Covid-19: Financial Support
Caroline Nokes Excerpts(2 days, 9 hours ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. In the region of 10 Members wish to speak. If they restrict themselves to about five minutes each, I will probably get everybody in.
Esther McVey
I do not believe the evidence proves that. We can look to other parts of the world where that was not the case.
This policy had unwavering and enthusiastic support from across the House, with just a few of us in this House —too few—raising valid concerns, but we were shut down. It should be obvious that some people cannot be damaged in the name of protecting others with interventions such as lockdowns that we do not even know will work. The moral mathematics never added up.
And now we must live with the consequences of what we did. We spent in the region of £400 billion on the covid-19 response—a vast sum that will be clawed back through increased taxation and hardship for generations to come. Of course, the Conservative party had to put up taxes to pay for that £400 billion, and it was voted for by pretty much every Member in the House. For me, such a statist, socialist intervention would never work, and that is proving to be the case.
Those businesses that did manage to survive after everything that was thrown at them in the name of covid are now having to face more gloom and doom from this socialist Government in charge of our country, with their two tax-rising Budgets and their removal of business rates relief without understanding it—
Madam Deputy Speaker (Caroline Nokes)
Order. The subject of the debate is financial support specifically during the covid pandemic. The right hon. Lady might want to make sure she stays within scope of that.
Esther McVey
Thank you, Madam Deputy Speaker. I added on that sentence because I felt it was very relevant that those who did manage to survive the pandemic are now not surviving, because of the extra taxes that are being put upon them and the removal of business rates relief that was introduced during covid, and it seems that the Chancellor does not even know how that works. Those businesses are suffering twofold, because some of that covid benefit is now being removed. It is no wonder Labour MPs are being banned from pubs, as we see mass closures of pubs.
I simply ask that we examine the bigger picture. Those 3.8 million people who were excluded from financial support suffered a terrible injustice, but so too did those who received support, because lockdown took from everyone: children denied education; mothers forced to give birth alone; people suffering heart attacks, strokes and sepsis but too frightened to burden the NHS; bereaved families unable to mourn the dead—the list of injustices goes on and on. None of it should ever have happened. The costs were always going to be too high, and worse, there appears to be no evidence that lockdown prevented covid infections.
The covid inquiry recently made two incredible assertions. One was that lockdowns were harmful but should have started earlier, and the other was that the modelling should not have been used to justify major policy but simultaneously proved that 23,000 lives could have been saved. Finally, lockdown was, as Professor Sunetra Gupta from the University of Oxford said—
Madam Deputy Speaker
Order. The debate is not about lockdown; it is about financial support. I hope the right hon. Lady is concluding her remarks.
Esther McVey
I am concluding my remarks. I am pleased to have been able to speak today as one of a handful of 650 MPs who stood by “the Forgotten Ltd” and by many of our constituents whose businesses went out of business. I was one of the few in the House who stood up for them.
Finally, as Professor Sunetra Gupta said, this was like taking a hammer to a fly on a pane of glass: you might or might not kill the fly, but you definitely shatter the window. It will take us a long time to pick up the pieces. Next time we face a similar crisis, let us not panic and reach for the hammer.
Andrew Cooper
The Chancellor of the Exchequer has done exactly the right thing by setting up the covid corruption commissioner. During the pandemic, there were those who saw it not as a moment of national emergency in which we should all get together, but as an opportunity to line their own pockets. The Chancellor is doing exactly the right thing by trying to root out those people and make sure that they suffer the consequences.
We cannot change what happened, but we can choose what happens next. Let us learn the lessons from past schemes that left too many people excluded, and move forward by building systems that protect everyone. Let us ensure that in any future crisis, we never again leave millions to face hardship alone. What specific steps will the Government take to ensure that any future emergency financial support schemes are designed with the flexibility, fairness and real-world applicability needed to prevent millions from ever again being excluded in their moment of greatest need?
Madam Deputy Speaker (Caroline Nokes)
There will now be a formal four-minute time limit.
Euan Stainbank (Falkirk) (Lab)
In the early days of the pandemic, the country came together in the worst of times, making unprecedented sacrifices in all of their lives so that they could collectively fight the pandemic and save lives. The pandemic also put the structure of governance and our public finances under extreme strain; there were undoubtedly difficult—sometimes impossible—choices that had to be made. Such is the responsibility of government, but as the covid inquiry and many of our constituents have told us, there were people who were failed.
Financially, individuals and small businesses in my constituency and—as we have heard powerfully—across the country found themselves excluded from support, as their lives did not map cleanly on to the fantasy of seamless transition from workplace to workplace and from business to business. They were told that their circumstances meant they did not qualify. They included new businesses, the newly self-employed, freelancers, those on parental leave, and company directors of small businesses who received their income from dividends and a salary, to name just a few. That point has been made powerfully by several Members, especially my hon. Friend the Member for Montgomeryshire and Glyndŵr (Steve Witherden).
Those who were in the most precarious employment were also hit hardest, with job opportunities limited. We saw youth unemployment spike during the pandemic, from 12.4% immediately before the lockdown to 15.2% only four months later. Many of those young people were made unemployed because of the high turnover and insecure nature of their workplaces—they were not on the payroll when 19 March 2020 came around. Just before the first lockdown, I and many other students were working seasonally in the hospitality sector, on zero-hours contracts, taking time off during February and March to complete the honours levels of our degrees. We expected to return to work that summer alongside pursuing our careers, but we were not given any support during the pandemic and found that our employment opportunities were limited, with no furlough available.
There was no restitution for the loss of income and opportunity many young people faced during the pandemic. The impact was that the generation most likely to be employed in those casualised or ad hoc employments were set back. Plans to move out of home, pay off their student loans and begin a career—the proof points of a successful journey through our economy—were delayed. For many, survival became the predominant need; the desperate need to pay their bills, feed their kids, and survive through any means possible. Although the pandemic was hopefully a once-in-a-lifetime event, this Government must be prepared for any such eventuality. What I have described is a good reminder of the harm of balancing the labour market in one direction.
One constituent who got in touch with me about this issue was a company director who was paid in dividends and a small salary, and who received no support because of that gap. They pointed out that not only was the lack of support hugely challenging, but colleagues and competitors in the same industry with a clearer definition of self-employment did receive support and were provided with a significant competitive advantage, which continues to this day. That is harmful to the economy, and is an injustice to my constituent and limited company directors like them. Years later, people feel like they are still trying to tread water with a weight chained to their ankle as they maintain businesses while paying back extensive loans that they took out to bridge the pandemic’s severe impact on their business.
I commend the Government on the very good work they have done to identify the clear waste and instances of fraud that occurred during covid. The covid corruption commissioner identified £10.9 billion in losses due to weak accountability, bad quality data and poor contracting under the previous Government. We can go further, and I would welcome an acknowledgement from the Minister that better design in the previous Government’s schemes could have averted those losses. That money should and could have been spent on deploying support that would have unchained many people, including my constituents, from the extensive consequential impacts they went through at the time. Those impacts should be recognised through a clear and unambiguous statement of support for those people by delivering an apology on behalf of the British state.
I commend the campaigners at ExcludedUK and its supporters, who have been relentless in advocating almost six years on from the start of the pandemic. They are fighting every day, chained financially to the circumstances caused by the pandemic—
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I refer Members to my entry in the Register of Members’ Financial Interests. I thank the hon. Member for Stratford-on-Avon (Manuela Perteghella) for securing this important debate. The covid pandemic was an unprecedented crisis that placed immense strain on ruling parties worldwide. Few, if any, could dispute that rapid, decisive intervention was necessary to prevent an utterly catastrophic collapse in the British economy. However, acknowledging the scale of the challenge does not absolve the Government of responsibility for how that money was spent, how their support schemes were designed and implemented, or how recklessly public funds were safeguarded.
While some degree of waste and fraud is inevitable in a crisis, the scale of loss during the pandemic was not inevitable, but the result of systemic failure within the UK Government. That failure remains unchecked under the current Labour Administration. The Office for Budget Responsibility estimates that covid support measures totalled somewhere between £169 billion and £192 billion. That included a variety of schemes, from furloughing individuals to protect them from unemployment to grants and loans intended to help businesses stay solvent.
However, the support system simply did not work for nearly 3.8 million freelancers and self-employed workers. Many were excluded altogether from financial assistance through rigid eligibility criteria, outdated data or the blunt distinction drawn between modern forms of work. That said, much of the covid-19 spending—for those to whom it was available—undoubtedly saved jobs and prevented mass insolvency. Departments and public bodies were forced into reactive policymaking, scrambling to design schemes in real time, often without effective oversight or proper safeguards against abuse. Nowhere was that more evident than in the scale of fraud committed against the Government support schemes.
According to the independent covid counter-fraud commissioner’s final report, published last month, some £10.9 billion of taxpayer money was lost to fraud and error across covid support schemes. Of that sum, only £1.8 billion has been recovered so far. The remainder, as the report makes clear, is likely beyond recovery, with fraud prevention efforts identified as falling short across Government. The causes of this failure are well documented in the aforementioned report, but one particular point that stuck out to me was that banks were instructed to suspend their usual due diligence, despite voicing explicit warnings about heightened risks of fraud.
Better design was possible. Britain appears to stand alone in the G7 on the scale of fraud experienced during covid. Other countries managed to move quickly while still embedding stronger checks. The lesson is not that speed and scrutiny are incompatible, but that the Government of the time chose not to prioritise the latter. That so few consequences have followed these failures only deepens public cynicism with democratic political processes. Keir Starmer was elected on a—
Madam Deputy Speaker (Caroline Nokes)
Order. We do not refer to the Prime Minister by his name, but as the Prime Minister.
