitment from the Government. This Bill will create a regulatory framework for rickshaws. While the intention for this legislation may be to control the unruly service that operates in central London, I believe that rickshaws could be a real game changer for those in my constituency and elsewhere who cannot access active travel. This could be a particular benefit as an interim transport solution across Hammersmith bridge, which has been closed to motor traffic for almost five years. I was pleased to meet the hon. Member for Copeland (Trudy Harrison) when she was a Minister in the Department for Transport to discuss the potential opportunities for rickshaws in my constituency. Now that the Bill has finally been introduced, I would welcome a further meeting with the Department for Transport to discuss the possibility for Hammersmith bridge and the surrounding areas to run a pilot scheme for a new licensed pedicab service.

Of the 21 Bills offered in this King’s Speech, there was not a single piece of legislation to tackle the crisis facing our NHS and nothing to ensure that the 7.8 million people on waiting lists can access treatment. Mental health is one of the top issues in my constituency, and I know that many of my constituents are deeply disappointed that plans to reform the Mental Health Act 1983 have seemingly been scrapped. My constituents were also looking to the King’s Speech to provide a solution to the sewage crisis polluting our waterways, but it completely fails to introduce measures that would stop water companies pumping sewage into rivers and oceans, and it fails to introduce a new tougher water regulator to hold water companies to account.

In my constituency of Richmond Park, Thames Water has become synonymous with poor-quality work and dubious environmental practices. Alongside failing to attend burst water mains for days and taking weeks to repair relatively simple issues, the company is spending millions on a project intended to replace water from the River Thames near Ham and Petersham with highly treated sewage in times of drought. Given the company’s history of frustrating business practices and an appalling environmental record, how are my constituents supposed to trust Thames Water to do its job? How will the Government ensure that the agencies responsible for monitoring Thames Water have the powers needed to hold it to account?

I hope that the King, on his 75th birthday today, has received some decent gifts and is enjoying a special day, because I am afraid that his Government have nothing to offer the families and businesses across the UK that are crying out for change. There is no plan for economic growth, no plan to protect our natural environment and no plan to tackle the crisis facing our NHS. This shows a Government that are out of ideas and will soon be out of time.

Financial Services Reforms

Sarah Olney Excerpts

Tuesday 11th July 2023 Commons Chamber

[Andrew Griffith]

I absolutely agree with my hon. Friend. The local government pension scheme is a huge opportunity for this country. In many cases, it is already very progressive. It is investing in local opportunities and allocating its capital to the sort of private growth assets that we wish to seek. With £365 billion under management, an increased rate of progress towards asset pooling, which, as the Government have made clear, should attract at least £50 billion, will provide the scale to invest well on behalf of beneficiaries. That is a great opportunity for us all.

[Sarah Olney (Richmond Park) (LD)]

The number of companies listed on the London stock exchange has plummeted to such an extent that the market value of Apple is now greater than the entire FTSE 100. Recently, Cambridge-based chip giant Arm decided to list in New York rather than in London. Does the Minister think that the Mansion House compact will reverse the trend of British-based companies deciding to list elsewhere?

[Andrew Griffith]

Yes.