Spring Statement

Daisy Cooper Excerpts

Wednesday 26th March 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

The people of this country are crying out for change, but they feel they are just getting more of the same. Of course, it was the Conservative party that wrecked the public finances, but we are eight months into the new Government and people are left wondering, “Where is the change that was promised?” The Chancellor says that the world is changing, so why will she not change course with it? The Chancellor said she wanted a dash for growth, but with her national insurance jobs tax she shot herself in the foot before she even crossed the start line.

After the Government’s disastrous Budget, the Government had the chance today to change direction, fix our finances, kick-start growth and deliver a small business Budget. The Government could have scrapped the jobs tax, which will hammer our high streets, and instead ask the big banks, social media giants and online gambling companies to pay their fair share instead. The Government could have changed their approach to trade, launching talks to boost growth through a new trading deal with our European neighbours. Instead, the Government have made the wrong decisions to cut public services, hit disabled people and inflict more pain on our small businesses and high streets. In doing so, they have delivered no change and almost no growth at all.

After years of Conservative mismanagement, people can see just how broken our public services are. They cannot see a GP, they cannot see a dentist, they are fighting for an education plan and, they are picking up the pieces of a broken social care system. Everything is broken. Nothing works. That is why people are impatient for the change they were promised.

We have to bring the welfare bill down and support more people into work. That is right for people and our economy, but cutting support for someone who needs help getting dressed and washed in the morning is not just wrong; it does absolutely nothing to support that person into work. If anything, it does the exact opposite. It will also have knock-on impacts for the entitlements of their family carers, too. Will the Chancellor come clean about this? If the Government are serious about cutting welfare spending, they must get serious about fixing health and social care. Will the Chancellor speed up the social care review and ensure that it concludes no later than the end of this year?

In the Chancellor’s quest to slim down the civil service, I wonder why she has not looked at the mountain of red tape created by the previous Government’s terrible trade deal with Europe. A whopping 2 billion extra pieces of paper have had to be completed by businesses since Brexit, enough to wrap around the world 15 times. If we manage to cut the red tape, we can give British businesses a tailwind, deliver far more growth than is currently predicted, increase the fiscal headroom to deal with global headwinds, and free up precious time and money in our civil service. That would be real change.

Business was promised change too. Today’s statement should have been a small business Budget. We Liberal Democrats have repeatedly raised the alarm about the impending damage of the national insurance jobs tax, bigger business rates bills and changes to reliefs for family farms and family businesses. Those changes will be a hammer blow to small and family businesses, leaving communities facing the prospect of an epidemic of boarded-up shopfronts. They will be a hammer blow to community health and care providers who stop our NHS from falling over. This is not the change that was promised. Instead, I say again that the Chancellor should look again at much fairer ways to raise the tax revenue our public services desperately need by reforming capital gains tax more fairly and asking the big banks, the social media giants and the online gambling companies to pay their fair share.

I know the Chancellor must contend with President Trump’s trade war, which is causing global economic turmoil, but our response to Trump’s bullying cannot be to cower in the corner and just hope that he is nice to us. We cannot sit on our hands while British steel is hit with Trump’s tariffs. We Liberal Democrats warmly welcome the Chancellor’s move to raise defence spending to 2.5% of GDP, but instead of cutting the aid budget, which abandons the world’s poor and damages our soft power, she should be covering the cost by raising the digital services tax, handing the tab to Elon Musk and Trump’s other billionaire backers. At the very least, can the Chancellor categorically rule out any reduction in the tech tax in an attempt to appease the White House, especially when disabled people in Britain face eye-watering cuts?

To conclude, I have a series of questions. Will the Chancellor recognise that cutting public services that are already stretched is a false economy? Will she accept that trying to bring down the welfare bill without fixing health and social care is a road to nowhere? Will she listen to the warnings of small and family businesses that her jobs tax will do more harm than good? Will she look at the fairer ways of raising revenue that we Liberal Democrats have put forward? And will she take the bold action we need to grow our economy by rebuilding our broken trading relationship with Europe? The public were promised change. Where on earth is it?

[Rachel Reeves]

The hon. Lady says, “Where is the change?” Let me tell her: more money into our NHS, with 2 million additional appointments and waiting lists falling five months in a row; rolling out breakfast clubs in primary schools from April this year; increasing defence spending to protect us in a more uncertain world; additional support for carers, the living wage up, the Employment Rights Bill and so much more. That is the difference we have made in nine months, and we have only just got started.

The hon. Lady talks about trade. We believe in free trade. We are an open trading economy and we benefit from trade links around the world, including with our single biggest trading partner, the United States of America. It is right that we work with our allies in the United States to ensure that that free and open trade continues. That is in our national interest and this Government will always act in our national interest. At the same time, there will, as the hon. Lady knows, be a summit between the UK and the EU in May, where we will look to re-set our relationship, so we can see more free trade and the better flow of trade, especially for our smaller businesses to be able to export around Europe.

The hon. Lady talks about welfare. She has not admitted that there is a single problem in the welfare system as it exists today. I am not willing, and this party is not willing, to write off one in eight young people who are not in education, employment or training. It is why, for example, we announced this week, with my right hon. Friend the Secretary of State for Education, an additional 60,000 training places to train people up in the construction industries of the future, and a £1 billion package of personalised targeted support because there are many disabled people—the hon. Lady knows this—who are desperate to work but are not getting the support and were denied support by the previous Government. That is why we have said there will be additional support for the most sick and disabled, and that personal support for getting people back into work. That is the right approach, so that we have protections for those who need it, work for those who can, and a sustainable system that is here for generations into the future.

I want to take on the hon. Lady’s main point. She wants all the money for public services, but she does not want to raise the taxes to pay for them. At the moment, we spend £105 billion a year in interest on Government debt. It seems that she would just like more of that debt. She says that people cannot see a GP or a dentist. How does she and the Opposition parties think that we pay for those things? They cannot object to the tax increases and support the money we have invested in our public services. To say otherwise, I am afraid, is fairytales and the magic money tree—it just does not add up. The difference on the Labour Benches is that we will put money into our public services, explain where it comes from, and ensure that the public finances are on a firm footing. That is the difference between our party and the Opposition parties.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Daisy Cooper Excerpts

Consideration of Lords message
Tuesday 25th March 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

I rise to speak to Lords amendments 1B, 5B, 8B and 21B. Even before the Budget, there were rumours that the Government were thinking of introducing a hike to national insurance contributions. We Liberal Democrats issued a stark warning to the Government. We challenged them at Prime Minister’s questions and in questions to the Deputy Prime Minister, saying that if they went ahead and introduced these changes, social care providers up and down the land would be hit incredibly hard. The Government cannot say that they were not warned. We warned them, even before they made the announcement.

