Oral Answers to Questions

Ashley Fox Excerpts

Tuesday 3rd November 2026 Commons Chamber

[Torsten Bell]

I absolutely agree with the point that my hon. Friend makes about reliance on emergency food parcels. In his constituency, over 90% of properties fall into council tax bands A to D, which means that residents will receive £100 directly in their bank accounts come January, in the coldest part of the year, but he is right to say that we must go further. That is why we will see 29 million households benefiting from the extended cut to VAT on electricity and 35 million motorists benefiting through extending the freeze in fuel duty. On the social security question he raises, that is also why we have ensured we are changing the support that goes to families with children, so that this Parliament sees the biggest fall in child poverty of any Parliament on record.

[Sir Ashley Fox (Bridgwater) (Con)]

The Government have said that they wish to join the EU’s internal energy market, which will involve a payment to the EU for the privilege. When will the Government say how much that policy will cost British taxpayers?

[Emma Reynolds]

The hon. Gentleman will know that an EU summit is coming up on 20 November, and we are still negotiating with the EU. We are putting right the botched Brexit that we inherited from the Conservative party, which put frictions at our border and increased costs for farmers, family businesses and others.

Inheritance Tax

Ashley Fox Excerpts

Wednesday 14th October 2026 Commons Chamber

[Blake Stephenson]

I am impressed by the hon. Lady’s research between the intervention earlier by my right hon. Friend the Member for South West Wiltshire (Dr Murrison) and her making that point now. I might add that constituents on that street may have been duped by some Lib Dem bar graphs.

Mid Bedfordshire is a rural constituency with many farming families, as is the case right across the country. They were told in October 2024 that the Government were coming for the land that they have worked for generations. Thanks to their hard work, campaigning and pressure from the Opposition, the Government retreated last December and raised the threshold to £2.5 million. Those farming families are grateful for that, but it does not go far enough.

Despite debate after debate in this House, the Government still do not seem to understand that a farmer earning a small yield from land worth millions on paper only, cannot cover the inheritance tax liability unless they sell the land. If the Government would prefer farmers to sell their land rather than farming it, they should just say so. If not, they should acknowledge that the incentives their family farm tax creates are simply wrong. Under their plans, a 20% charge still applies on land that often yields only 1% or 2% a year, but that is vital for them to help feed the nation.

The rules have changed twice in 14 months. A farm or business succession cannot be planned over a generation when the tax rules change every Budget. The same is true of a family business. The engineering firm, the builder’s merchant, the garden centre—up and down the country, great family businesses cannot plan their succession when they do not have certainty in the rules.

[Sir Ashley Fox (Bridgwater) (Con)]

Does my hon. Friend agree that it is completely iniquitous that family farms have to pay inheritance tax on their assets, and yet if those assets were owned by a foreign company or individual, no inheritance tax would be paid? Why do this Labour Government want to single out British-owned family farms?

[Blake Stephenson]

My hon. Friend makes a superb point. The Conservative Benches find it beyond all comprehension as to why the Government would target small family businesses and farms in the way that they have. I thank my hon. Friend for making that point.

When an owner of a small business or a farm dies unexpectedly, the family should be focused on keeping the business going and the staff in work, not on raising a tax bill by selling off pieces of the business until there is nothing left. The Government cannot talk about growth and then take apart small businesses because an owner has died. That is completely the wrong approach.

What will we do in Government? A Conservative Government will abolish inheritance tax on the family home; that is the right thing to do. We will replace today’s complicated allowances with a single £500,000 allowance per person—£1 million per couple. We will restore agricultural and business property relief in full, so that no family farm or firm is broken up to fund Labour’s welfare spending.

The Prime Minister says we cannot have national security without social security—an absolutely shocking statement. But we cannot have either without economic security; without an economy where people create jobs, expand businesses, buy homes and feel the benefits of doing so. Our reforms would ensure that welfare works for British citizens, that people with lower-level mental health conditions get treatment rather than being written off with a cheque, that more assessments are done face to face, and that the obligation to look for work means something. Getting people into work is good for them, good for their families and good for the taxpayer.

In two weeks’ time the Chancellor will deliver his first Budget. I know that Conservative Members are really looking forward to that day. The Chancellor has a choice: he can keep taxing work, savings and inheritance—taxing everything people own that is not nailed down and more besides, perhaps; let us see—to pay for a welfare bill that is truly out of control, or he can change course, get a grip on spending and help to power the engines of growth that will make us all richer. I know which choice families in Mid Bedfordshire would make.

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[Dr Shastri-Hurst]

I fundamentally do not agree with the hon. Lady’s point, and I suspect that farmers in this country will be wondering why her party has not stood up for farmers over fertilisers today.

[Sir Ashley Fox]

Perhaps it is a leadership bid.

[Dr Shastri-Hurst]

From a sedentary position, my hon. Friend makes a very valid point.

Let us not kid ourselves: this debate has been framed as though we have some sort of Dickensian model of the idle rich and then the poor who are propping up the state. That is not the truth. The reality is that, as my hon. Friends have said, those who are very rich will inevitably put their affairs into trusts and escape inheritance tax. We are talking about those who are just about managing: those who are trying to earn a crust and to support their families. It is the middle class who get caught—those who go out to work every day to provide for their families.

The average property price in my constituency of Solihull West and Shirley is now £345,000. Such properties are owned not by the toffs who are often derided by those on the Labour Benches, but by people who get up every morning and often work more than one job to provide for their families. People have tripped into paying inheritance tax by virtue of property prices being pushed up and the threshold remaining the same. The reality is that this tax is not operating as it was intended. It is not capturing the individuals it was intended to capture; it is capturing the ordinary man and woman. The fact that the Government have frozen the threshold until 2031—a threshold that was first put in place in 2009—means that, whereas only 4% of deaths were captured by this particular tax between 2001 and 2024, 9.5% of deaths will be captured by 2030.

When we compare ourselves with other OECD nations, we see that 18 of those 38 nations do not pay any inheritance tax at all—Australia, Canada and New Zealand among them—and none of the remaining 20 has it at such a punitive rate as we have here. The purpose of a tax system is of course to help fund our public services, but it also has to be fair, sensible and aspirational in its intent. It must ensure that those who strive and work hard are not penalised as a consequence, and I am afraid that this Government’s direction of travel is simply taking out those that do work hard—our family farms, our family businesses and others—by the knee.

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[Sir Ashley Fox (Bridgwater) (Con)]

If we want our children to have a better life than us, to enjoy a better standard of living than ourselves, to enjoy better healthcare and to live in a better environment, then it is necessary to grow our economy. Conservatives understand that Governments do not create growth. A wise Government will try to create the conditions for growth and then stand back and allow individuals, families, partnerships and businesses to do their best to work hard, provide goods and services that people want to buy, and thus improve the world we live in.

Creating wealth is hard work. I do not suppose that many Government Members are aware of that, because so few of them have ever worked in the private sector. It is quite remarkable that the shadow Chancellor has more experience in the private sector—23 years, I believe—than the whole of the Cabinet put together. This Government often talk about supporting business, yet time and again they do the opposite: higher national insurance charges that make it more expensive to employ people; 350 pages of the un-Employment Rights Act to further drive up the cost of labour; plans for a tourist tax—eagerly embraced by the Liberal Democrats—that will place additional burdens on a tourism sector made up largely of family businesses.

Instead of helping local enterprises flourish, this Government’s first instinct is to ask, “How much more can we tax them?” We know that because the Work and Pensions Secretary told us that his colleagues are always asking him to pay more benefits to more people. Conservatives understand that the drive, innovation and hard work of family farms and businesses do more to create jobs, train apprentices and sustain communities than Government ever could.

My constituency in Bridgwater sits in the heart of rural Somerset; ours is overwhelmingly a small business economy. More than 99% of the businesses in Somerset employ fewer than 250 employees. Those businesses are rooted in the places they serve; they support local sports teams, support village events and provide opportunities for local people. For those of us representing rural communities, small-scale family businesses underpin our local economies. They grow our food, make up our high streets, support tourism and more. That makes the fact that the Government feel no remorse in penalising their hard work, in the name of subsidising those who avoid it, even more depressing.

Conservatives are on the side of those who work hard, save, invest, and create jobs and wealth. We will reward those who do the right thing. That is why we will abolish inheritance tax on family homes, farms and businesses. We will restore fairness to a system that has neglected those who play by the rules. Because when a business passes from one generation to the next, we should help it grow and continue a legacy, not force it to sell assets to pay a tax bill.

[Markus Campbell-Savours]

The motion says “family homes”; it does not specifically say “family farms or businesses”. The hon. Gentleman raises family businesses, so how would someone define a family business for the purposes of legislation?

[Sir Ashley Fox]

If the hon. Gentleman reads it, the motion does specifically refer to family businesses. It is about agricultural property relief and business property relief—they are agricultural and business assets that form part of an estate. We will reverse Labour’s family farm and family business taxes.

