Finance (No. 2) Bill

Caroline Voaden Excerpts

Committee of the whole House
Tuesday 13th January 2026 Commons Chamber

[Steve Darling (Torbay) (LD)]

I will focus on Liberal Democrat new clause 9, which would require an assessment of the cumulative impact of the proposals on the hospitality industry.

One must bear in mind that, after a medley of challenges, our hospitality industry fears the future—it is in crisis mode—so it is not prepared to invest or take a chance by improving its offer, and it is hunkering down and hoping for the best. I reflect on the international pandemic, which had a massive impact; Torbay’s tourism and hospitality industry has still not recovered to pre-pandemic levels. The outrageous second invasion of Ukraine almost four years ago caused a shock in our energy costs. I am afraid that there have also been self-inflicted wounds, such as the national insurance hike and the ensuing employment challenges.

David from Rock Garden in Torquay told me that his utility bill has risen to £3,000 a month, which dwarfs his rental costs. Ofgem is asleep at the wheel; it must back local businesses and drive the changes that we need. Our hospitality industry is horrified by the proposals for business rates. The Government must apply the full 20% rate of relief to ensure that there are protections. I am afraid to say that many people in the hospitality industry scoff at proposals that simply deregulate around the edges, because if they do not have paying customers in their premises, they are set up to fail.

[Caroline Voaden (South Devon) (LD)]

Will my hon. Friend give way?

[Steve Darling]

I will happily give way to my Devon colleague.

[Caroline Voaden]

As his constituency neighbours mine, my hon. Friend may be aware that three much-loved venues—Wild Artichokes, the Old Warehouse and the Old Bakery—closed in the town of Kingsbridge last week. The owner of one of those venues told us that part of the problem was the cumulation of challenges faced by the hospitality industry—not just the lack of people coming through the door and spending money because of the cost of living crisis, as my hon. Friend just said, but the rises in business rates and employer national insurance contributions, which have made it impossible for businesses to continue. Does he agree that it is a tragedy that such venues are closing every day, and that something must change before the hospitality industry is devastated?

[Steve Darling]

My hon. Friend is spot on. We need the Government to wake up, smell the coffee and recognise the challenges that our hospitality industry faces.

Some national chains, such as Wetherspoons, use their buying power to drive down the cost of a pint—many customers reflect on prices when they cross the threshold of a venue. The reality for lots of independents—because it is independents that are really important—is that £6 a pint is the minimum they can achieve with all the costs that are involved. When we compare that with the cost in a supermarket, it is really scary. The Minister rightly highlighted the difference we see today, with more than 70% of the alcohol consumed having been purchased at a supermarket. I feel we need to have a national debate about whether we have got the balance right and how we can ensure that we are driving greater footfall towards our hospitality industry.

Clause 1

Caroline Voaden Excerpts

Monday 12th January 2026 Commons Chamber

In conclusion, this new clause is about fairness, realism and respect. It recognises Northern Ireland’s disproportionate contribution to the UK, which I am very proud of. It gives the Government the evidence they need to get this right. Supporting it means supporting farmers, protecting rural communities and safeguarding the UK’s food supply. I also want to raise something that is of psychological value. We are having this debate tonight, but not one of us has said anything about the psychological impact and the body blow that this has caused to farming communities across the UK. They felt genuinely unneeded. They felt undervalued. In fact, they felt a burden. They felt that this tax raid was being done to them, and I am not sure what they ever did to deserve it. That is why I will continue to oppose the family farm tax in its entirety.

[Caroline Voaden (South Devon) (LD)]

Following the initial decision to introduce new APR and BPR rates, farmers across the country rallied their tractors outside this place to get their voices heard. Other family-owned businesses have gone through the same agony over the last 14 months, but without the tractors and with perhaps less of a voice, fearing for the future of businesses that have been built up over generations—businesses that form the bedrock of local communities and economies, employing local people and supporting local suppliers. As one constituent business owner told me, even with the recent lifting of the threshold, the reforms to BPR could still lead to family businesses such as his having to break up their underlying assets just to survive. The resulting loss to the Treasury in economic activity will far outweigh the amount of tax raised.