In the many long debates that we have had in the Chamber since the Budget, we have consistently made the case that health and care providers should be exempted from this change. The Government say that they want to make the national health service a neighbourhood health service; we heard this just an hour ago from the Secretary of State for Health and Social Care. They also say that they want to take services out of hospitals and on to the high street, but this tax hammers the very providers of the neighbourhood community services on which the NHS relies. It is GPs, dentists, pharmacists, hospices and care providers who hold up our community care, and prop up our NHS, so that it does not fall over.

Government Ministers have said on many occasions that they have increased funding to social care, but the additional funding announced in the Budget is dwarfed by the rise in national insurance contributions. As other Members have highlighted, the Government have said that they have given more funding to hospices, but that funding is for capital projects. There is no point having another hospice building or hospice bed if there are no staff to look after the people lying in them. We know that we have to fix the front door to the NHS—our GPs and dentists—but we have to fix the back door to our NHS too, which is social care.

On hospices, there is nowhere else for the people in them to go. People look for support from hospices so that they can die in dignity, with independence, in a setting of their choice, surrounded by their loved ones—not in the sterile environment of a hospital ward or, worse, a busy corridor or ambulance parked outside. We need our GPs, dentists, hospices, pharmacists and care providers to survive and thrive if we are to end the crisis in our NHS.

The Lords in their wisdom have not sent back an amendment that simply asks for an exemption. They have put in a very clever tweak that asks that the Government to adopt a Henry VIII power. That is not something the Liberal Democrats would normally support, but on this occasion it would give Ministers the power to choose if and when they want to exempt health and care providers from the rise. That way, when we get this enormous growth booming in our economy—when we see the success that we all hope to see—a Minister could choose to exempt health and care providers and give them the cash injection that they need. I urge the Government to support this measure.

Amendment 8B provides a power to exempt small businesses from the changes. Small businesses are the engine of our economy and of growth. They are the very organisations that prop up our high streets. They are the glue that hold our communities together. The Government have raised the employment allowance for microbusinesses, but they have not put other provisions in place to support small businesses. While our small businesses can be the engine of growth, they are screaming out about the number of obligations being put on them, with the NICs changes, business rates bills going up and the new obligations under the Employment Rights Bill. It is all happening at once, and they say that they are overwhelmed. I support amendment 8B, which would give the Government the power to exempt small businesses.

I am also in favour of Lords amendment 21B on an impact assessment. As Ministers remind us, there is a tax and spend announcement coming, but looking at the impact of the provisions, this is less about tax and spend and more about the overwhelming impact on small businesses, which are really struggling right now. Many of them still have covid loans, and many are struggling with access to finance. Many owners are remortgaging their homes to prop up a new business. This change has come out of the blue. Small businesses have not been able to plan ahead for it, and many of them are fearful about what will happen. I fear that if the measures go ahead, in a matter of days, we will start to see shop fronts boarded up on high streets up and down the land.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I was going to call Sir Roger Gale, but he is no longer bobbing—ah, I call him now.

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[Dave Doogan]

I agree entirely. This is a £24 billion fiscal drag that is intended to create growth. Work that one out if you can, because it is beyond my ken. The Government will not make derogations for key elements of health and social care, because the benefit of the £24 billion drag on the economy that the right hon. Gentleman pointed out is, after compensation, already down £10 billion. If they compensate the people who they definitely should, such as GPs, pharmacies, care providers and hospices, that would take it down to somewhere around £7 billion or £8 billion. What type of Chancellor and Treasury orthodoxy says, “We place a £24 billion burden on the economy in exchange for an £8 billion return for the Treasury”? It is absolutely catastrophic. It is misadventure writ large, and it has Labour as its logo.

[Daisy Cooper]

The hon. Member highlighted the comments by the Office for Budget Responsibility, which said that the £24 billion is, in fact, only £10 billion once behaviour change is accounted for. If the Government were to agree to the exemption that we seek, the figure could be only £8 billion. Does he agree that there are much fairer ways of raising that revenue, such as by putting a digital services tax on the big online media giants and gaming companies?

[Dave Doogan]

The hon. Member raises two excellent examples of what could be done to raise the funding that the Government need in a just way. Let us not forget that Labour knew fine what it was walking into when it won the election. We told it, as did the Liberal Democrats and the media—the Tories were a bit quiet on the issue, right enough—that there would be an £18 billion black hole if it stuck to Tory tax and spending policy. This is on Labour. The hon. Member mentioned two examples of excellent and just ways to raise funding.

Similarly, the Government could apply Scottish income tax thresholds to the whole of the UK, giving most people a pay rise and raising £16 billion into the bargain. They could raise £40 billion from a 1% wealth tax on assets over £10 million. There are a range of other measures that they could take, such as raising £30 billion by rejoining the single market—not very many people in here talk about that.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Daisy Cooper Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

Notwithstanding what was said by the hon. Member for Loughborough (Dr Sandher), the Lords amendments were clearly not designed with the aim of creating a simpler tax system. They have been sent to us to consider because they may create a fairer society, and that, in my view, should be a driving force in our consideration of them today and in the work of this House.

Such is the strength of feeling in the other place that it has sent us 21 amendments, and such is the strength of feeling on the Liberal Democrat Benches that we will support every single one. Taken together, they offer exemptions for health and care providers, for small charities with an annual revenue of less than £1 million, for transport providers, for children with special educational needs and disabilities, and for small businesses with fewer than 25 employees.

[Steve Darling (Torbay) (LD)]

Rowcroft hospice in my constituency is impacted greatly by the Bill, as is Bay Care, an excellent social care provider. Both those organisations are having to make challenging and difficult decisions about how many people they can employ and how they can support people in their communities. Does my hon. Friend share my fear that this will result in the shunting of costs on to our core NHS services?