The Conservatives believe that allowing families to retain and reinvest their assets supports growth, encourages long-term planning, and strengthens local communities. It will actively put money in pockets, rather than take out more. If we want a prosperous Britain, we must back the people who have invested their lives in the community, building businesses, farms and homes that can be passed to the next generation.

Costs for Motorists

Ashley Fox Excerpts

Thursday 21st May 2026 Commons Chamber

[Lucy Rigby]

There is absolutely nothing humiliating about the action being taken by the Chancellor and the Prime Minister to protect millions of motorists across this country. Again, I have to remind the hon. Member that the plans we inherited from the previous Government would have seen motorists paying more.

[Sir Ashley Fox (Bridgwater) (Con)]

I welcome this latest U-turn by the Chancellor to freeze fuel duty, which will help my constituents, and I also welcome the cut in duty on red diesel to help our farmers. The Government’s carbon border adjustment mechanism comes into effect on 1 January. That will increase further the cost of fertiliser, which in turn will push up the price of food. Will the Chief Secretary undertake a review of that carbon border adjustment mechanism, to protect all our constituents from further food price increases?

[Lucy Rigby]

I am grateful for the hon. Member highlighting the measures we are taking when it comes to red diesel. He mentions fertiliser costs. We know that substantially increased fertiliser costs, as well as fuel costs, are hurting farmers. That is exactly why we are taking these measures on red diesel, cutting the duty rate by over a third per litre from just over 10p to 6.5p, which, as I said, is the lowest rate for more than 20 years.

Finance (No. 2) Bill

Ashley Fox Excerpts

Report stage & 3rd reading
Wednesday 11th March 2026 Commons Chamber

[Dan Tomlinson]

I am glad to return to the Commons to debate the Finance Bill on Report. Although I am sure that it would have been of interest to Members on both sides of the House, I am also glad that we have not just had a set of two 45-minute debates on the Ways and Means motions. The opportunity was there, but I am glad that Members did not take it in full. We now have ample time for this important Report stage.

I thank Members on both sides of the House for their contributions in Committee. I thank in particular the shadow Exchequer Secretary to the Treasury, the hon. Member for North West Norfolk (James Wild), for his scrutiny and challenge, and for the invitation to his wonderful constituency, which I hope to take up one day. As yet, no other Opposition Front Bencher has offered me such an enticing prospect as a visit to their constituency, but I look forward to those invitations.

Before I turn to individual amendments, I wish to reflect briefly on the Budget that was delivered in November by my right hon. Friend the Chancellor of the Exchequer. That Budget took fair and necessary decisions to deliver on the Government’s promise of change, to support cuts in the cost of living, to enable NHS waiting lists to continue falling, and to ensure that our national debt fell as a share of GDP and that borrowing falls over the course of this Parliament. As the Chancellor said in this place yesterday and on Monday, Government borrowing—public sector net borrowing—has fallen from 5.2% to 4.3% of GDP, which is a fall of 1 percentage point. That is very significant and means that our borrowing is coming down, as part of our plan to bring stability back to the public finances.

[Sir Ashley Fox (Bridgwater) (Con)]

Does the Minister acknowledge that debt reduction is taking place only because the Government have increased taxes by £66 billion? That contrasts with the tax rise of £7 billion that the Labour party promised in its manifesto. Could he explain the huge discrepancy between that manifesto promise and what the Government are imposing on our constituents?

[Dan Tomlinson]

I ask the hon. Member to consider whether his party wishes to identify £66 billion of expenditure cuts or borrow £66 billion more. I do not think that either option is what the British public want; they want us to bring borrowing down and get public finances under control, after they were spun out of control by Liz Truss and the previous Government. The public understand the need for fair and responsible increases in taxation to ensure that we can invest in our public services and in the future of our country.

[Dan Tomlinson]

I strongly agree with my hon. Friend. I thank him for making his representations again and for his ability to mention Harlow in his interventions. It is a fantastic part of the country, not too far from my constituency in north London, and I know just how strongly he seeks to represent it and to make sure that the public services in his patch—the local hospitals and schools—get the investment they need. That is why he and I are able to proudly support this Government’s decisions to bring the public finances back into good order, as well as to invest in our public services and to get borrowing down.

Of course, though, since the Budget, and particularly in recent days, the world has changed. As the Chancellor set out last week in responding to the Office for Budget Responsibility’s spring forecast, it is more important than ever that the Government continue to deliver on our economic plan. The choices that we have made at previous Budgets will fix long-standing issues in the taxation system, restore economic and fiscal stability, and lay the economic foundations that we need for higher growth and higher living standards across our fantastic country.

The Bill legislates to deliver on those choices, all while sticking to our commitment not to raise the main rates of income tax, employee national insurance contributions or VAT. We are also providing stability for businesses by keeping to important commitments in our corporate tax road map to keep our corporation tax rate at 25%—the lowest in the G7—rather than having it chop and change up and down, like it did during previous Administrations.

I thank all those who have submitted written evidence throughout the Bill’s passage. Following concerns raised by professional bodies and concerns discussed in the Public Bill Committee, I would like to take this opportunity to reiterate my reassurances to the sector that measures that directly impact tax advisers are intended to create a fairer tax advice market. I have heard concerns that tax advisers might be penalised if they file a client’s tax return late when their client has not provided their approval for filing the return on time. I want to clarify that these powers are not designed to penalise responsible tax advisers who act in good faith, and in that specific scenario, a tax adviser would not be penalised under His Majesty’s Revenue and Customs’ stronger powers. The Government are committed to ensuring that the tax system works effectively for everyone, which is why we are introducing a number of amendments on Report to ensure that the tax system is working effectively and as intended.

I turn to the first group of Government amendments. New clause 5 removes specific provisions that could prevent offshore income gains from being designated under the temporary repatriation facility, or TRF, to ensure that they can be designated as intended. The amendments also simplify the existing treatment of offshore non-reporting funds held by offshore structures for all taxpayers. New clause 6 introduces transitional provisions for offshore income gains arising before 6 April 2025.

Following the abolition of the lifetime allowance, new clause 7, as we were just discussing, ensures that multiple different regimes do not apply, providing clarity for pension schemes and members. It ensures that any necessary regulations can have a retrospective effect back to 6 April 2024, clarifies the scope of the original power, extends the power by a further three months and ensures that regulations are subject to the affirmative parliamentary procedure.

The Government are making a number of minor and technical amendments to help provide greater clarity and address important points that have been raised by stakeholders, particularly during the passage of the Bill. These amendments simply put the original legislative intent beyond doubt.

Amendments 12 and 13 ensure that clause 23 will apply only to general earnings for the tax year 2026-27 and subsequent tax years that are paid on or after 6 April 2026. Amendment 14 tightens the existing provisions under clause 24 to ensure that those rules do not catch legitimate agency structures.

Amendments 48 and 51 remove legislation that is not necessary under clause 43 and ensure that the TRF legislation works as intended, so that beneficiaries from overseas trusts are able to make designations in connection with offshore income gains.

Amendments 49, 50 and 52 are consequential amendments to schedule 3 and clause 43. They remove references to omitted legislation and insert wording to clarify reference to the Taxation of Chargeable Gains Act 1992.

Amendment 53 to clause 49 makes clear that a person concluding contracts on behalf of a non-resident company must be present in the UK when concluding those contracts in order to create a permanent establishment in the UK.

Amendments 56 to 61 to schedule 11 concern the rules preventing fund managers from circumventing the revised carried interest tax regime. These amendments ensure that the provision operates as intended, where two connected persons work in the same business, with each connected person only taxed on their own carried interest.

[Sir Ashley Fox]

It sounds as if the Minister is adding many, many extra pages to our tax code. What provisions will he be bringing forward to shorten and simplify the tax code?

[Dan Tomlinson]

The hon. Gentleman raises an important point. We need to do all that we can to ensure that we are simplifying our tax code in order to make it easier for tax advisers, individuals and businesses. I have also asked that question, but I am reassured by my officials—I am sure that the hon. Member could consult Hansard too—that this is a typical number of amendments to be made to a Finance Bill. This is a long Finance Bill, but there are a whole range of important changes that the Government wish to introduce and to make progress on. I am sure Members from all parties have enjoyed poring over the changes to the tax legislation. I do take his point about simplification, though; it is something that I wish to focus on. If hon. Members have good ideas in that space, they would genuinely be welcome to write to me.

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[James Wild (North West Norfolk) (Con)]

We are grateful to the Minister for running through the plethora of Government amendments that are being added to this already stonkingly large Finance Bill. The sheer number of amendments is an admission that Ministers did not get this right the first time—or even the second time, in Committee, which we enjoyed.

Let me turn to amendments 1, 2 and 8 and 67 to 94, as well as new clause 10 in my name and the names of my hon. Friends. This Bill embodies Labour’s approach of ever-higher taxes, spending and borrowing, for which hard-working families and businesses are paying the price. The measures in the Budget and in this Bill add a further £26 billion-worth of tax rises, bringing the cumulative total from the Chancellor’s first two Budgets to £66 billion. As my hon. Friend the Member for Bridgwater (Sir Ashley Fox) pointed out, that did not feature anywhere in the Government’s manifesto. Those further tax rises are despite the Chancellor promising not to come back for more.

