Finance Bill

Daisy Cooper Excerpts

2nd reading
Wednesday 27th November 2024 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

It is an honour to follow the hon. Member for South Derbyshire (Samantha Niblett), and I congratulate her on her very heartfelt maiden speech. I commend her for her commitment to the NHS, and for her desire to be a role model for the next generation of women, who will follow up the ladder behind us. Her skills in data and tech will be incredibly helpful in this House as we grapple with the challenge of online harms, and the threats and opportunities of AI, and I wish her well in her career in this House.

There is no doubt but that the Government have received a terrible inheritance. Under the former Conservative Government, our economy flatlined, people’s living standards plummeted and our public services were left on their knees, so inevitably the incoming Government have had to make some difficult decisions. [Interruption.] Conservative Members might like side B. [Interruption.] Steady on. Some of those decisions we Liberal Democrats agree with. To start with, the Government have decided to borrow for productive investment, and in principle we agree with that. They have raised the levy on the oil and gas giants and closed the loophole, and we agree with that. They have decided to invest in the NHS, and we also agree with that. However, we cannot support the Bill, for many of the reasons set out in our reasoned amendment.

The first question is who should pay for fixing our NHS and social care. We Liberal Democrats have always said that it should be those with the broadest shoulders. Unfortunately, the Government’s Finance Bill does not reverse the tax cuts given to the big banks by the Conservatives; it does not raise the digital services tax on the big tech companies; and it does not increase the remote gaming duty. Those three measures, outlined in our reasoned amendment, would have raised billions of pounds to help fix our NHS and social care, and that money could also have been used to reverse the cut to the winter fuel payment.

The inheritance tax measures are not included in the Finance Bill, but it does pave the way for them. I must say that it is a bit rich of the Conservatives to pretend suddenly to be the friends of the farmers when they ushered in the very trade deals that have undermined so many farmers. However, I urge the Government in the strongest terms to think again about the family farm tax. That measure is badly thought through and leads to the worst of both worlds. It does not close the loophole that results in big equity companies and investors buying up land—it is still more tax-efficient for them to do that than to place their money elsewhere—yet family farms are being caught up as collateral damage. There are rumours that the Government may be thinking again, and I urge them to do so. It is possible for them to look at introducing a genuine family farm test, as exists in France and Ireland. If the Government look at this issue, the Liberal Democrats will, in the spirit of constructive opposition, work with them to get this right and to protect family farmers.

Our reasoned amendment also outlines our opposition to the increase in alcohol duty, because it will hit not only consumers, but small businesses—and not just any businesses. The businesses in this sector are bastions of new craftsmanship and innovation in our small-batch distilleries.

In summary, we know that the Government had an awful inheritance and had to make difficult decisions, but we Liberal Democrats would have made different choices.

[Kanishka Narayan (Vale of Glamorgan) (Lab)]

Has the hon. Member reflected on the fact that the Liberal Democrats, instead of being just the party of no, were the party who enabled the coalition Government, which she is criticising?

[Daisy Cooper]

I think we can all say that a lot of water has passed under the bridge since those times. Since 2015, we have seen what the Conservatives did when they were left in government on their own. I hope that people will have seen at the most recent general election that we Liberal Democrats put health and social care front and centre; that led us to become the largest third party in the last 100 years.

To conclude, we Liberal Democrats would have made different decisions from the Government, and for that reason, we will not support the Bill.

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[Graham Stuart]

I am extremely grateful to you for your guidance, Madam Deputy Speaker. I will try not to refer too much to the impact of national insurance contributions, because we will have that opportunity next Tuesday. None the less, my hon. Friend was right to talk about the impact of this Budget overall, and the effect on hospices and charities in particular.

Yesterday I met the chief executive of HICA, a large not-for-profit provider of social care homes and in-home care. HICA is a brilliant organisation, which has made real progress over the last few years. It finally managed to make a surplus last year, so it can pay its staff more than the minimum wage and invest in its stock. Now it is facing a £3.5 million impact on its £40 million turnover as a result of this Budget and this Finance Bill.

As well as farmers, oil and gas have been touched on today. When I was the Minister for Energy Security and Net Zero, it always struck me as absurd to look at the production of oil and gas rather than the consumption. It is the consumption that is the problem. We must change our factories, our vehicles, our buildings, so that they no longer need oil and gas if we are to move away from them. Attacking production when it is driven by demand is attacking the wrong end. In this measure, the Labour Government are raising the energy profits levy, on top of refusing to issue new licences. The net effect of that, notwithstanding the Liberal Democrats’ saying that they support the policy—I do not know why or how they can do so—

[Daisy Cooper]

Will the right hon. Gentleman give way?

[Graham Stuart]

I will in a moment.