[Daisy Cooper]

I agree wholeheartedly with my hon. Friend. One of the main problems with this particular measure is that it is so self-defeating. It is effectively robbing Peter to pay Paul. I have said it once and I will say it again: this jobs tax is damaging to growth, and self-defeating for our health and care services. We Liberal Democrats have opposed it, and throughout the debate on the Bill we have suggested alternative ways—fairer ways—in which the Government could raise the same amount of revenue. We have also asked the Government, if they are indeed pursuing this measure, at the very least to exempt health and care providers.

The Government will not get hospitals out of a financial hole by taxing the GPs, dentists, pharmacies and care providers who prevent people from needing to go to hospital in the first place. The Government will not alleviate the pressure on hospitals by taxing hospices, which will now be forced to withdraw services from people who are trying to die with independence and dignity in a setting of their choosing, rather than in a cramped hospital corridor or a sterile ward. The Government will not keep people out of hospitals by levying a tax on the very health and care charities that provide vital services for those who are vulnerable—warm spaces, friendship for the isolated, financial advice, welfare support and social care. The Minister said that extra money would go into social care, but we know that the money allocated to it in the Budget is dwarfed by the increase in national insurance contributions. We cannot save the NHS unless we fix social care.

[Victoria Collins (Harpenden and Berkhamsted) (LD)]

There are many similar examples, but Quantum Care in Hertfordshire, a not-for-profit social care business, says that its costs will rise by £1.7 million in national insurance contributions alone, which will also have an impact on council and social services. That is certainly not solving our health and social care problem.

--- Later in debate ---

[Daisy Cooper]

As a fellow Hertfordshire Member, I have met representatives of Quantum Care a number of times and have heard the same reports as my hon. Friend. This is extremely worrying for our social care providers, who are very clear about the impact that this measure will have. They will have to put up their costs, they will have to hand back contracts to local authorities, and they will not be able to provide the level of care that many vulnerable people require.

The measure will also have a huge impact on small businesses and high streets. As I have said before, high streets are the most visual and visceral indicators of whether the economy is working in their area. If small businesses see their local high street going down the pan, they will lose confidence in their local economy. Pubs, hospitality companies, retailers, beauty salons and day centres are the glue that holds our communities together, but they are also the engines of local growth. Small businesses are crying out for assistance. What makes them feel so overwhelmed is the cumulative impact of all the measures that we are seeing from this Government: the national insurance increase, the rise in business rate bills, and the new obligations that are imposed by the Employment Rights Bill without the resources to manage them.

Throughout the passage of the Bill before us, we Liberal Democrats have set out alternative ways for the Government to raise funds. The Government say that this measure will raise £25 billion for the NHS, but the Office for Budget Responsibility says that when behaviour change and reimbursement in the public sector are taken into account, it will raise just £10 billion. We believe that that money could be raised from different sources, from the digital services tax to the gaming tax to reforming capital gains tax so that it is fairer and raises more money than it can currently raise because of the way in which the Government have addressed it.

This measure will destroy growth, decimate parts of our high streets, and cause vulnerable people to lose out on vital services. That is why we Liberal Democrats have opposed the increase in the jobs tax, and it is why we ask for, at the very least, an exemption for our valuable health and care providers.

[Rachel Blake]

Lords amendment 21 calls for a review of this policy. I will come to the practical reasons for my opposition to it shortly, but first I want to focus on the cause of the problem and the cause of today’s debate.

The last Government presided over economic chaos, scaring businesses away from long-term investment. The last Government failed to invest in the skills that are required in the vital sectors about which we have been hearing today. The last Government left the NHS on its knees, in desperate need of long-term investment. It will be hard to take the serious steps that will put the country back on its feet, but I believe that the measures we are debating today are necessary. What a contrast we see now: a Government laser-focused on economic stability, a Government determined to invest in skills for the future, a Government who are already reducing the NHS waiting list thanks to a £23 billion investment. That is the outcome of this policy, which is part of a package of measures to stabilise our economy and enable us to invest in public services.

I have to admit that I have been struck by the passion and commitment of Members on both sides of the House who have spoken about important public services. I talk to representatives of those services regularly myself, and I firmly believe that the investment that this Government will be able to make in childcare, in early years, in breakfast clubs, in the NHS and back into local government, where it needs to be, will in the round create the more sustainable public services that we so desperately need.

On the practical reasons why I oppose Lords amendment 21, the OBR has already considered the implications of this policy—

--- Later in debate ---

[Aphra Brandreth]

I completely agree with that excellent intervention. The frustration that hospices have is that in order to recruit staff, they need to pay wages comparable to what NHS staff receive, and this change is making that virtually impossible to do. Hospices requires a highly specialised workforce to provide the levels of care and dignity that they offer to patients. Without the proposed exemptions, I am unsure as to the sustainability of the hospices that serve my constituents.

The second issue I would like to mention briefly is the impact on transport for children with special educational needs. As we know, the complex needs and challenges of SEN children varies from case to case; some will need specialist transport to and from school, for appointments, or just for everyday tasks. Many of these young people are vulnerable children, to whom process and routine matter. They might have a driver with whom they have built a bond and who understands their needs; they might be a highly anxious child, or perhaps a non-verbal child who has a driver who can use British Sign Language.

For my constituents in Chester South and Eddisbury, specialist transport is of the utmost importance. Our communities are isolated and rural, and parents and children rely on this vital service. There are no transport alternatives in many areas. People cannot get a bus—not even one without a specialist driver—leaving many of my villages cut off with no public transport options at all.

[Daisy Cooper]

In my constituency of St Albans, which is not particularly rural, many children with special educational needs have to travel a great distance, because we do not have enough special school places. Does the hon. Member agree that this is an issue that affects children right up and down the country?

Oral Answers to Questions

Daisy Cooper Excerpts

Tuesday 4th March 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

Health and wealth are two sides of the same coin, and we will not get economic growth without a healthy population. But as a result of the national insurance contribution changes, the Care Provider Alliance reports that 73% of social care providers will have to refuse new care packages from local authorities or the NHS, and that 57% will have to hand back existing contracts. What assurances can the Government provide to the huge number of people who are very scared that they will have to go without care and see their lives deteriorate?