Debt interest is forecast to hit £140 billion by 2030. Unemployment is set to increase to 1.9 million, and youth unemployment has risen to 16.1%. Meanwhile, welfare spending is set to hit £406 billion, and living standards are expected to slow towards the end of this Parliament. Last week, the Office for Budget Responsibility downgraded its growth forecast once again and warned that the Chancellor’s plan, far from working, could “constrain economic activity”. Instead of backing the risk takers and the wealth creators, this Bill delivers slower growth, higher borrowing and higher taxes.

Let me turn to the freeze in income tax thresholds set out in clause 10. The Chancellor said at the Dispatch Box that there would be no extension of the freeze on income tax thresholds, because it would “hurt working people” and

“take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.]

That promise has been broken by the measures in the Bill that do exactly the opposite, putting in place a £23 billion-a-year tax rise and bringing nearly 1 million more people into paying higher-rate tax.

It is not just working people who will pay the price. During this period, the state pension is forecast to be higher than the personal allowance. In the spring forecast, the OBR warned that an additional 1 million pensioners will find themselves liable for income tax by 2030-31 because of the Chancellor’s freeze. In anyone’s book, that is a retirement tax.

The Government have promised to protect people who rely solely on the state pension, but where is the detail? There is nothing in this legislation to do that. The public out there will rightly be sceptical, given that the Chancellor has already broken the promise not to freeze this threshold. Amendment 5 offers the House a very simple choice to stand by working people and pensioners and end the freeze.

Let me turn to the Government’s damaging family farm and family business tax. I know that Labour Members are going around their constituencies saying that they got a great win from the Chancellor just before Christmas, but let us be honest: that win was purely a fig leaf. The Government could have actually corrected their mistake, but the partial reversal that the Chancellor was forced into falls short of what is needed. The Country Land and Business Association has said that it only limits the damage—yet another broken promise from a Prime Minister who pledged not to impose an inheritance tax on farms. That measure epitomises Labour’s apparent hostility towards family farms, tenant farmers and our rural communities. I have spoken to farmers, as I am sure other hon. Members have, who are desperate about this situation. That is why we continue to strongly oppose the family farm and family business tax, and amendment 6 would scrap them.

Our further amendments seek to mitigate the worst effects of those taxes. Amendments 67 to 87 would remove the transition period for changes to the reliefs, and would delay implementation until after March 2027, lifting the unfair anti-forestalling rules that have tied the hands of farmers and business owners. The Chartered Institute of Taxation—which provided a lot of support in Committee and at earlier stages of the Bill, for which I am grateful—has warned that the measures particularly affect older farmers, robbing them of the ability to plan properly.

Amendment 88 would defer the deadline for inheritance tax instalments by a further 12 months. This reflects the conclusion of the House of Lords Economic Affairs Committee that the six-month deadline proposed for the first payment

“does not appear to be realistic”.

As we know, farming estates and family business are often asset-rich but cash-poor, which makes it difficult to raise the funds quickly. The National Farmers Union has warned that expecting probate to be granted within six months is

“completely unrealistic, especially given the complexity of valuing an agricultural business”.

Does the Minister recognise the strain that such unrealistic deadlines place on family farms and family businesses, and will he therefore accept our amendment and extend the payment deadline by 12 months? If he will not, will he explain to family farms and family businesses why not?

Amendments 89 to 94 would exclude from inheritance tax the value of any jointly held tenancy on the death of a joint tenant. This issue is causing concern across the sector, and has been raised by the Tenant Farmers Association and by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore). Exempting genuine arm’s length tenancies between unconnected parties from inheritance tax is simply the fair thing to do. I would be grateful if the Minister could explain what engagement he has had with the Tenant Farmers Association on that point, what his response is, and how he intends to rectify this injustice. Of course, this is not just about farms; family businesses, which make up 90% of our firms and employ well over half the workforce, are firmly in the Chancellor’s crosshairs as well. These are firms that focus on the long term, yet according to Family Business UK, over half of affected businesses have already paused or cancelled investment as a result of the threatened tax.

It would be remiss of me to not mention that the Government’s claims do not seem to add up. Will this tax actually end up raising money? While the OBR forecasts a £500 million gain, analysis by the Confederation of British Industry suggests a net loss of nearly £2 billion, once the wider damage to the economy is considered. The family farm and family business tax does nothing to promote growth or fairness. It targets those who anchor our rural economy and communities—the family businesses committed to long-term growth. It is already having a chilling effect on investment, and now there is a prospect that companies that would otherwise thrive under family stewardship will break up. Again, I urge hon. Members to support amendment 6, which would remove this damaging measure from the Bill.

Savers and investors are not safe from the Chancellor, either. Amendments 1 to 4 deal with the introduction of increases in income tax on dividends, savings, and property income in the years ahead. Increases to the dividend tax will hit 4 million people by 2029-30, while the savings tax rate increase will hit a further 3.8 million individuals, and 2.4 million landlords will now face higher bills, making it less attractive to provide the rental properties that our constituents want. These measures are targeted at entrepreneurs, investors, pensioners and hard-working families. Rather than supporting growth, the Government seem determined to stifle it.

The Government are also scrapping the long-standing inheritance tax exemption for pensions. Some 10,500 estates will be targeted under this measure, costing savers £1.5 billion by 2029. We oppose this extension of inheritance tax, which seems predicated on the Government’s belief that people’s money belongs to the Government, rather than being their own. We should be rewarding saving and people who do the right thing, but extending inheritance tax in this way does exactly the opposite. As we discussed previously, there is also a concern about the burden being placed on personal representatives, and I have mentioned the unintended consequences for unmarried couples. In some cases, a surviving partner could lose up to 40% of a pension fund built up over a lifetime. Again, this is manifestly unfair, and amendment 7 would remove this damaging new tax from the Bill.

[Sir Ashley Fox]

Has my hon. Friend noticed a common thread through the Budget, which is that everyone who works hard, saves hard, invests and creates jobs is being penalised, and all that money is being used to benefit Benefits Street? It is no wonder that the growth rate is going down. [Interruption.]

[James Wild]

My hon. Friend is absolutely right, despite the chuntering that we hear from the Minister. The welfare bill is predicted to rise to £406 billion over the forecast period. The Chancellor keeps saying that she is fixing welfare. Where? What is she doing? She had to back away from very modest savings. We have identified £23 billion-worth of welfare savings, and the Minister could make those if he wished, but he does not, and that is why growth has once again been downgraded. The Chancellor boasts about beating the forecast last year. Well, the forecast at the beginning of the year was 2%, and the Government failed to get anywhere near 2%. They beat the downgraded forecast, so let us not hear any more about that. We want to hear what the Government will do to drive growth, and taxing the people generating it is precisely the wrong thing to do.

New clause 10 requires the Chancellor to review the UK carbon border adjustment mechanism. We debated CBAM extensively in Committee, and it is dealt with in a great swathe of the Bill—in the schedules—but there is plenty more to come. Given the complexity of the policy, many industries believe that the absence from the Bill of a formal oversight and review process is a serious mis-step that needs to be addressed.

There are many potential pitfalls in this new mechanism. First, the measure fails to consider several sectors that are at significant risk of carbon leakage, such as chemicals and refining. Secondly, the Government have decided to link the UK and EU emissions trading schemes. Following the announcement of that alignment, the price of carbon in the UK more than doubled, which cost our economy about £5 billion. We should be reducing the burden of carbon taxes on business, not increasing them. The EU has yet to publish its benchmark beyond 2030, which means that the UK would be signing up to a system that would effectively give Brussels a blank cheque. Moreover, CBAM does not address issues with carbon leakage in export markets. There are proposals to exempt our manufacturing exports from UK ETS costs and CBAM to make the industry more competitive, putting it on a level playing field internationally. Has the Minister considered maintaining long-term free allowances for products destined for the export markets? Given those complexities—I could go on about them more, but the Minister gets the gist—[Hon. Members: “More!”] It seems that other Members may want to come in on this issue.

I think that the Minister should recognise the value of regular reviews. I know he will say that the Government keep all taxes under review, but let us have an actual review that is published, so that we can see what is happening. I encourage Members to support new clause 10.

This is a Finance Bill full of tax increases that break trust with the British people. The Labour Government have introduced the family farm and business tax, frozen personal thresholds, hiked taxes on savers and investors, cut relief on employee ownership trusts, taxed inheritance pensions, taxed taxis—we discussed that in Committee—and increased gambling, alcohol and other duties and environmental levies. The list goes on and on. There is 534 pages-worth, which I could read out if there were any appetite for it. Our amendments and new clause would back the taxpayers, and the investors and businesses trying to drive growth in our economy, and I urge Members to support them.

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[Dan Tomlinson]

I thank all Members for their contributions at this stage of the Bill’s passage—we are almost there. I will take some time to respond directly to the amendments that have been discussed today.