Iqbal Mohamed
My apologies, Madam Deputy Speaker. The Prime Minister was elected on a platform that pledged to clean up politics and crack down on those who defraud the public purse. However, instead of introducing stiffer penalties for individuals and corporations that are illegally profiteering from a crisis, the Government are spearheading punitive legislation on alleged welfare fraud, criminalising innocent benefit claimants.
In conclusion, what unites all of what I have spoken about, as it does Members from all parts of the House, is that fraud, waste and cronyism are a failure of governance and a failure to adequately plan and properly design systems to protect the public purse. If we are serious about restoring—
Susan Murray (Mid Dunbartonshire) (LD)
I thank my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) for securing this important debate. The covid-19 pandemic was undoubtedly one of the most impactful and damaging events to unfold in our lifetimes. Being told to stay inside was incredibly difficult for everyone; people were unable to see loved ones and were uncertain about the future. Thankfully, that time is now just a memory for most—one that we would rather forget, and which we can put behind us as we move forward.
Sadly, though, covid is something that many people cannot move past, as we have heard. Across the country, people have lost businesses, lost their homes and, in the worst cases, lost loved ones to the financial stress that the pandemic caused. To add to that distress, the hard-working British people who fell through the gaps have had to watch on as numerous instances of fraud and PPE procurement mismanagement have come to light. Billions of pounds have been wasted and lost; had it been managed properly, that money could have saved people’s livelihoods.
In my constituency of Mid Dunbartonshire, we have seen local businesses close. One constituent, who still feels the impact, has told me that a complete lack of support forced their takeaway business, which they had built up from scratch, to shut, yet when they tried to move on, they found that they were at a disadvantage. Despite holding a personal taxi driver’s licence, they had to rent a taxi plate at a cost of more than £400 a week.
The absence of meaningful support during covid did not just cost them their business at the time; it continues to have a direct and measurable impact on their ability to rebuild their livelihood today.
My constituent is just one of the nearly 4 million people impacted, and these people deserve support, acknowledgment of the loss that they suffered, and an apology. Beyond that, we need to listen to the voices of those affected, and to learn from their experience, so that we can find and plug the gaps in our system that people have fallen through. As the world becomes more unstable, we must make sure that, at home, people and businesses have security. If we are serious about building resilience as a country, we cannot simply move on and hope that those left behind will do the same. We must recognise the harm that has been done. We must be honest about the failures that allowed people to fall through the cracks, and we must take steps to fix them.
Madam Deputy Speaker (Caroline Nokes)
That brings us to the Front-Benchers’ speeches. I call the Liberal Democrat spokesperson.
Sarah Olney (Richmond Park) (LD)
I thank my hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) for securing this debate and for her excellent opening speech, and I thank the Backbench Business Committee for giving us the time to debate this important topic.
Small businesses and self-employed people played a vital role in sustaining communities throughout the challenges of the covid-19 pandemic, often at significant personal and financial cost. The pandemic placed unprecedented pressure on people, affecting the livelihoods of millions from all walks of life. There were additional concerns for self-employed people and small business owners, who faced even greater uncertainty because of the lack of support from the then Tory Government. The Liberal Democrats have stood by those people from the get-go. We were the first party to call for support for self-employed people during the pandemic, and we helped to secure the support scheme for them.
The covid pandemic had a devastating impact on people across the country, and tens of thousands of people lost their life. We must never forget the tragedies of that pandemic, as people lost mothers, fathers, grandparents, siblings, friends, husbands or wives. People were left isolated, unable to see others for weeks on end. They were unable to visit sick relatives, attend the wedding of a loved one, or hug their family at funerals. It is possibly a measure of how much time has passed and how much has changed since then that only a minority of those in the Chamber were Members of Parliament during the pandemic; I think I am the only Liberal Democrat in the Chamber who was here then. Like many MPs during the pandemic, I received heartbreaking correspondence from my constituents. Their struggles will stay with me, and I will remember their suffering for as long as I continue to represent my constituency.
I reflect with gratitude on the bravery of the doctors, nurses and carers who did everything they could; they often worked incredible hours to save lives and support those around them, and often put themselves at risk. I think of the thousands of people who selflessly helped their communities, be it as vaccinators, by picking up prescriptions, or by shopping for elderly and vulnerable neighbours. We must not forget those who suffered, and those who made sacrifices to ensure that the suffering was limited as much as possible.
The strong sense of public service and neighbourliness shown by people across the country was not reflected by the Government of the day. The covid inquiry has confirmed that systematic and political failings worsened people’s suffering. A lack of scrutiny and accountability led to wrong decisions, often with catastrophic results—from the lack of preparedness for a pandemic to the failure to protect those in care homes, the cruelty and inflexibility of the isolation that people endured in the most desperate circumstances, including on their deathbed, and most shockingly of all, partygate. We must ensure that there can never again be such suffering or such a lack of preparedness.
It is particularly important that the Government continue to recognise the contribution made by small businesses and the self-employed during the covid pandemic. The Government should ensure that they have learned the lessons of that period, and keep under review its long-term impacts. Ensuring that people and businesses can leave behind the series of economic challenges that began with the pandemic—including the energy crisis, the rising cost of living and the growing tax burden—and remain resilient is essential to our long-term economic and social wellbeing.
The Government need to do more to recognise the value of the self-employed, contractors and small businesses to our economy. There is so much more that they could do to support them, and to show the value of what they contribute—the flexible working, the specialist expertise and so on. There is a range of ways that contractors, the self-employed and small businesses can support the broader economy. We need to do much more to recognise that value. The Liberal Democrats are calling for greater transparency and support for the self-employed in, for example, Making Tax Digital. That was originally intended to simplify the tax system, but it has created new burdens, costs and confusion. We must make sure that the self-employed are properly informed and supported through that reform.
The Liberal Democrats strongly supported the expansion of workers’ rights during the passage of the Employment Rights Bill, and we pushed for some of those benefits to be extended—
Madam Deputy Speaker (Caroline Nokes)
Order. I appreciate that the hon. Lady is referring to the self-employed and small businesses who were impacted by covid-19 financial support, but I am not convinced that Making Tax Digital and the Employment Rights Bill fall within the scope of this debate.
Sarah Olney
Thank you, Madam Deputy Speaker. I wanted to reflect the value of the self-employed to our economy, and to reflect on how, as we learn the lessons from covid, that group of workers can be supported more broadly. That is a pressing issue for now, but I accept that we are debating what happened six years ago.
The extremely challenging period that small businesses and self-employed people went through just a few years ago makes it even more important that the Government address the major challenges that they are experiencing here and now. For many, those challenges include repaying the loans that they took out to maintain their business. Today, as they face increased cost challenges, that continues to be a huge burden. I sincerely hope that the Government will listen to the impassioned speech of my hon. Friend the Member for Stratford-on-Avon and think about how they can do more to support self-employed people, contractors and small businesses, who contribute so much to our economy.
Finance (No. 2) Bill
Caroline Nokes ExcerptsTuesday 13th January 2026
(4 days, 9 hours ago)
Commons ChamberRead Full debate Finance (No. 2) Bill 2024-26 View all Finance (No. 2) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 13 January 2026 - (13 Jan 2026)
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I remind Members that in Committee, they should not address the Chair as Deputy Speaker. I ask them please to use our names when addressing the Chair. Madam Chair, Chair, and Madam Chairman are also acceptable.
Clause 63
Tax to be charged on certain pension interests
Question proposed, That the clause stand part of the Bill.
The Second Deputy Chairman
With this it will be convenient to consider the following:
Clauses 64 to 68 stand part.
New clause 18—Review of the effect of sections 63 to 68—
“(1) HM Treasury must carry out a review of the effect of sections 63 to 68 of this Act (Pension interests).
(2) The review under subsection (1) must include an assessment of—
(a) the impact of those sections on individuals’ pension savings and beneficiaries, including on estate values and inheritance tax liabilities,
(b) the administrative effects on personal representatives, pension scheme administrators, and HM Revenue and Customs, and
(c) any behavioural effects on how pensions are used during life and on death.
(3) HM Treasury must lay before the House of Commons a report setting out the findings of the review under subsection (1) no later than six months after the date on which sections 63 to 68 come into force.”
This new clause would require HM Treasury to review and report on the effects of Clauses 63 to 68 of the Bill, which introduce inheritance tax charges on unused pension funds and death benefits, including their impacts on individuals, administrators, and behaviour, and to publish the findings to Parliament.
New clause 19—Report on the impact of inheritance tax liability on personal representatives in relation to pension assets—
“(1) The Secretary of State must, within 12 months of the passing of this Act, lay before the House of Commons a report on the impact of the changes to inheritance tax treatment of pension assets on personal representatives of deceased persons made under this Act.
(2) The report must consider—
(a) the legal obligations of personal representatives to collect the assets of an estate, settle all liabilities (including inheritance tax), and distribute the estate to beneficiaries,
(b) the extent to which personal representatives may be personally liable for inheritance tax due on assets, including pension funds, which do not form part of the estate and do not come into their possession,
(c) any risk of increased litigation arising from the imposition of personal liability on personal representatives in respect of inheritance tax due on pension assets,
(d) the impact of any such liability on the willingness of personal representatives, particularly those who are not beneficiaries of the estate, to distribute estate assets promptly,
(e) any practical difficulties faced by personal representatives where pension assets, lifetime gifts, or other chargeable assets are discovered after initial inheritance tax calculations have been completed, including the requirement to recalculate inheritance tax liabilities and re-apportion the nil rate band,
(f) any administrative and timing challenges associated with identifying multiple pension arrangements, particularly where a deceased person held several pension funds arising from different employments, and
(g) whether the existing six-month timeframe for inheritance tax reporting and payment adequately reflects those practical difficulties.