[James Murray]

The hon. Lady makes an important point, but it is also important to point out that tough decisions on taxation must be made to fund the very services she is keen to support. On her specific point about these pressures, we announced at the provisional local government settlement a further £200 million for adult and children’s social care to support authorities in delivering key services. This will be allocated through the social care grant, which will bring the total increase in this grant in 2025-26 to £880 million, meaning that up to £3.7 billion of additional funding will be provided to social care authorities in 2025-26.

[Daisy Cooper]

Ministers will be aware of analysis from the Nuffield Trust showing that that additional grant is being dwarfed by the additional costs that the Government are introducing.

On the great British high street, we know that our high streets are beautiful features of our cities, market towns and villages, but hospitality, retail, beauty and other service sectors are saying that the combination of national insurance and other changes will be a real hammer blow. If high street shops start to close, that is bad for economic growth and bad for confidence. What mechanisms will Ministers put in place to monitor the impact of the national insurance contributions changes on the vibrancy and resilience of our high streets?

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.

Family Businesses

Daisy Cooper Excerpts

Wednesday 26th February 2025 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

I have been invited to make an intervention, so I will very quickly say that while the right hon. Gentleman was reasonably outspoken on the mini-Budget, the same cannot be said of his colleagues on the Front Bench.

[Mel Stride]

I have made the position extremely clear. What is very clear is that we actually left the current Government with an excellent inheritance—[Laughter.] Well, where has it all gone now? We left the Labour party with the fastest growing economy in the G7. We left the Labour party with a near-record level of employment. We left the Labour party with a near-record low level of unemployment. We left the Labour party with 13 consecutive months of real wage growth. And we left the Labour party with inflation figures, which had gone up to over 11% in October 2022 due to the Ukraine war, of just 2%—bang on target—on the day of the general election. That is a decent inheritance. It has taken the Labour Government seven short months to completely trash it, so we will take no lectures from them.

We would do things very differently, because we recognise that small businesses and family businesses are the backbone of our economy. They are the life and fire of our economy, but there is no life or fire in the Chancellor—just tragic mistakes and miscalculations. The sugar rush of borrowing and spending that we saw in the last Budget further bloated the size of the state and forced taxes ever upwards. We have seen the Government failing to grasp the nettle of productivity, giving into those trade union paymasters, and awarding above-inflation wage settlements with no strings attached whatsoever. They have had absolutely nothing to say on the issue of welfare, the budget for which has been ballooning out of control. When we were in government, we reduced the welfare budget on my watch by £5 billion. The OBR recorded over 400,000 fewer people going on to long-term sickness and disability benefits as a result of the reforms that we brought in.

There was, however, more to be delivered. We went into the last election with a clear plan to save a further £12 billion every year as a result of our welfare reform. Where has the zeal for welfare reform gone? It has evaporated entirely under the Labour Government—in fact, it was never there. Simply, if the Government have the backbone to come forward with some serious proposals to deal with the welfare budget, such that the Chancellor says at the Dispatch Box on 26 March that she will unwind the national insurance increases, the Opposition will support her.

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[Daisy Cooper (St Albans) (LD)]

I am delighted to speak on behalf of the Liberal Democrats about family businesses, because they are so important and make a distinct contribution to our economy and to their local communities. Family businesses are synonymous with quality, trust and reliability. Family businesses have a strong sense of stewardship of their craft, their capital and their customer base. By their very nature, family businesses have the goal of nurturing their business to pass through to the next generation and, as a result, have a vested interest in long-term decisions, the stability of the economy and building a resilient community.

Where family businesses are located on high streets, they are often the anchor stores, bringing back loyal customers time and again. Family businesses are present in every part of the UK. Indeed, they are often the largest employer in a region and the largest philanthropic organisation in those communities, too. But in tabling the motion, the official Opposition do not seek to acknowledge or accept the damage that they have done to family businesses over the years. [Interruption.] If the official Opposition are patient, they will realise that I will not pull my punches when addressing the Government, but it is an Opposition day debate, so let me continue to outline the litany of mistakes that have occurred over the years.

The Conservatives scrapped the industrial strategy, which was the bedrock of long-term planning. They failed to reform the broken business rates system, which has hammered family businesses on the high street. They starved family businesses of seasonal workforces, which many of them need. Their botched Brexit deal has deprived many family businesses of access to European markets, raising trade barriers for imports and exports, and wrapped them up in reams of red tape. They wreaked havoc with their mini-Budget, making access to finance too expensive for many, and they failed to address the soaring energy costs and broken energy market that has resulted in many small family businesses suffering from extortionate energy contracts and being frozen out of the best deals.

That is why it is disappointing to see that the Labour Government are making some of the same mistakes. The national insurance contributions rise is unnecessary. The Government could have raised that £10 billion through other, fairer means such as taxes on big corporations that have raised billions, using that money to put public services back on their feet.

The business rates proposals will be incredibly damaging for small businesses on our high streets. On a number of occasions in the House, I have invited Ministers to look at House of Commons Library research commissioned by the Liberal Democrats that shows that chains will continue to be subsidised by small independents. Of course, there are also the changes to APR and BPR, which will raise a relatively small amount of money for the Treasury but could be devastating to many small family businesses across the UK.

Family Business UK, which I met this morning, is urging the Government to run an impact assessment. It is conducting its own impact assessment in partnership with the National Farmers Union, where it intends to speak to more than 3,000 family businesses about the potential impact of these measures. May I invite the Minister either to intervene on me now or to say in responding to the debate whether the Government will meet Family Business UK to discuss the findings of its survey once it is complete?

We should not just think of family businesses as units for tax revenue. Family businesses are different. Family farms rightly grab the public’s imagination, but there is more than that. In my constituency of St Albans, I can think of many. Hedges Farm Shop is a much loved, family run, award winning farm shop, and its delicious meat is often on the menu of our award winning restaurants. Waterers tailors is run by two generations of the Masi family, providing bespoke, high quality tailoring and some especially fancy men’s jackets. Burston Garden Centre is a long-established family business with a lovely restaurant and is a fantastic place for a day out. We have beauty companies, building merchants and electric vehicle charger stores, all of which are family businesses. And one of my favourite pubs, too: The Boot, handed down from Will to his son Sean.