This does not make the slightest difference to how much we consume, but it means that we import more from abroad, and, in the case of liquefied natural gas, those imports have embedded emissions four times higher than the emissions of what we produce domestically. We are going to bring this in from places that are less careful than we are in its production. We are going to lose tens of thousands of jobs and £13 billion of tax revenue, and we are going to lose the engineering expertise and companies that we need for the transition. There is literally no way to make that make sense, and I hope the hon. Lady will now do a U-turn and see the logic of my argument.

[Daisy Cooper]

I will resist that invitation. Does the right hon. Gentleman understand the nature of a windfall tax? It raises money on the windfall that a sector was not expecting. We know that the big oil and gas giants base their investment plans on the profits that they were expecting, but clearly they raised a lot more money because of Russia’s illegal invasion of Ukraine. Windfall taxes have been placed on the big oil and gas giants for the profits over and above what they were expecting to receive.

[Graham Stuart]

The hon. Lady did not actually refer to the measure in front of us. I know it is the Liberal Democrats’ policy to have a windfall tax on anyone who does not sound popular—big banks, big tech, and oil and gas. That is their answer. If anyone says, “How would you do it?”, they trot that out and lose not a single vote, because the very definition of not taking a tough choice is suggesting that there is easy money.

The measure in front of us, which the hon. Lady specifically said she supported, is not a windfall tax. It is a further tax, in tandem with the removal of any new licences, which effectively destroys investment in the North sea. I point to Apache—which says it is looking to withdraw by 2029, risking 500 jobs—Harbour Energy, JAPEX and Chevron, to name just a few. They are pulling out, and there is no environmental benefit. We are losing all that tax, all those jobs and all that expertise, which is exactly what we need for carbon capture, and for hydrogen, for the green economy. It is utterly insane.

I note that there are very few Labour Members present. I watched them as they came in for the Budget, full of cherry-cheeked enthusiasm and reading out their Whip-prepared rote remarks about the disaster left behind, which, as we know, was the fastest-growing economy in the G7, with inflation at target, debt coming down and the economy coming up. They are not all mad, socialist loons, and day by day we can see them losing spirit in the Tea Room and in the corridors as they realise that the deceit that their Front Benchers practised not only on the people, but on them, is coming home to roost.

The Government will pour all of the £22 billion into the NHS in the next year—it is in the figures—and we are supposed to believe that public services will rise by 1.3% or 1.4% in the rest of the period up to the next general election. Is that credible? It is not. I think Labour Members know that, which is what they have signalled by their absence, because they realise, as we do, that this Finance Bill and the Budget are ruinous for this country. My right hon. Friend the Member for Central Devon (Mel Stride) was absolutely right to say that they make this country more vulnerable to the shocks that may and most likely will come, and it will be the Labour party that owns the mistakes that are being sown today.

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[Tulip Siddiq]

We will set out plans in due course. The Bill does, however, extend the scope of agricultural property relief from 6 April 2025 to land managed under certain environmental agreements. That supports the UK Government’s wider environmental objective of supporting farmers and land managers so that they can deliver, alongside food production, significant and important outcomes for the climate and environment. The measure is intended to prevent the loss of APR being a barrier to the involvement of agricultural landowners and farmers in land use change under environmental agreements including, but not limited to, the environmental land management schemes in England and equivalent schemes elsewhere in the UK.

I want to address something the hon. Member for St Albans (Daisy Cooper) talked about: family farms. This is not in the Finance Bill, but I will still refer to it. Individuals can pass on a sum of up to £325,000 inheritance tax-free; £500,000 if that includes a residence being passed to a direct descendent; and £1 million when a tax-free allowance is passed to a surviving spouse or civil partner. There is also a full exemption from inheritance tax when passing assets to a spouse or civil partner.

[Daisy Cooper]

I am grateful to the Minister for giving way. Madam Deputy Speaker, I beg for your patience as I retread some of the remarks I made earlier. It is my view that the family farm tax gives us the worst of both worlds at the moment. It does not prevent equity companies from buying up land, but it does treat family farms as collateral damage. I urge her to think again on this measure and think about introducing a genuine family farm test. If she were to do that, she would certainly have the Liberal Democrats’ support.

[Tulip Siddiq]

It was a difficult decision, and I understand the point the hon. Lady is making, but the reforms to agricultural property relief mean that farmers can access 100% relief for the first £1 million and 50% relief thereafter, meaning an effective 20% tax rate. It was a difficult decision, but we had to do it to fund public services.

My hon. Friend the Member for Bolton West (Phil Brickell) talked about tax avoidance and fraud. To stop people taking unfair advantage of our system, the Government announced in the Budget the most ambitious ever package to close the tax gap, raising £6.5 billion in additional tax revenue per year by 2029-30.

