Oral Answers to Questions

Dan Tomlinson Excerpts

Tuesday 9th December 2025 Commons Chamber

[Sir Ashley Fox (Bridgwater) (Con)]

18. What assessment she has made of the potential impact of extending freezes on income tax and national insurance thresholds on working people.

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

The Chancellor was clear at the Budget that we are taking the fair and necessary decisions on tax to do all we can to ensure that the contribution of working people is kept as low as possible. We have reduced the gap between taxes on income from assets and on income from work, stopped the unfairness that meant people could pay less council tax for a £10 million property than for a typical terraced house in much of England, and done much more.

[John Lamont]

There seems to be only one word that the Chancellor understands: tax. Her decision to continue the freeze on income tax thresholds is a hammer blow to working people. In fact, even one of the Chancellor’s favourite unions, Unison, has said:

“Freezing personal income tax thresholds disproportionately impacts lower and middle-income workers.”

Does the Chancellor agree with the Labour party’s union paymaster?

[Dan Tomlinson]

I am a bit confused by that question. The hon. Member said there was one word that was important. Let me give him one figure: £150. That is the amount we are taking off energy bills next year to help people to deal with the cost of living in the here and now. We are supporting people because of the mistakes that previous Governments made by not investing in our energy infrastructure and not investing in our future. We are picking up the pieces after the Conservatives did not take the necessary decisions.

[Sir Ashley Fox]

Extending the freeze on income tax thresholds will cost working families £900 a year. It will also drag many pensioners into paying income tax for the first time. Why is the Minister hitting these low-income families to pay more for welfare?

[Dan Tomlinson]

I suggest the hon. Member asks his Front Benchers why 75% of the impact of people paying more tax at the lower end is the result of decisions made by the previous Government, who spent seven years freezing income tax thresholds. It is a bit rich for the Conservatives to talk about this Government doing it for three years when they did it for seven years.

[Martin Rhodes (Glasgow North) (Lab)]

What assessment has the Minister made of the impact on working people of the historic increase in the living wage?

[Dan Tomlinson]

We have chosen to uplift the national living wage and the national minimum wage so that those on low incomes are properly rewarded for their hard work. It will benefit 2.7 million people, including many people in my hon. Friend’s constituency and across the whole country. I thank him and Members—particularly those on this side of the House—for their support in making sure that we can make work pay up and down the country.

[Mr Jonathan Brash (Hartlepool) (Lab)]

Pensioners in my constituency of Hartlepool who rely solely on the state pension have shared with me their concern that freezing the tax threshold will draw them into paying tax. Can the Minister confirm what the Chancellor has already said publicly, which is that pensioners who rely solely on the state pension will not be taxed during this Parliament?

[Dan Tomlinson]

Yes.

[Mr Speaker]

I call the Conservative spokesperson.

[Richard Fuller (North Bedfordshire) (Con)]

The Minister said this was “fair”—no, no, no. Perhaps breaking the election promise on tax thresholds is the reason why, by two to one, the public view the Budget as unfair, just 3% think it will make them better off, and two out of three think things will get worse. Does the Minister want to tell the public they are wrong, or will he explain to the House why this Budget has been received so badly by the British people?

[Dan Tomlinson]

The Conservative spokesperson talks about fairness. Let me just identify one element of unfairness he left in the tax system that this Government is correcting, and it is a popular measure when we look at the views of the public up and down the country. We on this side of the House do not think it is fair that someone in a £10 million property can pay less council tax than someone in a typical terraced house in his constituency, my constituency and constituencies across the whole of England. We are making that change to make things fairer in this country.

[Jack Rankin (Windsor) (Con)]

4. What assessment she has made of the potential impact of the autumn Budget 2025 on levels of incentives to work.

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[Wera Hobhouse (Bath) (LD)]

20. What steps she is taking through the tax system to help reduce costs for small and medium-sized businesses.

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Small and medium-sized businesses are vital to our economy and our communities, and the Government’s small business strategy, published in July this year, sets out our approach to supporting them. As temporary pandemic business rates relief ends and the new revaluation comes into effect, we are supporting the high street with £4 billion-worth of support through transitional relief and our supporting small business schemes, as well as through our long-term reforms to permanently lower the multipliers for eligible retail, hospitality and leisure properties, and support them with a significant package that will cap most of the increases this year for those who have seen large increases since the pandemic.

[Sir Julian Smith]

Last week, Skipton was voted the happiest town in Britain to live in. One of the reasons for that—[Hon. Members: “Is you!”]—is its hospitality sector. Through covid, energy cost rises, national insurance rises and other challenges, that hospitality sector is facing massive challenges. I urge the Government to look again at reliefs and multipliers. Over the weekend, so many pubs and hotels raised with me the fact that they are not going to invest. We need the growth and we need the jobs. Will the Government look at how they can make things easier for the pub and hospitality industry?