On the subject of pubs, what on earth is this absurd idea in the Opposition day motion that the Product Regulation and Metrology Bill will somehow put the British pint at threat? The pint is well and truly safe. [Interruption.] The pint is well and truly safe, something I am sure the entire House wants to hear. The pint is enshrined in law in the Weights and Measures Act 1985, so this scaremongering is just total nonsense. I am tempted to call it a load of old Codswallop, but I would not want to insult the makers of that very fine pale ale. I could instead accuse the Conservatives of scraping the barrel. Let us just say that the Conservatives’ claim that the pint will be abolished is as fanciful as Labour’s claim that punters will see a penny taken off the price of their pint. They won’t. Frankly, if the Opposition think they are standing up for pubs they need to think again. I say this not only as the MP for St Albans, where we have more pubs per square mile than anywhere else in Britain, but also, I am proud to say, as the MP crowned last year as pub parliamentarian of the year. [Interruption.] I was, yes.

The last Conservative Government proved, unfortunately, that they did not know their firkin from their pin. They could not tell a kilderkin from a craft keg. Their defective attempt to introduce a draught beer relief ended up excluding the very small craft brewers they were claiming to help. When a former Conservative Prime Minister had the audacity to have a photo op with the casks that he had mistakenly left out of the draft duty relief support scheme, it was the Liberal Democrats who worked with publicans and small brewers to force that correction.

If the official Opposition want to pretend to stand up for the great British pub, they will need to do their homework. They should get out and speak to the struggling pubs and hospitality businesses that they have ignored. If the Conservatives want to continue with their pint-sized politics, it will be the Liberal Democrats who will continue to have the official Opposition well and truly over a barrel. Jokes aside, there are changes in the Labour Budget that are no laughing matter: the national insurance contribution changes and the reduction in business rates relief will deliver a hammer blow to our pubs. They will have no choice but to put up prices for punters and many more may be pushed to the brink.

[Carla Lockhart]

A joint survey by leading hospitality trade associations in Northern Ireland has revealed that 65% of hospitality businesses will reduce their employment levels, 55% will cancel planned investment, and 22% believe they will have to close their doors. The same can be said of retail because of the extra threat around big business and online sales and the fact that they get away in the smoke around taxation. Does the hon. Lady agree that there will be tumbleweed on our high streets, rather than the thriving high streets that the Minister suggested today?

[Daisy Cooper]

I am grateful to the hon. Member for raising those points. Our high streets are the beating hearts of our communities all over the UK. There is real concern that when the national insurance contribution changes and the reduction in the business rates relief kick in, our high streets will be absolutely hammered and we may indeed see tumbleweed. That matters for two reasons: there will be an impact on our local economies and that could have a knock-on impact on people’s confidence. Many people with busy lives do not always get to follow headlines about growth, inflation, interest rates and all the rest, but they do look to their high streets as the primary signal of whether or not the economy is working for them and whether it is working in their local area.

In hospitality, of course, it is not just the increase in the national insurance contribution rates that will have an impact. The changes will also mean that many part-time workers will not be recruited to work in those businesses. That will impact in particular women, people from ethnic minorities and young people. Young people often work in hospitality as their first job. Often hospitality can give them the chance to work after something adverse has happened in their life. I think all of us in this House can say that we support hospitality, and it is vital that we continue to support it.

[Sarah Dyke (Glastonbury and Somerton) (LD)]

My hon. Friend talks about businesses run by women. I have a constituent who runs a nursery in Somerton. She has been struggling to stay afloat for some time, after issues relating to the Conservative Government and the impact of the increase to national insurance contributions. The announcement on nursery provision could be the last straw for her business. Does she agree that the Government must urgently look at the impact their measures are having on the early years sector?

[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.

[Several hon. Members rose—]

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

As we all know, family businesses are the very backbone of our local economy. They are the job creators, the innovators and the entrepreneurs—those that drive the local economy and are at the heart of all our communities. They employ 14 million people and contribute £585 billion to the economy.

Rightly, the Opposition are very concerned about last October’s Budget. As the shadow farming Minister, I have heard much noise that has been rightly made about the implications of the family farm tax, but I want to use the opportunity of this debate to focus specifically on the implications of business property relief.

Earlier, I heard the Exchequer Secretary to the Treasury at the Dispatch Box talk about the mechanisms by which the Government have calculated the impact that business property relief will have. I specifically question how he, and indeed the Treasury, arrived at those decisions. I note that that Minister is not even here to listen to the points I want to make, so I hope that the Under-Secretary of State for Business and Trade, the hon. Member for Harrow West (Gareth Thomas), will specifically address them. The Treasury has calculated that the agricultural property relief and business property relief changes will bring in about £500 million, yet despite the challenges that I and others have raised with Ministers and the Treasury, no economic impact assessment has been provided as a result of those changes.

I want to understand whether any specific detail has been looked at for business property relief and the wider implications that it will have on too many of our family businesses. Only last week, I met Richard Prudhoe, who runs Fibreline and employs 250 people in Keighley. He has commented that the negative implications of business property relief on his business, which is completely owned by him and his family, will be catastrophic. If something happens to him, the dire consequences of tax that will be implemented on his wider family will be catastrophic, potentially putting at risk 250 people employed in Keighley.

[Daisy Cooper]

Does the hon. Member agree that it would be helpful if the Minister, in his closing remarks, gave assurances that the Government were willing to meet Family Business UK, which is conducting its own survey of the impact of APR and BPR changes on businesses?

[Robbie Moore]

I absolutely wish that the Government would listen to the many concerns that are consistently raised by Family Business UK, which is doing an excellent job in the amount of data it seems to be providing to the Treasury, yet nobody in the Treasury seems to be listening. Indeed, just last week the Chancellor did not even have the courtesy to turn up to listen to many of our farming organisations. She is not even giving wider family business stakeholders the courtesy of listening to them.

The point is that the associated implications of business property relief will have dire consequences for businesses that are wanting to invest and employ local people. They are now having to face the same challenges as wider farming businesses of how to pay a potential IHT liability coming down the line. They could look at disposing of a shareholding in their business, but many of them do not want to do that—why would they want to sell out to a larger corporate?—as they want to keep their family business in the wider family, or they could sell plant and machinery, which negatively impacts the productivity of their business. The Treasury is not looking at that. Those businesses are saying to me, “What is the point? Why would I want to invest not only my time but my energy in growing that business if there will be negative implications on the wider family structure and the wider people we are employing within that business?”