Finance Bill

Daisy Cooper Excerpts

Committee of the whole House
Tuesday 10th December 2024 Commons Chamber

[The Chairman of Ways and Means]

As colleagues will notice, the Speaker’s Chair is vacant, so I remind Members that the Chair should be addressed as Madam Chair or Madam Chairman. I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

I commend the Government for looking at capital gains tax as a potential source of revenue to get public services back on their feet, but we Liberal Democrats believe there was a better way of doing it. Right now, capital gains tax is unfair for everyone. Most people already pay too much capital gains tax when they sell a property or a few shares because the system does not account for inflation over the time they have owned them. At the same time, a tiny number of super-wealthy individuals—the top 0.1%—are able to exploit the capital gains system as effectively one giant loophole to avoid paying income tax like everyone else.

According to the latest HMRC statistics, 12,000 multimillionaires used the loophole to pay less than half the top rate of income tax on their combined £50 billion of income. Instead of raising capital gains tax across the board, we Liberal Democrats would have liked to see the Government properly reform CGT to make it much fairer. To provide a comparison, under the Labour Government’s proposals, the main rate of capital gains tax for basic rate taxpayers is being increased from 10% to 18% and, for higher and additional rate taxpayers, from 20% to 24%. According to the Government’s own statistics, the change will raise about £2.5 billion per year by 2029 to 2030. Under the Liberal Democrat proposal, we would have separated out capital gains tax from income, raised the tax-free allowance, provided a new allowance for inflation and had three different rates of capital gains tax. That would have raised £5.2 billion, more than twice the Government’s proposals.

As colleagues will hear, key to our proposal is the reintroduction of indexation—effectively, an allowance keeping people from paying tax on gains that are purely the result of inflation. That would be fair for ordinary people selling a family home or a few shares, but it would also incentivise long-term investment by ensuring that taxpayers are not penalised due to inflation if they hold their assets for a long period of time.

To summarise, the Liberal Democrat proposals for reforming capital gains tax would be fairer and would raise twice as much. The Institute for Fiscal Studies said our proposals would move CGT in a “sensible direction”. Our new clause 1 is incredibly simple. It would require the Government to produce a report setting out the impact of the changes to capital gains tax under the Bill on investment and on the disposable income of people in different income brackets. The objective behind the new clause is to illustrate to the Government that there is a fairer way to reform capital gains tax and to encourage the Government, in the spirit of constructive opposition, to look at our proposals in future years.

[Jim Dickson (Dartford) (Lab)]

It is a pleasure to serve under your chairship, Madam Chair. I am grateful for the opportunity to take part in Committee of the whole House on a crucial Bill that underpins the new Government’s aim of fixing a tax system that has become less fair and less sustainable over 14 years of Conservative government. We will ensure that the wealthiest pay their fair share, and we will increase funding for public services. I will not detain hon. Members long as we have debated the measures at length already, but I want to make a few brief comments on the portions of the Bill that relate to capital gains tax.

As other Members have pointed out, we need to remind ourselves of our starting point. As the director of the Institute for Fiscal Studies, Paul Johnson, said in his response to the Budget:

“It does bear repeating that the fiscal inheritance”

—that this Government face—

“is truly dire.”

It is in that context that the Bill and the wider measures announced at the Budget should be seen. As the IFS has set out, and Members have mentioned, capital gains tax is paid by less than 1% of the adult population—about 350,000 people. If we break that down further, around 12,000 people—0.2% of the adult population—realise gains of more than £1 million, which account for two thirds of capital gains tax. That is 12,000 people—the main contributors to capital gains tax—paying a little bit more.

Clause 7 raises the headline rates of capital gains tax to 18% for gains within the basic income band for basic rate taxpayers and to 24% for those who pay higher rate income tax. Those levels have risen to match the unchanging residential property rates. The changes are welcome and perhaps not as substantial as was widely speculated in advance. It is important that we look at comparators with neighbouring countries. Those rates, even after the changes, compare well with our European neighbours. In France, as the Minister already said, capital gains tax sits at 30%, rising to 34% for high earners. Our closest neighbour Ireland—often seen as a haven for entrepreneurs who feel that the UK is not a good place to do business—charges 33%, and in Germany it is charged at 25%, plus a 5.5% solidarity surcharge on the tax paid.

Clause 12 includes a long-needed reform in the treatment of carried interest, and I am pleased that the Government are proceeding carefully with this long-overdue measure, moving us towards a tax regime where carried interest is within the income tax framework.

These measures will, I believe, contribute to the crucial revenue that must be raised to fix the foundations of our economy and repair our public services. We need to remind ourselves of the words of George Dibb, the associate director of economic policy at the Institute for Public Policy Research, who said of the changes in the Budget:

“After at least a decade of under-investment, there is now real hope that the government can start to fix the UK’s economic foundations.”

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[The Chairman of Ways and Means]

I call the Liberal Democrat spokesperson once again.