(3) The report must assess whether the current framework operates fairly and proportionately for personal representatives and whether legislative or administrative changes are necessary to reduce uncertainty, delay, or unintended personal liability.”
This new clause requires the Government to report on the impact of inheritance tax rules on personal representatives, including personal liability for tax on pension assets outside the estate and the practical difficulties of identifying and valuing multiple pension arrangements within existing time limits.
New clause 20—Administration of inherited pension pots—
“(1) HM Revenue and Customs must review the tax administration arrangements relating to inherited pension pots.
(2) The purpose of the review under subsection (1) is to ensure that—
(a) inheritance tax and related tax checks do not cause unreasonable delays in the payment of pension death benefits to beneficiaries, and
(b) bereaved families are able to receive pension benefits within a reasonable period following a member’s death.
(3) In carrying out the review, HM Revenue and Customs must have regard to—
(a) the cumulative administrative burden placed on personal representatives, pension scheme administrators, and beneficiaries,
(b) the interaction between inheritance tax reporting, clearance processes, and pension scheme payment rules, and
(c) any evidence of prolonged delays in the payment of inherited pension benefits.
(4) HM Revenue and Customs must publish the outcome of the review, including any proposed changes to its processes or guidance, within 12 months of the passing of this Act.”
This new clause would require the Government to address delays in the payment of inherited pension pots by reviewing HMRC’s tax administration processes, with the aim of preventing prolonged waiting periods for bereaved families.
New clause 22—Statement on inheritance tax on pension interests—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, make a statement to the House of Commons on the effects of the charging of inheritance tax on pension interests made under sections 63 to 68 of this Act.
(2) The statement made under subsection (1) must include analysis of the impact on—
(a) pension saving levels,
(b) household saving decisions, and
(d) personal representatives.”
This new clause would require the Chancellor to make a statement on the effects charging inheritance tax on pension interests on pension saving levels, household saving decisions and personal representatives.
New clause 23—Consultation on changes to inheritance tax on pensions interests—
“(1) The Chancellor of the Exchequer must, before 6 April 2027, undertake a consultation on the potential impacts of the changes made by sections 63 to 67.
(2) The consultation made under subsection (1) must consider the extent to which the changes to inheritance tax on pension interests deliver better outcomes for UK savers and pensioners.
(3) The Chancellor of the Exchequer must lay before the House of Commons a report summarising the responses to the consultation.”
This new clause would require the Chancellor to consult on the potential impacts of the changes made by sections 63 to 67. The consultation must consider the extent to which the changes to inheritance tax on pension interests deliver better outcomes for UK savers and pensioners. A report summarising the responses to the consultation must be laid before the House of Commons.
New clause 24—HMRC guidance on inheritance tax on pension interests—
“(1) HM Revenue and Customs must, within six months of this Act being passed, publish comprehensive guidance on the implementation of sections 63 to 68.
(2) HMRC must establish a dedicated helpline for enquiries relating to inheritance tax on pension interests.
(3) The guidance published under subsection (1) must be reviewed annually and published in accessible formats.”
This new clause would require HMRC to publish comprehensive guidance on the implementation of sections 63 to 68 and establish a dedicated helpline for enquiries relating to inheritance tax on pension interests. The guidance must be reviewed annually and published in accessible formats.
The Economic Secretary to the Treasury (Lucy Rigby)
It is a pleasure to open this second day of our Committee stage debate. Yesterday the Exchequer Secretary to the Treasury, my hon. Friend the Member for Chipping Barnet (Dan Tomlinson), explained how the Bill gives effect to a Budget that took fair and responsible decisions to stabilise and strengthen the public finances, address the cost of living and renew our public services. We are clear about the fact that we will not repeat the mistakes of the last Government. That means no return to austerity and no completely irresponsible unfunded spending commitments, both of which, unfortunately, were features of the Conservatives’ time in power. This Government wholeheartedly reject those failed approaches and choose a different path, one of fiscal responsibility and one that will strengthen our economy so that it delivers for people throughout the country. Today the Committee will consider a further set of important and targeted measures relating to pensions, gambling duties and alcohol duty, which reflect this Government’s commitment to a tax system that is fair, modern, and aligned with the realities of today’s economy.
Our approach to changes in gambling taxation is fair and proportionate, as the Committee will hear later this afternoon, and, as my right hon. Friend the Chancellor explained in her Budget statement, those reforms will contribute significantly to the Government’s efforts to lift an additional 450,000 children out of poverty. The pensions clauses will ensure that generous tax reliefs continue to support the core purpose of pensions, which is to help people to save for retirement. They address long-standing inconsistencies, and will ensure that pensions are not used primarily as a vehicle for passing on wealth free of inheritance tax, but instead continue to protect the vast majority of estates and maintain strong incentives to save.
I turn to clauses 63 to 68. Pensions enjoy significant tax benefits, with gross income tax and national insurance contributions relief costing £78.2 billion in 2023-24. It is therefore crucial to ensure that these reliefs are used for their intended purpose, which is to encourage saving for retirement and later life. Changes to pensions tax policy by the previous Government over the last decade led to pensions being used, and increasingly marketed, as tax planning vehicles to transfer wealth, rather than holding true to pensions’ primary purpose, which is of course to provide a way to fund retirement.
As hon. Members will know, there are also long-standing inconsistencies in the inheritance tax treatment of different types of pensions. Most UK-registered pension schemes are discretionary, meaning members can nominate whom they would like to receive death benefits, but the scheme trustees are not obliged to follow members’ wishes. Under existing rules, any unused pension funds and death benefits from discretionary schemes are not subject to inheritance tax. By contrast, some pension schemes are non-discretionary, and these are subject to inheritance tax under existing rules.
The changes made by clause 63 mean that most unused pension funds and death benefits payable from a pension will form part of a person’s estate for inheritance tax purposes from 6 April 2027. Clause 64 ensures that personal representatives are responsible for paying any inheritance tax due. Clause 65 means that personal representatives will be able to request that the pension scheme administrator withhold paying a proportion of benefits where certain conditions are met. It also allows both personal representatives and pension beneficiaries to make pension scheme administrators pay inheritance tax due on pensions directly to His Majesty’s Revenue and Customs—again, provided certain conditions are met.
Clause 66 makes some consequential amendments to the Inheritance Tax Act 1984 to ensure that the existing exemption for spouses and civil partners and the treatment of payments to charities continue to apply. Clause 67 changes the income tax rules for pensions to provide for the payment of inheritance tax, including in respect of direct payment by pension schemes. Clause 68 ensures that the changes take effect from 6 April 2027.
These clauses ensure that pensions are used, as I have said, for their core intended purpose, rather than as a vehicle for passing on wealth free of inheritance tax. They also remove long-standing inconsistencies and deliver on the Government’s promise to this country to build a stronger and fairer economy.
James Wild (North West Norfolk) (Con)
On behalf of His Majesty’s Opposition, I wish to speak to new clauses 22 to 24, tabled in my name and those of my hon. Friends. As the Minister set out, clauses 63 to 68 introduce measures to apply inheritance tax to unspent pension assets and other death benefits for deaths occurring after 6 April 2027.
This Labour Government have taken taxes to record levels, with £26 billion in additional taxes in this Budget and £66 billion since the election. These tax increases were not mentioned in Labour’s manifesto. Labour is increasing taxes on family businesses, farms, jobs, dividends, savings, motorists and now death. Removing the inheritance tax exemption for pensions could undermine efforts to encourage people to save at a time when people are not saving enough. And what do the Government do? They limit the salary sacrifice pension contributions scheme and introduce a new raid on people’s pensions pots.
The Minister did not refer to the impact assessment, but it is worth pointing out that it estimates that 10,500 estates will now become liable for inheritance tax, raising £1.5 billion by 2029, and 38,500 estates will pay more inheritance tax than was previously the case. That is why we oppose this extension of inheritance tax and the underlying principle, to which the Minister seemed to allude, that people’s money belongs not to them but to the state.
New clause 22 is straightforward. It would require the Chancellor to set out the impact of these measures on pension saving, household saving decisions and personal representatives. There is real concern—I am surprised the Minister did not address this—about the administrative burden being placed on personal representatives and the effect on the industry. Personal representatives will be required to identify every pension asset, calculate the inheritance tax due and ensure payment within six months, and they will be personally liable if they fail to settle all the liabilities due. In many cases, that deadline would be impossible to meet and must be extended. Furthermore, if a pension fund has to quickly sell illiquid assets, such as commercial property, it may not get the full market value, but the Bill does not introduce a relief where the underlying assets must be sold and the proceeds are less than the value of the assets at the time of death. Late payments will attract interest at 8%. By contrast, someone in self-assessment has 10 months to pay tax on the income they already understand.
Both the Association of Taxation Technicians and the Chartered Institute of Taxation have offered some practical solutions, the first of which is to extend the withholding periods. Personal representatives can ask pension administrators to withhold 50% of funds for up to 15 months, but that is simply not long enough for the complex cases I have referred to, particularly where business property valuations have to be agreed with HMRC. Will the Minister consider allowing HMRC to extend withholding in such complex cases?
Secondly, the Government should allow instalment payments for illiquid pension assets. Billions of pounds of pensions wealth are in illiquid assets. The Government allow inheritance tax to be paid over 10 years for illiquid estate assets. Why deny the same practical relief for pensions?
When this policy was announced, the Office for Budget Responsibility gave it a “very high” uncertainty rating and estimated that behavioural effects will cut the static yield by about 43%; the Government’s own forecasters accept that the changes may well significantly alter saving behaviour. The new clause would simply require the Chancellor to assess that impact and come to the House to make it clear.