This attack on family-run businesses is particularly damaging in a constituency such as South Devon, where the family-run hotels and holiday parks are the foundation stones of the local economy. Passed down from generation to generation, they are more than just businesses. They are woven into the fabric of our communities. The director of one popular holiday park has been left questioning the long-term viability of their business due to the inheritance tax that will be due. This family-run business was founded over 65 years ago and employs over 180 staff in the summer season, which is a large number in a constituency such as mine that has few large employers. It uses an abundance of local suppliers and makes a significant contribution to the local economy. But I am told that when the 81-year-old majority shareholder passes away, it is likely that the family will have to sell up completely, after at least five generations of ownership, to pay an inheritance tax liability of approximately £2.5 million. The business cannot just chop off a section of the holiday camp, sell it to pay the tax and be left with a viable business—it just does not work like that. That illustrates perfectly how this tax is not merely a financial burden; it threatens the very survival of these businesses, and the ripples will spread out across the pond with scores of people losing their jobs, which will have knock-on effects on the local economy, the community and the mental health of all those people left high and dry.

Examples such as that are why my Liberal Democrat colleagues and I support amendment 42, which would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family. That is the least that this Government could do given the plethora of financial challenges these family-run businesses already face. Whatever loophole the Government were looking to close with this business property relief, they have gone way beyond that, and the implications will be an economic and personal tragedy for so many.

I could not speak today without again mentioning our family farms. I am pleased that the Government have finally listened and made the adjustment to the threshold, which will end the agony for many farmers. However, I am concerned that in areas where land prices are particularly high, such as the South Hams, the £2.5 million threshold will still be too low. There are also a significant number of farms owned by a single person rather than a couple, meaning they will not benefit from the spousal allowance. When APR was originally introduced, I surveyed all the farmers in the South Devon constituency, of which there are many hundreds: 85% of them said that they would be affected. Of those who responded, 44% said that they would have a bill of at least £300,000. The average bill was going to be £637,000 across my constituency, and the highest inheritance tax expected by one of my farms is £3 million.

I therefore support amendment 48, which would make the resulting inheritance tax liability chargeable only if agricultural land is sold or ceases to be used for farming within 10 years of the relevant transfer. I urge the Government to support new clause 7 to ensure the relief allowance is uprated annually according to the change in the value of agricultural land. I also urge the Government, as many of my colleagues have, to consider extending the spousal allowance to siblings who co-own a farm so that they too can benefit from this relief. Why should one family be penalised because a brother and sister own a farm compared with another family where it is a husband and wife? It is incredibly old fashioned to design a policy that benefits people who are married but not people who co-own within the same family.

I hope the Government will now provide meaningful support for farmers, who have been through so much over the last 14 months, starting with a £1 billion increase in the farming budget as promised by the Liberal Democrats if we were sitting on the Government Benches. If we undermine British farming, we undermine our ability to feed the nation and, in turn, compete in an increasingly uncertain world. Our farmers have been through an agonising 14 months. They should never have been subjected to this fear and stress. It is a disgrace that the Government took more seriously a prospective revolt from their own Back Benchers than the committed, desperate and passionate campaigning of farmers, countryside organisations and rural communities right across the country for the last 14 months. This policy still retains huge unfairness, as colleagues have explained so clearly, and I urge the Government to pause and think again while a proper impact assessment of even the new APR is carried out.

[Olly Glover (Didcot and Wantage) (LD)]

I stand to speak in favour of various Lib Dem amendments and in particular new clause 7. Farmers in this country continue to be hammered, as they were under the previous Government, by the current one. From poor funding of rural public services to botched trade deals that undercut British farmers, rural communities have been left behind, despite the industry being vital to delivering our food supply and a key pillar in our fight against climate change. Food is not some luxury or niche commodity but an essential, and an important part of our heritage and culture. In an increasingly volatile world, it is important that we recognise the value of domestic production.

Many speakers this evening have discussed problems with the Labour Government’s changes to agricultural and business property tax relief, and it is welcome that the Government have to some extent listened to that. However, in my constituency, the key thing I hear when speaking with farmers is that the proposed changes, in their original form, were the final straw for them on top of so many other challenges and headwinds. That is why the reaction has been so strong. They face the uncertainty and impact of Brexit; trade deals based on proving the so-called benefits of Brexit, no matter the impact on our farmers; constantly changing Government incentive and payment regimes; the impact of recent worldwide inflation on fertiliser prices and equipment costs; labour shortages, also partly as a result of Brexit; and the dominance of large supermarkets seeking ever lower prices.