I will first address amendments 1 to 4, 5 and 7, which were spoken to by the shadow Exchequer Secretary, the hon. Member for North West Norfolk (James Wild). Amendments 1 to 4 would remove the increase in dividend, savings and property income tax rates; amendment 5 would prevent income tax thresholds from staying at their current levels until 2030; and amendment 7 would remove reforms to the inheritance tax treatment of pensions. Based on costings that have been certified by the OBR, the direct impact of these amendments would cumulatively reduce forecast revenue raised in 2029-30—the year of relevance for our fiscal rules—by a whopping £12 billion. These amendments therefore pose a significant risk to the sustainability of our public finances and to our ability to fund the NHS and the public services that we all rely on. I therefore urge the House to reject them.

[Sir Ashley Fox]

Would the Minister concede that if that was offset by £12 billion less welfare spending, there would not be any threat to the sustainability of the finances?

[Dan Tomlinson]

If the Conservatives had credible plans and a credible history of reining in welfare spending, then I would, of course, be interested in taking them seriously. However, it was the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride), who was the Work and Pensions Secretary when the welfare budget exploded. We are now trying to get on top of that.

I will not address new clauses 15 to 19 directly. The Government have set out our position on them at previous stages, although I do urge the House to reject them today.

I will now turn to the points raised by the hon. and learned Member for North Antrim (Jim Allister) around amendments 112 to 139, which would have the effect of removing the distinction between the options available in respect of “specified Northern Ireland companies” and other companies from clauses 13, 14 and 15. The hon. and learned Gentleman has made his views known very clearly both today and on Second Reading. I will make the same point that the Economic Secretary to the Treasury made on Second Reading: as he will be aware—although he did not, I believe, mention this in his speech —service companies are able to benefit from the increase in the threshold. It is the Government’s understanding that there are very few, if any, goods and electricity companies in Northern Ireland that are close to the current enterprise management incentive limits, and we therefore think there will be minimal impact from these companies being subject to the previous scheme limits.

Oral Answers to Questions

Ashley Fox Excerpts

Tuesday 10th March 2026 Commons Chamber

[Rachel Reeves]

The price of petrol today is 8p per litre lower than if I had followed the plans that were left to me by the previous Conservative Government. From April, it will be 11p per litre lower. Of course, we keep these things under review, but oil prices today are 24% lower than they were yesterday, so things are very volatile at the moment. That is why, as I said yesterday, the most important thing we can do to address the cost of living challenges people face is to de-escalate the conflict in the middle east, which is exactly what this Government are attempting to do.

[Sir Ashley Fox (Bridgwater) (Con)]

2. What assessment she has made of the potential impact of changes to business rates announced in the autumn Budget 2025 on the retail, hospitality and leisure sectors.

[Wendy Chamberlain (North East Fife) (LD)]

6. What assessment she has made of the potential impact of tax changes on high street businesses.

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

On business rates, the Government have announced a support package for all businesses worth £4.3 billion over the next three years. We have introduced permanently lower multipliers for eligible retail, hospitality and leisure businesses, including those on the high street. In addition, every pub and live music venue will get 15% off its new bill from April. The Government will also bring forward a high streets strategy later this year.

[Sir Ashley Fox]

Many retail, hospitality and tourism businesses in my constituency traditionally give young people their first job, but with the Chancellor’s jobs tax, the unemployment rights Act and now huge increases in rates, many of those businesses are struggling to survive, so they just cannot afford to take on those young people. Does the Minister accept that his Government are the reason that youth unemployment is now higher in the UK than in the EU for the first time since records began?

[Dan Tomlinson]

One reason we have a challenge with youth participation in the labour market is the broken welfare system and the broken support system that we inherited from the previous Government. The proportion of young adults who are not in education, employment or training is broadly unchanged since the general election. It is too high, and it has to come down. That is why we are reforming our system and providing more support through actions such as our jobs guarantee. That is the right approach, as is the approach we are taking on business rates.

Clause 1

Ashley Fox Excerpts

Monday 12th January 2026 Commons Chamber

[Gareth Davies]

I have great sympathy with what my right hon. Friend says. He is right that there is a point at which you overtax risk and enterprise, and people stop taking risk and stop being enterprising. The trick in the Treasury is to ensure that the Government can raise enough revenue from a broad base of different taxes to pay for public services. [Interruption.] They need to try to achieve growth, not overtax growth and growth activity. They should incentivise it through other means. I completely agree with him on that point.

I was talking about the increase in tax on dividend income and savings. Together, clauses 4 and 5 will have significant consequences, not just for those who take risks, but for household savers and pensioners, as well as investors in the companies that my right hon. Friend describes. In fact, Hargreaves Lansdown described clause 5 as a “shocking tax rise” for savers. The measures will combine with the Chancellor’s cut to the allowances for individual savings accounts—in the Bill, there is a double whammy tax on savers. It treats saving less like a virtue to be encouraged, and more like a habit to be discouraged. We believe that will have a big impact on savings culture and the financial reality of people across the country. That is why new clause 11 calls for the Chancellor to come to the House to make a statement setting out the impact that the onslaught of this savers’ tax hike will have on all British savers and pensioners.

It is not just savers who are impacted by the Bill. Small and medium-sized businesses are, as we were just discussing, the engine of growth up and down the country, in every constituency. They provide 60% of employment. They will feel the pain from these changes. Indeed, the Federation of Small Businesses has been clear that through clause 4, the Government continue to make investing in your own business one of the least tax-friendly things you can do with your money.

Many entrepreneurs and business owners choose to pay themselves part of their income in the form of dividends. For many years, dividend tax rates have been set below the main rate, not by accident or ideology, but to reflect the fact that dividend income is paid out of profits that have already been taxed through corporation tax. I am afraid that even the largest businesses, never mind small and medium-sized enterprises, are not safe. Literally as soon as the Chancellor announced the changes in clause 4, investment managers were warning that the change completely contradicts the Government’s stated desire to encourage more investors to hold UK equities—many of which, by the way, are pretty good income-paying stocks. International investors come to the UK to buy dividend-yielding stocks, yet these measures will discourage that even further.

[Sir Ashley Fox (Bridgwater) (Con)]

Does the shadow Minister agree that the overall thrust of these clauses is to discourage saving and enterprise, and to hit the people who do the right thing, all to fund more welfare spending? That is not a recipe for growth, is it?

[Gareth Davies]

My hon. Friend touches on an important point. What is this for? People know that they have to pay tax. We may disagree on who pays tax and how much, but ultimately, where is the money going? It is going to the surrender of the Chagos islands. It is used to pay public sector workers eyewatering sums, only for them go on strike again. The hard bit for the general public is understanding where on earth all the money that is being raised by record tax hikes is actually going. That is what the Minister needs to be held to account for today. No explanation has been made. We are not in covid times; we are not in times of great crisis. This money is being raised because Labour is in trouble and in the pocket of the unions. I am very grateful to my hon. Friend for his intervention.

New clause 10 includes further assessments specifically on domestic equity markets and institutional investors. This will have a negative drag effect on the international climate as it relates to getting more investment in UK equities from institutional investors.

Finally, clauses 6 to 8 and schedules 1 and 2 introduce new rates of income tax altogether, this time on property income. Again, those rates are to be set for the tax year 2027-28 at two percentage points higher than the main rate of income tax. Government Members may take great satisfaction in what could be described as a war on landlords, but we should pause and remind ourselves who many landlords are. They are not barons or vast landowners; they are ordinary people doing what we have encouraged them to do for decades: taking responsibility for their future. They are the couple—one parent works long hours in a steady job, and the other juggles work and family life—who save carefully and invest in a small property because they know that the state pension alone might not be enough when they retire. They are the retired couple who inherit a modest flat from their parents—a flat that is not a windfall, but a source of security in later life—and who rent it out to supplement a fixed income. These are not people gaming the system, as many Labour Members have tried to suggest in the past, but people responding to it. They are good people. Forty-four of them are Labour MPs.

This new tax does not just hit landlords, though; it hits renters, too. The British Property Federation and the Office for Budgetary Responsibility have both warned that this measure could restrict the supply of private rental properties, adding pressure to an already strained market. The Royal Institution of Chartered Surveyors and the National Residential Landlords Association both say that rents will rise faster as a direct result of the Bill. New clause 12 in my name seeks to force the Government not to rely on their stereotypes about landlords, but to assess the impact of their new renters’ tax on both the supply and cost of private rental properties.

In summary, these clauses represent a new front in Labour’s war on the middle class and aspirational households in Grantham and Bourne, Chipping Barnet and across the country. These clauses impose not one, not two but three income tax rises on the British public, totalling more than £5.5 billion. This is not a plan for change; it is a savers’ tax onslaught, carefully phrased, politely worded and deeply felt—the same old Labour.

[Dr Jeevun Sandher (Loughborough) (Lab)]

Before I speak, I draw attention to my entry in the Register of Members’ Financial Interests. It is a pleasure to speak in this packed Chamber, and to the millions of people no doubt watching at home.

I will speak to clause 4, but first I wish to thank the hon. Member for Mid Bedfordshire (Blake Stephenson). I seem to recall making a slight mistake last year in a debate on the Finance Act 2025 by not speaking to a specific clause. He very graciously saved me, callow youth that I was, and I thank him very much. I certainly remember that today.

