Finance Bill

Ashley Fox Excerpts

Report stage
Monday 3rd March 2025 Commons Chamber

[Jim Dickson]

Thank you, Madam Deputy Speaker. I simply intend to illustrate why the changes proposed in the amendments do not help what the Government are attempting to achieve via the Finance Bill. The FSB said that the Budget

“shows a clear direction in business policy now for the whole of this Parliament to target support at small businesses, rather than big corporates”.

As hon. Members have stated, the Government are supporting SMEs by more than doubling the employment allowance, keeping the small profits rate stable, maintaining the annual investment allowance and freezing the small business rates multiplier. I ask hon. Members not to forget that this is an important piece of legislation underpinning measures announced at the Budget that will help fix the NHS, improve public services, incentivise capital investment and rebuild Britain.

[Sir Ashley Fox (Bridgwater) (Con)]

This Finance Bill implements the 2024 autumn Budget. That was a bad budget and this is a bad Bill. It punishes businesses, discourages entrepreneurship and raises taxes on those trying to make a living. It will lead to job losses, reduced investment and higher prices. It will lead to higher interest rates and higher Government debt, which will lead to lower growth. If we wanted to make a list of things that our economy did not need, this Finance Bill would be a good starting point.

The Bill is built on broken promises. The amendments tabled try to help the Government to keep their manifesto promises. During the election, Labour told the public that its plans were fully costed and fully funded. Its manifesto said that it would increase spending by £11 billion, so how can the Government now justify an increase in spending of £70 billion a year funded by an extra £40 billion in taxes and £30 billion in borrowing? Even if people believe the fairy story of the black hole told by Labour Members—I do not—£11 billion plus £22 billion does not equal £70 billion.

Is not the truth that the Labour party always planned a large increase in taxes and borrowing but did not have the courage to tell the British people in advance? The Chancellor and the Prime Minister insisted that working people would be protected, but it is now clear either that they were wrong or that they do not consider small business owners, publicans or farmers to be working people.

[Noah Law]

Does the hon. Member not recognise that one of the primary challenges faced by the sectors he mentions is that of workers’ inability to afford to live in the areas where they work, such as in Cornwall, and that the changes to stamp duty land tax will go a long way towards improving the ability of workers to be housed in what are currently, in so many cases in Cornwall, second homes? Does he not recognise the potential contribution of that to the workforce?

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[Sir Ashley Fox]

I am sure that there are one or two good parts to this Finance Bill, but the hon. Gentleman was elected on a manifesto pledge to increase spending by £11 billion, and that was fully costed, yet this Finance Bill increases spending by £70 billion. I just wonder why he and his hon. Friends did not have the courage to put that before the British people at the election.

Small and medium-sized enterprises and the hard-working entrepreneurs who run them are the backbone of our economy, and they are the victims of this Finance Bill. In constituencies such as Bridgwater, where SMEs are key to local prosperity, the Government have imposed a huge national insurance hike that will make it more expensive to employ people. This rise, which breaks Labour’s manifesto commitment not to raise national insurance, will cost SMEs £732 more per year for every employee earning £20,000. This tax on jobs will stifle growth and lead to higher unemployment. The rise in national insurance is especially damaging to those in the healthcare sector, and the proposed amendments will help to assess the damage that that causes. Last week, representatives from the social care—

[Madam Deputy Speaker (Caroline Nokes)]

Order. In the interests of complete impartiality, I want to make sure that all Members are aware that they have to speak to the amendments as proposed in this Finance Bill, not any other amendments that they might wish had been proposed.

[Sir Ashley Fox]

I am grateful for your guidance, Madam Deputy Speaker.

People in the social care sector in Bridgwater were particularly concerned that the national insurance contributions rise had not been subject to an assessment. Assessing the damage that it and the other tax rises will do is therefore critical to the successful implementation of this Finance Bill.

[Joe Robertson (Isle of Wight East) (Con)]

I am grateful to my hon. Friend for giving way and for his assessment of the Finance Bill. Does he agree that the best way the Government can raise revenue is not to raise taxes but to grow the economy and increase the money taken through taxes in that way? Does he also agree that the national insurance contribution increases will deliver the very opposite of what the Government say? They will not grow the economy at all; they will stifle it, which is likely to lead to an increase in taxes in the future.

[Sir Ashley Fox]

I am grateful for my hon. Friend’s intervention. Indeed, combined with the rise in the minimum wage and Labour’s Employment Rights Bill, the contents of this Finance Bill seem to deliberately set out to harm small businesses.