Our farmers also face rural crime, which, as the hon. Member for Lagan Valley (Sorcha Eastwood) rightly stated, has a significant impact on their mental health and wellbeing. Even with Thames Valley police’s best efforts, farms’ remoteness makes them easy targets for theft or hare coursing. Flooding has also affected many farms across my constituency, such as George Gale’s Manor farm in Appleford or Paul Cauldwell’s Dropshort farm in Drayton. Increased rainfall and a lack of river maintenance are both contributing factors to wider flooding incidents, plus run-off from new developments.

The National Farmers’ Union hustings were by far the toughest of the general election campaign, but I have also been warmly welcomed by farmers who have been very patient and generous in explaining their trade to someone who could not have less of an agricultural background. They include Matt Lane of Grange farm, David Christensen of Lockinge estate and Alan and Richard Binnings, who put so much work into Truckfest, which, as well as being an amazing concert experience on their land, raises tens of thousands of pounds for local charities each year.

I want to talk in particular about Ben Smith from Manor Road farm near Wantage. When I met him last winter to hear his challenges, he explained that he is a third-generation arable farmer. At that time, his mother was 90 years of age. She owns the farm. Ben’s big concern was that when she dies, he and his family will be significantly hit by the inheritance tax, with revenues from their arable farming barely able to cover the liabilities. At that time, his mother was saying that she would rather die than leave Ben and his sister to deal with the situation later. Ben wants his son and daughter to have the farm, but he will be in a financial mess. He might need to lose six or seven staff, some of whom have worked for him for between 10 and 45 years. Inheritance tax is a big worry to him, but he has also been hit by other increases in tax and national insurance.

All the farmers I have met have been welcoming, tolerant of my agricultural ignorance, forgiving of my vegetarianism, patient in educating me about their work and profoundly passionate about what they do. I have been surprised to find parallels between my experience of working in railways before coming to this place and farming. Both are subject to the stop-and-start whims of Government policy and the decisions of people who have little knowledge or experience of the sectors concerned and often do not take the time to listen and learn.

In contrast, the Liberal Democrats are proud of our advocacy for farmers and are calling for the farming budget to be raised by £1 billion, for a renegotiation of trade agreements to protect British farmers in line with our objectives for health, environmental and animal welfare standards, and for strengthening of the Groceries Code Adjudicator to ensure that farmers can keep farming in fair circumstances.

It is welcome that the Government have started to listen, but we must always remember that we need food, we need countryside and our farmers do so much to look after both. They deserve our support.

Agricultural Property Relief and Business Property Relief

Caroline Voaden Excerpts

Monday 5th January 2026 Commons Chamber

[Dan Tomlinson]

I have been asked that question already by an Opposition Member, but I am happy to give the right hon. Lady a similar answer. I can say to those families that we listened carefully to the representations that were made about the level of the threshold as it was originally set at the Budget in 2024, and we have now come forward with a change to increase the threshold from £1 million to £2.5 million, which, coupled with the changes announced at the Budget in 2025, will now be transferable between spouses, allowing those families to pass on up to £5 million tax free.

[Caroline Voaden (South Devon) (LD)]

Happy new year, Madam Deputy Speaker. For 14 months, I have stood here alongside my colleagues and asked various Ministers to reconsider this policy. For 14 months, farming organisations up and down the country have campaigned relentlessly against the policy. Why did it take the Government so long to listen to them? Would it not be nice if someone was able to stand at the Dispatch Box and simply say, “We’re sorry—we got this wrong. We commit now to consult with farming and rural communities on any further changes to tax reliefs affecting them”?

[Dan Tomlinson]

We have come forward with a change to this policy after listening to farmers and farming communities and to the representations that have been made. We think that this is the right change. We will have the chance to debate it again when we consider the Finance (No. 2) Bill in Committee of the whole House next week, when the amendment that has been tabled will be voted on. In the end, Opposition Members who wish for the Government not to go ahead with this change at all should come forward with ideas for how they would raise £300 million from those who have the very largest estates in this country. We think it is right to raise revenue from those with the very broadest shoulders, and that is what this change will allow us to do.