[Daisy Cooper]

At the heart of the debate is a stark injustice, understood by every man, woman and child on the streets of Great Britain. In the last few years, oil and gas giants have made eye-watering profits—in many cases, they are profits that they did not expect to make—and they have made them off the back of Putin’s brutal invasion of Ukraine and global supply chain issues that caused energy prices to soar. At the same time, people have seen their living standards drop and their energy prices soar. In too many cases, people have had to choose between heating and eating.

We Liberal Democrats were the first party to call for a tax on oil and gas windfall profits back in October 2021, but it was not until May 2022 that the previous Government eventually introduced the energy profits levy. It was half-hearted and woefully late. If it had been brought in when we had called for it, there would have been additional revenue to reduce people’s energy bills and launch an emergency home insulation scheme, reducing energy consumption, which would have been good for the climate, and reducing people’s bills, which would have been good for their pockets.

The previous Government effectively let oil and gas giants off the hook, by initially setting the energy price levy at just 25% and putting in place a massive loophole in the form of the investment allowance. That allowed the oil and gas giants to get away with vast sums at taxpayers’ expense, with the excuse of investments that they would have made anyway. In essence, the Conservatives gave them tax relief on polluting activity when they should have been doing everything to raise funds to reduce people’s bills and urgently insulate homes.

Thanks to the investment allowance—the big loophole—in 2022, Shell admitted that it had paid zero windfall tax despite making the largest global profit in its 115-year history: a profit of £31 billion. As some colleagues in the Committee have referred to, energy prices have come down since those record levels of 2022, but the oil and gas producers have still seen huge profits. In 2023, Shell saw its profit come down from £31 billion, but it still made £22.3 billion.

[Harriet Cross]

How much of that profit was made in the UK versus globally?

[Daisy Cooper]

To be honest, I do not know what the distinction is between global profits and UK profits. The point is that the levy is put on UK profits made out of UK operations. I hope that the hon. Lady will agree that when her constituents cannot afford to put their heating on, she should not miss the opportunity to raise taxes from the big oil and gas companies.

As I said, Shell made a profit of £22.3 billion in 2023, and BP saw profit of £11 billion, its second highest in a decade. I hope the Committee agrees that where those profits are made on UK operations, they should pay their fair share. We are glad that the current Government have listened to calls from Liberal Democrats and others and finally scrapped the unfair investment allowance loophole, but we would like the Minister to give the Committee some clarity on how much money will be raised, particularly through the abolition of the carve-out. By extension, we would be able to see how much money could have been raised under the previous Government but was gifted to the large gas giants. [Interruption.] Conservative Members may not like it, but their constituents are choosing between heating and eating. People should know just how much money could have been raised and how much will now be raised through this measure.

Finance Bill

Daisy Cooper Excerpts

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

[Rachel Taylor]

Increasing rates of stamp duty land tax for second properties to 5% more than those buying their home will free up housing stock for first-time buyers, and hopefully stop prices continuing to skyrocket. Before I came to this place, I was a property solicitor in a high street firm in my constituency. Part of the reason I loved that job was that I got to be part of so many brilliant projects that transformed communities, but I was always so happy when I helped first-time buyers who would come through my door, proud that they had saved up and were able to buy their first home. They would tell me their plans for the future. We would overcome mountains of paperwork. I love being part of the moment when they got the keys to their first home, and they were finally homeowners.

I got to know my clients well. Each new homeowner would talk to me about how they would become part of their local community—supporting the local football club, or working at local businesses, hospitals and schools. They were planning to have kids who would go to local schools and shops in the town centre. But the longer I worked in that role, the fewer first-time buyers came into my office. Becoming a homeowner became out of reach for most young people. There are already half a million fewer young homeowners than in 2010. Millions are stuck in expensive, poor quality and insecure rented housing. The average cost of a home is over 10 times the average income of my constituents.

The Conservative party left a legacy of the most acute housing emergency in living memory. This Government could have ignored it and let more people miss out on becoming homeowners, but they decided to act and boost the supply of affordable homes. In addition, this policy will free up more housing stock for first-time buyers. For those who can afford the luxury of a second home, it will bring much-needed income into the Treasury in the form of an increased one-off tax—stamp duty land tax—that will help to pay for the much-needed improvements in health and education that this Government promised to deliver.

The status quo is unacceptable. Our housing market is not a fair market, and I am glad that this policy will help to remedy that. It will ensure that those buying properties as investments pay a fair level of tax at the start, so I urge all Members to vote for this important change.

[Daisy Cooper (St Albans) (LD)]

We Liberal Democrats have long campaigned against what has become, in some places, the scourge of second homes. In too many cases they disrupt or destroy local communities. However, I argue, as does my party, that this is not the best way of doing it. Clauses 50 to 53 raise the stamp duty surcharge on second and subsequent homes. I can see why it is attractive—it is an easy way of raising tax revenue for central Government—but it does not tackle the root problem. I urge the Government to look at the Liberal Democrat proposals, which would do both.

