Stamp Duty Land Tax

Ashley Fox Excerpts

Tuesday 28th October 2025 Commons Chamber

[Bobby Dean]

I think the hon. Member will find that across the country there will be opposition politicians opposing developments. In Sutton council in my borough, where we are in control, we are outstripping all of London in house building, and I am very proud of that record.

In order to fix the housing crisis, we need sustained wage growth, so that wages come up against the increase in house prices. I do not hear that on offer from the Conservative party today. I am sorry to say that we have a Trussite proposal on the table: an unfunded tax cut that lacks real credibility.

[Sir Ashley Fox (Bridgwater) (Con)]

If the hon. Gentleman had listened to the shadow Chancellor, he would have heard him say that half the £47 billion in savings will come from reducing welfare spend. Another significant proportion will come from reducing the civil service to the size it was back in 2016. The proposal is fully funded, and he does himself no favours by inventing other facts.

[Bobby Dean]

I thank the hon. Member for bringing me on to my next point early. I want to address this proposed £47 billion in public spending cuts. If the Conservatives were to hand over that proposal in its current form to the Office for Budget Responsibility, it would laugh them out of the front door. Those cuts are not credible at all. Over half of that figure is based on welfare cuts—a welfare bill, by the way, that rose on the watch of the Conservative Government, not least because of the defunding of the NHS, which caused people to be in ill health in the first place.

The Conservatives are also talking about reducing the size of the civil service. Can any Member hazard a guess as to why the civil service has grown since 2016? It is because we have in-housed a lot of bureaucracy that we used to outsource to Brussels. One of the primary reasons why the civil service has grown is the number of services that we now have to deliver in this country.

[Sir Ashley Fox]

The hon. Gentleman has not mentioned covid, which is the largest single contributor to the increase in the size of the state. He also did not mention the £5 billion reduction in welfare spending proposed by the Government; the Conservative party supported that, but the Government just gave in on it. There is plenty of money to be saved.

[Bobby Dean]

When the hon. Gentleman refers to covid, I think he is referring to total debt, which has increased. We are talking specifically about why the civil service has increased in size. A lot of that can be attributed to the new functions that the UK Government have had to take on.

On the welfare budget, yes, the Government struggled to get through their welfare reforms, but so did the previous Conservative Government. That is why the proposal that half of the £47 billion will come from welfare cuts lacks credibility.

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[Rebecca Paul]

Yes, I should declare that interest.

This amounts to an economic failure, but also to a social failure. Home ownership gives people stability, autonomy and long-term security. It encourages saving, it strengthens families and it fosters pride and a sense of genuine community in our towns and villages. Abolishing stamp duty will save families thousands of pounds and put the many benefits of home ownership back into reach for the next generation.

[Sir Ashley Fox]

Does my hon. Friend agree that cutting stamp duty will not only benefit young people aspiring to home ownership, but act as an incentive for older people to downsize, freeing up larger family homes and making them available for families that need to increase the size of the house they own?

[Rebecca Paul]

I will make that exact same point later in my speech, and I completely agree that that is a relevant change that will come from this policy.

I clearly see in my constituency the way in which stamp duty chokes and distorts the market as it penalises those who move, creates a disincentive for older people to downsize and deters growing families from upsizing into more suitable family homes. As the Institute for Fiscal Studies has put it, in a crowded field, stamp duty land tax is

“the most economically damaging tax in the UK.”

I cannot disagree with that.

My constituents feel that acutely. Stamp duty is all the more painful in an area where the average house price is now above £490,000. The young families I speak to, who have made the move out of London and settled in towns such as Redhill or Reigate, have been hit with eye-watering up-front costs that made those moves extremely challenging. Many more will have found it impossible. That is why our policy matters.

We intend to strip away one of the fundamental barriers to family life in this country. Eliminating stamp duty will save the average first-time buyer in the south-east around £4,000 and as much as £18,000 in London. Unlike the Labour party, we will not punish those looking to move further up the ladder with frozen thresholds and stealth tax hikes.

I would, of course, be expected to paint a suitably positive view of the proposal, but what do the experts think? Zoopla’s Richard Donnell has rightly said,

“More home moves would support economic growth and the ambition to build more homes.”

The Institute of Economic Affairs went further, calling this

“the single best reform any government could make to Britain’s tax system.”

Indeed, the case seems so strong that one has to wonder why the Government oppose us on this.

The truth is that Labour has always been the party of higher taxes on homes. It reversed the Conservative policy that raised the first-time buyer threshold to £425,000. It is freezing stamp duty thresholds in real terms, dragging more and more people into paying this punitive tax each year. While it talks endlessly about house building, its actions tell a different story. Not only is it on track to miss its self-imposed housing targets, but the Housing Secretary tried to block 237 new homes in his constituency despite promising to “build, baby, build”. By contrast, the Conservatives have delivered 2.8 million homes over the past 14 years, including nearly 750,000 affordable homes, and we pledge to go further.

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[Rebecca Paul]

My hon. Friend’s excellent point is pertinent to my constituency as well, which is full of amazing and beautiful green-belt land. We are suffering from what this Government have done on housing targets, which have doubled in Reigate and Banstead while going down in London. That means that we are building more homes, but not for local people and not for the children the hon. Member for Hexham mentioned, who want to stay close to home. It is for people living in London who then move out to Reigate and Banstead.