Finance (No. 2) Bill

Caroline Voaden Excerpts

2nd reading
Tuesday 16th December 2025 Commons Chamber

[Sir Mel Stride]

My right hon. Friend is absolutely right. What businesses, including farms, need to succeed is lower taxes and not to be spending most of their time worrying about how they will cover the impact of future taxation. They need to be planning for the future of their businesses and investing in them.

[Caroline Voaden (South Devon) (LD)]

The hon. Member will be very familiar with my constituency, as he is my constituency neighbour. Does he agree that the Minister might have got his figures wrong? I surveyed all the farms in South Devon—there are nearly 500 small farms—and 44% of respondents said that they would be hit with an inheritance tax bill of over £300,000 when these measures come in. Does he agree that the Government simply do not understand the value of a farm, particularly in a part of the country like ours?

[Sir Mel Stride]

I would not naturally defer to the results of a Lib Dem survey over the work of His Majesty’s Treasury. However, I get the gist of what the hon. Lady is saying—perhaps a bar chart with a slightly dodgy scale would be a good way of putting the point.

The Chancellor says that those who are in receipt solely of the state pension should not worry about being dragged slightly into taxation, because that will be dealt with, but we do not know what that actually means. We do not know what the plan is, nor the cost. Perhaps in the wind-ups the Minister can tell us exactly what is envisaged for the very large number of pensioners who, under the Bill, will be dragged into paying tax on their state pension for the first time. What a mess! The Government are working against the instincts of those who are doing the right thing to save for their future.

The same is the case in respect of investment. The 2% increase in tax on dividends—a £1.2 billion tax grab—will simply have the effect of disincentivising investments in equities. That will mean less capital being invested in businesses, which is what drives up productivity. Part of the story of low productivity in our country is the fact that private investment has been too low for too long. This tax increase will weigh in the opposite direction. The Minister spoke about the importance of increasing investment in plant and machinery; the reality is that the Bill cuts the writing-down allowances, unless they relate to new plant and machinery, which will weigh against that very objective.

This is an unfair Bill. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) raised the issue of the farm tax, and he was absolutely right to do so. Farms up and down this country are now worried about the future. Farms in my constituency, which have sometimes been in the family for decades or generations—in some cases even for centuries—are now having to stare down the barrel of a very uncertain future. What an irony and what a tragedy that, during the run-up to the general election, the then shadow Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Streatham and Croydon North (Steve Reed), looked the president of the National Farmers Union in the eye, and said that, when it came to inheritance tax, farmers had nothing to fear from a future Labour Government. How wrong they were. As Tom Bradshaw said, this whole tax increase is

“morally wrong and economically flawed”,

and he is right.

Alcohol Duty: UK Wine Sector

Caroline Voaden Excerpts

Tuesday 11th November 2025 Westminster Hall

[Charlie Maynard (Witney) (LD)]

It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Farnham and Bordon (Gregory Stafford) for bringing us this very important debate; it is much appreciated.

The overall logic of more alcohol resulting in more tax makes sense, and the taxation of wine needs to be stable, fair and workable. That principle has to work in practice, and we are completely failing on that in the current system. We really need to fix that as soon as possible.

To recap, before August 2023, in line with EU regulations, wine duty was predominantly charged according to volume, rather than how much alcohol the product contained. In August 2023, through the Finance (No. 2) Act 2023, a new duty system was introduced that required duty to be paid on all products according to strength. On 31 January 2025, wines between 11.5% ABV and 14.5% ABV were taxed as if their strength were 12.5%, but that measure was withdrawn on 1 February 2025. Therefore, 85% of all wine sold in the UK is subject to the same rate of duty.

Under the new system, that has been replaced by 30 different rates based on ABV at 0.1% increments. That is extraordinary. It would make sense if we were talking about vodka, which is distilled, or beer, which is brewed, as the producer is able to perfectly and precisely determine how much alcohol is in those products. It makes absolutely no sense for an agricultural product like wine; a bottle of wine may have more or less alcohol in it from one season to the next. Dealing with the microscopic increments puts domestic and foreign producers and retailers in this country in real trouble, because every single one of those bottles needs to be measured and calibrated, and priced and taxed accordingly. The administrative burden of that is absolutely horrendous.

