VAT Registration Threshold: SMEs

Daisy Cooper Excerpts

Tuesday 24th June 2025 Westminster Hall

[Daisy Cooper (St Albans) (LD)]

It is a pleasure to serve under your chairship, Mr Vickers. I congratulate the hon. Member for Mid Leicestershire (Mr Bedford) on securing this important debate. It is a pleasure to wind up on behalf of the Liberal Democrats.

As we have heard from a number of colleagues, small and medium-sized enterprises are the heartbeat of our local economies. It is not just that they are the engine of growth: they have enormous social impact too. Whether it is the physios or beauty technicians who travel to people’s homes, sometimes to visit older people who are less mobile and cannot get out, or market traders selling the wares they have made at home, sole traders and small businesses bring real vibrancy to our local economies, and we must do everything we can to support them. I am proud that the Liberal Democrats have tabled various amendments to Government legislation to call for impact assessments on measures that affect small businesses, including the changes to national insurance contributions, the Employment Rights Bill and the business rates changes.

The jobs tax will hit small businesses particularly hard. The change in the threshold as well as the rates particularly gets small businesses. The Government’s proposals on business rates will be very difficult for small businesses. It is not just about the changes this year, with the bills going up; next year, under the Government’s proposals, small independent businesses will effectively subside the larger chains.

I say with some affection to the hon. Member for Strangford (Jim Shannon) that although he wishes he had the same Brexit as everyone else, he should be careful what he wishes for. I am sure he will know from Liberal Democrat research that since the Conservatives botched the Brexit deal small businesses have had to complete 2 billion extra pieces of paperwork thanks to Brexit red tape—enough to wrap around the world 15 times. I am sure none of us want to see additional red tape for small businesses and sole traders.

We have heard compelling arguments that the Government should at the very least look at the VAT regime. Do they have any plans to change it or review the threshold? We Liberal Democrats would welcome a review and would be keen to see any impact assessment that the Government might commission. There have been compelling arguments about simplifying the system. From what colleagues across the House have said, we know that the current threshold deters sole traders and others from earning more, which is really bad for growth.

Many people want to avoid the complicated form-filling, and I hear from my constituents that they also want to avoid the misery of sitting on the phone trying to get through to HMRC. We have all heard horror stories of people calling time and time again, only to have their calls cut off, unable to get through or get the advice they need. Will the Minister give an update on what is happening in HMRC to provide additional support for small businesses in particular? We know that those who are incredibly wealthy have a direct line to HMRC, but our small businesses—the engines of growth—often struggle to get the advice they need.

We urge the Government to simplify the VAT regime, and there are companies with proposals on how to do that. One quick example, which is slightly different from today’s topic, is that Amazon is working with HMRC to discuss cracking down on resellers, to tackle VAT tax avoidance by shell companies and avoid the situation many people experience when they order something from an online marketplace and either it is not very good quality when it arrives or it does not arrive at all. Conversations are happening about how to simplify the process for legitimate sellers on platforms. If there are big-eyed companies out there with ideas on how to simplify the VAT registration system, I very much hope the Government will take them up and roll them out not just to those who sell online but to those who sell in our communities.

Finally, the Minister will have heard over several months from colleagues across the House that small businesses are very different, and that one size does not fit all. Small businesses struggle with the paperwork, and do not have the lawyers or HR departments that larger businesses have, so I urge the Minister to consider proposals for a small business one-stop shop, to make sure that small businesses across the land receive the advice they desperately need.

Spending Review 2025

Daisy Cooper Excerpts

Wednesday 11th June 2025 Commons Chamber

[Daisy Cooper (St Albans) (LD)]

It has been almost a year since Labour swept to power with the promise of change, but we are still not seeing the scale of ambition needed to turn the country around. We welcome the announcement of investment in the NHS, but it will not work unless the Government invest in social care too. We welcome the investment in infrastructure, but it will not work unless the Government invest in skilling up the workforce that we need to build it. Cutting billions in real terms from departmental budgets seems unnecessary when the Government could instead go for growth and get a much deeper trading relationship with Europe—a move that could raise an extra £25 billion a year for the public purse. As long as the Government fail to truly tackle the red tape and trading barriers blocking British businesses, the Government’s grip on economic growth is more akin to a handbrake than an accelerator.