[Sir Ashley Fox]

Does my hon. Friend share my concern that in the south-west of England, the Government have reduced the building target for Bristol city council, which has a lot of Labour members, and have instead increased the building target for rural Somerset, where there are few Labour members, by 40%? Does she share my concern that Labour is fiddling the housing targets for political advantage?

[Rebecca Paul]

I thank my hon. Friend for yet another relevant and important point. I urge the Government to think logically about what they are trying to achieve. We all support the ambition to build more homes and recognise the problem that needs to be solved. However, the way we do it is really important, and it is important that we have those homes in the right places and that we set the targets in a logical and meaningful way. With this policy, and others like it, we are offering the public a clear choice between a party that wants to unlock aspiration and reward the hard work of our young people and a party that clings to economically damaging taxes because its own Back Benchers refuse to make even the smallest concessions on out-of-control spending.

We on the Conservative Benches are clear that any significant change to tax policy must be properly costed. The public finances are in a challenging place, and reckless commitments only add to the prevailing sense of uncertainty. That is why it is so important to emphasise that our intention to scrap stamp duty on primary residences is costed, fully funded and fully paid for through our £47 billion savings package. Our plan is clear: it is costed and it is rooted in a belief that home ownership should be within reach of the next generation, just as it was for our own.

--- Later in debate ---

[Jack Rankin (Windsor) (Con)]

In preparing for this debate, I was thinking about my history when it comes to stamp duty. I recall quite vividly going to see a mortgage broker on Dedworth Road in Windsor—I am not quite sure what year it was; perhaps I was in my late 20s. I had been quite dutifully saving for some years in order to achieve my aspiration, which a lot of young people have, to get a foot on the property ladder. I remember that I dutifully took my payslips and bank statements, and the mortgage broker turned to me and laughed. He said, “Congratulations on saving that, Mr Rankin. You have now saved the stamp duty; we just have to save up for a deposit.” It was a joke, but it was kind of true.

There has been lots of criticism of our record, but one of the things we Conservatives did in office that I was most heartened by was removing first-time buyers from stamp duty. That was incredibly powerful for young people in this country.

I might have to declare an interest that is not just historical. I am a father with a young family—we have two boys under the age of four. Housing is incredibly expensive in my constituency, with the average house costing around £750,000. We are considering a third child, and just like families up and down the country we are discussing what that means. The particular limiting decision for my family, despite us wanting a third child, is housing. We live in a wonderful home in the village of Sunninghill that is probably okay for three babes and tots, but it would not be okay for a growing family. That is the kind of decision that is being made up and down this country.

One of the things that has made me proud this afternoon to sit on the Conservative Benches was listening to some Labour Members, because from some there has been a sneering assumption that stamp duty is a tax for the rich. When I think about myself and many young people in their early 20s trying to put together their stamp duty, I do not think that is a tax cut for the rich. When I think about families trying to get another bedroom in order to grow their families, I do not think that is a tax cut for the rich. That is not going into any of the other dynamic effects at all. I am proud that on the Conservative Benches, we stand up for aspirational people.

If we think about the crowded field of all the taxes we might want to cut, to my mind stamp duty is where we might start. We have heard from many Members who have quoted distinguished economists—much more distinguished than anything I might come out with—but it is clear that stamp duty is one of those taxes that destroys almost as much wealth as it raises. It is anti-growth, anti-ambition and anti-free market, and as I have already articulated, I think it is anti-family. It is a significant part of the reason why this country has such a lethargic housing market.

This is all despite the fact that home ownership is not only key to our prosperity; perhaps even more so, it is important to people’s pride and the security of millions of families around this country. It is the foundation of this great property-owning democracy, but as a nation, we are not in a great state when it comes to housing. For my generation and the generation behind me, home ownership sometimes looks quite impossible. To fix this, our focus must be on supply, supply, supply, but we also need a market that flows freely. Frankly, today’s housing market is gummed up.

[Sir Ashley Fox]

Is my hon. Friend aware that the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell), used to be part of the Resolution Foundation—that well-known right-wing think tank—which itself has called for the abolition of stamp duty to free up the housing market in the way my hon. Friend is describing?

[Jack Rankin]

I would say that I hope the hon. Member in question is closer to this Budget, but having listened to some of his other utterances, perhaps most of us on the Conservative Benches would not hope for that. Never mind!

The main criticism we have heard from Government Members, which is a fair criticism, is that of cost. There has been some constructive criticism from Labour Members who have agreed that stamp duty is a bad tax, but have then said that cost is the problem. They should be a little bit self-aware about that, because one of the reasons we are in such a fiscally precarious place is that some of the decisions the Government made in their previous Budget have put us in something of a fiscal doom loop, which we do not seem to have any chance of escaping.

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[Sir Ashley Fox (Bridgwater) (Con)]

All of us here want to improve the lives of our constituents, though we often differ in how we might achieve that. As a Conservative, I believe we do so by working with the grain of human nature, by allowing people the maximum amount of liberty to live their lives, by supporting families, by rewarding hard work, rather than penalising it, and by incentivising entrepreneurship and the creation of wealth. As legislators, we do that by keeping the size of the state under control, keeping borrowing low and reducing the burden on taxpayers wherever possible.

It is with regret that I see this current Labour Government increasing taxes, increasing borrowing, increasing the deficit and our national debt, and increasing the interest we pay on that debt. It saddens me that we have a Government whose answer, whatever the question, always seems to be more public expenditure. I am pleased therefore that not only will the Conservative party reduce taxes when we form the next Government, but will scrap one altogether.