I hear that from Oli Gauntlett, the head of Eynsham Cellars and a loyal constituent, and from the Oxford Wine Company, which is a wonderful wine company that serves Oxfordshire. It has had enormous admin trouble dealing with this issue. I also hear it from Majestic Wine, which has a shop in Witney. The single best reason to change this is, as so many people have said already, that it is not working: we have £300 million less excise duty as a result. I cannot think of a better argument to tickle the Treasury into a sensible decision.

[Caroline Voaden (South Devon) (LD)]

Does my hon. Friend agree that this policy directly hits the small independent wine importers, such as The Wine Loft in Brixham? It sells many different kinds of wine, but it does not have the power of Sainsbury’s or Majestic. It does not have a whole department to manage it and bring in large quantities of the same wine.

[Charlie Maynard]

I agree 100%. That is a great illustration of just how painful and unnecessary it is. This is not benefiting anyone, not even His Majesty’s Revenue and Customs. The Budget is very soon and, bluntly—I do not want to stick the knife too much into my Conservative colleagues—I think the previous Government’s tax reforms were, overall, quite sensible in levying more tax on higher amounts of alcohol, but that is obviously mad when it comes to wine. I am an equal-opportunities knife sticker, so why did Labour follow a mad Tory policy? It is a bit like, why are they following a mad hard Brexit? Pull out, blame the Tories and then change the policy back to something sensible. They could raise more tax and put UK growers and UK retailers back on their feet.

Oral Answers to Questions

Caroline Voaden Excerpts

Tuesday 4th November 2025 Commons Chamber

[Dan Tomlinson]

I have already answered the question about the CenTax proposals, but it is clear from its analysis that the number of estates that would pay more inheritance tax would be more than double the number contained in the proposals that the Government have put on the table. I understand that changes in inheritance tax are always difficult, but last year the Government had to make the decision to raise more revenue to ensure that we could fund our public services adequately, and this change raises half a billion pounds in a fair way.

[Caroline Voaden (South Devon) (LD)]

2. What recent assessment she has made of the adequacy of access to banking services in rural areas.

[The Economic Secretary to the Treasury (Lucy Rigby)]

The Government understand the importance of in-person banking to communities, and we are working closely with industry to roll out 350 banking hubs across the United Kingdom. More than 240 hubs have been announced so far, and more than 180 are already open. I know that that includes two in the hon. Member’s constituency, and I look forward to our upcoming meeting to discuss her constituents’ banking needs.

[Caroline Voaden]

When Labour was in opposition, its shadow Economic Secretary, the hon. Member for Hampstead and Highgate (Tulip Siddiq), welcomed measures to protect access to cash, but was concerned about the fact that they did

“nothing to protect essential face-to-face banking services.”—[Official Report, 26 June 2023; Vol. 735, c. 71.]

Such services go beyond a banking hub, but they are now vanishing. While the Financial Conduct Authority is responsible for access to cash, it appears that there is no Government body overseeing access to face-to-face banking services. Does the Minister agree that new regulation is needed to support residents and businesses in rural areas, especially as banks will prevent customers from cashing cheques in post offices from January?

[Lucy Rigby]

We recognise the important role that post offices, in particular, play in providing essential banking services as well as banking hubs. Decisions about which services are available at post offices—such as cheque deposits—are made by banks as part of their commercial arrangements. I should emphasise that customers continue to have other options for paying in cheques, which I know is an issue for the hon. Member; in the case of Lloyds, it can be done via Freepost. As I have said, I look forward to discussing these issues further with the hon. Member during our meeting.

Independent Lifeboats: Government Support

Caroline Voaden Excerpts

Wednesday 29th October 2025 Westminster Hall

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Harris. I congratulate my hon. Friend the Member for Hamble Valley (Paul Holmes), a fellow south coast MP, on securing this important debate.

I am an avid sea swimmer and sailor who enjoys every opportunity to be in the sea, so it brings me great joy that more and more people are enjoying open-water swimming, paddleboarding, kayaking and coastal sailing. I am happiest when I am in the sea, but I am aware of the dangers of the sea: even on apparently calm and sunny days, it can be unpredictable and unforgiving. Tides change and winds rise rapidly, and that can turn a fun-filled day on the water into a tragic accident.