The impact of holiday homes, and short-term lets in particular, has been well rehearsed in the House over the years, but without any action by the previous Conservative Government to tackle it. In my constituency we have seen an absolute explosion of Airbnbs, which have become a magnet for antisocial behaviour and noise. Properties are taken out of the rental market, increasing demand and pushing up rental costs, squeezing many people out of the market and out of our area all together.

The shadow Minister, the hon. Member for North West Norfolk (James Wild), highlighted the risk that this measure may pose of properties being moved from long-term let to short-term let. It may come as some surprise that the previous Conservative Government failed to regulate short-term lets properly. Indeed, when this House was considering the Levelling-up and Regeneration Act 2023, we Liberal Democrats tabled amendments to the Bill to give local authorities the power to regulate the number and location of Airbnbs—a power that is desperately needed. Every single corner of our country should be able to strike the right balance between tourism and homes for local people, where they can build their lives and their community.

We also called for a separate planning class to be created for local authorities, and we want local authorities to have the powers to levy higher council tax for newly bought second homes, with an additional surcharge on overseas residents. That would provide regular income for our hard-pressed councils, not just infrequent money for central Government.

We all know that we have a national housing crisis, but it is also a local housing crisis, because it presents differently in different parts of the country. We urge the Government to look at our proposals to raise regular tax revenue for our hard-pressed councils while tackling this problem at its root. I invite Ministers to speak to the Secretary of State for Housing, Communities and Local Government to ensure that we can give our local authorities the power to regulate the number and location of short-term lets such as Airbnbs, so that our communities are no longer disrupted and destroyed.

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the Minister.

Finance Bill

Daisy Cooper Excerpts

Report stage
Monday 3rd March 2025 Commons Chamber

[Dr Jeevun Sandher (Loughborough) (Lab)]

Economic growth is the ability to produce more with less. It is the foundation of all human progress. It is why we are not all scratching around in the dirt, desperately hoping something will grow. However, there is no economic law that says that when the economy grows, all must share in it. In decades past, it has not been shared. Growth has gone to high earners over everyone else, to the old rather than the young, to capital over labour and to London over everywhere else. This is tearing our democracy apart, and it is tearing other democracies apart. That is why I am so proud to speak in favour of this Finance Bill, which will help to ensure that economic growth is shared among all people and all places.

I worked as an economist before entering this place. As Members may know, my PhD was on the causes and consequences of inequality and particularly why, since the 1980s, people and places have not shared equally in growth. In my adult life, I have never known a growing economy, and now my beard is turning grey—[Interruption.] I will soon look like Gandalf. I want to see the dotted line on the GDP chart finally go up, but that is not enough. We have to ask whether all are sharing in that growth. Growth for where, and growth for whom? The only way to ensure that all share in growth is for this Government to act. When people do not share in growth, when their incomes do not rise and when life becomes worse, hope turns to cynicism, happiness turns to anger and peace turns to riots.

There are four ways in which growth has not been shared by all, and we are fixing all four in this Budget. First, across high-income nations, top earners have seen their pay rise far faster than the rest. Technological change destroyed manufacturing jobs and led to a divided labour market of high-paid and low-paid jobs. High-paid workers benefited from new technology—computers, Excel and PowerPoint—and they saw their wages increase 50% faster than the average. We are fixing that in this Budget by investing in the skills of non-graduates, with more money for further education colleges and apprenticeships.

Secondly, older generations have benefited from cheaper homes, while younger renters cannot buy a home because we have failed to build enough houses in this country. Twenty years ago, house prices were three times the average wage. Today, they are more than eight times the average wage.

[Daisy Cooper (St Albans) (LD)]

Does the hon. Gentleman agree that one thing that could be done very quickly is that the Government could legislate so that all Airbnb properties need planning permission? That would release a lot of short-term lets back into the market as longer-term lets for younger people.

[Dr Sandher]

I am sure the Government will consider these measures in the round, but more broadly, of course, it is about building many more homes. Some 40% of 18 to 34-year-olds are living with mum and dad, and we are starting to fix that in this Budget, including by providing a 20% increase in the affordable homes programme, which is a stepping stone to building 1.5 million new homes.

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[Daisy Cooper]

I rise to speak to new clauses 4 to 8, and I will make a few additional comments at the end.

New clause 4, tabled in my name, would review the Bill’s impact on small and medium-sized enterprises by requiring an impact assessment. In this House, we have rehearsed many times the impact of the Government’s Budget on small and medium-sized enterprises, including through the rise in national insurance contributions, the changes to business rates and, of course, the plans to change inheritance tax and business property relief. We are very concerned about the impact of the Budget as a whole on small and medium-sized enterprises, on our high streets and, of course, on family businesses. It is inconceivable that these changes are going ahead without an impact assessment, so we urge the Government to consider this amendment.