Stamp duty is a bad tax. The current stamp duty regime means that anyone seeking to buy their first home or to move house faces an additional burden at one of the most important moments in their lives. By eliminating this tax on main homes, the Conservatives would be removing a financial barrier, which for many first-time buyers or young families makes the difference between owning their first home or not. My hon. Friend the Member for Windsor (Jack Rankin) alluded to that in his excellent speech. It would mean the dream of home ownership was made more accessible.

While stamp duty has been around since 1694, the current regime was introduced by Gordon Brown in 2003. When it came into effect, it charged a fixed percentage rate depending on the value of a house—the so-called slab system. It meant that when the price went from £250,000 to £250,001, people faced an enormous increase in the tax paid. The coalition Government, to their credit, reformed the tax so as to remove the tax from those purchasing a property for under £125,000. They eliminated the slabs in the model with a slice model. That made the tax better, but the core problems remain. Stamp duty makes it harder to purchase a house. It dissuades people from upsizing or downsizing, and therefore prevents a host of other economic activities associated with moving house. A vibrant housing market is vital to economic health. When more people buy and move, transactions increase, new homes are built, tradespeople are employed, and local economies benefit. The tax on each move discourages those transactions. People stay put because of the cost of moving, and that can lead to the housing market locking up. Scrapping stamp duty on primary homes will free up the market. That will have benefits not just for buyers and sellers, but for builders, developers, local services, and the whole national economy.

There is a fairness argument, too. Buying a home is one of the largest investments that most people will ever make, and to tax that moment seems not just counterintuitive but perverse. Removing the tax on a main residence signals a commitment to giving people a chance to grow, to aspire and to build their lives. Those are Conservative principles, and the announcement made by my right hon. Friend the Leader of the Opposition in Manchester recognised that. I entirely agree with my right hon. Friend that this change will create

“a fairer and more aspirational society.”

[Dr Evans]

My hon. Friend is making an excellent speech. Does he agree that when supply is tight, if we allow people to move more easily, the right people will be in the homes that are right for their time of life? An elderly couple in a five-bedroom house will make the choice to downsize, while a family can upsize to the right house. When supply is tight, that fits much better for us as a society.

[Sir Ashley Fox]

My hon. Friend has made a valuable point. This tax cut benefits not just the first-time buyer, but the family moving into a larger home and the empty nesters—I am almost one—seeking to move into a smaller house.

[Graham Stuart]

May I take up my hon. Friend’s point about the dynamic market that we need? People in south-east England may be thinking of moving to, for instance, Beverley and Holderness to take up a job, but may be put off by the costs involved, and the risk that they are taking in moving to an area where there may be only that one job for them, and no other jobs to compete with it. So they do not make that move, and we do not benefit from their input into a business in Beverley and Holderness, purely because of the dampening effects of this tax. They stay in the south-east, although they, the country and Beverley and Holderness would be better off if only they were incentivised to move and take a chance.

[Sir Ashley Fox]

That is another valuable point. This tax cut benefits not just the housing market but the jobs market, and therefore the whole economy. Our politics ought to empower people, not load them with additional burdens. This is an important measure for young people, because, as we acknowledge, they face higher costs and more competition for housing than their parents did.

To be credible, we must explain how we will pay for this measure. That is a valid question, and, unlike some parties in this place, we will not make promises without a plan for delivery. The measure is possible as part of a wider package of economic reform, spending discipline and growth creation. The Government were elected on a policy of “going for growth”, yet everything that they do seems designed to bring about the opposite. A jobs tax makes it more expensive to employ people; higher business rates make it more expensive to conduct business in a property; the changes in agricultural and business property relief—increasing inheritance tax—reduce investment by family businesses; and the Employment Rights Bill makes it more expensive, time-consuming and difficult to employ people. The Government have turned on the spending taps and levied record levels of tax, while at the same time implementing measures that increase unemployment and make Britain less competitive. Every Labour Government has led to higher unemployment, and it is deeply regrettable that in every month since the general election, unemployment has risen. I do not think that the Government are malevolent; they simply have no clue about how business works.

[Tom Hayes (Bournemouth East) (Lab)]

The Conservative party’s position on the green economy is now to remove some of the support for it. Figures show that the green economy is growing by around 10%; it is fuelling job creation and often provides better-paid jobs. Does the hon. Gentleman believe that it is in the economy’s interests to cut the legs out from underneath the green economy?

[Sir Ashley Fox]

Well, I am amazed to hear that the real economy is growing by 10%. That must be a forecaster I have not heard of! We believe it is possible to cut welfare spending. In fact, a few months ago, the hon. Gentleman’s party believed it was possible. The Government put forward a modest proposal to reduce welfare spending by £5 billion, which had our support, yet, unfortunately, at the first whiff of rebellion, the Chancellor caved. That shows that the Government have no idea how finance works, how business works or how confidence works. They undermined their credibility by being unable to undertake even the smallest reform.

We can announce the abolition of stamp duty because we have promised to put Britain on a different track. Our golden rule means that, for every pound we make in savings, half will go on reducing the deficit and paying down our debts. We will reduce spending by £47 billion a year, and have announced plans to do so. About half of that will come from cutting the welfare bill, including stopping the ballooning bill for Motability cars for those with mild mental health issues. Some £8 billion of savings will come from reducing the civil service to the size it was before the pandemic. We will save money by closing asylum hotels, reserving other benefits to UK nationals, and coming to a more credible position on net zero.