Britain faces an affordability crisis, with record numbers unable to afford a decent living standard. On top of that, we face a military crisis; we have to defend our nation as we have not had to for almost a century. As a nation, we are deeply divided between those who can afford decent lives and those who cannot; because of that, we are unable to stand united as one nation to meet this moment and those challenges. That is why today I speak in favour of clause 4. Yes, it is a tax that hits the wealthiest, but it also ensures that we can help grow the economy, and it is easily implementable. I will cover why that is.

People in this country are deeply frustrated and angry about where this nation is. Record numbers of people cannot afford a decent standard of living; just one third feel comfortable with how much they can afford. That is lower than in the financial crisis, and lower than during austerity—it is the lowest rate in our lifetime. That is why we see such anger on our streets and screens. We constituency MPs feel it viscerally.

Meanwhile, we have also seen the wealth in this nation grow dramatically. We have seen wealth as a proportion of GDP double since the 1980s, the amount of dividends paid out more than doubling since 2010, and owner-managers able to reduce their tax liability by not drawing their income from earnings. That is why it is right that we rebalance the tax burden between earnings and income earned from elsewhere, and especially income earned from dividends.

Our taxation system has not kept up with how our economy has changed; wealth has become far more important in this nation, but it has not been taxed commensurately. While income tax and national insurance have increased as a share of GDP, the same has not happened for taxes on profits. While the amount of wealth as a proportion of GDP has doubled, the income tax from that wealth has increased by only 30%. The income taxes in this nation are being levied on earners, not those who get their income from wealth. That is why it is entirely right that, through this Budget and this clause, we tax dividends at a greater rate. I will set out how this measure will improve growth and ensure that we hit the richest, and will show that it is easily implementable. We know that it improves growth because, as we have seen in France, dividend taxation stops payments going out of companies, instead ensuring that money stays in and is invested. We know that it hits the wealthiest, because one fifth of those who gain dividends are in the top 1%. We know that it is an easily implementable tax, because we are seeing it implemented in this Bill.

[Sir Ashley Fox]

Does the hon. Gentleman believe that increasing taxation on dividends will result in more entrepreneurs taking risks, employing people and growing the economy, or fewer?

[Dr Sandher]

I believe it will lead to more investment in this country. I will say this as well: the reason why people across the world invest in this nation and create great companies is because they want the return after tax. If an economy is growing and has more investment, that means more sales and more money in people’s pockets. I do not accept the hon. Gentleman’s proposition that raising this taxation rate somehow means less entrepreneurship and less investment in our economy.

[Sir Ashley Fox]

rose—

[Dr Sandher]

I believe the hon. Gentleman wants to get in again.

[Sir Ashley Fox]

I am grateful to the hon. Gentleman for giving way a second time. Is he seriously saying that increasing the rate of tax on dividends will result in more investment in this country?

[Dr Sandher]

To be clear, we have seen this happen in France, where that is exactly what happened. The incentive then was for payments to go back inside the company rather than being drawn out in dividends. In addition, owner-earners in this nation are currently able to reduce their tax liability by 13% by paying out in dividends. It is a form of income that is effectively earnings, but is not being reported as such. So yes, I would say that that is the case. Not only would I say that is the case, but I would say it is shown by international evidence. I take the theoretical point the hon. Gentleman raises, but in practice, we have seen that raising dividend taxes keeps the money in the company and leads to rising investment rates.

This is the most important Parliament in a century. Like those in this House a century before us, we face deep challenges: like those in this House almost a century ago, we are seeing the far right on our streets because people cannot afford a decent living; like those a century before us, we face a military dictator in Europe who wishes to redraw borders by force; like those a century before us, we in this continent must ensure that we defend ourselves. It was almost a century ago in this House that a Conservative Prime Minister increased taxes on the wealthiest to pay to defend our nation. It was almost a century ago that we taxed the wealthiest to ensure that every single person in this country had a good job. It was almost a century ago that we built a welfare state to ensure that every single person could have a decent living and a stake in this nation.

For our nation to meet this moment, we have to be united; to be united, every single person has to have a stake in this country; to have a stake in this country, people have to see and believe that democracy can deliver for them and that they can earn a decent living. That is why, by taxing the wealthiest on dividends—taxing those who gain their payments from wealth instead of earnings from pay-as-you-earn—clause 4 will help to ensure that we raise the revenue we need to get investment and growth going in a way that is easily implementable.

--- Later in debate ---

[Daisy Cooper]

These stealth taxes were started by the Conservatives and are being continued by Labour. When the Liberal Democrats were in government, we made sure to raise the income tax thresholds, taking people out of paying tax, but it is clear that the two biggest parties continue to drag more people into paying tax. According to the OBR, by 2030, an extra 9.4 million people will be dragged into paying the basic and higher rates of income tax, 1.7 million of whom will be dragged into the system because of this Government’s decisions at the last Budget. By 2031, the stealth taxes introduced by the Conservatives and continued by Labour will cost British taxpayers an eyewatering £67 billion a year, some £13 billion of which is a result of last November’s Budget.

To put that into perspective, in a two-person household, where someone earns £26,000 and someone earns £60,000 a year, over the decade of Conservative and Labour stealth taxes, the lower of those earners will lose the equivalent of an entire year’s pay due to frozen tax thresholds. Wiping out an entire year’s pre-tax salary for a typical earner is devastating for household finances. It is staggering to realise that this decade of frozen thresholds will cost what is broadly a typical two-earner family a staggering £26,800. The OBR says that one in four adults will be a higher rate taxpayer by 2031, up from one in seven in 2022. That represents an additional 5.7 million people, including 920,000 dragged into the higher rate band as a result of the Chancellor’s latest three-year extension.

It is really important that people understand that this is happening. The Liberal Democrats have tabled new clause 3 so that people are notified about how they will be affected by these frozen thresholds. The new clause will require the Chancellor to properly communicate to the people the impact of frozen tax thresholds. One of the most damaging aspects of this tax rise is that it goes unnoticed by so many. Unlike other tax changes, the stealth tax does not show up on people’s payslips and too many people are simply unaware that they are paying more tax because of the Government’s decisions. New clause 3 would require the Chancellor to be transparent with taxpayers and directly write to them, explaining in black and white the impact frozen thresholds will have on their pay cheques.

As many other hon. Members have said, there is huge concern among pensioners about what the measures will mean for them. In a recent meeting with the Chartered Institute of Taxation, it was highlighted to me that is not clear who will qualify for which rate of tax. The way that the system is set up suggests that pensioners who receive the same amount of income but from different sources could end up paying different rates of tax. Many of us like Martin Lewis, but the fact that the Chancellor has done a podcast with him does not mean that the impact of the Government changes has been communicated clearly to every single pensioner. I urge the Minister to adopt our simple new clause 3. The Government have said that they want to make the tax system more transparent, so if Ministers truly want to be honest with people, they should accept this simple amendment and write to the people who are affected by these policies.

[Sir Ashley Fox]

A Budget is the most important set of choices that a Government can make, and introducing clause 10 is a choice by this Government. I oppose clause 10 because it extends the freeze on the personal income tax allowance and the basic rate limit for a further three years, from 2028 to 2031. That means that rates will have been frozen for 10 years.

The choice in this Budget, as in all others, was clear: will spending be controlled or will taxes be raised? For the second year running, this Labour Chancellor chose higher taxes. In 2024, the Chancellor said that to extend this freeze would be to break her manifesto commitment not to raise the level of income tax, but at this Budget, she did it anyway. At the last election, the Government promised growth. They promised not to raise taxes on working people and to fund public services through a stronger economy, but from the moment that they took office, they have done the opposite. Labour have expanded welfare without reform, handed out huge pay deals without productivity gains and piled costs and regulations on to employers. When the inevitable bill came, what did they do? They reached into the taxpayer’s wallet.

These tax rises are a political choice. The consequences of these choices are clear. Taxes on working people are at record highs, growth is sluggish and unemployment has risen consistently since the election. Record numbers are now trapped outside the labour market on benefits, with no requirement and no incentive to seek work at all. Those who do the right thing, who work hard to provide for their families, now face higher tax bills to fund an ever-larger welfare state.

[Paul Holmes (Hamble Valley) (Con)]

My hon. Friend is making an excellent speech. Does he agree that these tax rises are damaging to our middle earners? The number of people who are being dragged into taxation—essentially, a fiscal drag—will increase from 15% in 2010 to 24% by 2030. Does he agree that that is bad for the economy?

[Sir Ashley Fox]

My hon. Friend makes a valuable point, which anticipates my next point. Teachers in my constituency have written to me saying that they will be pushed into the higher rate tax bracket by 2030, paying 40% on any extra work that they do—marking exams during the summer, for example—and that doing such work is not worth it any more.