New clause 5 would require the Chancellor to assess and publish a report on how tax changes in this Bill affect households at various income levels. Of course, we all know that the cost of borrowing is at a 30-year high. After the misery of the mini-Budget, mortgage holders in particular will be deeply concerned.

Just as we are concerned about certain measures that are in the Finance Bill, we are also concerned about certain measures that are not in the Bill. As we outlined in our reasoned amendment on Second Reading, the Bill does not include measures to reverse the winter fuel payment cuts. More recently, we Liberal Democrats have also called for a social energy tariff, which I hope the Government will consider in due course.

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[Nesil Caliskan (Barking) (Lab)]

Is that not precisely the point? Our state system does not have the capacity or the means to support children with special educational needs. The additional £1 billion investment, which in part will be raised by getting rid of the VAT exemption, will help deliver not only 6,500 new teachers but the additional support for special educational needs children in our state system.

[Daisy Cooper]

We disagree on this point. Fundamentally, Liberal Democrats have said that we should rise the tide for all children, not lower the tide for some. We had a very ambitious education agenda in last year’s general election manifesto. Some areas we had in common with the Labour party, and some not. Our very ambitious agenda for education included a ringfenced high needs budget. I have campaigned relentlessly on improving SEND provision for the past five or six years in this Chamber, in Westminster Hall debates and in various meetings. We do not think that this particular measure is needed to improve SEND funding. Other measures could be used. We have a difference of opinion about how to raise that money.

[Graham Stuart]

The hon. Lady’s response to that intervention is perfectly good in its own way, but her new clause simply asks to measure the impact and look at whether the damage is too great to justify it in that broader sense. I hope that the Government consider looking at it, take it seriously and follow the hon. Lady’s arguments.

[Daisy Cooper]

I am grateful to the right hon. Member for highlighting that the new clause is about an impact assessment. Labour colleagues will be aware that the VAT provision will come into effect very quickly, but it will not provide the instant support that many children need. If children’s education is disrupted, they immediately suffer disadvantages in their life. If the Government had really wanted to pursue this measure, I would have hoped at the very least that it would have happened in a few years’ time to allow for adjustment. But we are where we are. We do not support the measure, but at the very least we request an impact assessment, as the right hon. Member suggested.

New clause 8 on alcohol duties would require the Government to produce an impact assessment of the Bill’s measures on distilleries, wine producers and the hospitality industry. Since 2022, I have tabled numerous questions in the House and written letters to the Treasury with evidence of falling tax receipts and sales as a result of the measures that the Labour Government are now introducing. They will introduce huge amounts of red tape, which will be very complicated, very costly and, ultimately, will push up prices for consumers and the industry.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

May I draw the attention of the House to my entry in the Register of Members’ Financial Interests? Let me voice my support for my hon. Friend’s new clause, which would require the Government to review the impact of alcohol duty increases on key sectors. Scotch whisky is one of Britain’s greatest industries, accounting for 22% of the whole of Britain’s food and drink exports and supporting tens of thousands of jobs. Yet despite repeated assurances from the Government, the industry continues to face sharply rising duty costs. Since the duty on Scotch and other spirits was—

[Madam Deputy Speaker (Caroline Nokes)]

Order. The hon. Member’s intervention is slightly too long. He is on the list to speak in due course, so perhaps he will make his point about the importance of Scotch whisky then.

[Daisy Cooper]

I am grateful to my hon. Friend for raising the plight of Scotch whisky. My husband is an Ayrshire boy who is certainly doing his bit to keep the Scotch whisky industry going.

Notwithstanding that, it would help if the Government did not pursue these particular duties. Near my constituency —it was in it before the boundary changes—is an importer of fine wines. One of its products is port—not the kind of drink that many people sit and glug as they might do with a cheaper form of alcohol. [Hon. Members: “Speak for yourself!”] For most families around the United Kingdom, port is a drink to buy for an occasion—a birthday, Christmas, a wedding or something of that kind. It is not typically the kind of drink that someone would glug—with the exception of a few people in the House—in such volumes as other alcoholic drinks. None the less, that business will be impacted by these measures. They will affect a huge amount of innovation in the industry, which is a prize to our economy.

[Jim Shannon]

I ask the hon. Lady to cast her mind back to Scotch whisky. I met representatives of the Irish whiskey industry just before Christmas. They told me of their deep concerns over jobs and employment and the future of their distilleries. In my constituency, the Hinch, Rademon and Echlinville distilleries all have those concerns. The hon. Lady is right to pursue this matter on their behalf.

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[Daisy Cooper]

I am grateful to the hon. Member for adding his support. I hope that he will join us in the Lobby later.