By taking those tough choices, we can cut taxes and help the economy. We estimate that abolishing stamp duty will cost £9 billion, which is set against the savings we have outlined. By pledging to remove it, we are signalling that we believe in growth, in enterprise and in enabling every citizen to build their future.

Property Taxes

Ashley Fox Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sir Ashley Fox (Bridgwater) (Con)]

This Government were elected on a manifesto to increase spending by £9.5 billion. That was to be paid for through £7.3 billion of extra taxes and £3.5 billion of extra borrowing, all of which was set out in the Labour manifesto. It was a modest plan with a prudent margin—exactly the sort of plan one might expect a party in opposition to put forward to show that it can be trusted to run the public finances. Labour Members might reflect on the fact that had they implemented the plan, the British economy would be in better condition than at present.

In its first Budget, Labour increased public expenditure not by £9.5 billion, but by £70 billion. How those on the Labour Benches cheered with delight at the thought of all the extra spending: pay rises for train drivers, with no conditions; pay rises for junior doctors, with no strings; money for Great British Energy; and more money for the British Business Bank—all so the Government can invest in projects that the private sector does not think will make a return.

We all know how this story ends: Labour will use all the business acumen that the Cabinet has at its disposal to create a modern version of British Leyland. It is what Labour does best: spending other people’s money, and borrowing yet more money that other people’s children can repay. But all this extra spending and borrowing comes at a price, and the Government are now paying 5.7% interest to borrow money for 30 years. That is the highest level since 1998, and this surge in borrowing costs reflects the market’s lack of confidence in the Chancellor’s ability to manage Britain’s finances.

[Oliver Ryan (Burnley) (Lab/Co-op)]

Does the hon. Gentleman accept that the surge in borrowing costs actually started with Liz Truss’s mini-Budget and has not really stopped since the trajectory started?

[Sir Ashley Fox]

I do not accept that at all. This surge is entirely due to the Chancellor losing control of public expenditure, and the increased cost of servicing our national debt adds further pressure on the British taxpayer.

Having presented her Budget, the Chancellor said:

“We’re not going to be coming back with more tax increases, or indeed more borrowing.”

The problem is that no one believes her. The markets do not believe her, and Labour Back Benchers certainly do not believe her. They now know that they only have to threaten to rebel on any item of public expenditure and the Chancellor will cave. We saw that on the welfare reform Bill, which was brought forward to save a modest £4.5 billion. What happened? The first whiff of a rebellion, and the Bill was gutted, leaving the taxpayer to pick up the cost.

In that context, over the summer we saw briefings from the Treasury testing the water on a whole series of potential tax rises: higher rates of council tax, a land value tax, capital gains tax on family homes, lowering the thresholds for inheritance tax and an annual property levy on the family home. No wonder the Deputy Prime Minister is being so careful about which of her many homes is her primary residence.

The Chancellor is clearly desperate to raise more money. It is a cruel irony, is it not, that having invented a £22 billion black hole to justify her taxing and spending, the Chancellor now finds herself facing a black hole entirely of her own making? It is her jobs tax and other tax rises that have caused the economy to slow and unemployment to rise. Her increase in public expenditure has fuelled inflation, which has led to higher wage demands and increased benefit costs.

[Robbie Moore (Keighley and Ilkley) (Con)]

That is exactly the problem. Many businesses in my constituency—and, dare I say it, in others—are saying to us as Members of Parliament that they want to but dare not invest in growing their businesses, because they do not know what increases in taxes are coming down the line from this Chancellor. Does my hon. Friend share my concern that businesses are reluctant to invest right now in the projects they want to deliver for the growth of their own enterprises?

[Sir Ashley Fox]

I agree. It is the threat of higher taxes that is causing the economy to stall.

Rather than reducing the size of the state so that it is affordable, the Government give every indication of wanting it to grow further. The fundamental reason that this Government need to raise taxes is that they are incapable of controlling the fiscal incompetence of their own Back Benchers. At their core, Labour MPs genuinely believe that the state can spend our constituents’ money better than they can spend it themselves. They do not believe in thrift or self-reliance, and they see no limit on the size of the state.

Opposition Members know that it is businessmen and businesswomen across Britain who create wealth and growth. Success is the result of hard work, taking risks, satisfying customers and employing neighbours. The Government should provide the environment for those businesses to thrive, rather than threatening every part of the economy with higher taxes.

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[Jerome Mayhew (Broadland and Fakenham) (Con)]

I have been told that we are speculating today, so I do not know whether I have to refer to my entry in the Register of Members’ Financial Interests. However, in an abundance of caution, I declare that I am a homeowner and I also have properties for rent.

The kids in Downing Street—whether in No. 11 or No. 10—think it is clever to fly kites about tax rises. We had it last year, from 4 July onwards, with briefings to the press saying there would be tax rises because of a wholly fabricated £22 billion black hole in the economy. That was fabricated as a fig leaf for tax rises that were not in the manifesto. From July to October, those stories dripped in one after the other—and what was the impact? It has been the collapse in business confidence to pandemic levels, the collapse in consumer confidence as a result, and unemployment beginning its inexorable rise month after month for every single month that this Government have been in office.