The last Conservative Government left our NHS on its knees. On their watch, waiting lists were soaring, hospitals were crumbling and our high street healthcare was hollowed out. Can the Chancellor confirm that this funding will deliver the extra 8,000 GPs needed to guarantee everyone an appointment within seven days, or within 24 hours if the matter is urgent? Can she confirm that this funding will bring dentists back into the NHS and put an end to dental deserts? Will she promise that this funding will mean that every cancer patient starts treatment within 62 days? Will she promise that the Government will meet the Prime Minister’s own pledge for 92% of routine operations to take place within 18 weeks? Will she and the Health Secretary—they are sitting side by side—set up a crumbling hospitals taskforce to look at creative funding ideas, bring construction dates forward and put an end to the vicious cycle and false economies of delayed rebuilds leading to rising repair costs, as we saw under the previous Government?

Then, of course, there is the elephant in the NHS waiting room: the crisis in our social care services. The Chancellor knows, the Health and Social Care Secretary knows, this whole Parliament knows: today’s investment in the NHS will be like pouring water into a leaky bucket if hospitals cannot discharge patients who are well enough to leave because there are no care workers to help them recover at home. The fair pay agreement that the Chancellor talked about is of course welcome, but it is barely a baby step, and it is nowhere near enough to bring social care back from the brink. At a bare minimum, we need a higher minimum wage for our care workers to stop the sector haemorrhaging staff to other sectors. When will the Chancellor finally recognise that we will never fix the NHS if we do not fix social care too? Will the Government finally act with urgency by committing to conclude the social care review by the end of this year, not in three years’ time?

On housing, we warmly welcome the Government’s investment in social homes. Will they now commit to the Liberal Democrats’ target of building 150,000 social homes every year?

Other public services are crying out for investment, too. Our communities need proper neighbourhood policing to feel safe, our farmers need fair support payments to keep putting food on our tables, and people of all ages deserve access to training and skills to build their future and to power our economy forward. That is why it is so disappointing that the Chancellor has today made things so difficult for our public services by cutting unprotected budgets by billions. Yes, we know she was faced with the fallout from the most reckless, out-of-touch Conservative Government in recent memory, but being responsible is not just about making tough decisions; it is about having the moral courage to make the right ones. Yet this Government seem determined not to adopt the one policy that could put rocket boosters on our economy and raise billions for our public services: a proper trade deal with Europe.

A new, bespoke customs union with the European Union could boost our GDP by more than 2.2%, securing additional revenue to the tune of £25 billion a year—a huge boost to businesses and our struggling public services. If the Chancellor can U-turn on the winter fuel payment thanks to a skinny EU trade pact worth just 0.2% in extra GDP, just imagine how many more U-turns she could perform with a proper trade deal worth ten times as much.

We Liberal Democrats strongly support the allocation of 2.5% of GDP on defence, but we want Ministers to go further and faster to bolster our national security in today’s uncertain world. Will the Chancellor agree to cross-party talks in which we can work together to set a pathway to 3% of GDP well ahead of 2034? Will the Government use some of today’s investment to reverse the Conservatives’ irresponsible cut of 10,000 troops? Will she ensure that investing in our national security becomes a lever for economic growth, putting much greater emphasis on British steel producers and SMEs as we scale-up our defences, and ensuring that British start-ups can use defence innovation for the public good?

Before I conclude, I must thank the Chancellor for finally completing the world’s slowest U-turn, on the unfair winter fuel payment cut. Now that she has U-turned, will she do the right thing and backdate the payment for all those who lost out on support last winter but who are now eligible under the new rules? And now that she has U-turned once, will she make it a hat trick and also change course on the PIP and carer’s allowance cuts? Perhaps she might even look again at the growth-crushing jobs tax and the other changes affecting our high streets, small businesses and family businesses, and consider instead the fairer ways of raising the same amount of revenue that we Liberal Democrats have set out time and again: asking the big banks, social media giants and online gambling companies to start paying their fair share of tax.

After years of chaos and incompetence under the last Conservative Government, this was a unique opportunity to draw a line under the social care crisis, squeezed budgets and sluggish economic growth. I strongly urge the Chancellor to ignore those who talk down Britain’s economic potential, to rip up the red tape holding British business back, and to strike a properly ambitious trade deal with Europe that will turbocharge our economy and bring in billions to rebuild our public services. The Government say that their No. 1 mission is growth. That is the way to deliver it.