Many pensioners in my constituency, who have worked and saved all their lives, and who have done the right thing, are now set to be punished too. Clause 10 will drag more pensioners with modest private pensions into the tax system. Freezing allowances will mean more pensioners paying tax on their income from savings. Anyone with income from a private pension or income from savings will now face having to fill out a tax return, and that number will grow when clause 10 takes effect. Unlike those in work, pensioners cannot put in more hours or ask for a pay rise. They are victims of this Government’s failure to control public expenditure.

Where is all the extra money that clause 10 will raise going to go? Rises in welfare spending. With the uprating of universal credit, the rise in the amount of people claiming health-related benefits and now the scrapping of the two-child benefit cap, more and more families are finding it less beneficial to work. Clause 10 is perverse. It discourages work and entrenches dependency. Labour says it is all about fairness and compassion, but in truth it is the opposite. The best way to alleviate poverty is through work, and that is exactly what Labour’s Budget seeks to discourage.

There is another choice. Had the Chancellor chosen to control public expenditure, then clause 10 would not be necessary. She could have chosen to make work pay. She could have chosen to reduce our welfare bill, to increase productivity in the public sector, and used savings to reduce debt and protect taxpayers, but she chose not to because when faced with difficult decisions, this Government’s guiding principle is their own survival: surviving the next vote, the next headline and the next rebellion by Labour Back Benchers.

This Government have now U-turned on headline policies 12 times. By the Prime Minister’s own admission, that meets the definition of serial incompetence. The people paying for the price for this incompetence are working people, pensioners, and everyone who has ever worked hard and done the right thing to provide for themselves and their families. It is no wonder that my constituents are so livid with this Government, and that is why I shall oppose clause 10, which is the cornerstone of this Budget for “Benefits Street”.

[Dr Luke Evans]

It is a shame that the hon. Member for Poole (Neil Duncan-Jordan) is not still in the Chamber, because he hit the nail on the head. He asked the question that I am keen to get answered and that is the reason why I have come to this debate. It is about the freezing of the thresholds and what the impacts will be on pensioners. I too am worried about pensioners suddenly being brought in to pay tax and having to do a tax return.

I am glad that the Minister saw the interview with Martin Lewis, because the Chancellor was very clear, so he has to try to answer the questions. When Martin Lewis put this case to the Chancellor, she said:

“If you just have a state pension…we are not going to make you fill in a tax return”

at any time. That is great, but how does that work? What does it look like? Where is that written down? The Chancellor went on to say:

“In this parliament, they won’t have to pay the tax…we’re looking at a simple workaround at the moment.”

That was back in November, so my curiosity was pricked to think, “Maybe it will be in the Finance (No. 2) Bill in Committee.” Yet, as pointed out by the Opposition Front-Bench spokesman, my hon. Friend the Member for Grantham and Bourne (Gareth Davies), the Bill has 535 pages, and there is no answer. I am pleased to have the opportunity to ask the Minister on behalf of my constituents how he will answer that question.

What is the workaround in play? If it is there, we should like to see it. Is there an impact assessment that goes with it to help us to understand whether people will have to do a tax return? How many people will have to do a tax return? If they will not have to do a tax return, how will we know whether they need to pay the tax? Will it simply be part of PAYE? That is a solution; it could be moved, and adjustments are already made. Will we simply say that it is an easement and write it off?

We then get to the problem of the Chancellor talking about small tax. We have no definition of what small tax looks like. This Government’s definition of it is as close to a definition as their definition of “working people” is, and we all know what the definition of “working people” is under this Government—well, actually, we do not, and that is the problem.

I am here asking the question on behalf of my constituents: what does the workaround look like? How will it take place? How will it affect my constituents? That is why I support new clause 15, which would go at least part of the way to understanding the assessment of this decision taken by the Government, but I appreciate that that is outside of the Bill. If the Government turn around and say that they do not need to do primary legislation—the best protection for my pensioners—the Minister can find another way to do it, but I look forward to hearing what that will look like in statements to the House.

Oral Answers to Questions

Ashley Fox Excerpts

Tuesday 9th December 2025 Commons Chamber

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

3. What assessment she has made of the potential impact of extending the freeze on income tax thresholds on working people.

[Sir Ashley Fox (Bridgwater) (Con)]

18. What assessment she has made of the potential impact of extending freezes on income tax and national insurance thresholds on working people.

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

The Chancellor was clear at the Budget that we are taking the fair and necessary decisions on tax to do all we can to ensure that the contribution of working people is kept as low as possible. We have reduced the gap between taxes on income from assets and on income from work, stopped the unfairness that meant people could pay less council tax for a £10 million property than for a typical terraced house in much of England, and done much more.

[Dan Tomlinson]

I am a bit confused by that question. The hon. Member said there was one word that was important. Let me give him one figure: £150. That is the amount we are taking off energy bills next year to help people to deal with the cost of living in the here and now. We are supporting people because of the mistakes that previous Governments made by not investing in our energy infrastructure and not investing in our future. We are picking up the pieces after the Conservatives did not take the necessary decisions.

[Sir Ashley Fox]

Extending the freeze on income tax thresholds will cost working families £900 a year. It will also drag many pensioners into paying income tax for the first time. Why is the Minister hitting these low-income families to pay more for welfare?

[Dan Tomlinson]

I suggest the hon. Member asks his Front Benchers why 75% of the impact of people paying more tax at the lower end is the result of decisions made by the previous Government, who spent seven years freezing income tax thresholds. It is a bit rich for the Conservatives to talk about this Government doing it for three years when they did it for seven years.

--- Later in debate ---

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

The child poverty strategy published last week sets out the steps that we are taking to support families now, as well as the building blocks that we are putting in place for the long term. We will lift 550,000 children out of poverty by removing the two-child limit and through other measures, including the expansion of free school meals.

[Sir Ashley Fox (Bridgwater) (Con)]

T2.   Unemployment is higher today than it was on the day the Chancellor took office. Will she tell the House why that is the case?

[Rachel Reeves]

Employment is up since we took office, and part of the reason for the disparity between those numbers is the fact that people who were economically inactive are now seeking work. That is exactly what we want, for people to be seeking work and to get back into work, but there are more jobs in the economy today than when we took office.

OBR: Resignation of Chair

Ashley Fox Excerpts

Wednesday 3rd December 2025 Commons Chamber

[James Murray]

My hon. Friend is right to point out that while Conservative Members are keen to raise points of history, they seem to be rewriting history when it comes to their last few years in office. He asks an important question about cyber-security. The Government will work with the National Cyber Security Centre and the OBR to take forward the OBR report’s recommendation that a forensic examination of potential premature access at previous fiscal events be carried out. For the avoidance of doubt, I should reiterate that the report found no evidence of hostile cyber-activity, but my hon. Friend is right to point out that information security and cyber-security are important for all of us across Government. Indeed, that was reflected in the spending review.

[Sir Ashley Fox (Bridgwater) (Con)]

For the first time in its history, the OBR was forced to correct the record about the forecasting process in the run-up to the Budget. Is not the reason that the Chancellor selectively leaked information from the OBR to mislead the public and justify tax rises?

[Madam Deputy Speaker (Caroline Nokes)]

Order. I am sure that the hon. Gentleman does not want to suggest that the Chancellor in any way misled anyone.

[Sir Ashley Fox]

I am grateful for your advice, Madam Deputy Speaker. Perhaps I can rephrase that: the Chancellor inadvertently misled the public to justify those tax rises.

[James Murray]

The OBR set out in black and white that the productivity downgrade reduced tax receipts by £16 billion, and identified the cause of that downgrade as the previous Government’s record in office, whether their slashing of public investment or their mishandling of Brexit. In her speech on 4 November, the Chancellor was clear that this productivity downgrade, combined with the clear need to increase headroom to build resilience in the public finances, would require everyone to make a contribution. That is what happened at the Budget.

Taxes

Ashley Fox Excerpts

Wednesday 12th November 2025 Commons Chamber

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

This will be a very simple speech, because it has only a single fundamental point, which is that honesty in politics matters. That should not be a controversial statement. In debates in this place, we are advocates for a political philosophy, and for certain political tactics, and yes, we should put forward our case as attractively as possible, perhaps using statistics that make our case more effectively than others, but if we downright mislead the public, a line is crossed. That is wrong, because it is taking the public for fools.

In the election of 2024, the Labour party had a manifesto on which every single one of its Members was elected. There was an identified £7 billion that they intended to raise through tax rises, but a core promise at the very heart of the manifesto was that apart from that, there would be no tax rises—in particular, no increases to national insurance contributions, income tax or VAT. That is the very basis of their electoral mandate, and even then, they only managed to secure 34% of the vote. The first breach of those promises came in October last year: the tax rises were for not £7 billion, but £40 billion. That was justified by a wholly fictitious £22 billion black hole, a figure that the Office for Budget Responsibility refused to support, and that the Institute for Fiscal Studies and the Financial Times, among others, could not identify.

The Government raised taxes on employers; it was a tax on jobs of fully £25 billion. The IFS said that was a “straightforward breach” of their manifesto. We were told that this was a one-off, and that the Government had “wiped the slate clean”. The Chancellor of the Exchequer’s words were that they were

“not coming back with…more taxes”;

they had fixed

“the foundations of our economy”,

and she said, “It’s now on us.” Those are not my words, but the words of the Chancellor of the Exchequer.