Now the Government are at it again. They have not realised their past terrible mistake, and they are doing it once more. Despite raising taxes by £40 billion last October and increasing borrowing by another £32 billion, they have created a genuine black hole, which the National Institute of Economic and Social Research suggests means that about £51 billion is required in higher taxes or lower spending. The briefings have started again—a property levy on mansions, the replacement of stamp duty with a national property tax, national insurance contributions on rental income and capital gains tax on primary residences with a value of more than £1.5 million. Even Which? magazine has said there may be changes to the in-life gifting regime to reduce inheritance tax.

[Sir Ashley Fox]

Does my hon. Friend accept that speculation about all those new additional taxes causes more uncertainty, which itself causes the economy to slow further?

[Jerome Mayhew]

My hon. Friend is absolutely right. Do the Government not recognise that posturing from the Government Benches does not come for free? Construction activity has had a bigger fall recently than in the last five years due to the leaks from No. 10 and No. 11. The commercial property sector is in recession. There are hiring freezes and staff are being laid off. People are losing their jobs because of the Government’s kite flying. Residential property prices had a surprise fall last year.

We are asked to believe that growth is the No. 1 priority of this Government. They say they are going to build 1.5 million houses during this Parliament. Merely saying that does not make it true, when their policies serve to do exactly the opposite. If Members do not believe me, look at the markets—they are not politicians. Look at the 30-year gilts that the Government are paying today. Government debt is now running at 5.73%. That is the highest rate this century. The markets think that further tax increases will damage growth. That means they will damage the fiscal environment in the future. We will have less tax in the future because of the tax-raising decisions the Government are apparently going to take in November. Labour is planning, literally, to rob Peter to pay Paul. This is no way to run an economy.

As someone much more famous than me once said, the problem with socialism is that you eventually run out of other people’s money. Stop now. Stop before it is too late to avoid a vicious debt spiral. I fear—I genuinely fear this—that the Government will be forced to cut spending. They have two options: they can be forced to do so by the markets in a chaotic fiscal event, or they can take the responsibility of government seriously and take the difficult but necessary decisions on spending that the country needs them to take as a responsible Government. Otherwise, they will be swept away by their own incompetence.

Business Rates Relief: High-street Businesses

Ashley Fox Excerpts

Wednesday 4th June 2025 Westminster Hall

[Sir Ashley Fox (Bridgwater) (Con)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I thank my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson) for securing this important debate.

Our high street shops and pubs are at the heart of our communities, yet many are threatened by big increases in business rates. Our high street businesses are already contending with Labour’s new tax on jobs. The hike in national insurance makes it more expensive to employ someone who works in a shop or a pub on our high street. The Employment Rights Bill will further increase costs, hitting small businesses with new regulations that make it harder and more expensive to operate. In that context, the decision to cut the retail, hospitality and leisure business rates relief from 75% to 40% is wrong.

I met recently with Mr Paul Davis of Styles Menswear in Bridgwater. His business rates have gone up from £3,000 a year to £9,000 a year. That new cost, before we can even consider Labour’s new jobs tax, puts his livelihood at risk. He will not be alone. Paul’s business has the double misfortune of being based in Eastover, where he has had to contend with extensive and lengthy roadworks. In Liberal Democrat-controlled Somerset, we have had a particular problem with various roadworks being scheduled at the same time and harming local businesses. It seems that the Liberal Democrats know little and care less about the damage that they are causing.

The roadworks in Eastover started in October with a partial road closure. As if that were not bad enough, the council then decided to impose a full road closure in January, which is now set to continue until at least September. Ironically, it is on the council’s “celebration mile” project, although to date there has been very little for local businesses to celebrate. The project has proved a hammer blow to many local businesses, which have seen footfall collapse: footfall in Bridgwater is down 400,000 in the past 12 months, mostly caused by the incompetent way in which Somerset council has handled the project.

I believe that those businesses deserve our support. Businesses disproportionately affected by council actions should have the right to claim rates relief. Will the Minister consider that proposal? The situation in Eastover is now desperate, and I fear that in the coming months we will see more shops and businesses closing their doors for good.

It seems that this Labour Government, with the able assistance of Liberal Democrat councillors in Somerset, are set on destroying those businesses. The truth is that, despite the Government’s claim to be going for growth, everything that they are doing appears designed to achieve the opposite. I say to the Minister, “Businesses in Bridgwater are suffering. They need your help now.”

[Mike Martin]

On a point of order, Ms Jardine. It seems that the hon. Gentleman is confused and in the wrong debate. This is a debate about business rates, but he spent his entire time talking about local government sequencing of traffic works.

Income Tax: Personal Allowance

Ashley Fox Excerpts

Monday 12th May 2025 Westminster Hall

[Lewis Atkinson (Sunderland Central) (Lab)]

I beg to move,

That this House has considered e-petition 702844 relating to the Income Tax Personal Allowance.

It is a pleasure to serve with you in the Chair, Mr Stuart, and it is a privilege to open the debate as a member of the Petitions Committee.

All colleagues from all parties will recognise the priority that the public place on improving living standards, as our conversations with constituents, polling and the facts of the matter tell us. The reality is that average disposable incomes after tax fell from 2019-20 to 2023-24 —an unprecedented and shocking situation in which people were left poorer at the end of the last Parliament than they were at the start of it. That is the key context for today’s debate, which has been triggered as a result of more than 250,000 citizens signing the petition on income tax personal allowances. It also speaks to wider and entirely understandable public frustration about living standards.

In preparation for the debate, I had the pleasure of talking to Mr Alan Frost, the creator of the petition and a constituent of the hon. Member for Bridgwater (Sir Ashley Fox). Mr Frost, who is in the Gallery, explained that he has recently retired, having worked his whole life. He feels a sense of injustice that his state pension is considered as income for tax purposes, and that the tax thresholds he faces are not increasing.