[Rachel Reeves]

I thank the hon. Lady for her comments. I know she has not had a chance to look at the figures yet, but it is not right to say that there are real-terms cuts to public services. Public service spending is increasing by 2.3% a year on average over the course of the spending review.

I will start on investment in the NHS and social care. As I set out in my speech, we have already delivered 1,500 more GPs and put £26 billion into the NHS in the first phase of the spending review. I note that that compares with the £8 billion that the Liberal Democrats said they were going to put into the NHS in their manifesto. We have already put £26 billion in, and we will put more money in today and in every year of this Parliament.

The new hospital programme is being rolled out. I think the Health Secretary met just last week with Members of Parliament who are having hospital improvements in their local communities, including many Liberal Democrat MPs, so the hon. Lady should be aware that we are making improvements to the fabric of our hospitals as well as investing in technology, scanners and so on to improve productivity in our health service.

With regard to social care, as the hon. Lady knows, we are introducing the fair pay agreement—that is something that the Health Secretary and my right hon. Friend the Deputy Prime Minister are very much committed to. As the hon. Lady will know when she looks at the documents, we have increased local government spending power so that we can put more money into social care. In addition, Louise Casey is doing her review into the future of social care.

We are going big on infrastructure. We announced £100 billion more in the Budget last year and another £13 billion in the spring statement, and we are backing that up with skills. As I set out in my speech and as is detailed in the spending review documents, we are making the biggest ever investment in young people’s skills so that they can access the new jobs that are being created in defence, house building and other infrastructure.

On red tape and backing business, it is a little bit ironic that the Liberal Democrats voted against the Planning and Infrastructure Bill yesterday, yet they come to the House today saying that they want to do away with red tape and go for growth. Well, we want to go for growth, and that is why we took that legislation through Parliament. Perhaps the hon. Lady will ask her party’s Lords to vote for growth in the other place.

We have done trade deals with the US, India and the EU. I think the Liberal Democrats opposed the trade deal with the US, but apparently they now think that trade deals are the way to go—well, so do we. That is why my right hon. Friend the Business and Trade Secretary has three of them helping our automotive sector, our steel sector and our farming communities.

We will use defence spending to support growth—the Defence Secretary and I have been very clear about that—and, as I set out in my speech, to make Britain a defence industrial superpower. I say gently to the Liberal Democrats and the hon. Lady that if we want to support investment in public services, we have to increase the tax rises to get there. They voted against the national insurance increase, which is what has enabled us to make the investments that I have set out today.

The hon. Lady says that she wants a wealth tax. We changed inheritance tax, and the Liberal Democrats voted against it. We introduced VAT on private schools, and the Liberal Democrats voted against it. Either they are serious about investing in public services, in which case they need to back the tax increases, or they want to go down the route of the magic-money-tree Conservative party and just borrow more to pay for things.

On the winter fuel allowance, we have made our choices clear: we will keep the means test, but it will be paid to people with a pension of less than £35,000. I think the Liberal Democrats want to make it a universal benefit again.

[Daisy Cooper]

indicated dissent.

[Rachel Reeves]

Okay, that is just the Tories—well, they need to explain how they would pay for it.

I appreciate the fact that the hon. Lady welcomes some of our policies, but the job of the Chancellor and the Government is to ensure that the sums add up. We made difficult decisions last October, but I stand by those difficult decisions; without them, today we would not have been able to make the investments we have made in schools, energy and our health service. I am proud of what we have achieved as a Government, and I am proud of the investment that we are putting in today.

Regional Growth

Daisy Cooper Excerpts

Wednesday 4th June 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

We Liberal Democrats believe that when the economy is growing, every nation, every region and every person should feel and see the benefits, so we are pleased to see investment in public transport and public infrastructure, but I must ask the Minister: where is the plan and the money for rural areas? He will remember that, at the Budget, we Liberal Democrats supported and welcomed the Government’s changes to the fiscal rules that allowed for borrowing and more productive investment, and we are delighted to see that one of the beneficiaries of today’s announcement is the Metrolink to Stockport, which is a testimony to the hard work of the Liberal Democrats, who have been campaigning on this for far longer than the mayor and the combined authority have even existed. From Shropshire to the south-west, from Cumbria to Cornwall, and from Norfolk to Newton Abbot, rural areas once again feel as if they have been forgotten. Will the Government therefore bring forward a rural growth strategy?