The second Budget is in just two weeks’ time, and no global event has blown this Government’s plans off course. There has been no pandemic, and there has been no European invasion sending electricity and energy prices through the roof. If things have changed, it has been as a direct consequence of the political and economic decisions of the Government.

[Sir Ashley Fox (Bridgwater) (Con)]

Would my hon. Friend agree that what has actually changed is the inability of the Prime Minister and the Chancellor to control their Back Benchers, who now feel free to demand whatever public expenditure they think is convenient?

[Jerome Mayhew]

My hon. Friend is entirely correct. The Prime Minister tried—half-heartedly, admittedly—to save £4.5 billion from the welfare budget. He put his Secretary of State for Work and Pensions in the ridiculous position of starting a debate arguing for £4.5 billion of savings from long-term disability and health benefits, only for her to end the very same debate advocating for a £300 million increase in those same benefits. The Prime Minister has lost control of his Back Benchers, and he has lost control of his Government’s spending.

We have had no global event, but we do have Government policies that have been economically disastrous. Labour is truly the tax-and-spend party. It has raised the tax burden to the highest in history—certainly since the second world war. As for spend, it raised £40 billion in tax, borrowed a further £30 billion, and increased spending by £70 billion. According to the Government’s own plans, they intend to borrow half a trillion pounds extra during the course of this Parliament. And for what? Has there been reform of public services? No. Public sector productivity has declined. We are getting less for our money—even more so in healthcare, where the decline in productivity is fully 8.3%. What they have done is increase wage inflation. For public sector pay, it is more than 6%, whereas in the private sector, it is a third less.

The Government are coming back for more. They intend, we are told through multiple briefings to newspapers, to breach their core election manifesto pledge and raise taxes, because they cannot reduce spending.

--- Later in debate ---

[Sir Ashley Fox (Bridgwater) (Con)]

During the general election, the Labour party said that it would not increase income tax, national insurance or VAT. It repeated that it would not increase taxes on working people. In its manifesto, it said it would increase spending by only £9.5 billion and that that was to be paid for by £7.3 billion in extra taxes and £3.5 billion in extra borrowing. That was a modest plan with a prudent margin. It was a plan put forward to the electorate to show that the party could be trusted with the public finances. My constituents might be surprised to learn, however, that if they now look on the Labour party website, that manifesto is rather more difficult to find than it was a couple of months ago.

It is fair to say that we Conservatives did not believe them, so we were not entirely surprised when, within weeks of moving into Downing Street, the Chancellor told the country that she would have to raise taxes after all. She had apparently found a magical £22 billion black hole. I say “magical” because nobody other than the Government seemed able to locate it—certainly, the Office for Budget Responsibility could not find it. It was, of course, a fiction to give the Chancellor cover for what she always intended to do, which was a massive increase in taxes, borrowing and spending, because that is what Labour does. Dogs bark, cats miaow and Labour increases taxes, borrowing and debt.

In her first Budget last year, the Chancellor did not raise taxes by the £7.3 billion promised in the manifesto. She increased taxes by £40 billion. She increased borrowing not by the promised £3.5 billion, but by £32 billion. And believe it or not, she did not increase spending by the promised £9.5 billion. She increased it by £72 billion. The Chancellor imposed £40 billion of extra taxes on our economy. She increased employer national insurance, stamp duty and capital gains tax and she imposed extra taxes on family businesses and family farms, then she pretended that none of those were taxes on working people.

[Charlie Maynard]

Will the hon. Member acknowledge that debt has risen from £0.5 trillion to £2.9 trillion from 2005 to 2026, forecast to March? That is nearly six times as much, and the great majority of that happened under the Conservatives’ watch. Yes, we can talk about covid, but covid is a very small portion of that—about £0.7 trillion—so what about the rest of it? Is anyone going to take any responsibility for that?

[Sir Ashley Fox]

The hon. Gentleman will know that the Liberal Democrats joined a coalition Government in 2010 with the Conservatives. We inherited a deficit of £156 billion in 2010—11% of GDP—and it took 10 years, to 2020, to reduce that steadily to 2% of GDP. For all the moaning and whining from the Labour Benches about austerity, what we were trying to do—as a coalition Government for five years and as a Conservative Government for the remainder—was to live within our means, and that is tough. That is really difficult. It is about improving public services, but without necessarily hosing money at them. We see that most successfully in the field of education. In England we have seen a dramatic increase in reading standards and the standards of examination of English pupils caused by genuine reforms. That compares very favourably with what has happened in Scotland and Wales, where those reforms did not take place. The skill of government is in improving public services without always spending more money. The Liberal Democrats used to have a few Members who were called “Orange Book” Members. It is a shame there are so few of them left.

Who does the Chancellor think she is kidding when she says she has not increased taxes on working people? Try telling the farmers in my constituency that they are not working people, or the young family where both parents work and are saving to pay the stamp duty on their first home. As Labour Members will recall, that first Budget was not well received, so to draw a line under her broken promises, the Chancellor said:

“We’ve now wiped the slate clean. It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope for the course of this Parliament. We don’t need to come back for more.”

Except we know that that is not true. She is coming back for more. She is now set to break that promise again by putting up taxes again.

[Jerome Mayhew]

Does my hon. Friend have any idea why the Chancellor has changed her mind or what it is that has affected her decision? Just a year ago, she said that she did not need to come back for more, but now she says she does. Has there been any great global shock, or does he think the problem lies closer to home?

[Sir Ashley Fox]

I would suggest two reasons. First, our economy has slowed down as a result of the very tax increases that the Chancellor has imposed. Secondly, the feral Labour Back Benchers have made them lose their nerve. The Prime Minister and the Chancellor therefore cannot control public expenditure in any way at all. The British people are already paying the highest tax burden in 70 years and Labour wants to increase it further. It is sad to say that this Government have no clue as to how the economy works. I genuinely believe that their Front Benchers want to reduce unemployment, but have they ever considered that if they increase employer national insurance charges and the cost of employing labour, businesses might use less of it? If they pass an Employment Rights Bill that increases the cost of labour, might businesses use less labour? Might that be why unemployment has increased every month since they took office? Is that why unemployment increases under every Labour Government?

Labour is just as ignorant on the effects of taxes and spending. If the Government tax entrepreneurs, there will be less enterprise. If they increase benefits, they should not be surprised if it becomes more attractive to claim them. Unfortunately, Labour’s answer to every question is more spending because, of course, it is what they do best: spending other people’s money. We never hear about its plans to improve efficiency or get better value for the taxpayer because there are no such plans.

Labour’s higher taxes and borrowing are leading to higher unemployment and lower growth. We are in a doom loop created by the Chancellor, and if we are to revitalise our economy, the first step is for the Government to control public expenditure. That is why we have outlined our plans to reduce expenditure by £47 billion. We will reduce welfare spending by £23 billion. Unlike the Liberal Democrats, Reform UK and other high-spending left-wing parties, we would keep the two-child benefit cap. We would reduce the size of the civil service to where it was in 2016, saving £8 billion, and reduce overseas aid by a further £7 billion. We would use those savings to cut both borrowing and taxes to bring about a new spirit of enterprise and confidence in our country.

It is ironic that it is the Conservatives calling today for the Government to stick to their manifesto promise not to increase taxes. The British people will notice if they break that promise for a second time.

[Madam Deputy Speaker (Caroline Nokes)]

That brings us to the Front-Bench contributions. I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

I am grateful to be able to respond to the debate on behalf of His Majesty’s official Opposition.

Let me start by thanking everybody from both sides of the House for their contributions, but in particular those on my side of the House. My hon. and gallant Friend the Member for South Shropshire (Stuart Anderson) pointed out the impact of the family farm tax on his farms in Shropshire and that 6,000 farms across the country have closed. The hon. Member for Harlow (Chris Vince), who is sadly not in his place—probably on the phone to his mother—spoke well about Harlow and his mum. I particularly enjoyed the bromance emerging between him and the hon. Member for Runnymede and Weybridge (Dr Spencer).

My hon. Friend the Member for Gosport (Dame Caroline Dinenage) spoke well about the impact of the rise in national insurance contributions on the Gosport employment market. My hon. Friend the Member for Solihull West and Shirley (Dr Shastri-Hurst) said a good quote by Margaret Thatcher. As the MP for Grantham, I particularly appreciated it, but it still rings true today about spending other people’s money wisely.

My hon. Friend the Member for Farnham and Bordon (Gregory Stafford) rightly highlighted that not a single Liberal Democrat Back-Bench MP has turned up, which I agree is completely shameful. We did hear from the hon. Member for Witney (Charlie Maynard), who had the temerity to talk about our country’s reputation when it is his leader who is prancing about in a wetsuit falling off paddleboards—slightly ironic. Finally, my hon. Friend the Member for Broadland and Fakenham (Jerome Mayhew), who made a number of important interventions, pointed out that every Labour Member should ask themselves the same question every morning when they wake up, “Who voted for this?” None of them have a mandate for further tax rises, just as they did not have a mandate for last year’s jobs tax increase. They must know this. The proof is right in front of them. Labour has over 400 Members of Parliament and fewer than 10 have shown up. I was going to say that they have come to defend the indefensible, but they have not even done that. None tried to defend the indefensible; we just heard more and more speeches about the past, while their constituents are living in the present.