This Budget is hostile to our family businesses and will have a hugely detrimental impact on them. Family Business UK has already said that the data it has presented to the Government shows that these changes will likely result in a gross value added loss of £9.4 billion and the potential loss of 125,000 full-time equivalent jobs during the period from April 2026 to April 2030 alone.

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[Andrew Griffith]

I will not, as time is limited.

Yesterday, the Conservatives successfully amended the national insurance Bill in the other place to mitigate the worst of Labour’s job tax. In winding up, will the Minister confirm that the Government will respect that amendment to exempt hospices, care providers, GPs, pharmacies, small charities and special educational needs and disabilities providers from the worst ravages of Labour’s job tax?

Let me be entirely clear, for the benefit of every one of our constituents, that these are choices that Labour has made, and they are not choices that will lead to growth. One archetypal small business is the family-owned pub, and we can all think of a family-owned pub that we have come to love. Thousands of them will fall victim to this Government’s anti-business agenda. That is not to mention the Government’s tax on the staff behind the bar, a Bill to ban banter, a threat to end even those cheeky cigarettes outside and even a power for the Business Secretary to shrink the size of the British pint.

The Government are giving themselves unchecked powers that could see the great British pint vanquished as part of their Trojan horse, EU surrender product regulation Bill. The hon. Member for Ealing North (James Murray), who has returned to his place, says that the Government have no plans to ban the pint. If that is the case, will they support our amendment 38 to save the pint?

[Daisy Cooper]

The shadow Minister was in the Chamber when I spoke earlier. Does he not agree that it is the Weights and Measures Act 1985 that protects our pint and that we should not be scaremongering that our pint is in anyway at risk?

[Andrew Griffith]

I deeply regret that if the hon. Lady reads the Bill, she will find that it precisely confers those powers on the Secretary of State, but she can join with those on our Benches in the other place by supporting the amendment. The Government can make clear today whether they are scaremongering or whether we should all be deeply concerned. By backing the amendment, they can remove that live risk to the British pint. [Interruption.] They can back the amendment any time they want.

The bravery—I will be kind—of those sat on the Government Benches is impressive. Every single one of them will have to look their constituency business owners in the eye. Every single one will have to face constituents as they lose their livelihoods. The choices that this Government have made will put thousands of employers in the red and some out of business for good. Hundreds of thousands of jobs will be lost. For just one second, I ask Labour Members to put themselves in the position of an employer, telling their long-standing staff that they can no longer afford to keep them on.

Those on the Government Benches do not understand business. Their interests are with their union paymasters, not the workers who will lose their jobs. They are petrified of celebrating success and supporting wealth creators. This is a Government who are taking business for granted. It is devastating our economy, and we will all pay the price.

Charter for Budget Responsibility

Daisy Cooper Excerpts

Wednesday 29th January 2025 Commons Chamber

[Richard Fuller]

The Chief Secretary to the Treasury, like so many on the Labour Benches, loves to talk—almost fondly—about the former Prime Minister Liz Truss. Well, at least she knew her time was up after 50 days; we are stuck with the Chancellor for five years.

When it was noted a few months back that the entire Labour Cabinet could barely scrape together a year’s worth of business experience between them, it was thought to be just a curiosity. Little did we know it was an early warning sign of their lack of suitability for the task of managing the British economy: business confidence down, job losses up, consumer confidence in the gutter and Government debt spiralling further upwards—and they are just getting started.

There are, of course, potential benefits from the investments that are being announced today. We share a desire for a more competitive, less regulated economy based on a passion for free enterprise, but while Labour celebrates the exodus of millionaires from our country, we recognise that it represents a loss of skills, lower job creation, and the evaporation of potential future taxation to support public services. While Labour sees the attack on family farms and family businesses as a vital part of its warped class-war ideology, we recognise that putting family at the heart of enterprise is a critical piece of our nation’s proud heritage of freedom.

[Daisy Cooper (St Albans) (LD)]

The shadow Minister talks fondly about the importance of family farms. Where were his comments on that topic when his party was negotiating trade deals with Australia and New Zealand that have sorely impacted farms around the country?

[Richard Fuller]

My friend, the Liberal Democrat spokesman on economics, makes a fair point about the impact of trade agreements on family finances. However, as she knows, that is very different from the pain that farmers are feeling right now about Labour’s attack on the ability of families to pass on their farm to their children—it is different in scale and in type. It is a damaging policy by the Labour party that we know, or at least hope, that Labour will change in due course.

I am sure that today, the Chief Secretary to the Treasury is also engaged in a series of phone conversations with his departmental colleagues as, ahead of the March update on the OBR’s financial forecast, they review what it will mean for their departmental expenditures. As he has those difficult phone conversations, I say to the Chief Secretary that we stand ready to support effective steps on prudent financial responsibility.

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[Daisy Cooper (St Albans) (LD)]

The charter for budget responsibility is at the heart of the OBR’s function, setting the Government’s fiscal rules, as well as the OBR’s broader remit and how it is to perform its duties. It is important to stress just how vital the OBR is for the sound management of our public finances and for the UK’s economic stability.

I am very proud that the OBR was set up during my party’s time in office, and the Liberal Democrats have backed it at every turn since. In our most recent general election manifesto we said that every fiscal event should be accompanied by an OBR report, and we are pleased that this Government are taking the same approach. We also called on the Government at the time to establish the OBR to assess general election manifestos independently.

Unfortunately, commitment to the OBR as an institution cannot be taken for granted, as we have seen over the past few years. We saw Liz Truss’s Conservative Government sideline the independent watchdog at the mini-Budget and cast doubt on its forecasts at every turn. Equally unfortunately, we all witnessed the consequences: soaring interest rates, sky-high mortgage bills and a spike in the cost of servicing our national debt. We Liberal Democrats are crystal clear that we can never have a repeat of that debacle.

[Matt Rodda]

The hon. Lady is making an excellent speech. Will she also reflect on the disastrous impacts on pensions savings, and particularly on people who were drawing their defined contribution pensions at that point in time? Some of my constituents had awful experiences, which they relayed to me.

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[Daisy Cooper]

The hon. Gentleman is right to point to the fact that many people were impacted by the mini-Budget in different ways. [Interruption.] I hear chuntering from a sedentary position from the shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller). Those on the Conservative Benches may want to forget the impact of the mini-Budget, but many of our constituents across the country continue to live with the consequences.