May I also ask the Minister about Wales? We know that HS2 and the Oxford-Cambridge line have been designated England-Wales lines, as opposed to England-only lines. Can he explain to the people of Wales why that has happened and why they are set to lose out on Barnett consequentials?

There is one big piece missing from the puzzle. Many of us rightminded people want to see investment in infrastructure, but if we want to build stuff, we need skilled people to build it. Will the Government now fix the apprenticeship levy so that it can be spent on skills and training? When will the Government produce their skills strategy? Why has Skills England been set up as an executive agency of the Department for Education rather than having employers at its heart, as was promised? And why are the Government scrapping the level 7 apprenticeship when we know that it supports social mobility, including into engineering? We welcome this investment into transport infrastructure, but that transport infrastructure will not build itself; we need the people skilled to do it.

[Darren Jones]

I am pleased that the Liberal Democrats welcome today’s announcement, which is specifically about investment in city regions. The House will know that, at the 2024 autumn Budget, the Chancellor said that this Labour Government are choosing investment over decline, which is why we are increasing investment in every part of the country. Announcements outside of city regions will come next week at the spending review. To some of the hon. Lady’s broader questions on policy, I can tell her that we will debate the infrastructure strategy the week after that. She will have to bear with me, but she should know that there is good news coming, because Labour is delivering.

Oral Answers to Questions

Daisy Cooper Excerpts

Tuesday 20th May 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

In the Budget the Government reduced business rates relief, which is hitting small businesses hard. Under current plans, in the next financial year small independent businesses could see their rates go up by 80% and chains could see theirs go down by 40%. I have shared that analysis with Ministers; will the Chancellor please promise that she will look at it personally to ensure that this—I think—unintended consequence does not come to pass and independent businesses do not close, leaving even more of our high streets looking the same?

[Rachel Reeves]

The hon. Lady will know that in the Budget, at a cost of about £1.5 billion, we were able to extend business rates relief, which was due to end entirely under the plans we had inherited from the Conservative party. As she will also know, we are reforming the way in which business rates work so that there are permanently lower rates for hospitality and retail sectors, particularly on our high streets.

--- Later in debate ---

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

Yesterday the Chancellor said that she understands the concerns that some people have about the limit at which the winter fuel payment is removed. Does she therefore now agree that restricting the eligibility so tightly was a mistake?

[Rachel Reeves]

As the hon. Lady knows, when I became Chancellor last year, we inherited a £22 billion black hole in the public finances—not in some year in the future, but in the financial year that we were already three or four months into. This meant that we had to make difficult and urgent decisions to put our public finances back on a firm footing—because, unlike the Conservatives, I will never play fast and loose with the public finances.

Draft Pension Fund Clearing Obligation Exemption (Amendment) Regulations 2025

Daisy Cooper Excerpts

Wednesday 14th May 2025 General Committees

[Daisy Cooper (St Albans) (LD)]

The Minister made her case very well. The Liberal Democrats recognise that there is no viable widely adopted method for pension funds to meet the CCP margin requirements without harming pension outcomes. Although we all recognise how important clearing is for broader market stability, we also recognise that enforcing it on pension funds right now could do more harm than good. In that spirit, I add our support to the cross-party agreement on the draft regulations, which will create a permanent exemption.

Income Tax: Personal Allowance

Daisy Cooper Excerpts

Monday 12th May 2025 Westminster Hall

[Daisy Cooper (St Albans) (LD)]

It is a pleasure to serve under your chairmanship, Mr Stuart.

I start by thanking Mr Frost for launching this petition and the 250,000 people who have signed it. The number of people who have signed it speaks to the strength of public feeling about this issue, which is a serious policy challenge for all political parties. Indeed, I think the petition does more than showing the strength of feeling that exists. I regard it as a cry for help, because right around the country there are struggling families gripped by a cost of living crisis, there are high streets and small businesses gripped by the cost of doing business crisis, and people are crying out for the change they were promised.

Most ordinary folk work hard, play by the rules, pay their taxes and expect certain public services to be there for them when they need them. Even when they become pensioners, they may well still be working. I hear time and again that pensioners want certainty. They have worked for their entire lives, they know how much money they have coming in and they need to know how much money is going out. They need to budget. When a shock comes along—whether something like the mini-Budget, a cut to the winter fuel payment or sky-high energy prices—they do not know what to do. They have far less capacity than other people to increase their income. Increasingly, pensioners have caring responsibilities, not just for their spouses but for their children, grandchildren or, even in some cases, their great-grandchildren. I take the petition as a cry for help.