The events that led to that situation are as follows. In the 2021 spring Budget, the right hon. Member for Richmond and Northallerton (Rishi Sunak), who was Chancellor at the time, announced that the income tax personal allowance threshold of £12,570 would be frozen until April 2026. In the 2022 autumn statement, the Chancellor at that time, the right hon. Member for Godalming and Ash (Sir Jeremy Hunt), announced that the freeze would be extended for a further two years until April 2028. Following the change of Government, the current Chancellor announced in her autumn 2024 Budget that the freeze would not be extended any further, and therefore income tax personal allowances are expected to next rise in April 2028.

Although Mr Frost is a pensioner and his petition reflects a desire to boost pensioner incomes, he also believes that significantly increasing the personal tax allowance would benefit those in work, boosting incomes and reducing the need for benefits. That belief reflects the reality that less than a quarter of the 37 million income tax payers in the UK are over the age of 65. The vast majority of those paying income tax are of working age and are not receiving the state pension.

In their written response to the petitioners, the Government highlighted that making the suggested changes to the personal allowance would cost “many billions of pounds”. I am sure that the Minister will say more about that when he responds, but cost is a key element to discuss in our debate. It is Parliament’s responsibility to agree the ways and means of any policy it makes—that is, how to pay for what we decide to do.

I gently suggest that the events of the last Parliament remind us how serious that responsibility is. The mini-Budget of September 2022 announced tax cuts costing around £45 billion without explaining how they would be funded, and the market reaction to that announcement left ordinary people paying the price. An emergency reversal of those tax changes followed, but not before high inflation and interest rates hit the standard of living. I therefore urge our debate to be conducted in full consideration of the cost and funding of any tax policy changes.

Were income tax personal allowances to rise in the way suggested by the petition, there would be several other linked tax policy choices to be made, and those choices would determine the full cost of the change. For example, would the size of the tax bands above the personal allowance be maintained? Currently, the basic rate of 20% is levied above the personal allowance and up to about £50,000 of income. Would the size of that band be maintained if the personal allowance were increased by £7,500? If so, the point at which the higher rate of tax takes effect would, in turn, increase to almost £58,000, at further cost to the Exchequer.

Similarly, the additional rate of tax is currently levied on incomes above £125,000, so if the personal allowance was to rise, would that level rise proportionately too? Finally, the income tax personal allowance is aligned with the level at which people start making national insurance contributions; should that level also rise to £20,000, or would we return to a more complicated tax system in which income tax and national insurance thresholds were no longer harmonised?

[Sir Ashley Fox (Bridgwater) (Con)]

I am grateful to the hon. Gentleman for introducing the debate. Will he join me in paying tribute to my constituent, Mr Alan Frost, for raising the number of signatures required to achieve the debate? Does he also agree that freezing the level of the basic allowance at £12,570 most heavily impacts pensioners with limited income, who find themselves paying more income tax on small occupational pensions as time goes by?

[Lewis Atkinson]

Of course, I join the hon. Gentleman in paying tribute to his constituent for securing this debate; 250,000 signatures is an extraordinary level of engagement in the democratic process, and that is to be applauded. I will make some points about the distribution of the benefits of income tax freezes later on in my speech.

The cost of the policy requested by the petition depends on the answers to the questions I just posed. Other Members may wish to speak about how they would approach such matters, but, to aid debate, I thought it would be useful to present some indicative costs. At this point, I want to place on record my thanks to the staff of the House, including those from the Petitions Committee and the Library, for their work in helping me to access such information.

The House of Commons Library estimates that it would cost more than £60 billion to increase the personal allowance to £20,000, make corresponding increases to the higher rate tax threshold, and raise the national insurance threshold to £20,000 to maintain alignment. That figure is consistent with the range of costs expected by the Institute for Fiscal Studies, which I also met in preparation for this debate. The IFS estimates that increasing the personal allowance to £20,000 would cost somewhere in the range of £40 billion to £90 billion, depending on the choices made on the related tax matters that I have outlined.

To put those figures into context, at a minimum cost of £40 billion, the proposal would be at least as large as the tax measures proposed by the September 2022 mini-Budget, which were then quickly reversed after the economy crashed. At the higher end of the estimates—£90 billion—the cost of such a change would be around the same size as the entirety of public revenue spend on education, or two thirds of the total cost of the state pension. It is not for me, in introducing the debate, to advocate one way or another, but I urge Members contributing to speak frankly about the costs and funding of any tax changes they favour.

I hope it is also useful briefly to provide some context about how individuals throughout the UK would be impacted by increases in the personal allowance. The IFS notes that the income level of one third of adults is already below the existing personal allowance. That group—those with the lowest incomes in society—would not benefit from the changes sought by the petition, while the greatest benefits would be received by those who are best off. That is to say, in net, such a change would be regressive, increasing inequalities of income.

Oral Answers to Questions

Ashley Fox Excerpts

Tuesday 4th March 2025 Commons Chamber

[Darren Jones]

To ensure that we protect the country from the devastating impacts of flooding, we have committed £2.65 billion over 2024-25 to 2025-26 to improve flood defences, and we have established a flood resilience taskforce to feed into our decisions on future spending, which will report in due course.