New clause 23 would require the Chancellor to consult on the impact of clauses 63 to 67, and whether they deliver better outcomes for savers and pensioners. The truth is that the Government rushed the consultation out after the 2024 Budget and followed it with a very narrow technical consultation, which did not consider the principled question of whether this approach to pensions being brought within the inheritance tax framework was appropriate. As the Investing and Saving Alliance told the House of Lords Economic Affairs Committee in its inquiry to which the Exchequer Secretary also gave evidence:
“If we were consulted and listened to, we probably would not be having this discussion today, because I do not think pensions would be going into IHT.”
Both the chartered institute and the ATT have criticised the Government for consulting on pensions in isolation, rather than in the context of individuals’ wider inheritance tax position. Our new clause is explicit. Consultation must take place to assess whether these changes
“deliver better outcomes for savers and pensioners”
—wording that reflects the commitment the Labour party made in its manifesto.
New clause 24 is essential. It would require HMRC to publish comprehensive guidance on the new rules for pensions and to set up a dedicated helpline. Why does that matter? Because this measure will be incredibly complex in practice. The chartered institute has said that professional executors are already questioning whether they can continue to operate in the market at all. Some firms, we are told, are already leaving the market. If professionals step back, the burden falls on lay personal representatives: often grieving family members or friends, with more errors, delay and potentially a wider tax gap ensuing.
Professional indemnity insurers also need clarity, yet when is HMRC due to deliver detailed guidance? Not until spring 2027, just weeks before the changes take effect. That is completely outrageous and far too late. That is why the new clause requires guidance to be published within six months of the Bill being passed.
I want to touch on a broader concern that has been raised with me on the potential serious unintended consequences for unmarried couples. Today, couples can anticipate making financial provision for each other via pensions, but if this measure comes into force they will have to look at other options. If one member of an unmarried couple in their 50s or 60s dies with a pension at peak value, the survivor could lose up to 40% of that fund. Are Ministers talking to pension scheme administrators to mitigate the risks for such couples and to provide clear guidance?
These clauses increase taxes, add complexity, penalise saving and add stress for grieving families. Despite clause 67, we are also advised that there is still a risk of double taxation of inheritance tax and income tax, which could see beneficiaries paying an effective tax rate of 67%. Our amendments seek to mitigate their worst impacts. The Chancellor should assess the real impact on saving behaviour and personal representatives. She should consult properly on these provisions and she must provide clear guidance, backed by dedicated support. We should be incentivising saving and encouraging people to do the right thing. Extending inheritance tax does the opposite, and we will oppose the Government’s measures.
Daisy Cooper (St Albans) (LD)
This is a retrospective tax without transitional protection. It upends plans for those who have already made sacrifices to build up their pensions, undermines confidence in pensions planning, reduces long-term investment and causes people to rush to withdraw money from their pensions.
As has been mentioned, the chartered institute and the ATT have raised concerns about this group of clauses, which shoehorn pensions legislation into tax legislation. There are major worries about creating personal liability without control for personal representatives, whether executives or administrators. Personal representatives are legally obligated to gather all the assets, settle any liabilities, including inheritance tax, and distribute the remainder of the estate to the beneficiaries. They are personally liable if they do not set aside enough money to settle all financial liabilities, including IHT. Experts have warned that someone being personally liable for IHT on a pension fund that never comes into their hands leaves the door open to costly and protracted litigation and will understandably make personal representatives, such as professionals or friends of the deceased, much more cautious before they distribute all of the estate.
Even more concerning is the fact that if representatives discover a new pension fund after settling the initial IHT liability, this would have a knock-on effect on not only the estate but all other pension funds. It means that IHT will have to be recalculated for every part of the estate and every pension fund. It is far from uncommon for people to have had different jobs with separate pension plans, so the risk of miscalculation is obvious. If someone passes away before they have had the chance to consolidate their pension funds, tracking down the unused pots within six months of their death will be very difficult for executors and will mean that the initial IHT calculations could be wrong. The Government must recognise that and amend this measure. If they do not, and Ministers simply ask future executors to sign some sort of disclaimer form, they will soon find that nobody will want to take on that role.
Our new clauses 18 to 20 raise the clear need for significant reforms and are a means of pressing the Government to protect individuals from being liable for private pensions that they did not know about and could not reasonably know about either. Finally, there is widespread worry that family members might have to wait up to 15 months before they are able to access their inheritance, during what is bound to be a hugely straining period of loss and grief. The Liberal Democrats’ new clause 20 urges the Government to recognise that reality and take steps to address it.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
With this it will be convenient to consider the following:
Clauses 84 and 85 stand part.
Schedule 13.
New clause 21—Review of the impact of sections 83 and 84: free bets and freeplays—
“The Chancellor of the Exchequer must, within six months of the passing of this Act, undertake an assessment of the impact of implementation of sections 83 and 84 of this Act in respect of the treatment of free bets and freeplays for calculating general betting duty on remote bets.”
New clause 25—Statements on increasing remote gambling duty and introducing a new rate of General Betting Duty—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, make a statement to the House of Commons on the effects of the increase in gambling duties made under sections 83 to 84 of this Act.
(2) The statement made under subsection (1) must include details of the impact on—
(a) sports and horseracing,
(b) the number of high street betting shops,
(c) the gambling black market,
(d) the employment rate, and
(e) the public finances.”
This new clause would require the Chancellor to make a statement about the effects of the increase in gambling duties.
Lucy Rigby
Clauses 83 to 85 and schedule 13 make changes to the gambling duties regime, to better reflect the modern gambling market and to raise more than £1 billion a year to support the lifting of the two-child benefit cap. I will first speak briefly to the broader context of the package, and I will then turn to each clause.
Gambling is a significant part of the UK economy, generating an annual gross gambling yield of around £16.8 billion in 2025, according to figures from the Gambling Commission. The industry has changed markedly in recent years, while the duty system has not changed since 2019. Most notably, there has been a structural shift from in-person to online gambling. Between 2015 and 2025, remote gambling grew by 80%, while land-based gambling has declined by 10%. At the same time, evidence of gambling-related harms has become even clearer.
The estimated cost to the Government and society of gambling-related harms in England alone is between £1.05 billion and £1.77 billion a year. NHS figures show that over 40% of gamblers using online slots, bingo or casino games are considered to be at risk, compared with less than 15% of those betting in person on horseracing. Referrals for gambling addition have risen sharply—NHS England has doubled the number of clinics for problem gambling. I am grateful for representations from so many MPs and campaigners on this matter, alongside those with constituencies where horseracing plays an important role in the community and, indeed, the local economy.
In the Budget, the Chancellor made it clear that changes to gambling taxation are fair, proportionate and for a purpose, as they will directly contribute to lifting an additional 450,000 children out of poverty. This Government are very proud of that. Unfortunately, the Opposition showed little regard for child poverty when they were in government, and it is entirely in character, albeit no less shocking, that they oppose this Government’s changes and would increase child poverty as a result. Reform UK is even more brazen.
Lucy Rigby
As I said, employment is an important consideration that has been borne in mind for the purposes of this Bill, and there has been considerable engagement on all these issues. If the right hon. Member seeks further engagement, I am more than happy to have it.
I was just about to conclude.I commend clauses 83 to 85 and schedule 13 to the Committee.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call the shadow Minister.
James Wild
These changes were presented as some sort of simplification and modernisation, but clauses 83 and 84 nearly double remote gaming duty from 21% to 40% and increase general betting duty to 25%. We will have some of the highest rates of tax on gambling in the world. As we have heard from some Members, the industry has warned that that could have severe consequences for an internationally competitive sector that supports tens of thousands of jobs, underpins horseracing and other sports and already contributes significantly to the Treasury. It is questionable whether these measures will lead to stable, long-term revenue gains for the Exchequer, and there is a very real risk that they will result in job losses and greater use of unregulated operators in the black market. New clause 25 would require the Chancellor to come back to the House and explain what the consequences have been for revenue, sports and horseracing, high street betting shops, the black market, jobs and the public finances.
Of course, the origin of these changes owes much to Gordon Brown, who encouraged the Chancellor to hike taxes in order to increase welfare spending. Proponents of higher taxes often suggest that they will not have any consequences, but it is the role of us in this House to scrutinise potential changes and assess the impact after the event. Independent modelling from EY shared by the Betting and Gaming Council suggests that the impact of doubling remote gaming duty could be the loss of 15,000 jobs, and a further 1,700 jobs could be lost as a result of the increase in general betting duty. In total, 17,000 positions located in Stoke-on-Trent, Leeds, Sunderland, Manchester, Nottingham, Newcastle-under-Lyme, Norwich and other areas could be affected. Of course, those are simply projections—they could prove to be pessimistic, and we certainly hope that will be the case—but when unemployment has risen consistently under this Government due to the jobs tax and other costs, such warnings should not just be dismissed. That is why the Chancellor must account for the impact of her choices, as new clause 25 requires.
There has been some mention of horseracing. I was pleased to join colleagues across the House in support of the “Axe the Racing Tax” campaign. That is another tax that the Chancellor wanted to introduce, but she was forced into one of her all-too-regular U-turns.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Daisy Cooper
We Liberal Democrats have long campaigned for the doubling of remote gaming duty, and we are grateful to the Government, who have finally listened and taken that on board. This measure will raise vital revenue in a fair way, while addressing the eye-watering profits of the big online gambling companies and standing up for the thousands affected by problem gambling. According to the latest figures from the Gambling Commission, the online gambling giants saw revenues reach an eye-watering £7.8 billion in 2024-25. Meanwhile, Public Health England has estimated that gambling costs the UK economy about £1.4 billion a year through a combination of financial harms and the impact on physical and mental health, employment, education and crime. About 300,000 adults in Britain experience problem gambling, as well as roughly 40,000 children. Those figures are stark. This measure finally takes action that should have been taken a long time ago, and it will raise about £1.8 billion a year by 2029-30 to fund our public services fairly.