[Dan Tomlinson]

If I had a such a charming Member of Parliament, I would also be as happy as his constituents in Skipton. I thank him for his question. We considered the support really carefully in advance of the Budget decisions announced last month. There is a challenge in that the revaluation, which was instigated by the previous Government and is carried out independently by the Valuation Office Agency, means that some businesses have seen their values increase significantly since the pandemic. That is why the Government are putting in £4 billion of support over the coming years, with around half of that coming next year to support businesses. Many will see their increases capped at either £800 or 15%. We think that that support will provide significant help to those businesses, alongside the underlying reform we are making to rebalance the system in favour of the high street.

[Wera Hobhouse]

May I give the Minister another example in which the numbers simply do not stack up? Mr B’s independent bookshop in Bath will see its business rates bill rise by more than 70% after factoring in changes to rateable value. The changes were packaged as a move away from short-term fixes, yet vital discounts have been scrapped and replaced with less-generous support and an unclear transitional relief system. How can he justify such a stark increase in business rates? It is a challenge for Bath’s cherished bookshops—we have three—which we want to support.

[Dan Tomlinson]

It is important that we all communicate to the small businesses in our constituencies, as I was doing this weekend, that there is a difference when it comes to the increase in the rateable value. It may be that the business to which the hon. Lady refers—I like good small independent bookshops myself—has seen a large increase in its value since the pandemic, but precisely because that has happened in some cases, we are implementing a significant support package this year. That will mean that no business that has a rateable value of less than £100,000 will see an increase in its bills of more than either 15% or £800. There is a bit of a technical detail there, which I would be happy to go into with her, but the important thing is that there are significant protections on bills in place this year, even if rateable values have increased significantly since the pandemic.

[Clive Lewis (Norwich South) (Lab)]

In Norwich there is a saying: there is a church for every Sunday and a pub for every day of the week. After 14 years of austerity, the numbers are a lot lower. After this Budget, many pub landlords—small and medium-sized businesses—tell me that we are not going far enough, and that many of them will go under. They need more support, and they need it soon. If the changes go through, I fear that Norwich will not have that saying at all; we will have hardly any pubs. Can we not put more of the burden on the pub companies and big corporations, which should be paying their fair share, rather than on the small and medium-sized businesses and small pub landlords, who cannot pay what is coming at them?

[Dan Tomlinson]

One of the things we announced at the Budget is a rebalancing in the system away from properties that have large rateable values and towards the small businesses on our high streets. That shift from the large to the smaller properties is worth almost £1 billion and supports them in the business rates system, as part of our work to reform business rates and support our high streets.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I welcome the Government’s support for our high streets and the consultation on the business rates system, which the Treasury launched on 25 November. But it is not just high streets that are suffering. Under the current system, major transport infrastructure owners face crippling bills: Eurotunnel’s business rates valuation has tripled from 2017, so it has cancelled investment in its international freight hubs, and Heathrow Airport’s business rates bill will increase by millions of pounds. Will the Treasury’s consultation on 25 November give transparency and predictability—

[Mr Speaker]

Order. The hospitality sector might use the rail industry, with freight, so I am sure we can get something on that.

[Dan Tomlinson]

I am sure that many of us do jump on the train to support our hospitality businesses. The consultation that my hon. Friend mentions, which we published on the day of the Budget, is an important piece of work. Chapter 4 of our call for evidence on how we can reform business rates to support investment will be important. We recognise that airports and other large infrastructure are valued in a different way from other business properties, and we want to look at the changes that we can make to support those businesses, which have seen very significant increases in their rateable values. Under the scheme that we have announced, they will of course be capped as well.

[Mr Speaker]

I call the shadow Minister.

[James Wild (North West Norfolk) (Con)]

The Chancellor promised a new golden era of hospitality, but the reality of her business rates raid, as the British Beer and Pub Association has said, is

“sleepless nights, pay cuts and staff layoffs”

for publicans, who will be paying an extra £13,000 on average. Why did the Chancellor tell businesses last week that their taxes were going down when they are going up, and will she think again and change the multipliers?

[Dan Tomlinson]

The multipliers are a product of the change in the valuation, and they did come down. We brought them down even further for retail, hospitality and leisure businesses. Without intervention this year, the bills paid by pubs would have increased by 45% as a result of the increase in value since the pandemic; because of this Government’s significant intervention this year, bills are going up by 4%. That is the impact of the changes this Government have made.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Dan Tomlinson]

We have set out our plans to reduce the multipliers for retail, hospitality and leisure properties, which is a rebalancing in the system. It means that those businesses—particularly the smallest RHL properties—face the lowest tax rate in the system since 1991. At the same time, there is—[Interruption.] The hon. Lady shakes her head, but the tax rate is the lowest it has been since 1991. At the same time, there has been an unwinding of the reduction in values going into the pandemic, and because we are seeing a recovery and businesses are bouncing back, and their properties are worth more, there has been an increase in the values. We are spending £2 billion this year to cap those increases at either 5% or 15% for many of those businesses up and down the country.