I think that Labour Members know that the upcoming Budget is surely the beginning of the end. The Government have lost control. Just when the Prime Minister should be focused on fixing their mistakes, he is instead having to oversee co-ordinated briefings against the apparent plots to depose him by his own Health Secretary. It is troubling, to say the least, that the Prime Minister seems more worried about the damage coming from inside his own Cabinet than about the damage already done outside it. The truth is that the Labour party will not be forgiven. Socialism has failed everywhere and every time it has ever been tried.

We should not forget that Labour won the last election because it promised not to be a socialist Labour Government. It said that it would not fiddle with the fiscal rules to borrow more money. It said that it would not increase national insurance, income tax or VAT. It said that it would not pursue ideologically driven policies that would push up energy bills—in fact, it said that it would cut those bills by £300. Unfortunately for the country, this has very much turned out to be a socialist Labour Government after all: higher taxes, fewer jobs, lower confidence, and an economy put into reverse—back to the 1970s. That is felt in every boardroom, every workshop, every pub and every place of work across this country. The best thing that the Government can do right now is take responsibility for their actions and show leadership. After just 16 months of Labour, inflation has doubled, taxes are heading for record highs, borrowing has risen rapidly and unemployment has surged to the highest level since the pandemic. And none of that takes into account what may yet be to come.

We know that the Chancellor deliberately picked the latest time possible for her upcoming Budget, in a last-ditch hope that someone, somewhere might come up with something that makes it all better. The date of 26 November is a highly unusual one for an autumn Budget. The last time we had a Budget this late, phones still had aerials, Mark Morrison was “returning the mack”, and we had to rewind VHS tapes before taking them back to Blockbuster. If only we could rewind the past 16 months; sadly, we cannot.

[Sir Ashley Fox]

Does my hon. Friend agree that this very long lead-in period for the Budget has caused enormous uncertainty for businesses, which have faced a string of briefings in the media about every possible tax rise, and that the very date that the Chancellor has chosen for her Budget is itself causing more uncertainty and delaying investment decisions?

[Gareth Davies]

I could not agree more. In fact, markets and investors have now endured week after week of reckless and irresponsible speculation, not about whether Labour will put up their taxes, but about which taxes will go up. The endless uncertainty that my hon. Friend mentions has caused relentless Treasury kite-flying that has damaged confidence. There are so many kites in the air but none of them is tied to an actual plan.

My hon. Friend the Member for Isle of Wight East (Joe Robertson) said it well: everyone seems to be looking over their shoulder to see who the Chancellor will come for next. That cannot be what Labour MPs want in the run-up to Christmas. They have a chance tonight to reaffirm the promises that they made to all their constituents. It should be their easiest vote this year. Their core manifesto commitment, which won them the election, is printed in black and white in the motion. To fail to support the motion is to confirm to each and every one of their constituents that Labour is content to betray their trust. Be in no doubt, the country is watching.

Alcohol Duty: UK Wine Sector

Ashley Fox Excerpts

Tuesday 11th November 2025 Westminster Hall

[Gregory Stafford (Farnham and Bordon) (Con)]

I beg to move,

That this House has considered the impact of alcohol duty on the UK wine sector.

It is a pleasure to serve under your chairmanship, Mr Turner. I am grateful to colleagues for attending this evening’s debate. A bit of background and heritage: the United Kingdom has long been a global hub for beers, wines and spirits. Dating back to 1698, with the founding of Berry Bros. & Rudd, we are the largest exporter of spirits in the world and the second largest importer of wine by both volume and value. The sector represents some of the very best of British enterprise: from heritage distillers to pioneering new producers who continue to innovate and support our economy. Behind every bottle on the shelf is a small family business, a logistics worker or a hospitality employee whose livelihood depends on the trade.

Each year, the United Kingdom imports the equivalent of 1.7 billion bottles of wine, accounting for 99% of all wine consumed here. This vibrant culture of responsible enjoyment sustains our high streets, supports independent retailers and provides essential income for pubs and restaurants that continue to face difficult trading conditions. In 2024, more than £12 billion was paid to the Treasury in alcohol duty, with wines and spirits contributing £8.5 billion—around 70% of that total. The wider wine and spirits sector generated more than £76 billion in economic activity in 2022, supported £22 billion in gross value added and sustained more than 400,000 jobs.

However, when more than 60% of the cost of a bottle of wine is tax, we must ask who is truly being squeezed—the consumer, the publican or the common sense of good economic policy? The reality is that the margins for producers and retailers are tightening. There is a limit to what the British public are willing to pay before they simply choose to stay at home. Changes in duty directly alter prices on the shelf and on restaurant wine lists. Every percentage point of duty may appear small in Whitehall, but for many businesses, it is the difference between survival and closure. Treasury Wine Estates, the producer of brands such as 19 Crimes and Penfolds, has warned that further tax increases will deepen pressure on hospitality. Its managing director of global premium brands, Angus Lilley, stated that higher costs mean tougher choices for local pubs, higher prices for consumers and less money circulating through the hospitality sector, which keeps our towns and cities vibrant.

A recent YouGov poll commissioned by the Wine and Spirit Trade Association found that one in four regular drinkers will buy less alcohol from shops if prices continue to rise, and two in five will reduce their consumption in pubs and restaurants. In my constituency, we have excellent local brewers such as Tilford and Kilnside, and craft distillers such as Hogmoor distillery; I had the pleasure of visiting the team recently and sampling their locally made spirits. Those are small creative producers that bring jobs, pride and flavour to their communities, but they will not survive if the alcohol industry continues to face relentless pressure from Government policy that fails to support its long-term sustainability. If we price people out of the pub, we do not just lose the sale; we lose the cornerstone of British community life.

Turning to the current picture, sales data illustrates the scale of the problem. In the 12 weeks to mid-June this year, volume sales for wine were down by 3% in the off-trade, rising to 5% for spirits. The picture in the on-trade is even more severe, with wine volumes down by 7% and spirits by 8%. Hospitality has been one of the hardest hit sectors of the economy since the Budget, accounting for nearly half of all job losses. We are now taxing our way to lower revenues. That is not sound economics; in fact, it is counterproductive. As one industry voice put it:

“Britain is becoming the most taxed place to raise a glass and the hardest place to sell one”.

Colleagues will recall that in 2023, the UK moved from the inherited EU duty framework to a strength-based system taxing wine by labelled alcohol by volume in 0.1% increments. Alongside that reform, the headline rate increased in August 2023, and it increased by a further 3.65% in February of this year. For a 14.5% ABV wine, that represents a cumulative increase of around 44% in just 18 months.

[Sir Ashley Fox (Bridgwater) (Con)]

I am grateful to my hon. Friend for securing this debate. On the point about excessive tax inhibiting entrepreneurship, I visited Ned Awty and his family, who run the Oatley vineyard in Cannington in my constituency, and they pointed out that it is perverse that the United Kingdom has a duty relief scheme for small brewers and distillers but no similar scheme for small vineyards. Does my hon. Friend agree that a small duty relief scheme for small producers would help English wine producers—and that we could all raise a glass to that?

[Gregory Stafford]

My hon. Friend is absolutely correct, and he pre-empts something I was going to say later about the inconsistencies and unfairness in the current system. Small producer relief is capped at 8.5% ABV, and the Government should look at what they can do for the smaller producers that he mentions.

The TaxPayers’ Alliance has highlighted that the UK has the third highest wine duty in the world, now at £2.44 per bottle—an increase of 9p since 2023. By comparison, France charges the equivalent of just 2p per bottle and Romania 1p, and Spain applies no excise duty at all. In fact, half of the EU’s 27 member states do not charge duty on wine whatsoever. When neighbouring countries impose far lower rates, our competitiveness suffers. We pride ourselves on being a global trading nation, but we have priced ourselves out of the very markets we helped to create. Labour’s current approach is short-sighted and self-defeating: taxing ambition, throttling innovation and penalising productivity. The Treasury cannot build growth by breaking the back of the very industries that deliver it. As Winston Churchill put it in 1904, we cannot tax our way to prosperity any more than we can drink our way to sobriety.

I turn to the inconsistencies and unfairness in the system, which my hon. Friend just mentioned. Products with an ABV of between 8.5% and 22% are taxed at the same rate per litre of pure alcohol, and yet producers of beer with an ABV of between 3.5% and 8.4% pay more than twice as much duty as producers of cider of the same strength. Small producer relief, although it is welcome in principle, is capped at 8.5% ABV and therefore excludes virtually all winemakers and distillers. This policy fails to support small English wineries such as Chapel Down—in the constituency of my hon. Friend the Member for Weald of Kent (Katie Lam)—Nyetimber or Camel Valley, which I am sure Members are all familiar with, and which contribute to rural employment and agricultural production.