The Labour Government’s plan to introduce inheritance tax on farmers and family businesses is more evidence, if it were needed, that they do not understand how farms and small businesses work. Under this Government, a family farm with land, buildings and machinery worth £5 million will incur inheritance tax of £400,000 when it passes to the next generation. That same farm might produce a return of 1%, or £50,000, in an average year, so the Government are proposing to take all that family’s income for the next eight years. I have a question for the Minister: how does he expect that family to live in the meantime? Labour’s response to our farmers has been to sneer at our rural communities. The Treasury offered a Minister to farming representatives, who then spent that time telling them that there was not a problem. This is bad not just for farmers but for rural economies and our nation’s food security.

This Finance Bill increases taxes, spending and borrowing. It makes our public sector larger and the private sector smaller. It does exactly the opposite of what is required. If we want a prosperous society, we need to encourage enterprise. We need low and simple taxes that incentivise people to work hard, to invest and to grow their businesses. This Finance Bill does exactly the opposite, and that is why we will oppose it this evening.

[Nesil Caliskan]

I want to thank the Members who have spoken so far. I have great enthusiasm for the Finance Bill, and I thank the hon. Member for North West Norfolk (James Wild) for his contributions, alongside the Minister at the time, over the several days I sat through the Bill’s Committee stage. I speak in favour of the Finance Bill as a member of the Committee. I recognise that it is part of the Government’s mission to turn the page on what was a period of decline for the country.

There are several aspects of the Bill that I would like to focus on. To begin with, I see the Government’s proposals on non-dom status as a crucial part of our agenda to ensure that we are delivering a fair approach to taxation in this country. Closing the non-dom loophole, alongside extending the levy on oil and gas companies and ending the VAT exemption for private schools through this Bill, will raise the necessary income to deliver what the Government are trying to do: achieve a balanced budget that will stabilise and then grow the economy.

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[The Exchequer Secretary to the Treasury (James Murray)]

At the heart of the Prime Minister’s plan for change is our mission to grow the economy to put more money in people’s pockets. We are determined to make people better off. We know that investment and growth depend on the essential foundations of economic stability, fiscal responsibility and public services being on a firm footing, but this Government inherited a challenging and unsustainable set of future spending plans based on unfunded commitments that had not been shared with the OBR or the British people.

No responsible Government could have let things carry on as they were. That is why at the autumn Budget, my right hon. Friend the Chancellor set out the Government’s plans to fix the foundations of the economy and deliver change—a plan to protect working people, fix public services, including the NHS, and rebuild Britain. That has meant taking difficult decisions on tax, spending and welfare to repair the public finances and support investment in public services, and the Government have done that while protecting people’s payslips. We have also ensured that the UK is one of the best places in the world to grow a business, with corporation tax capped at 25% and reforms that will support small businesses and the British high street. This Finance Bill represents the next step in delivering on the autumn Budget by legislating for several key manifesto commitments, supporting businesses to invest and implementing reforms to the tax system.

I thank all hon. Members for their contributions during the debate; before I turn to the individual amendments, I will briefly address some of the points that they made. I thank my hon. Friend the Member for Loughborough (Dr Sandher) for setting out the importance of growth and making people better off, and for his thorough analysis of all the amendments and new clauses to the Bill, which I seem to recall. Perhaps that was in fact my hon. Friend the Member for Dartford (Jim Dickson), who did go through all the new clauses—I thank him for his contribution. I also thank my hon. Friend the Member for Barking (Nesil Caliskan) for being on the Finance Bill Committee, although I note her description that she “sat through” it, rather than thoroughly enjoying the episode.

I also thank Opposition Members for their contributions to the debate. The hon. Member for Bridgwater (Sir Ashley Fox) recognised that even in his view, he could agree with a few points in our Bill, which I welcome.

[Sir Ashley Fox]

I invited the Minister to explain how the Budget would improve the lot of farmers. In particular, I gave the example of the £5 million family farm that would incur an inheritance charge of £400,000. How will that family pay that out of an annual income of about £50,000? That is eight years’ income, with nothing to live on.

[James Murray]

The debate on this Finance Bill has to focus on matters that are within the Bill and in the new clauses and amendments. As the hon. Gentleman will know, and as Madam Deputy Speaker reminded him, he strayed rather outside the ambit of the Finance Bill by referring to important changes to agricultural property relief that are not dealt with by the Bill or by any of the new clauses or amendments. I gently point out that any of his constituents, whatever industry they work in, will see that the income tax on their earnings does not go up as a result of this Government keeping their commitment in that regard.