[Kevin Bonavia (Stevenage) (Lab)]

7. What fiscal steps she is taking with Cabinet colleagues to reduce costs for commuters.

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[Matt Vickers (Stockton West) (Con)]

T3. Since this Government came to office, 110,000 jobs have been lost in the hospitality sector and eight pubs are closing every week, but the Chancellor has made it worse. Jonathan at The Devonport has told me that his business rates are set to treble. Does the Chancellor realise that her Budget will cost people their jobs, landlords their businesses and communities their pubs?

[The Exchequer Secretary to the Treasury (Dan Tomlinson)]

Let us be clear: nobody’s business rate bills are trebling. If businesses come to talk to us about increases in their rateable values because of the unwinding of the effect of the pandemic, it is important that all of us, on both sides of the House, are clear that the Government have put in support to ensure that pubs and those that have seen their values go up will not see increases next year. If the pubs rateable value is more than £100,000, they will be capped at a 30% increase. If it is less, they will be capped at 15% or £800. That is £4 billion of support that this Government are providing.

[Tom Hayes (Bournemouth East) (Lab)]

An independent and effective OBR is critical for our country, but it needs to do better. Why can the OBR not count? Why can it not forecast accurately, given that the economy grew 50% faster than it had predicted in March? Why can it not even publish the Budget document without making a dog’s breakfast of it? Is it not time for the OBR to properly price pro-growth measures and get behind our growth mindset?

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[Alison Bennett (Mid Sussex) (LD)]

T9.   The Government seem set on pushing on with the family farm tax, despite opposition from the Liberal Democrats—and indeed from Labour Members. Will the Minister at least revisit the forestalling clause, which would help older farmers in Mid Sussex and across the country to avoid the consequences of backdating the legislation?

[Dan Tomlinson]

At the Budget, we came forward with a revision to the policy to support people whose spouses have already passed away, and we made the allowance transferable between the spouses. That change will reduce the number of farms affected by the agricultural property relief changes from about 500—as was estimated at the previous Budget—to 375, when coupled with changes to the underlying economic forecast. The policy raises money from those with the largest estates in a fair way, and I encourage Members in all parts of the House to consider whether or not—

[Mr Speaker]

Ahem.

[Dan Tomlinson]

I will stop there, Mr Speaker.

[Alison Hume (Scarborough and Whitby) (Lab)]

Alexander Dennis is a British electric bus manufacturer employing more than 700 people in Scarborough. Major bus contracts are due to go live in early 2026. Will the Minister confirm that this Government are backing British-built buses over Chinese imports, and can he confirm that the changes to public procurement processes will be implemented in time for taxpayers’ money to be spent on buying British buses?

--- Later in debate ---

[Dan Tomlinson]

I thank my hon. Friend for her question and her continued campaigning on this issue, which I know is important to her constituents. On those who seek to bend the rules, companies like Airbnb now send data to His Majesty’s Revenue and Customs on all their hosts, and where hosts fail to provide the detail that HMRC requires, Airbnb stops payments until they do. However, we need to go further, and I will meet my hon. Friend to discuss this.

[Simon Hoare (North Dorset) (Con)]

In the hope that the Government had listened to the National Farmers’ Union and others, a North Dorset farming family sat to watch the Chancellor’s Budget statement, in expectation. They were disappointed with the announcement on the family farm tax. The farmer withdrew from his medical treatment, and three days later he died. That is how determined he was to keep the farm in his family. He knew the struggle that they would have had in meeting the tax bill after 1 April. I share that not to be inflammatory, but to ensure that Members on the Treasury Bench know that their decision on the family farm tax has direct consequences for people up and down the country.

[Dan Tomlinson]

Members on the Treasury Bench are fully aware of the fact that changes to inheritance tax have an effect on those who are older. In the changes to both agricultural and business property relief that we have put forward, we have ensured that there is a higher allowance, with an extra £1 million, and a tax rate that is half as low as everyone else pays. We think that these reforms, which raise money in a fair and sustainable way, will contribute to raising the revenue that we need, in a way that protects family farms. Of course, we understand that there will be impacts on people. That is why we have designed the policy in the way that we have, and why we came forward with the changes that we announced at the Budget just a few weeks ago.

[Rachael Maskell (York Central) (Lab/Co-op)]

Independent businesses in York are really struggling with the revaluation of business rates. In 2024 they were £6,200; in 2025 they are £15,000; and in 2026 they will be £19,100, after discounts. Will the Minister meet representatives from York High Street Forum to understand the challenge of those rates for my city?

[Dan Tomlinson]

I am happy to speak to my hon. Friend about the issues that she raises in her constituency.

[Rupert Lowe (Great Yarmouth) (Ind)]

The Chancellor has embarked on a Fabian programme of brutal tax-and-spend economics that might please the dwindling number of Labour voters, but is hollowing out the nation’s productive base. Those who take risks, invest long term and create high-quality jobs are increasingly voting with their feet. Record numbers of top earners—the rain-makers who actually bankroll public services—are leaving the UK for good, taking their wealth and, more importantly, their brain power with them. Does the Chancellor even begin to understand the lasting and irreversible damage that she is causing to the British economy?