Finally, I will touch briefly on the Government amendments. The Chartered Institute of Taxation has provided a comprehensive briefing to all MPs on the 57 amendments to part 2 of the Bill. It is fair to say that the Government’s proposals on non-doms have been a little hodgepodge. The chartered institute is now strongly advocating for proper consultation. It warns that “uncertainty” that has been introduced through these measures and that the drafting of some amendments may inadvertently achieve the opposite of what the Government seek. On that note, I encourage Ministers to meet the Chartered Institute of Taxation and heed its warnings to ensure that measures are properly drafted and that no uncertainty is introduced through them.

The Liberal Democrats have tabled a number of new clauses, and we hope that colleagues will join us as we press them to the vote.

[Jim Dickson (Dartford) (Lab)]

It is a pleasure to contribute once again to a debate on this important piece of legislation. A number of amendments have been tabled by hon. Members from across the House and, while I do not have time to cover them all, I will address the key ones.

As I said in Committee of the whole House, this is a crucial Bill that underpins the new Government’s aim of fixing a tax system that has become less fair and less sustainable over the last 14 years of Conservative government. I am conscious of the need to confine my remarks to the amendments rather than speaking to the Bill itself, but I remind everyone that the Bill was necessary because of the dire economic inheritance that the Government found on entering office last year.

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[Jim Dickson]

I thank the hon. Gentleman for his intervention. He seems remarkably well informed already about the impact of the changes in the Budget, and I imagine that hon. Members across the House will be similarly well informed.

The Leader of the Opposition has outlined her desire for a British equivalent of Elon Musk’s Department of Government Efficiency. I wonder how she can square that desire with the new clauses, which, if passed, would seem to duplicate work already done by the Government. That is hardly a model of efficiency—more like playing politics.

[Daisy Cooper]

In the Liberal Democrats’ new clause 8 on alcohol pricing, the hon. Member will see that we are asking not just for an impact assessment of the taxation raised, but for an assessment and estimation of the administrative and operational costs for the preceding 12 months already incurred by this fantastic part of our industry. Does he agree that an impact assessment of the red tape is important as well as the tax take for the Treasury?

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[Nesil Caliskan]

Ministers have provided an assurance of their assessment, and they do not believe that will be the case. The Government are taking a rounded approach to energy that, alongside our commitments to GB Energy and to a transfer to more renewable energy, will allow there to be a more mission-led approach. I take the right hon. Member’s point, but the Government have provided assurances that there will be constant monitoring and that if changes are required they will deliver them.

[Daisy Cooper]

The hon. Member will be aware that there is a mechanism within the Government’s energy profits levy, which will kick in in 2030, to ensure that if energy prices start to go down, the levy will cease to work. So there is an intrinsic link between the money that the energy companies pay and energy prices. Does she agree, given that energy prices have now gone up for the third time in a row and all our constituents are struggling with energy prices, that it is right that the big oil and gas companies should pay their fair share, but that when energy prices come down, the levy will stop?

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[Jim Shannon]

It is a pleasure to speak in the debate—is it the end? No, I am sure it is not. I thank you, Madam Deputy Speaker, for calling me so soon; I was just getting myself prepared. This is an opportunity to speak on this Bill one last time. I have spoken every time it has come to the Chamber, and I am pleased to do so again.

The shadow Minister, the hon. Member for North West Norfolk (James Wild), referred in his contribution, which was helpful for setting the tone and level of the debate on these important issues, to the impact of the inheritance tax changes on small and medium farms. That needs to be raised at every opportunity until the Government understand the devastation that it will wrought on farmers, causing them to sell their land and their future to pay the Government. I have sat beside the Minister and asked for the threshold to be increased. If the threshold were increased by £1 million to £5 million for farms, it would mean that many farms would not be penalised by the changes. The Government urgently need to promote food security in the United Kingdom of Great Britain and Northern Ireland. This decision beggars belief. If they are aiming the measures at those who abuse the system, they should design a scheme for them—not a scheme that affects many farmers across this great United Kingdom, including 70% of farmers in Northern Ireland.

The other major concern is that of the NI contributions. GP clinic and health centres are the latest to suggest that they will have reduced hours and capacity because of the constraints of their NI contributions. That must not be the case.

I support the Opposition’s new clause 2, on “Energy (oil and gas)”. The shadow Minister made the case for it extremely well, and others have spoken to it. I agree with them, and my party will support the new clause if it is pressed to a Division, as I understand it will be.

On new clause 8, the hon. Member for St Albans (Daisy Cooper), who spoke for the Lib Dems, referred to the whisky sector. I will make the case for Irish Whiskey Association, which was clear when I met it before Christmas that the measures will have a great impact on a sector that is already under pressure. Let us be honest: most Irish whiskey organisations’ trade is under pressure. They export most of their whiskeys to make their money, but the fact of the matter is that they find that extremely difficult to do. They tell me clearly that if they are taxed more heavily, it will lead to job losses and a reduction in what they are able to do. They do incredible work for the community. I have known the owners of three whiskey distilleries in my constituency—Rademon, Hinch and Echlinville distilleries—since they have had their businesses, and they are concerned about the impact of the measures.