Buried in the fine print, however, is a detail that makes it seem as if the Government are giving the big online gambling firms a get-out, and I should be grateful to the Minister for some clarification. According to the “Budget 2025 Policy Costings” document,
“The tax base for this measure is the Gross Gambling Yield”,
which is the revenue retained by gambling operators after they have paid out winnings to customers. The tax base for remote gaming duty as defined in the Finance Act 2014 is a larger tax base. It is known as the gross gambling revenue, and includes the notional stake value of free bets and free plays. Can the Minister explain why today’s tax measure will apply to a narrower tax base than the one currently targeted by remote gaming duty? How much tax revenue has been forgone by this narrowing of the tax base? Was it unintended, or was it a result of influence from the sector? Did any of the big online gaming companies meet any Ministers and discuss these measures while they were being considered?
New clause 21, tabled in my name, seeks to clarify this situation by requiring the Chancellor, within six months of the passing of the Act, to undertake an assessment of the impact of the implementation of sections 83 and 84 in respect of the treatment of free bets and free plays for calculating general betting duty on remote bets, so we can clearly see the impact of this difference.
Alex Ballinger
I want to speak in support of clauses 83 and 84 on gambling taxation. I of course strongly welcome these steps on remote gaming duty, which cover online slots, online casino games and other high-risk remote gambling products.
Ahead of the Budget last year, I was one of more than 100 Labour MPs, alongside Gordon Brown, who wrote to the Chancellor calling for a different approach to gambling taxation and one that recognises the reality of the modern gaming industry. We highlighted how taxing the social ills caused by online gambling could pay for the abolition of the two-child benefit cap, and I strongly welcome the action the Chancellor has taken to lift hundreds of thousands of children out of poverty on the back of these changes. For us, fairness was not just about asking those with the broadest shoulders to contribute more, but about ensuring those whose business models generate the most harm make a proper contribution to the cost of that harm. That is why clause 83 is so important, as it targets the most addictive and dangerous forms of gambling: online slots and casinos.
As a country, we are experiencing record levels of harm caused by gambling. The Gambling Commission’s figures tell us that 2.5% of adults, which is more than 1 million people, are suffering from serious gambling harm. There are many types of gambling harm—debt, family break-up, crime and, at the most severe end, suicide—so it is extremely worrying that the Royal College of Psychiatrists has seen a threefold increase in the number of those referred for gambling treatment since gambling moved online during the pandemic.
In my own area, the Dudley-based Gordon Moody charity, which provides gambling treatment centres all over the west midlands, has seen a large increase in referrals, most worryingly among younger people involved in online gambling. This is not a coincidence, because online slots and casinos are designed to be high speed, continuous, psychologically manipulative and, for many, overwhelmingly addictive. So the Chancellor’s decision to increase remote gaming duty targeted at these most harmful forms of gambling is absolutely the right thing to do. It sends a clear message that the tax system must reflect the level of harm caused.
There is another reason why this change—as well as clause 84, which increases general betting duty—is the right thing to do: many online gambling operators, particularly large global operators, have spent years offshoring their profits, booking revenues overseas, minimising their UK tax liabilities and contributing very little in meaningful employment or investment in our communities. In one example, at the end of last year the online operator Sky Bet moved its headquarters to Malta specifically to avoid UK corporation tax, cutting its contribution to the Treasury by tens of millions of pounds. In another example, an unnamed online bookmaker was investigated by the Gambling Commission for illegally directing customers to offshore-based platforms —indeed, to the black market itself—to avoid paying UK tax and to avoid UK regulations. Increasing these online duties means that it will be harder for unscrupulous operators to avoid tax by moving operations offshore. Online gambling in the UK will be taxed fairly in the UK.
Raising remote gambling duty to 40% and general betting duty to 25% for remote bets also puts us on a footing much closer to that of other European jurisdictions and many states in the United States. Until the Budget, the UK was behind the curve in taxing these highly harmful online products. For us, the Chancellor’s move is a matter not just of revenue, but of fairness, responsibility and aligning our tax system with the reality of modern online gambling.
However, taxation is only one element of harm reduction. Raising duty alone will not of course prevent gambling addiction, stop children being exposed to online gambling advertising and ensure that families receive the support they need when a loved one falls into crisis. If we are to tackle these harms, we need a public health approach. That means proper funding for treatment, and I welcome the steps already taken under the statutory levy. However, it also means serious investment in prevention, community education and early intervention, and a modern regulatory framework that puts people, not profits, first and is fully independent of the gambling industry.
I want to highlight another pressing issue for the Minister, which is the continued prevalence of the B3 gaming machines on physical premises. These high-intensity machines, so often located in areas with higher deprivation, continue to cause significant harm, yet they remain under-regulated and undertaxed relative to the risks they pose. If we are to take harm seriously, B3 machines should be included in the next phase of gambling tax reform.
Finally, the most recent gambling Act was introduced more than 20 years ago, in a completely different era: before the smartphone, before the explosion of data-driven behavioural targeting, and before 24/7 online casinos in your pocket. A new Act is clearly needed. Our laws have not kept pace with technology, they have not kept pace with the scale or sophistication of online gambling operators, and they have not kept pace with the reality of the harm we now see every day in communities across the country. I welcome the measures in the Bill, but I urge the Government to move quickly to update advertising rules, strengthen affordability checks, protect children and vulnerable people, and ensure that tax policy, regulation and public health strategy on gambling are all aligned.
The measures on remote gaming duty and general betting duty are excellent steps in the right direction. They acknowledge the reality of harm, strengthen fairness in our tax system and take us closer to a modern framework that puts the wellbeing of the public first.
The Second Deputy Chairman
I call the Chair of the Culture, Media and Sport Committee.
Dame Caroline Dinenage (Gosport) (Con)
I would like to speak in support of new clause 25, which would require the Government to assess the effects of an increase in gambling duty, because just as I believe individuals have a right to spend their hard-earned money as they like, I believe it is important that they do so in a sensible, regulated and safe environment.
Whatever we may think about gambling companies, gambling is already a very heavily regulated sector. Since the gambling White Paper was published in 2023 by the previous Government, the industry has already absorbed over 62 policy changes. Those changes include a limit on slot stakes, financial risk checks on transactions, tightened market rules and the statutory levy. The sector is so well regulated that the Culture, Media and Sport Committee warned the previous Government that the finance risk checks should be as minimally intrusive as possible. The Committee concluded that the Government must strike a careful balance: preventing harm for all, while allowing those who gamble safely the freedom to continue to do so. I have concerns that this vast increase in taxation on online betting and gaming does not strike that balance.
The combination of an existing regime of strong regulation and a sudden jump in the levels of remote gaming duty from 21% to 40% is the kind of environment that I believe risks pushing people into the black market. As a floor, 40% is very high for remote gaming tax by international standards. It has been suggested that such high taxes could double the size of the online black market. Does the Minister recognise research from the Netherlands, highlighted by the shadow Minister, which found that after steep tax rises were introduced on remote slots, visits to black market domains increased fivefold over a three-year period? That is what we have to worry about if we are concerned about the oversight of those making bets and playing slots. That is why I am supportive of new clause 25, tabled by the Opposition. It requires the Chancellor to assess and report back on the effects of the increase in gambling duties on the number of high street betting shops, the black market, the employment rate, the public finances, and sports and horseracing.
On sports and horseracing, I was glad to see a carve-out from general betting duty for UK horseracing. I was among many Members calling for that in recognition of the unique place horseracing occupies in British cultural life, as well as the 85,000 jobs and £4 billion contribution to the economy that horseracing offers.
The Government have slightly dressed up their raid on gambling companies as being driven by concerns around gambling harms. In November 2024, I spoke to the Bacta convention about the then recently announced statutory levy and my concerns about how it would be distributed to organisations that conduct harms research. The Committee recommended the year before that the Government ensure that service providers, which were operating via the voluntary funding system, were adequately supported to make the transition to the statutory levy. However, we have now received very concerning reports that voluntary organisations in particular are facing a funding cliff edge, with delays and a lack of information about the transition to levy payments from the NHS.
I am not entirely sure the Minister is listening to what I am saying, but I am hoping she will be able to address that point. She has not looked at me once while I have been speaking, but hopefully she is furiously writing notes about what I am talking about and will be able to address those concerns. Hopefully, she will tell me that she will discuss them with colleagues and act to ensure that no charitable organisation currently operating within the gambling harm prevention sector will have to fold due to delays with levy funding.
The Chancellor is looking around for money and believes that she can raise it from gambling companies, but, as with many of her other measures, such as national insurance rises, she will be a victim of the law of unintended consequences if she is not careful. On this occasion, the consequence will be that more people are dragged into the black market, where they will quite simply find better offers than those offered by gambling companies.
Clause 1
Caroline Nokes Excerpts(5 days, 9 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Second Deputy Chairman
With this it will be convenient to consider the following:
Clauses 2 to 6 stand part.
Schedule 1 stand part.
Clauses 7 and 8 stand part.
Schedule 2 stand part.
New clause 2—Review of the impact of section 7 on rent prices—
(1) The Chancellor of the Exchequer must, within three months of this Act being passed, lay before the House of Commons an assessment of the impact of implementation of section 7 of this Act on rent prices.
(2) The assessment made under subsection (1) must—
(a) estimate the proportion of the increase in income tax on property income that is passed on to renters through higher rents,
(b) analyse the impact on renters by—
(i) region, an
(ii) income decile, and
(c) set out the methodology used to reach those estimates.”
New clause 10—Statements on increase in dividend ordinary and upper rates—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, make a statement to the House of Commons on the increase in dividend ordinary and upper rates introduced by section 4 of this Act.
(2) The statement made under subsection (1) must include details of the impact on—
(a) household saving decisions;
(b) the domestic equity market;
(c) institutional investors; and
(d) outcomes for all British savers and pensioners.”