As the Liberal Democrat spokesperson, I am incredibly proud that our policy when we were in government was to raise the personal allowance. That went through, and by April 2015, more than 3 million people had been taken out of paying income tax all together. It remains our priority to raise the tax-free personal allowance, as the best and fairest way of cutting tax when the public finances allow. And there is the rub, because the public finances are under enormous pressure and strain and, at the same time, there are very few signs of economic growth. We know that the public finances are in a terrible state in large part because of the mess left behind by the Conservative Government; in part, too, because of the growth-crushing Labour Budget, but also because of President Trump’s trade war. We have a toxic combination that means that people are seeing their seeing their taxes go up but not seeing services improve. It is leading to that cry for help.

As has been mentioned, the House of Commons Library briefing estimates that this measure alone would cost around £50 billion, and additional measures to equalise it with national insurance could cost £60 billion to £65 billion. If I remember correctly, I think the pandemic cost £40 billion, so this would be 1.5 pandemics, which is a staggering amount of money. None the less, we should not dismiss the call.

There are other things that we could do. We Liberal Democrats have said that the key to sorting out the public finances is to get more economic growth. We think that a key way of doing that is to improve our trading relationship with the European Union. Liberal Democrat research has shown that since the Brexit deal came into effect, small businesses have had to fill in 2 billion pieces of paper—enough paper to go round the world 15 times. The cost of that red tape is falling on to the shoulders of small businesses and, through them, their customers as well. Sorting out that trading relationship and ripping away that red tape will improve our economic growth.

We have also said that there are fairer ways of raising taxes. We have suggested that the Government look at increasing the digital services tax on the 20 largest online social media platforms and search engines. We have suggested that the Government look at increasing the remote gaming duty on those big gaming companies that made an enormous amount of money—billions of pounds in profits—during the pandemic, who we believe could pay a little bit more to help public services back on their feet.

We know that the Labour Government have gone some way to reforming capital gains tax. We have suggested alternative ways of reforming it to raise even more money than the Labour Government have raised, but also that we should raise that money from the 0.1% richest—the super-wealthy. There are fairer ways in which this Government could raise taxes from those with the broadest shoulders—those big corporations—to bring in billions of pounds in order to support people at the other end of the ladder.

There are other things that the Government could do. We have suggested that a home insulation scheme not only would be good for the planet by reducing carbon emissions, but would reduce people’s energy bills, meaning that the money that they do have would go further. Equally, by improving investment in our farming and reducing the cost of healthy, locally grown food, people would not have to spend so much of their money on food bills.

I thank Mr Frost again, and everybody who signed the petition. We as policymakers should take this challenge very seriously. We see it as a cry for help from those who are struggling the most at this incredibly difficult time. I urge the Minister again, as I have done many times in previous months, to look at some of the suggestions from the Liberal Democrats and to engage in those conversations about how we raise tax in a fairer way and support those who are struggling at this very difficult time.

Retail Investment

Daisy Cooper Excerpts

Tuesday 22nd April 2025 Westminster Hall

[Daisy Cooper (St Albans) (LD)]

May I start by being a little off topic? This is my first opportunity to congratulate you in person, Mrs Hobhouse, on your heartwarming reunion with your family. Congratulations—that was delightful to see over the Easter weekend.

I start by congratulating the hon. Member for Buckingham and Bletchley (Callum Anderson) on securing this incredibly important debate. As he highlighted, the UK has history and status as a global financial centre. We have a reputation for being very strong at securing international investment, but domestic investment has never always been quite as strong. The domestic investment that we do have is often propped up by pension auto-enrolment. That masks the fact that the share of UK wealth in company stocks is the lowest in the G7 and, as hon. Members have highlighted, it is lower now than it used to be.

The net effect is that individuals are missing out on financial returns and on having a stake in our economy, and companies are missing out on investment. That leads many companies to choose not to list here in the UK; they list in other countries where they can secure higher valuations and more capital investment. Other Members have rehearsed some of the reasons for that. Some individuals cannot afford, or feel that they cannot afford, to invest, while others are risk-averse. There are those who lack the knowledge or confidence about how to invest. Some choose to invest in property: house prices and building prices in this country continue to go up and up, and that often means that people choose to invest in that.