[Sir Ashley Fox (Bridgwater) (Con)]

T8.   Bridgwater’s 77 pubs, including the Crossways Inn in West Huntspill, are at the heart of our local communities, yet the sector overpays £500 million in business rates relative to turnover. Will the Chancellor commit to the British Beer and Pub Association’s call for a 20p cut in the small business multiplier and 15p off the standard multiplier, in order to secure the future of British pubs?

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

We have frozen the small business multiplier this year and we will be introducing permanently lower multipliers for retail hospitality and leisure premises from April 2026, which will benefit pubs. Meanwhile, they also benefit from our decision to increase the duty relief for draft products.

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?

--- Later in debate ---

[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.

--- Later in debate ---

[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.

Family Businesses

Ashley Fox Excerpts

Wednesday 26th February 2025 Commons Chamber

[Sir Ashley Fox (Bridgwater) (Con)]

I am pleased the Opposition are using our time today to debate the importance of businesses large and small. It is the private sector that creates the wealth on which our society depends, and it is the taxes businesses pay that fund our NHS and other important public services. The policies of this Labour Government, from raising taxes to imposing additional regulations, are putting those businesses at risk.

Having promised during the general election not to increase NICs, the Chancellor immediately broke that promise in the Budget. This national insurance hike will cost employers £900 for every employee earning the average salary. The tax rise disproportionately affects employees on low wages. Someone earning £9,000 a year will cost their employer an extra £600 a year in tax. This is not just a tax on businesses; it is a tax on jobs. Labour has introduced a £25 billion jobs tax that will increase the cost of hiring workers. It has also increased business rates by £2.7 billion. Under the Conservatives, businesses in the retail, hospitality and leisure sectors received a 75% relief on their business rates; Labour has reduced this relief to just 40%.

[Bradley Thomas]

Does my hon. Friend agree that the reduction in hospitality rate relief and the lower earnings threshold, which he has just acknowledged, create a perfect storm for hospitality businesses—not just because of the additional rate pressure, but because they will be less incentivised to recruit part-time workers? As has been acknowledged by other Members, that is often a route for young people into their first employment opportunity.

[Sir Ashley Fox]

My hon. Friend is right: all Labour’s measures will increase unemployment. Although Labour will say it has reduced the multiplier of business rates, this does not fully compensate—it leaves an average pub paying an additional £5,500 a year. This is not a sustainable burden for many businesses that are already struggling with inflation and rising costs. These taxes add up, and will lead to closures, job losses and harm to our communities.

Another troubling decision from the Labour party is the reduction of the cap on business property relief. BPR, introduced in 1976 by Denis Healey, was designed to protect family-owned businesses from being broken up and to ensure these businesses could continue to provide jobs and contribute to the economy across generations. It is extraordinary that Labour has found a Chancellor less sympathetic to businesses than Healey. This decision is a blow to those who have worked tirelessly to build and sustain their businesses, and will force families to sell their businesses or take on crippling debts just to pay the taxman. For many, this will be the end of their family businesses.

The Employment Rights Bill will require employers to spend £150 per employee on additional administrative costs to comply with new rules, including a ban on zero-hours contracts and potential liabilities for third-party harassment. At a time when businesses are already under strain, this is a further unnecessary cost, especially for small businesses that do not have the resources to navigate the red tape.

Having spent 11 weeks going through the Employment Rights Bill line by line, I know just how damaging it will be to SMEs in Bridgwater and elsewhere. Let us take just one example: the so-called day one rights. These rights would mean that if, after less than a week, it became apparent that a new employee was the wrong fit for a company, a complicated process would have to be followed to dismiss them. Speaking as a former—though fully qualified—solicitor, I know that this will have a disproportionate effect on small businesses without an HR department. If they do not dot all the i’s and cross all the t’s, they will be left exposed to being taken to court for unfair dismissal.

[Laurence Turner]

I understand the point the hon. Gentleman is making, but is it not the case that in that specific circumstance, after a week, they would be covered by the new probationary period provision? This provision is writing probationary period into the law for the first time.

[Sir Ashley Fox]

The hon. Gentleman would be correct if, in fact, there was a written contract that included a probationary period. What he forgets, however, is that many small businesses will conclude that contract on a handshake and a verbal agreement—there will not be a formal probationary period. It is exactly those small businesses that do not use a written contract that will be liable to legal action.

Let us take another example. Should a business fail to notify a new employee of their right to join a trade union in writing, it may be liable to pay an additional four weeks’ pay as a compensatory award. In what world is this system really going to work? Do we believe that those running a corner shop, pub or fishmonger are going to give their employees written notice that they have the right to join a trade union? No, they will not—and legal consequences will follow.

We on the Conservative Benches believe that businesses are at the heart of the economy and that they should not be punished by Government policies that stifle growth and investment. It is important to note that, when it comes to business, this Government’s track record is deeply troubling. Just one member of the Cabinet has ever started a business. When decisions are made by those who do not understand the pressures faced by small business owners, it is no surprise that the policies are so harmful. The Labour Government that we face is not a new Labour Government in the Tony Blair model. It is very much an old Labour Government of the 1970s, addicted to taxing, spending, borrowing and regulating. I regret to say that we will see unemployment rise. We will support family businesses, safeguard jobs and ensure that the British economy prospers.