When disaster strikes, it is our brave lifeboat crews, many of them volunteers, who launch into the sea to keep people safe and to save lives. My wonderful coastal constituency, Bognor Regis and Littlehampton, is lucky to be served by the incredible RNLI. There has been a lifeboat house in Littlehampton for more than 140 years—since 1884. Today, the RNLI’s inshore station on the bank of the river Arun provides vital lifesaving services along our beautiful stretch of Sussex coastline.

This year, that crew has been called out more than 50 times. It supports yachts and fishing vessels in difficulty, and waders and swimmers caught in strong currents. It also rescues pets who have fallen into the water and become stranded. I was delighted to attended the christening of its new D-class lifeboat, Spirit of Fidelity, in September.

I really cannot speak highly enough of the fantastic work that the RNLI and its many volunteers do to keep seagoers in Sussex safe. A true national treasure, the RNLI deserves all the plaudits it rightly receives internationally. But not every constituency is as fortunate as mine is to benefit from an outstanding RNLI lifeboat station. Maritime rescue off the coast of the British Isles is often provided by a remarkable network of independent lifeboats. Community-run and locally fundraised, these vital lifesaving organisations provide the same services as the RNLI, but often in areas far larger than they can reach quickly enough, with a fraction of the funding needed and without the same public and Government recognition of their work. The dedicated volunteers and generous donors who keep independent lifeboats afloat deserve acclaim equal to that of their RNLI colleagues.

Last year, independent lifeboats attended more than 1,800 incidents and assisted more than 2,000 people in the UK. We cannot take them for granted and must support their efforts to keep people safe at sea. The rescue boat grant fund was a key source of funding for independent lifeboats between 2015 and 2020. I join my hon. Friend the Member for Hamble Valley in calling for the Government to reinstate it. To do so would not only celebrate the tireless dedication of the volunteers who run independent lifeboats but invest in the future of those vital lifesaving services.

We would not settle for under-equipped ambulances, fire engines or police cars. We need to ensure that our lifeboats are properly funded, so that their crews can purchase the equipment they need and complete essential maintenance to keep their boats seaworthy and their stations fit for purpose.

[Caroline Voaden (South Devon) (LD)]

Hope Cove lifeboat station in my constituency is considering purchasing a new rescue boat, which could cost in excess of £220,000—a vast amount of money for such a small organisation. Does the hon. Member agree that a specific grant scheme should be introduced to help independent lifeboat stations with capital expenditure?

[Alison Griffiths]

The hon. Member makes a good point. She would probably agree with me that asking the Government to reinstate the rescue boat grant fund is a first step in that direction. I hope the grant would include capital expenditure.

This is not a topic for political point scoring; it is about saving lives. The reintroduction of the rescue boat grant fund would send a clear message that this House values the commitment and bravery of our lifeboat crews. I hope the Minister has listened carefully to the calls being made, led by my hon. Friend the hon. Member for Hamble Valley, and that she reaffirms the Government’s support for all those who risk their lives to protect others at sea.

Regional Growth

Caroline Voaden Excerpts

Wednesday 4th June 2025 Commons Chamber

[Darren Jones]

I thank my hon. Friend and the wider group of Labour Members from Cornwall, who have campaigned vociferously on the Green Book. That may seem technical, but for the people at home it is important because it alludes to all the issues that my hon. Friend points out—not least because in the past, Government have made decisions about particular projects as opposed to particular places. That means that we cannot unlock the potential for growth and better livelihoods because of a failure of applying the Green Book and its rules.

The Chancellor announced today that the Green Book update will be published next week at the spending review. I can give my hon. Friend the guarantee that the detail of that, when it is published, will show that this Government will look much more widely at how spending across Government lifts the potential of places to deliver better jobs and better wages for people, and more secure communities.

[Caroline Voaden (South Devon) (LD)]

The Chief Secretary rightly says that stronger transport links are crucial for creating opportunities for jobs and economic growth, and it is great to see so many happy Labour MPs in the Chamber. I heard what the Minister said to my hon. Friend the Member for St Albans (Daisy Cooper) about being patient, but it feels like the Government, by trailing the spending review with this announcement, are prioritising spending on urban areas and in particular those with many fine Labour MPs. Will he therefore assure me and my constituents in South Devon, that the Treasury will remember next week that the west country does not end at Bristol? Indeed, many would say it starts there.