As has been highlighted, people are often saving for a rainy day. Our public services remain on their knees, so individuals and families are increasingly saving money, whether for social care, knee operations, private education, healthcare assessments or mental health appointments. Clearly, we need get our public services back on their feet. Boosting people’s confidence in public services will convince them that they will not have to pay out when they should be relying on public services.

We have seen many moves by different agencies to address some of these problems. The Financial Conduct Authority is looking to offer more than just generic guidance on how to invest, and we can all welcome that. Some banks are calling for a badging scheme to identify entry-level investment products. I think we can all welcome that as well, particularly long-term, low-risk investments for those people who want to get going. I am sure that, irrespective of political party, we can agree with calls for greater financial literacy. It is vital that we do more on all these fronts because people are missing out on financial returns and companies are missing out on investment and choosing to go elsewhere.

I was particularly interested in some of the recommendations and calls for action from the hon. Member for Buckingham and Bletchley. I wholeheartedly agree with his call for a long-term retail investment strategy, and I hope that the Minister will say a little more about that. I urge some caution around the call to simplify the four ISAs. Many individuals are fairly au fait with choice, and choice in itself is a good thing. People have more agency when they can choose between different products, and I would be wary about throwing the baby out with the bathwater; if more information is available about the differences between the ISAs, choice is a good thing.

Increasingly, people want to choose how they invest their money. They may want to invest in a particular sector. They may want to make investments in line with their outlook on the world, whether those are green investments or something that has another impact. Some people are willing to sacrifice a bit of financial return if they feel they are using their money for a good cause. I urge the Government and colleagues to reflect on that point. I am interested in the calls to revisit tax exemptions so that we incentivise people to invest in companies that genuinely contribute to building Britain and the British economy and to providing more secure jobs. In addition to the financial literacy, that call for a campaign to, effectively, democratise investment is a really good idea. We Liberal Democrats would be keen to hear more from the Government on that point.

On green investment, we know there is a green stocks and shares ISA. The Government have talked about a social impact investment vehicle; it would be interesting to hear whether they have more to say on that, perhaps before we get to the spending review. I urge the Government to consider tackling crypto scams. We see warnings on an almost weekly basis about such scams, and we would like the Government to do more to tackle them, especially on social media platforms, and guarantee that protections would not be watered down in any future Trump trade deal. We need to see greater stability more generally, of course.

I also urge the Government to consider more long-term, responsible investment opportunities for individuals. At the moment, a lot of people’s confidence in retail investment might be a little shaken because of global headwinds and the geopolitical situation that. None the less, there is still a very strong argument for longer-term investment, and the rewards that can provide.

Finally, I have a comment for the Minister in the spirit of constructive opposition: there are lots of rumours flying around at the moment about whether and how the Government may change various ISAs, and whether they are looking at a particular cap, and that has created a little uncertainty. I have heard from a few constituents anxious about what the changes might be, and what they might mean for them. We all want to make sure that our constituents are well informed and do not take rash decisions because of rumours they have heard, so I urge the Minister to assure us that whatever plans the Government may bring forward will be phased in and that people have no cause to panic or be anxious about what may change. Such reassurances would be well received by some of our constituents.

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[The Economic Secretary to the Treasury (Emma Reynolds)]

It is a great pleasure to serve under your chairmanship, Mrs Hobhouse; congratulations on your appointment to the Panel. Thank you for presiding over this very good-natured Westminster Hall debate. I wish everybody a happy Easter—I do not know about everybody else, but for me, it is the first day back from a nice Easter break. I hope people got some rest over recess, and lots of Easter eggs to boot.

I start by congratulating my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) on securing this debate. He brings great expertise to the House on the issue and many others, and it is great to respond to his thoughtful contribution. He was right to draw attention to the benefits of retail investors to consumers and the country as a whole. As he said, it is a win-win situation: if we get this right, it will benefit savers, who will get better returns, and it will bring benefits to British business by unlocking more capital to boost economic growth. I will shortly respond to the four points that he raised.

Before I do that, I thank my hon. Friend the Member for Hexham (Joe Morris) for his thoughtful contribution. He spoke about the lack of financial education and targeted support for entrepreneurs in rural areas. Like him, I want to ensure that our Government, in our drive to increase economic growth, pursue that in a way that brings about inclusive growth, across the country, in urban and rural areas. I heard what he said about access to cash; I was not in the privileged position of Minister when he secured his Adjournment debate on that issue, but if he would like to meet to discuss it, I would be happy to do that, because it is obviously a concern in his constituency.