This new clause requires the Secretary of State to make a statement on the impact of increase in dividend ordinary and upper rates.
New clause 11—Statements on saving rates of income tax for tax year 2027-28—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, make a statement to the House of Commons on the saving rates of income tax for the tax year 2027-28 introduced by section 5 of this Act.
(2) The statement made under subsection (1) must include details of the impact on—
(a) household saving decisions; and
(b) outcomes for all British savers and pensioners.”
This new clause requires the Secretary of State to make a statement on the impact of the saving rates of income tax for tax year 2027-28.
New clause 12—Sections 6 to 8 and Schedules 1 and 2: impact on private rental sector—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of the changes introduced by sections 6, 7, and 8 of this Act on the private rental sector in England, Wales, Scotland, and Northern Ireland.
(2) The assessment made under subsection (1) must consider -
(a) the effects of the provisions of sections 6, 7, and 8 on the cost of private rent in each region within England, Wales, Scotland, and Northern Ireland,
(b) the effects of the provisions of sections 6, 7, and 8 on the supply of private rental properties in each region within England, Wales, Scotland, and Northern Ireland,
(c) any other implications of the changes introduced by sections 6, 7, and 8 of this Act.”
This new clause requires the Secretary of State to publish an assessment of the impact of imposing new rates of income tax on property income.
Dan Tomlinson
If I may, I will make a little more progress.
Those with small amounts of income from assets will continue to be protected by tax-free allowances, and income from savings and investments held in individual savings accounts will continue to be tax-free. The vast majority of UK taxpayers are unaffected by these changes as they do not have taxable property, dividend or savings income. Changes to savings and dividend income will apply UK-wide, and the Government have engaged closely with the devolved Governments of Scotland and Wales to provide them with the ability to set property income rates in line with the current income tax powers in their fiscal frameworks.
Clause 4 will increase the tax rates applicable to dividend income by 2 percentage points for the 2026-27 tax year. Clause 5 will increase the tax rates applicable to savings income by the same amount. Clauses 6 and 7 will create separate tax rates for property income, which will apply from the 2027-28 tax year. The property basic, higher and additional rates will be set at 22%, 42% and 47%, respectively, for the 2027-28 tax year. Clause 6 will also make changes to the income tax calculation so that general reliefs and allowances will be applied to property income, savings and dividend income only after they have been applied to other sources of income.
Clause 8 will make provision for the Scottish Parliament and the Senedd to set devolved property income tax rates. This power will be commenced by the Treasury if the Scottish and Welsh Governments agree—individually, of course—to take the power, which is the typical process to protect the powers and responsibilities of devolved Governments.
These changes will still ensure that those with the broadest shoulders contribute more. In 2029-30, around two thirds of the revenue from the increases to the dividend, property and savings tax rates is expected to come from the top 20% of households. Taken together, these measures are projected to yield £2.2 billion in additional tax revenue by 2029-30.
This Finance Bill is about delivering on choices—choices to protect ordinary workers; choices to cut their energy bills, freeze train fares and prescription charges; and choices to focus on reducing inflation to push down mortgage costs. It delivers the Government’s commitment to this country to build a stronger and fairer economy where living standards rise and child poverty falls, and to ensure that public services are improved, with every measure in the Bill geared towards those high-level goals. The choice at the Budget was austerity and decline or investment and renewal, and this Labour Government back investment and renewal.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call the shadow Minister.
Gareth Davies (Grantham and Bourne) (Con)
I wish to speak, on behalf of the official Opposition, to new clauses 10 to 12, which are in my name, but first, I want to set the scene on clauses 1 to 8.
Dr Sandher
I am not sure I quite follow the hon. Gentleman’s point there, to be perfectly honest. It is true that most people’s main savings investment will be through the pension funds they own, which will be their biggest savings vehicle; that would not be subject to dividend taxation in the same way because people will buy out at the end and ensure that they have a payment for their products. I am not sure I quite follow, but, to be fair to the hon. Gentleman, it is possible that I misunderstood his point.
I can see there are lots of people trying to get in, Ms Nokes. [Laughter.] I will end my speech now to allow them to do so. It is a thrilling topic, as I am sure everyone across the Committee would agree.
This is the right thing to do to balance taxation between earnings and payments from wealth. It is a long-needed update to our taxation system. I am proud of a Government who do that, as I am sure we all are. With that, I will close.
The Second Deputy Chairman of Ways and Means (Caroline Nokes)
I call the Liberal Democrat spokesperson.
Daisy Cooper (St Albans) (LD)
I will speak to clauses 1 to 8 and schedules 1 and 2. Overall, the tax changes increase complexity, raise the tax burden on small businesses and savers, and raise the risk of serious unintended consequences on the property market. They all have the hallmarks of a Treasury tax grab without proper the consideration of the broader consequences.
When taken together, clauses 4 to 8 add more complexity, and concerns have been raised by the Chartered Institute of Taxation and the Association of Taxation Technicians, which highlighted that the new property rates add five new income tax rates. They are: the property basic rate of 22%; the property higher rate of 42%; the property additional rate of 47%; the property trust rate of 47%; and the savings trust rate of 47%. Rates will apply differently to investment returns and to savings. Basic and higher dividend rates have been changed, but additional dividend rates have not, and no explanation has been given as to the policy intent behind that. It would be helpful if the Minister could set that out on the record.
The long and short of it is that the Government say that they want to simplify tax, but their tax changes are making things more complicated. The Making Tax Digital forms will need to updated, and more individuals and small businesses will likely make more calls to His Majesty’s Revenue and Customs. Recent research by the House of Commons Library, commissioned by Liberal Democrats including my hon. Friend the Member for Maidenhead (Mr Reynolds), shows that HMRC failed to pick up one in five taxpayer calls over the last decade, with the tax service leaving the best part of a hundred million calls unanswered in the last 10 years. HMRC has failed to pick up 83 million calls from Brits in the last 10 years—6 million in just the last year. That is why we have been calling for a new HMRC hotline dedicated to supporting pensioners. It would help those who are among the likeliest to seek tax information over the phone while freeing up capacity for the tax service to deal with other queries—something that is imminent, given that the tax changes will result in more phone calls.
More broadly, the Federation of Small Businesses said:
“Hikes to dividend tax mean the Government continues to make investing in your own business one of the least tax-friendly things you can do with your money.”
Will the Minister listen to our small businesses, which are suffering under a mounting tax burden, not least from the Government’s business rates bombshell, and finally give them some respite?
With new clause 2, the Liberal Democrats call for a review of the impact of section 7 on rent prices. As many hon. Members have highlighted, the new clause would require the Chancellor of the Exchequer to lay before the House a proper assessment of the impact of the Bill’s tax changes on rent prices. Countless renters across the country will be worried that the higher property income tax will simply get passed on to them, making things even worse during the cost of living crisis. We cannot afford to ignore the unintended consequences of any tax policy.
The new clause would require the Government to update the House on some crucial details about the broader impacts of this measure. What proportion of the tax rise will get passed on to renters, according to the Treasury’s estimates? Which income groups are most likely to be affected by the tax rise? Which parts of the country will bear the brunt of it? I hope the Minister will agree that that information is essential.
Finance (No. 2) Bill
Caroline Nokes ExcerptsTuesday 16th December 2025
(1 month ago)
Commons ChamberRead Full debate Finance (No. 2) Bill 2024-26 View all Finance (No. 2) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
The reasoned amendment in the name of the Leader of the Opposition has been selected.
Carla Lockhart (Upper Bann) (DUP)
The Government have chosen to absolutely decimate family farms across the whole United Kingdom. The Prime Minister was questioned yesterday by members of the Liaison Committee, and he was told that farmers have said that they might be better off dying before this tax change comes in. I feel that we need to let the reality of that sink in. His response was that Governments have to bring about sensible reform, but sensible reform is not someone lying in an early grave to avoid the break-up of their family farm. He also claimed that this policy was not targeted, and was merely a change to the tax regime, but when this Finance Bill decimates family farms, it certainly—
Madam Deputy Speaker (Caroline Nokes)
Order. The hon. Lady’s intervention is far too long.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. I encourage the remaining speakers to focus on the fact this is a Finance Bill, and therefore the debate is about taxation measures, not spending.
Conduct of the Chancellor of the Exchequer
Caroline Nokes Excerpts(1 month, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
Before I call the shadow Chancellor to move the motion, I remind Members that, as “Erskine May” says:
“Good temper and moderation are the characteristics of parliamentary language. Parliamentary language is never more desirable than when a Member is canvassing the opinions and conduct of their opponents in debate.”
The reason that matters in this particular debate, and does not really occur in other debates, is that this debate is on a substantive motion directly relating to the conduct of the right hon. Member for Leeds West and Pudsey (Rachel Reeves). In this debate, because it is on a substantive motion of this kind, arguments intended to criticise or defend the Chancellor’s conduct relating to public finances are in order. Therefore, things may be said that the Chair would not normally permit in other proceedings. Those speaking on the motion should set out their arguments clearly. Intemperate abuse is out of order on this motion as much as on any other.
I inform the House that the Speaker has not selected the amendment. I call the shadow Chancellor to move the motion.