In the run-up to the Labour Government’s Budget, we Liberal Democrats welcomed one of the Government’s new fiscal rules—namely, the switch to public sector net financial liabilities as the targeted measure of debt. We are pleased that the Chancellor made a change that will create more room for productive public investment, while also making a commitment that debt as a share of GDP should keep falling. We Liberal Democrats have long recognised the need to boost public investment in a responsible way, and we are glad that the Government have moved in that direction.

However, as we debate the new charter, it is also worth reflecting on how fiscal rules are treated in our politics more broadly. Although they are absolutely necessary for economic stability, there is too often a sense that fiscal targets can be arbitrary and that they are chosen based on what is convenient for each Government; previous Conservative Chancellors changed the fiscal rules five times in seven years between 2015 and 2022. What often seems to be lacking throughout the process is a sober, pragmatic dialogue about what the best fiscal rules are for our economy, for everything from growth and investment to jobs and net zero—a discussion perhaps ideally not affected by politics, but focused on what is right for our economy.

Notwithstanding that, and although I hope we will all agree to these changes in the borrowing rules, the costs of borrowing clearly rely on good economic management, which, in turn, as the Chief Secretary said, relies on stability. Borrowing costs have gone up in part due to events abroad, but they have also risen because of the Government’s jobs tax, the uncertainty over their business rates reform and the impact that that will have on small businesses. It is therefore clearly important that we recognise that any changes to productive borrowing must go hand in hand with the responsible management of day-to-day spending and tax changes.

A second point, which I made in an earlier debate around the time of the Budget, is that although the Liberal Democrats welcome productive borrowing for investment, we recognise that the Government’s headroom is quite slim. Will the Minister be able to offer a word or two about which measures the Government are taking to ensure that we have a resilient economy that can withstand any external shocks? We live in a very uncertain world. There are rumours of trade wars and tariffs, and God forbid we have another pandemic. It is only by having a resilient economy that we can withstand unpredictable external shocks.

There are several elements in the charter that we support, and we do not want to stand in its way, but I express the hope that, from here on in, we may be able to adopt an approach to fiscal rules that is more pragmatic, open and grounded in what is best for our British economy.

--- Later in debate ---

[Darren Jones]

That is a very strong accusation, which I refute in the strongest terms. The Chancellor was very clear that debt would be falling as a share of the economy. That is the fiscal rule. As predicted by the OBR, we will deliver on that promise. It is right that the Chancellor chose at the Budget to define debt as public sector net financial liabilities. The big question is why. As the Liberal Democrat spokesperson, the hon. Member for St Albans (Daisy Cooper) said, it is because having a Government with stability and competence at their core means that we are borrowing not to pay for out of control day-to-day spending, which I think everyone in the House would agree is an unsustainable path to higher debt burdens, but instead borrowing responsibly within guard rails for investments, predominantly alongside the private sector, to enable, for example, infrastructure delivery across the country or investment in businesses, for example, through the national wealth fund.

The reason that the public sector net financial liabilities debt rule is important in that context is because it reflects the fact that, where Government have an equity stake or have provided debt for non-commercial terms, there is a rate of return. The taxpayer receives some of the benefit of that investment and growth in the economy, which I am sure we would all welcome. There is the important difference about the type of debt. Under the last Administration, debt was spiralling out of control because the last Government could not pay their day-to-day bills. Everybody knows, whether they are running their household finances or the country’s finances, that that is not a sustainable thing to do.

That has changed under this Government. Debt will be for productive investment only and day-to-day costs will be met by revenues. Yes, that means that public services have to live within their means, and often that means difficult discussions in the spending review that I have to conduct with Secretaries of State, to which the hon. Gentleman alluded. However, all of us around the Cabinet table recognise not only the non-negotiable nature of the fiscal rules, which are the foundation of economic stability, but the prize of the modernisation and reform of our public services. He will have heard the Prime Minister and other Secretaries of State talk about just that fact. There is a huge amount of opportunity to achieve better outcomes for people at lower cost, not just through basic technology but by improving the way we deliver public services. That means delivering services designed around the person and how they wish to interact with the Government. It means that people can receive support from different Departments and different functions, and they can receive the information they need at the time they need it.

Let me give one example. In the constituency of my hon. Friend the Member for Filton and Bradley Stoke (Claire Hazelgrove)—just north of my Bristol North West constituency—I visited a community diagnostic centre. The CDC programme began under the last Administration, but we have committed ourselves to it. The provider works in partnership with the NHS trust, charging exactly the same rate as the hospital for a diagnostic scan. The company involved does not make profits in comparison with the hospital costs; it is the same NHS tariff rate. People can have MRI and CT scans, gastroscopies, and other tests. The centre is attached to a branch of Asda and there is plenty of free parking.

I asked the owners, “Why are you able to charge the same rates as the hospital in my constituency while running this service more effectively?” They said, “We are open for 14 hours a day from Monday to Saturday and for 12 hours on Sunday, we sweat the assets more than a hospital can, and we have new bits of kit with AI that are more productive to use”—which is why the Health Secretary wants to roll those out across the NHS. They also said that the customer service was the key driver for productivity, because customers could book their appointments and move them if necessary, they could visit the centre after work, and they could go there between shopping trips. Essentially, the service has been designed around the patient. Patients turn up pretty much all the time, and they are never not able to do so. That is just one example of the way we are modernising public services.

[Daisy Cooper]

The Chief Secretary has given a fantastic example of how improving capital infrastructure in the NHS can improve productivity, but one of the big frustrations in the NHS is the fact that staff cannot be productive because the buildings around them are falling apart. I have seen that in Watford General hospital, where A&E staff cannot be as productive as they might be because they are in a crumbling, cramped hospital. Has the Treasury considered conducting any assessment of the productivity gains that could be produced by the new hospital programme, and by potentially speeding up the delivery of those hospitals?

Growing the UK Economy

Daisy Cooper Excerpts

Wednesday 29th January 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

The Government are absolutely right to focus on economic growth, but their blinkered approach on Europe is holding back British businesses and stifling the very growth that we need to fund our public services. By ruling out negotiations with the EU on a bespoke customs union and a youth mobility scheme, the Chancellor’s dash for growth will be more like a slow crawl in a car with the handbrake on. In order to turbocharge economic growth, will the Government start negotiating those initiatives now?