I also pay tribute to an excellent speech, as ever, from my hon. Friend the Member for Vale of Glamorgan (Kanishka Narayan), who talked about five categories; I will not go through them all, but I am passionate about the pensions dashboard, having worked on it in my previous ministerial position. It could be game changing in terms of ensuring greater visibility. He rightly said that many people, even if they are not directly invested in the stock market, are invested via their pensions. The dashboard will give them much greater awareness of what they are invested in, what their likely pension income will be in the future, and what they might need to do to top that pension up. I was interested to hear what he said about that and about the culture of investing in North America—but I have a section about that at the end of my speech, so I will not pre-empt it.

I thank the hon. Member for St Albans (Daisy Cooper), who rightly said that London and the UK are a strong international financial centre. We should celebrate the fact that we attract a lot of investment from international investors, including international pension funds and others. She and my hon. Friend the Member for Buckingham and Bletchley both noted that the amount that our own pension funds and investors invest in the UK has decreased, which is worrying.

I thank the hon. Member for Wyre Forest (Mark Garnier) for his many, many questions—I am giving some thought to them as I proceed. He was absolutely correct to say that people think there is a risk to investing in stocks and shares, but particularly in a high-inflation environment—we are not in one now, but in recent memory inflation got as high as 11%—holding savings in cash is not a risk-free option, because inflation will erode the value of the money over time. If people have additional cash above the rainy day savings that the hon. Member for St Albans talked about, there is some merit to looking at what they might do to invest for the long term. Members from across the House talked about long-term investing.

My hon. Friend the Member for Buckingham and Bletchley set out the scale of the challenge and the potential opportunities. As he noted, the UK is an outlier compared with our international peers. He rightly said that the UK is the third worst in the G7—that is probably the simplest way of putting it—in terms of the amount of money that people hold in cash, over everything else. We are behind only Germany and Japan in terms of the amount of cash that people hold in savings. Do not get me wrong; we know there is a role for cash savings, but we have to look at the balance between saving in cash and investing in equities. The research by Aberdeen found that, within the G7, UK consumers have the lowest appetite for investing, which is very concerning.

Many of us hold all or almost all of our savings in cash. The Financial Conduct Authority reported in 2023 that almost 12 million consumers had more than £10,000 in investible assets held mostly or entirely in cash. Of that group, more than 5 million indicated some appetite to invest. I suppose our job as a Government, and as parliamentarians, is to look at what we can do to give people confidence to take that first step into investing.

Of course, the Government understand that people need cash savings for a rainy day buffer. Many of us have those; I lost my seat in 2019, and thankfully I had a cash buffer at that time. Beyond that, there are risks to holding more savings in cash, as I have suggested, given the impact of inflation, and there is an opportunity cost of holding money in cash savings when there are higher returns to be had from investing, and particularly investing in the long term, if that is open to individuals.

The Government want more people to take part in capital markets. The hon. Member for St Albans talked about democratising capital markets—I like that phrase; it is a good thing that we can all agree on—and about the benefits from the returns and long-term financial security that investing in those markets can provide. To make that happen, we need to build a stronger investment environment in this country, and a better investment culture that helps people to engage confidently with investing.

My hon. Friend the Member for Buckingham and Bletchley made four policy suggestions, which were also mentioned by other hon. Members. I will address in turn. First, he called for reform of the ISA system. There was some debate across the House; there was mostly cross-party support for that proposal, but it was nice to see some discussion and constructive disagreement between the Liberal Democrats and my hon. Friend. He suggested that we should consolidate and simplify ISAs, while the hon. Member for St Albans suggested that we should ensure the choice remains available.

We said in the spring statement that we are looking at options for reforming ISAs to get the balance right between cash and equities. I cannot comment on any tax changes or changes to the ISA or savings landscape today, but I can say to the hon. Lady that we will take representations into account very seriously. I will say—I think for the third time in this speech—that cash savings obviously play an important role in ensuring that people have a financial buffer in case something goes wrong.

[Daisy Cooper]

I recognise that the Minister will not accept my invitation to divulge more information about the Government’s thinking on this issue, but I would be grateful if she could at least confirm that the Government’s position is that they are not ruling out a phased approach to introducing whatever they may introduce. It is important that our constituents who are anxious and worried about their money and what they should be doing with it, and who are currently consulting with financial advisers and whatnot, are given the reassurance they need that whatever changes the Government introduce will be phased in a way that makes it easy for them to make decisions, and that they should not make snap decisions now.