Sir Mel Stride (Central Devon) (Con)
I beg to move,
That this House calls on the Chancellor of the Exchequer to apologise for misleading the country about the state of the public finances, rolling the pitch for raising taxes, breaking her promises and increasing welfare spending, including her claim on 4 November 2025 that the OBR would be downgrading their productivity forecast which, as the Chancellor said, had ‘consequences for the public finances too, in lower tax receipts’, when in fact on 31 October 2025 the OBR had submitted its forecast to the Chancellor that showed tax receipts would be £16 billion higher than previously thought, resulting in the Government’s current balance target being met by a margin of £4.2 billion; further calls on the Chancellor to apologise for breaching the trust of the OBR, whose forecasts are shared in strict confidence until the Chancellor has given her Budget Statement; also calls on the Chancellor to apologise for the misleading briefings and leaks from HM Treasury in advance of the Budget Statement which caused uncertainty for families, businesses and investors; and calls on the Chancellor to apologise for breaking her promise after the last Budget that the Government was not going to raise taxes again, instead raising taxes in the 2025 Budget by £26 billion.
I will, of course, heed your remonstrations and remarks, Madam Deputy Speaker.
It is said that astrologists are there to make economists look good and second-hard car dealers are there to make politicians look good. It is inconceivable that anywhere in the world there is any trade or career that could possibly make this Chancellor look good. Indeed, one need only look at the polls. The Ipsos poll on the Chancellor’s approval rating shows that she has achieved minus 60%. That is a record low for a poll that was first commenced in the 1970s. A recent YouGov poll stated that the Chancellor was the least trusted on the economy, even more so than Jeremy Corbyn and, yes, Liz Truss—
Sir Mel Stride
You are quite right, Madam Deputy Speaker; I meant to say the right hon. Member for Islington North and Liz Truss. The Chancellor is not so much the wilting lettuce as a complete liability. How could this possibly have occurred? We have a Government who came to power with one of the largest majorities in the history of our country. One could almost see their majority from the moon. This has happened because of a huge failure on their part.
Let us take unemployment. Unemployment is now at a five-year high, back at a level last seen during the pandemic. The latest forecasts from the Office for Budget Responsibility show unemployment higher in every single year than in the forecasts from back in the spring. The International Monetary Fund tells us that inflation will be at the highest level of the G7 this year and next year too. Looking beneath the headline figures, the rate of inflation for food is at almost 5%. For a party that claims and professes to stand up for the poorest in our society, that is a disgrace.
When it comes to growth, we know from the OBR’s latest forecasts that, for every year going forward, growth will be lower than the spring forecast set out. Our borrowing costs not so long ago reached a 27-year high, and we are now paying more on our borrowing than Greece.
Dave Doogan (Angus and Perthshire Glens) (SNP)
We know that there are serious questions over this Chancellor’s alleged experience in the financial services sector. We can see that she has no experience in either industry or commerce. Perhaps the worst of her detriments, however, is her clinical lack of empathy, seeming totally unable to connect cause and effect. That is why she has allowed the disastrous—
Madam Deputy Speaker (Caroline Nokes)
Order. May I respectfully remind the hon. Member that comments need to be about what is in the substantive motion and not wider matters?
Dave Doogan
Indeed. In terms of that conduct and those decisions that have been made, that is most evident in the egregious family farm tax—a betrayal of the producers of our food, no less—and the, let us call it, management of market-sensitive information before the Budget, which had a material effect on the economy of these islands.
OBR: Resignation of Chair
Caroline Nokes Excerpts(1 month, 2 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
James Murray
I will not speculate on the outcome of the leak inquiry, but it is under way now, with the Chancellor’s support. The Government take our obligations to this House very seriously, and last week we produced a Budget that delivers on our priorities for the British people.
Charlie Maynard (Witney) (LD)
On behalf of my party, I thank Richard Hughes for his service. We respect his resignation. I also thank Laura Gardiner, Professor Ciaran Martin and Huw Stephens for the very quick turnaround of the investigatory report on the leak. In that report, the point is made that, unlike all other IT systems and services, the OBR’s website is locally managed and outside the gov.uk network. That decision was made, apparently, to ensure the OBR’s full independence from the Treasury. Will the Minister soon report back to the House with a timeline for decisions—between now and the OBR’s next report in spring 2026—on how these matters will be managed in future? Will he provide an outline of how the OBR website will be operated so that it is secure and maintains appropriate separation from the Treasury?
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.
Taxes
Caroline Nokes Excerpts(2 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Bradley Thomas (Bromsgrove) (Con)
Can the hon. Gentleman clarify the bundle of contradictions that we have heard over the last year from Labour Members? I recall that, in July 2024, we heard from the former Leader of the House, the right hon. Member for Manchester Central (Lucy Powell), that Labour had to abolish winter fuel payments for older people because there would be a run on the pound, and then they were reinstated because the economy had allegedly stabilised. We are hearing from the Chancellor and from Ministers that the economy is in a state that requires additional taxation and additional spending. We are hearing all these noises from the Labour party around the need to—
Madam Deputy Speaker (Caroline Nokes)
Order. I am sure that the hon. Gentleman will be making a speech in due course. That was a very long intervention.
Sam Rushworth
I am not sure that I fully understood the hon. Gentleman’s question or what contradiction he sees, but I will go on to talk about why I feel that we need to see major investment in our public services and our infrastructure.
Sam Rushworth
That is not a vote before the House right now, but I have been pretty clear in my answer. I never agreed with the cap when the Conservatives introduced it. They did terrible things that put too many children in my community into poverty. The Government are addressing child poverty in multiple ways, including through the welfare system. However, children are not poor just because we do not have good enough benefits. In Bishop Auckland, people do not want better benefits; they want better jobs, a stronger local economy, better infrastructure, better education and a better health service. All that will require public spending. If I may say so—[Interruption.] Do you want to make an intervention?
Madam Deputy Speaker (Caroline Nokes)
Order. I do not want to make an intervention. Perhaps the hon. Member for Wyre Forest (Mark Garnier) does, but I certainly do not.
Sam Rushworth
I was distracted by the chuntering of the hon. Member for Wyre Forest (Mark Garnier) and thought that he may have wanted to make an intervention.
I will finish as I started. For me, the choice is really this: do we return to the dark days of austerity, which created the challenges that scourge the community that I represent, or do we lift people out of poverty, give them hope and the public services that they need, and invest in the critical infrastructure that brings our economy and our country into the 21st century? I know where I stand on that. Do the Conservatives know where they stand?
Stuart Anderson
I am happy that you intervened, and if you support tax hikes for your—
Stuart Anderson
I will start that again, Madam Deputy Speaker. I am happy that the hon. Gentleman intervened. If he speaks to businesses across his constituency, they might say that they understand the tax hike, but I am asking if any of them support it. I am happy if he wants to intervene to say that they do.
Despite the huge pressures, I will continue to campaign for funding and support that enables businesses to thrive. The biggest area is tax cuts, and it remains a vital part of my focus to unleash rural prosperity for South Shropshire. I urge colleagues across the House to vote down any future tax rises.
Chris Vince
I thank the hon. Gentleman—I had not thought to do that, but I will do so. I am sure my mother will appreciate that I am having that conversation. I briefly spoke to the Chancellor before this speech, to let her know about my mum’s circumstances. I just put that on the record, and I thank the hon. Member for his intervention—
Madam Deputy Speaker (Caroline Nokes)
Order. I think there will be another intervention, but I want to bring us loosely back to the subject of taxes. While I can see that the career of the hon. Member’s mother at HMRC is related to taxes, it would be unfortunate, would it not, if I had to put a tight time limit on other Members?
Chris Vince
Thank you, Madam Deputy Speaker. So I cannot talk about my father’s and grandfather’s experiences—[Interruption.] No, okay.
Madam Deputy Speaker (Caroline Nokes)
After the next speaker, I will impose a seven-minute time limit.
John Slinger
I am for doing absolutely everything we can to reduce child poverty. One way in which we can achieve that is by ending the two-child cap—there are other measures. However, that is a matter for my right hon. Friend the Chancellor; it is not for me to decide right now in the Chamber.
Our approach is paying off. We were the fastest-growing economy in the G7 in the first half of the year, and the average person’s disposable income is £800 higher now in real terms than just before the election, but there is not time for me to go through the long list of our achievements. My right hon. Friend the Chancellor will set out more in the Budget. In my view, ours is a can-do approach, not a kicking-the-can-down-the-road approach.
David Pinto-Duschinsky (Hendon) (Lab)
You have mentioned the £47 billion of savings, but you have neglected to identify the number of teachers—
Madam Deputy Speaker (Caroline Nokes)
Order. If the hon. Gentleman had been here for more of the debate, he would have heard that I am being particularly pernickety about the use of the word “you”. I have not identified anything this afternoon, and I do not intend to do so. Perhaps the hon. Gentleman will make his intervention short, given his short tenure in the Chamber this afternoon.
David Pinto-Duschinsky
Thank you, Madam Deputy Speaker, and I apologise. The hon. Member has not mentioned how many teachers, how many doctors and how many police would be involved.
Madam Deputy Speaker (Caroline Nokes)
Order. When the hon. Gentleman makes an intervention, he should do that via me, facing the Chair and not the Back Benches.
Charlie Maynard
Let us talk about trade, Madam Deputy Speaker. I find it extraordinary if we look at the future. I think it was Stephen Bush in the Financial Times who talked about the permanent lobotomy that the Tory party needs to have when talking about Brexit. If we are talking about getting money into the Exchequer, let us get our economy moving again and get growth back into the economy. Let us open up a customs union with Europe and get our economy growing. Let us look to the future.
Dr Spencer
I have to apologise to the hon. Member. I came into the House in 2019, and it strikes me that this debate is probably better suited to 2018, before I was elected.
On the situation that we find ourselves in, many Labour Members have spoken about the Chancellor or the Government bringing in free this and free that. The Government do not have money and the Chancellor does not have money. It is not even just taxpayers’ money that they are pledging to spend; it is our children’s money. That goes to the core of the problem that we face.