To unleash growth through our small businesses, the Chancellor should scrap her national insurance contributions rise, and instead seek to raise the same amount of money through the measures that we Liberal Democrats have suggested: reversing the tax cuts on the big banks, increasing taxes on the big tech and gaming companies, and reforming capital gains tax in a way that would be fairer and raise more money. Will the Government look again at those alternative revenue raisers and lift the burden that the Government have placed on small business?

On airports, the Chancellor has voiced her support for Heathrow expansion and has suggested that expansion will be forthcoming for other airports. We Liberal Democrats oppose this, because it will deliver minimal growth at a huge cost to the climate. Can the Government confirm whether they intend to abide by the advice of their own climate change advisers that no airport expansion should proceed until a UK-wide capacity management framework is in place? In the midst of a climate emergency, can the Government give a cast-iron guarantee that the so-called refreshed carbon budget that the Chancellor referred to will not water down climate targets, and what do they have to say to those experts who say that sustainable aviation fuel is not realistic or scalable?

Turning to the Oxford-Cambridge growth corridor, we really welcome plans that further boost the UK’s position as a European and global science leader. Can the Government confirm that there will be enough money for the whole of the route to be constructed on the East West Rail route, and that they will work hand in glove with local authorities to minimise the environmental impacts, introduce infrastructure before or alongside housing, and maximise local community benefits?

[Darren Jones]

As the hon. Lady knows, this Government committed in their manifesto to not rejoin the single market or the customs union. We will honour that promise, but the trade deal that the previous Government put together was clearly not good enough. There is room for us to improve our trading, energy and security relationships with our friends in the European Union, and my ministerial colleagues are in active discussions with their counterparts to take that work forward.

The hon. Lady invited me to speculate on any future Budgets. That is above my pay grade, but I am sure the Chancellor heard her suggestions. On airports, as I said in my statement, all our plans will be in line with our legal obligations. Of course, we recognise the need for more sustainable fuel and sustainable transport as part of those expansion plans.

Lastly, the hon. Lady asked me about something that I cannot read—

[Daisy Cooper]

East West Rail.

[Darren Jones]

Thank you. I thought it was “EU” again—I could not read my own handwriting.

The whole premise of the growth corridor is that we will have a transport spine through that corridor that allows for all the developments—housing, lab space or communities—around it. That is a crucial part of our plans, and we will make sure that it is delivered.

Bank Resolution (Recapitalisation) Bill [Lords]

Daisy Cooper Excerpts

2nd reading
Wednesday 22nd January 2025 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

All of our constituents are still feeling the cost of living crisis very acutely, and mortgage holders are still suffering from the misery of the mini-Budget, so the very last thing that taxpayers want to worry about is whether public money will be used to bail out banks that have gone bust. That is why we Liberal Democrats are broadly supportive of the Bill, which we hope will make sure that taxpayers do not have to do so.

A number of improvements were made to the Bill in the other place, as the Economic Secretary alluded to, and we welcome the improved requirements on reporting and accountability. However, as she and the shadow Minister acknowledged, there was a point of contention on the Bill’s scope. Liberal Democrats in the other place supported the successful Opposition amendment to prevent the Bank of England from using this mechanism, which is meant for smaller banks, to support bigger banks that are signed up to a different scheme.

The Economic Secretary said that an updated code of practice has been produced, but it is disappointing to hear that Ministers intend to table an amendment in Committee to try to delete the Lords amendment from the Bill. The Economic Secretary suggested that the purpose of keeping it in the code of practice, rather than on the face of the Bill, is to ensure flexibility in a time of crisis.

I invite the Parliamentary Secretary to the Treasury, the hon. Member for Swansea West (Torsten Bell), to say a word or two about that in summing up, because it strikes me that if this is not on the face of the Bill, it could create uncertainty rather than provide flexibility in a time of crisis. There is a danger that even the suggestion that this mechanism could be used to support a bigger bank could cause chaos, confusion and instability. I encourage Ministers to think again and to ensure that the restriction on the Bill’s scope remains on the face of the Bill.

The Liberal Democrats tabled a further amendment in the other place that sought to create a secondary objective for the Bank of England to consider the competitiveness and growth of the market before directing the recapitalisation of failing small banks through this levy. In effect, the amendment was designed to protect against unintended consequences. Obviously, it could be a catastrophe if the Bank of England were required to rescue one small bank, even if that act may put others in jeopardy. The intention behind the amendment was to protect against the systemic collapse of the banking system. Will the Minister set out the Government’s objections to that amendment? Can the Government provide assurances about alternative protections that could be put in place to achieve the same goal of protecting against unintended consequences?

Oral Answers to Questions

Daisy Cooper Excerpts

Tuesday 21st January 2025 Commons Chamber

[Mr Speaker]

I call the spokesperson for the Liberal Democrat party.

[Daisy Cooper (St Albans) (LD)]

The rising cost of borrowing will bring more misery to mortgage holders, with reports suggesting that some mortgage holders could pay an extra £500 a year. Given that potential global trade tensions could further affect the UK’s financial stability, what assurances will the Government provide that UK lenders remain in a strong position to support households and small businesses?

[Rachel Reeves]

Labour and Liberal Democrat Members are mindful of the last Government’s impact on mortgage borrowing costs for many of our constituents, and we are determined to tackle the cost of living crisis. As the hon. Member knows, I have written to financial regulators, including the Financial Conduct Authority, about regulating for growth, not just for risk, so that we can help more people get on the housing ladder and help grow our economy.

--- Later in debate ---

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

A number of small high street businesses will be hit hard by the Government’s jobs tax and the dramatic reduction in business rates relief, and House of Commons Library research that I commissioned shows that from April 2026 the Government’s reforms to business rates could leave small and independent businesses in effect subsidising the big chains. Will the Chancellor meet me and a delegation of small and independent businesses from St Albans so that we can make the case for fairer reforms and for wholesale reform of the broken business rates system?

[James Murray]

One of the problems with the Liberal Democrats is that they support all our spending plans, but they do not support any of the tax changes to fund them. This is a prime example. When we talk about increasing employer national insurance contributions, we acknowledge that that was one of the toughest decisions we took at the Budget, but it was necessary to fix the public finances and provide support for those public services, which I note the Liberal Democrats are very keen to support.