[Emma Reynolds]

I have heard the hon. Lady’s representation, and I am sure that people in the Treasury hear that representation. I would mention to her more broadly that we have committed to one fiscal event a year, rather than the two or three that we might have seen from the previous Government—we might have got a third one in September, had we not had an early election. I hope that gives her some reassurance.

The hon. Member for Wyre Forest mentioned the issue of building societies, which he also raised with me in the House in Treasury questions. I am in close touch with the building societies and will be speaking at their conference in Birmingham—he might be too, as a west midlands MP; I do not know. I can reassure him that we are in close engagement with them and that we understand and appreciate the valuable role that they play in providing mortgages and other financial assistance to their members. Many of us in this place will be members of and have investments in different building societies.

Speaker’s Statement

Daisy Cooper Excerpts

Tuesday 8th April 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

People up and down the country will be incredibly concerned about what Trump’s trade war means for their living standards and their communities. At the same time, people want to show that Britain is not going to take Donald Trump’s trade tariffs lying down. We welcome the Chancellor’s announcement that the Government will be working further and faster with our allies abroad. Can she confirm that any new trade deals will be brought before this House for a vote before they are ratified? At the same time as working with our allies abroad to create new export markets, will the Chancellor and the Government commit to a “Buy British” campaign as part of a broader national effort to encourage people to buy British here at home?

[Rachel Reeves]

I thank the hon. Lady for those questions. This is a time for pragmatism and cool heads, not to rush a response. We are working closely with business. My right hon. Friend the Secretary of State for Business and Trade announced in the House last week a call for evidence on the response that businesses are looking for. Ratcheting up barriers to trade and ratcheting up tariffs will not be in our country’s interests, whether in terms of inflation or, indeed, for supply chains. We need to have cool heads and think about the national interest, not give knee-jerk reactions.

We are very much focused on doing deals with other countries around the world. There is the EU-UK summit on 18 May. We are hosting the economic and financial dialogue with Minister Sitharaman, who is coming to London today for those conversations, and those discussions are ongoing with a number of countries. Of course, any treaties would be brought forward for ratification by this House.

In terms of buying British, I think everyone will make their own decisions. What we do not want to see is a trade war, with Britain becoming inward-looking, because if every country in the world decided that they wanted only to buy things produced in their country, that would not be a good way forward. Our country has benefited hugely from access to global markets, and we will continue to want to be able to do that, because that is in our national interest, for working people and businesses in this country.

Oral Answers to Questions

Daisy Cooper Excerpts

Tuesday 8th April 2025 Commons Chamber

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

To follow on from what the hon. Member for Strangford (Jim Shannon) said, high streets up and down the land, be they in Liverpool Riverside, St Albans or anywhere else, have just been hit with the double whammy of the jobs tax and higher business rates bills. What steps are Ministers taking to prevent an epidemic of boarded-up shop fronts in the next 12 months, before the new rate comes in next year?

[Darren Jones]

As I have informed the House already, we are committed to supporting independent businesses and retailers on the high street. The change to employer national insurance contributions was designed to support smaller businesses in our country; over 50% of businesses will pay the same national insurance as before, or less than they did under the previous regime. The hon. Lady alluded to the fact that we are bringing forward permanent deductions in business rate taxation for the retail, hospitality and leisure sector, which will be important for the long-term sustainability of the businesses she mentions.

--- Later in debate ---

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

I welcome the fast action by the Government to convene the automotive industry in reaction to President Trump’s damaging tariffs, but the measures in and of themselves will not create new export markets or stimulate demand here in the UK. Will Ministers look at Liberal Democrat calls to reintroduce the plug-in car grant and equalise VAT for electric vehicle pavement charging? Will the Government instruct the valuation office to scrap business rates for EV charging bays until the transition is complete?

[Rachel Reeves]

The support that we announced yesterday on the phase-out of internal combustion engine cars was very much welcomed by the automotive sector. It will give much more flexibility around the allowances and around plug-in hybrid vehicles. All of that is welcome, but we are keeping a watching brief as well as trying to ensure that there are new markets for cars made in Britain in other countries around the world by securing more trade deals.

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.