[Daisy Cooper]

rose—

[Jim Shannon]

Whenever the hon. Lady pushes her new clause, we will support it. I give way.

[Daisy Cooper]

The hon. Member will be acutely aware that there are huge supply chains. Distillers are fantastic for attracting people, including in the tourism industry, to create strong local economies. There is huge innovation going on in that industry. It is essential that the Government carry out an impact assessment not just of how much the measures will cost and of the tax revenue to the Treasury, but of the operational costs and the red tape over the 12 months before the measure, which will cause havoc, comes in. Does he agree?

[Jim Shannon]

The hon. Lady makes her point succinctly. I hope that the Minister has heard her comments about the impact. Her concerns are certainly my concerns—indeed, the concerns of all Members on the Opposition Benches. She referred to the review of the impact on small and medium-sized enterprises. I understand that new clause 4 will not be pressed to a vote, but if it were, it is another that my party would support.

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[James Murray]

As the right hon. Gentleman will be aware, in the coming financial year 2025-26 the personal allowance will be above the level of the new state pension, so what he said should not apply when it is people’s sole income. However, there are already cases of individual pensioners who do owe tax; indeed, around two thirds of pensioners pay tax, because they also have private pensions. They pay via pay-as-you-earn or self-assessment.

I will not go into detail about the Government amendments to visual effects relief, because I assume they have the consent of the whole House. However, I will briefly speak to some of the amendments tabled by Opposition Members, as I feel I should address them. I will take together new clauses 1, 2, 3, 5, 6 and 8, which would require the Government to review the number of individuals receiving the full state pension and their income tax liabilities over the next four years, and to publish various impact assessments regarding the impact of changes to the energy profits levy, as well as the impact of the Bill on households, small and medium-sized enterprises, distilleries, wine producers and the hospitality industry.

The Government remain opposed to all of these new clauses, for the same reasons that I gave in Committee. First, the relevant information on those receiving the state pension and their tax liabilities is already published by HMRC, the Department for Work and Pensions and the OBR, and is publicly available.

[Daisy Cooper]

In new clause 8, which deals with alcohol pricing, we have made explicit that we are not just looking for an impact assessment of the tax that the Government intend to raise. It is about the estimate of administrative operational costs—that is, the red tape that is going to be put on the industry. Does the Minister agree that we need that impact assessment, and will he meet me to discuss how we can do it?

[James Murray]

The impacts of the changes to the alcohol duty and the energy profits levy have already been set out in the tax information and impact note that was published alongside the autumn Budget, so that information is already in the public domain. Information on the impact on households was also published alongside the autumn Budget in the “Impact on households” report, which demonstrated that households are on average better off in 2025-26 as a result of these decisions.

Finally, I will address the amendments tabled by the Opposition that deal with VAT on private school fees—several hon. Members have spoken about that matter. Amendments 67 to 69 would collectively remove clauses 47 to 49, which remove the VAT exemption for private schools and set out anti-forestalling provisions and the commencement date.

Ending the VAT tax break for private schools is a tough but necessary decision that will secure the additional funding needed to help deliver on our commitments, including those relating to education and young people. This policy took effect at the beginning of January, and I note that in his speech, the shadow Minister, the hon. Member for North West Norfolk (James Wild), did not say how his party would pay for its decision to reintroduce that tax break for private schools. The policy will raise £1.7 billion by the final year of this Parliament, so it is essential that the Opposition explain what they would cut from the schools budget, from education services, or from any other public services to pay for the reintroduction of that tax break. I will happily give way if the shadow Minister would like to make an intervention to place on record how he will pay for it. I do not see him leaping to his feet, so I will move on.

Finally in the debate we are having about VAT on private schools, the Government set out the expected impacts of this policy in the autumn Budget, so I do not believe that new clause 7—which would require the Government to make a regular statement on the impact of pupils with special educational needs and disabilities—is necessary. However, I take this opportunity to make clear that in developing this policy, the Government carefully considered the impact it would have, including on pupils with special educational needs and disabilities. I am sure that the hon. Member for St Albans (Daisy Cooper) and her colleagues will welcome the extra £1 billion next year for high needs funding that we have been able to announce thanks to our decisions on tax policy, including on private schools.

I hope I have set out why the Opposition amendments are unnecessary, and indeed why reintroducing the VAT tax break for private schools not only runs counter to the manifesto on which the Government were elected, but represents an unfunded tax cut from the Opposition—have they learned nothing? I therefore urge the House to reject those amendments, and I commend our amendments to the House. Again, I extend my thanks to all Members who have contributed to this debate.