[Darren Jones]

As I have alluded to many times today, this Government are committed to investing in every region and nation of the country. Today’s announcement is about city regions and city region transport, but the spending review next week will show how this Government are delivering for people, irrespective of where they live.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Caroline Voaden Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. We have three more speakers. If anyone intervenes, I will not be able to get all of them in.

[Caroline Voaden (South Devon) (LD)]

I rise to speak to Lords amendments 1, 2, 3 and 4. The Liberal Democrats are extremely concerned that this tax rise risks dire consequences for social care, primary care, the NHS, hospices and charities, many of which are delivering vital healthcare in the community. Thousands of care providers are already on the brink of bankruptcy, and this national insurance increase risks tipping them over the edge.

The OBR estimates that this hike will bring in £10 billion a year rather than the £25 billion estimated by the Government, once employers change their behaviour in response to the tax and once public sector employers are compensated. Yes, we know that finances are stretched, and that the Government inherited an incredibly difficult situation, but the Government could have raised that amount of money through much fairer tax changes, and we Liberal Democrats have come up with many suggestions. For example, they could have reversed Conservative cuts handed to the big banks; increased the digital services tax; doubled the rate of remote gaming duty; and introduced a fair reform of capital gains tax, so that the 0.1% of ultra-wealthy individuals pay their fair share. This may be something particular to Totnes, but many wealthy constituents have told me that they wish they were being asked to pay more tax.

The Liberal Democrats have called on the Government to exempt social care providers and GPs from the employer national insurance tax rise. On average, the tax rise will cost each GP practice an estimated £20,000 a year. The Government have announced an additional £889 million in the 2025-26 GP contract, but have failed to spell out how much of that they believe practices will need to use to pay the additional tax burden, and how much will be left to meet unmet patient needs. What is clear is that the national insurance rise will mean that the uplift to the GP contract is in fact far smaller than it appears, because a proportion will need to be returned directly to the Treasury—robbing Peter to pay Paul, as many Members have said.

What assessment have the Government made of how much of the recent uplift in the GP contract will practices need to use to offset the rise in national insurance? Rowcroft hospice, which is in the constituency next door, but which serves us, says the NIC rise is expected to add £225,000 to annual costs. One of my GP surgeries says that its costs will go up by £187,000, and the Devon Mental Health Alliance estimates the cost increase at £375,000, potentially resulting in a loss of 25,167 staffing hours.

One GP said to us:

“I have been a GP for 10 years and a doctor for 15. It is exhausting and, frankly, I just feel like giving up. This is not an attractive or stable job for training doctors.”

The Devon Mental Health Alliance, which is a strategic partnership, uniting five leading charitable organisations in Devon, said:

“As a sector, we play a critical role in easing the burden on the NHS by preventing thousands of people from needing GP appointments, hospital care, or sitting on waiting lists for treatment. By addressing health issues at their root and offering early intervention and prevention, this sector acts as a frontline defence, reducing demand on overstretched NHS services.”

It cannot fill the black hole by increasing revenue efficiencies or risk management. The organisation estimates costs of £375,000 next year and, as I have said, that could mean losing 25,000 staffing hours. That would mean that more people in Devon with complex needs will not be able to access its services.

Minister, at a time when we have a mental health crisis across all ages and communities, this extra financial impact on voluntary sector services is short-sighted and will only heap more pressure on the NHS. If we do not value the work done in primary care, particularly by GPs, we are putting the health of our constituents across the country at risk, putting more pressure on GPs who are already working at full capacity and threatening reforms to the NHS, which has already been brought to its knees by chronic underfunding over the past decade. I strongly urge the Government to reconsider the NICs rise for GPs, social care providers and all of those working to support health and wellbeing in the communities that we represent.

Just to finish, I would like to echo what others have said about the total absence of Government Back Benchers who have felt able to come in and speak in support of their hospices, their social care providers and their voluntary sector organisations, because they could not come in here and defend a Government policy that they know is indefensible.

[Llinos Medi (Ynys Môn) (PC)]

I rise to speak in support of these Lords amendments, and I will speak today on those that would protect small businesses with up to 25 employees.