The decisions that the Government are taking to keep on and not cut spending and to keep on borrowing and borrowing are not on my head. They are not on the heads of anyone in this room. Those decisions are on the heads of our children. Families know how to budget, and this is the equivalent of a parent saying, “We fancy going on holiday to—I do not know—Lanzarote this year and we are going to borrow money to do it. I am not going to borrow it on me, though; I am going to borrow it on my kids. They will take out the loan and they can pay it back in future.”
It is fundamentally and morally unacceptable that we are in this position and that the Government do not have an approach to try and drive down the deficit and pay back the debt. That is why I am so pleased that the Leader of the Opposition announced the golden rule for making sure that policies going forward recognise that we cannot keep on spending money that we do not have.
In the last Government, from 2010 onwards, we worked really hard on driving down debt, and we had almost got there, in terms of reducing the deficit, when covid kicked off. Can people imagine the situation we would have been in if covid had kicked off without the work we had done to balance the books and without the fiscal firepower that we had to get through it? I remember the debates that we had around covid, and I remember well the first year—I am sure everyone in this Chamber does, whether they were a Member or not. I remember early on being desperately worried that the shadow of covid would loom long and loom hard, and that, over the next decade, we would see the impact of turning off the economy for two years.
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.
Taxes
Caroline Nokes Excerpts(6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Madam Deputy Speaker (Caroline Nokes)
I must inform the House that Mr Speaker has not selected any amendment.
I call the shadow Chancellor of the Exchequer.
Ben Coleman (Chelsea and Fulham) (Lab)
Given all the extraordinary and wonderful things that the right hon. Gentleman is setting out, is it not equally extraordinary that the British people thought you were a shower and needed to get rid of you—and they did? That is why you are on the Opposition Benches and we are over here.
Madam Deputy Speaker (Caroline Nokes)
Order. I am not sure that the British people were seeking to get rid of me.
Sir Mel Stride
I think what the hon. Gentleman said was a gross impertinence, Madam Deputy Speaker. He also referred to you as an absolute “shower”, which is totally unreasonable. I have always been a great admirer of yours, as you know, and always will be. [Hon. Members: “ Name him!”] Name the hon. Gentleman—quite.
We have a Government who are grossly incompetent. As soon as they came into office, what did they do? They talked down the economy. It is no surprise that the British Chambers of Commerce is now saying that the No.1 concern of its members is high taxes, or that the latest survey by the Institute of Chartered Accountants in England and Wales once again shows that business confidence is down—and that is for the fourth survey in a row.
Darren Jones
As the right hon. Gentleman knows, my colleagues in the Department for Work and Pensions, with the Stephen Timms review and other work, are taking those measures forward.
Madam Deputy Speaker (Caroline Nokes)
Order. The Chief Secretary is the third Minister or shadow Minister to refer to a colleague by name. It seems to be a bad afternoon for it.
Darren Jones
Madam Deputy Speaker, it is because the review is named after the Member, which led to my naming him, but the Timms review will be taking forward that work and coming forward with proposals in due course.
If Conservative Members wish to challenge the fiscal rules, I invite them to do so. Do they instead think it would be wise to let debt balloon year on year, as they did, to pay for the day-to-day costs of Government, ultimately spending more and more on debt interest and less on the priorities of working people? In contrast, our fiscal rules are non-negotiable, and they are the foundation for stability and investment.
The first rule is for stability—that day-to-day Government spending should be paid for through tax receipts—which is the sound economic choice and also the fair choice, because it is not right to expect our children and future generations to pay for the services we rely on today. This first rule allowed my right hon. Friend the Chancellor, at the Budget last year, to allocate £190 billion more to the day-to-day running of our public services over the course of this Parliament.
The second fiscal rule has enabled this Government to invest in Britain’s economic renewal while getting public debt on a downward path. This rule has allowed the Chancellor to increase public investment by over £100 billion in the autumn and a further £13 billion this spring—investment to rebuild our transport network, our defence capabilities and our energy security. In short, it is investment to grow our economy, improve living standards and put more money into the pockets of working people in every part of the country.
Several hon. Members rose—
Madam Deputy Speaker (Caroline Nokes)
Order. The right hon. Member has set the tone with his speech length. If all Members could stick to around six minutes, everyone will get in. I call Joe Powell.
Government Performance against Fiscal Rules
Caroline Nokes Excerpts(6 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Urgent Questions are proposed each morning by backbench MPs, and up to two may be selected each day by the Speaker. Chosen Urgent Questions are announced 30 minutes before Parliament sits each day.
Each Urgent Question requires a Government Minister to give a response on the debate topic.
This information is provided by Parallel Parliament and does not comprise part of the offical record
Sir Mel Stride
The Chancellor said that she would not make any commitments that were not
“fully funded and fully costed”,
but the Chief Secretary to the Treasury has just said that he now expects us to wait until the autumn to hear how the Government intend to cover the £6 billion of unfunded commitments that their U-turns have run up in the last month alone. A Government divided. A Government racking up unfunded spending. A Government wrecking the public finances. Why is the Chief Secretary not prepared to explain how they will fund these U-turns? There are surely only two possible answers: either the Treasury has made them without a clue as to how they will be funded, or it knows but is refusing to tell us. Either is completely unacceptable. Can the Chief Secretary set aside the usual blather that we have just heard and tell us whether he knows how these unfunded commitments will be paid for, or are his Government simply refusing to say?
The House will also have noted the inherent contradiction in the Chief Secretary sticking to the line that decisions will be made at a fiscal event in the normal way, when that is precisely what the Government have not done. By losing control of the finances and of their own parliamentary party, the Government have made significant fiscal decisions outside of a fiscal event. The Chancellor said at the Budget that she would not be coming back with more tax rises. Is this still the position? Will the Chief Secretary rule out a wealth tax, along with reconfirming there will be no rise in income tax, national insurance or VAT? The Chancellor said that she would not extend the freeze on tax thresholds because it would hurt working people. Is this still the position? Can the Chief Secretary confirm that the Chancellor will not be adding to her fiscal black hole by scrapping the two-child benefit cap? Can I also ask whether consideration—
Madam Deputy Speaker (Caroline Nokes)
Order. The shadow Chancellor will know the time limit. I am sure that this will be his last sentence.
Sir Mel Stride
It certainly is now, Madam Deputy Speaker. If Ministers are to begin putting their house back in order, that must start right now with full transparency and proper answers.
Daisy Cooper (St Albans) (LD)
We all know the Government had a terrible inheritance from the previous Government, whether it was the incompetence of covid contracts, the mini-Budget or the botched Brexit deal. But at the same time, last year’s Labour Budget was a Treasury tax grab with no vision for the economy and no regard to the impact on small and medium-sized businesses and key sectors like hospitality and social care. We Liberal Democrats want to see things getting better in this country for our constituents and for the country. In the spirit of constructive opposition, I will ask the Minister a number of questions. When will the Government get serious about growth through a much deeper trading deal with Europe? Will Ministers look at fairer revenue raisers, such as reversing the Conservatives’ tax cuts for the big banks and raising revenue from tech giants and online gaming and gambling companies? Will the Prime Minister make a public statement to calm the markets and avoid four months of speculation about what might be in the next Budget? Will the Government commission an interim Office for Budget Responsibility report now?
Madam Deputy Speaker
Order. The same strictures apply to the Liberal Democrats—one more sentence.
Daisy Cooper
I am grateful for your guidance, Madam Deputy Speaker. Can the Government confirm that they will not raid capital budgets to fix crumbling hospitals and to pay for day-to-day spending, and will the Minister confirm the date for the autumn Budget?
Darren Jones
I do. It is good that my hon. Friend has been able to raise that testimony from the Transport Committee, because it reminds us why the British people were so angry with the Conservative party after 14 years of failed promises, and why this Labour Government will always make sure that we deliver on our promises.
Madam Deputy Speaker (Caroline Nokes)
I thank the Chief Secretary for his answers this afternoon.
Bank Closures and Banking Hubs
Caroline Nokes Excerpts(7 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Emma Reynolds
I do not have very long left, I am afraid.
The hon. Member for Aberdeen North (Kirsty Blackman) and my hon. Friend the Member for Weston-super-Mare rightly stressed the importance of these services in urban areas as well. I will not go through all of them, but we heard lots of really good speeches on both sides of the House and a surprising degree of consensus, which is not always the case. It is interesting to see the right hon. Member for Tatton (Esther McVey) and my hon. Friend the Member for Blyth and Ashington so closely aligned, which is not something I expected.
Through the Financial Services and Markets Act 2023, the last Government legislated to protect reasonable access to cash, giving the Financial Conduct Authority new powers to ensure that communities could both withdraw and deposit cash. The Government recognise that the ability to access cash and in-person banking support remains essential for many, particularly in rural areas and for vulnerable people, which is why we have secured the industry’s commitment to roll out 350 banking hubs by the end of this Parliament, ensuring that access to face-to-face banking is protected. Over 220 have been agreed, and more than 160 are open.
Banking hubs are a voluntary initiative by banks as part of meeting their access to cash obligations, as legislated for in FSMA. Many Members have asked the Government to demand that Link reviews its assessment procedure, but it is worth reminding colleagues that the process for deciding where hubs are needed is independently determined by Link, the operator of the UK’s largest ATM network. The Government are not minded to review the legislation passed by the previous Government.
A number of Members—including the hon. Member for Dumfries and Galloway, who mentioned this to me yesterday as well—talked about ATMs’ lack of reliability. I have done a little bit of work on that, and Link assures me that it takes a hard line with its members over the functionality of ATMs. However, I urge Members to raise these issues with me, so that I can raise them with Link. I am soon to meet John Howells, the chief executive of Link, and I will feed back the concerns that Members have raised today about how Link applies its criteria.
I know that this is not necessarily the conclusion to the speech that Members were hoping for, but we think it is important that local communities have access to cash and banking services, which is why our Government are committed to rolling out 350 banking hubs across the country.