Bank Resolution (Recapitalisation) Bill [Lords]

Ashley Fox Excerpts

2nd reading
Wednesday 22nd January 2025 Commons Chamber

[Emma Reynolds]

My hon. Friend flatters me. It is not that easy to explain in simple terms, but I will do my best. Essentially, if a small bank is in trouble, it is better for it not to go into insolvency but instead to go through resolution to protect its depositors. In the case of SVB, only 14% of deposits were covered by the financial services compensation scheme, because the scheme only covers deposits up to the £85,000 threshold. Had public funds been required to facilitate the sale of SVB to another purchaser—in this case it was HSBC, but it could have been another institution—it would have had recourse to public funds. We are seeking to avoid a situation in which taxpayers in all our constituencies are on the hook for the failures of small banks. Where a bank has high-quality assets, which was the case for SVB, we can avoid the insolvency situation and pay out to depositors who have deposits above the £85,000 threshold. That resolution would be funded by the financial services compensation scheme and ultimately the banks, which contribute to the scheme through a levy. I hope that answer helps my hon. Friend—I am sorry that it was a bit long.

Stability is at the heart of the Government’s agenda for economic growth, because when we do not have economic and financial stability, it is working people who pay the price. We have to bear in mind what we are seeking to do, which is ultimately to protect the interests of the taxpayer and to ensure that we do not have to have recourse to public funds.

[Sir Ashley Fox (Bridgwater) (Con)]

I welcome this Bill, but can the Minister assure the House that, at all times, the aim of the Government is to minimise the liability of the taxpayer? Where losses have to be sustained, they should be borne first by the shareholders, secondly by the bondholders and perhaps thirdly, and regretfully, by the deposit holders. That should be the order in which losses are sustained.

[Emma Reynolds]

I agree with the hon. Gentleman, who puts it very well. He will know that there was a different order in the case of Credit Suisse, but the then Government said at the time that that would not be their order of priority. We are seeking to protect the taxpayer in this Bill, and he is right: had there been a cost associated with the transfer of SVB, it would have fallen first to those people before falling to the taxpayer. If we pass this legislation, for which I hope there is cross-party support, we will avoid that eventuality, because if we follow the order of priority and get to the financial services compensation scheme, the cost will be paid through a levy on the banks in that scheme. I thank the hon. Gentleman for his question.

The resolution regime is a critical source of stability when banks fail, because it ensures that public funds and taxpayer money are protected. This Bill delivers a proportionate and targeted enhancement to the resolution regime to ensure that it continues to provide that important stability. As I said at the start of this debate, it is therefore an important Bill that underpins the Government’s vision for economic growth, and I commend it to the House.

Oral Answers to Questions

Ashley Fox Excerpts

Tuesday 21st January 2025 Commons Chamber

[Sir Desmond Swayne (New Forest West) (Con)]

17. What assessment she has made of the potential impact of the autumn Budget 2024 on levels of debt interest spending.

[Sir Ashley Fox (Bridgwater) (Con)]

19. What assessment she has made of the potential impact of the autumn Budget 2024 on levels of debt interest spending.

[The Chancellor of the Exchequer (Rachel Reeves)]

When we entered office, debt was at highs not seen since the 1960s. My commitment to the fiscal rules is non-negotiable, and we will drive debt down to a sustainable level. There have been movements in global financial markets, and the UK is not immune. The Office for Budget Responsibility will produce a forecast in the usual way, and I will respond with a statement to Parliament on 26 March. I will not be giving a running commentary on that forecast.

--- Later in debate ---

[Rachel Reeves]

Let me have a go. There have undoubtedly been moves in global financial markets this year, and the UK is not immune to those movements. The OBR has not yet started its forecast. It will update that in due course, and I will make a statement on 26 March.

[Sir Ashley Fox]

Since coming to office, the Chancellor has increased taxes by £40 billion and borrowing by £30 billion and her Employment Rights Bill has increased the costs of employers by a further £5 billion. Does she accept that her decisions have led to a loss of confidence in the British economy and an increase in our borrowing costs?

[Rachel Reeves]

I do not think the borrowing costs in every major country in the world can be explained by the decisions made by this Government. As I said to the hon. Member for Hinckley and Bosworth (Dr Evans) last week, the hon. Gentleman has to get real. There have been global movements in financial markets that have affected the United Kingdom, but if he looks at the PWC report from yesterday, the most recent report on market confidence, global CEOs see the UK as the second best place in the world to invest, after the US.

Finance Bill

Ashley Fox Excerpts

Committee of the whole House
Wednesday 11th December 2024 Commons Chamber

[James Wild]

No, I won’t at this stage.

There are more than 100,000 pupils with special educational needs and disabilities in independent schools who do not have education, health and care plans, so they will be subject to this tax. That could make it unaffordable for the parents of those children to send them to the school that they think is best placed to look after them. There will be demand in places where there is not capacity as a result. A number of local authorities have pointed that out. That will just make the problems that councils face with their SEND budgets worse, despite the record amounts we have put into high needs.

[Sir Ashley Fox (Bridgwater) (Con)]

Does my hon. Friend agree that this disastrous education tax risks having a severe impact on those children and pupils with SEND in independent schools? It will force children with SEND out of independent schools as fees become unaffordable for their parents and it risks overwhelming the state provision, as there is not sufficient state provision at the moment.

[James Wild]

Absolutely. My hon. Friend makes the point very well. The knock-on impact and the damage to those children’s education will be considerable.

More than 40% of independent schools are small schools. They are at the heart of their local communities. They do not have big endowments. They operate on wafer-thin margins and simply cannot absorb changes of this magnitude, so it is likely that those schools will cut bursary places that exist due to this new tax that puts their viability at risk.