In Wales, more than 99% of all businesses are small or medium-sized enterprises. Of those, nearly 95% are micro-sized, meaning that they employ between one and nine people. For all the protections that the Government say they have put in place for small businesses, the increase to employer national insurance contributions will still hit these enterprises hard.

There is a lack of home-grown Welsh businesses developing beyond the micro-enterprise level and becoming larger businesses themselves. We need a Government who will step up and support local businesses to grow. Unfortunately, this Government are doing the exact opposite, as it is estimated that an employer of 40 people on an average salary is about £29,000 worse off a year under the national insurance changes. Why would Welsh businesses now be incentivised to grow and take on more staff given this extra cost? It is worth noting, too, that the OBR forecasts that 76% of the cost of the national insurance contributions increase will be passed on to workers through higher prices and lower pay rises.

The Government have said that small businesses will be shielded from the national insurance increases through the changes to employment allowances. However, when asked specifically how many businesses in Wales will benefit, the Government responded by saying that they did not know. This Government like to talk about growth as their central mission, but can they explain how this policy is good for growth for our small businesses in Wales? All I can see is that it is bad for Welsh business, bad for Welsh workers, and bad for the Welsh economy.

I urge the Government to support these Lords amendments to at least protect more businesses from the damage that the national insurance hike will cause. I have raised concerns previously in this Chamber that this Labour Government are not considering the needs of small and local businesses in their decisions, and these damaging national insurance hikes are only further proof that that is the case.

Family Businesses

Caroline Voaden Excerpts

Wednesday 26th February 2025 Commons Chamber

[Caroline Voaden (South Devon) (LD)]

I recently surveyed all the farms in my constituency, and 85% of the people who responded said that they would be affected by this inheritance tax, mainly because of the cost of land in South Devon—practically all farms will be subject to it. When will the Government listen to the evidence that we are collecting from our farmers, which shows that their assessment that only 25% of farms will be affected is not correct?

[James Murray]

It is important to emphasise that the correct data to work out the impact of these changes is the claims data. That is what is available to HMRC, and it is the basis on which we have established how many farm estates are likely to be affected by the changes.

--- Later in debate ---

[Daisy Cooper]

I am grateful to my hon. Friend for that contribution and I absolutely agree. The House has debated many times the impact of the national insurance contribution rise. Colleagues may remember that the Liberal Democrats tabled a number of amendments to exclude particular groups. We are opposed to the NIC rise full stop, and we put forward alternative ways in which the Government could raise the revenue, but we said that if the Government were intent on pursuing that particular measure, then some organisations should be exempted. We pointed in particular to health and care providers, including social care providers, but we also talked about early years providers, universities, charities and hospices. We have debated such things many times, and we urge the Government once again to look very closely at the impact of the NIC rise and to do the impact assessment that we all so desperately want.

[Caroline Voaden]

My constituency has a large employer with several sites who is now looking at automation because of the impact of the NIC rise. It will add a quarter of a million pounds to his bottom line, so he is actively looking at how he can make redundancies to keep his business afloat. Does my hon. Friend agree that that is not the way to improve the local economy and make people feel good about jobs and investment?

[Daisy Cooper]

I am grateful to my hon. Friend for that contribution. Automation can have some value many sectors and industries, alongside employing and training up the next generation, but it would be devastating to other sectors if automation replaces the next generation. That is particularly important in farming, but also hospitality. The very nature of hospitality is that it is hospitable. Going to the pub and being served by a vending machine is not really someone’s idea of a good night out. I agree with my hon. Friend that automation, when put alongside investing in the next generation and staff, can be a good thing, but as a replacement it can have devastating impacts on the future of sectors and on people’s opportunities.

We have rehearsed on a number of occasions the impact of the Government’s Budget on small businesses and family businesses across the land. The Liberal Democrats are incredibly concerned about the impacts on family businesses and on the future of our high streets. We will not be supporting the official Opposition’s motion today, which I am sure they will be astonished to hear. [Interruption.] They are astonished, as you can tell, Madam Deputy Speaker, from the chuntering from the Conservative Benches. Notwithstanding, we urge the Government in the strongest possible terms to conduct an impact assessment and to look again at the amendments the Liberal Democrats tabled to exclude key organisations from their hike to national insurance contributions.