Sovereign Grant Bill

Debate between Dan Tomlinson and Chris Vince

Committee of the whole House & 3rd reading
Monday 14th September 2026 Commons Chamber

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

I will turn briefly to each of the short clauses in the Bill.

Clause 1 gives effect to the central purpose of the Bill. It sets the amount of the sovereign grant for the financial year 2027-28 at £99.9 million. In doing so, it resets the level of the grant following the completion of the Buckingham Palace reservicing programme. As that programme nears completion, the temporary funding associated with it is no longer required. Both the previous Government and this Government recognised that the level of the grant should therefore be reset and that legislation would be necessary to achieve that outcome. That is what clause 1 does: it establishes a grant of £99.9 million for 2027-28, reflecting the conclusions of the 2026 royal trustees review. The practical effect, therefore, is that funding falls from £137.9 million in this financial year to £99.9 million in 2027-28.

[Chris Vince (Harlow) (Lab/Co-op)]

Thank you, Madam Chair. I desperately tried not to intervene at all, but I could not stop myself. I was on the Modernisation Committee when it had the opportunity to visit Buckingham Palace to see some of the regeneration work being done. Does the Minister feel as reassured as I do that the renovation work was done as efficiently and practically as possible, bringing in apprentices from elsewhere—I do not think any of them came from Harlow, unfortunately—to ensure it was successful?

[Dan Tomlinson]

My hon. Friend is right to highlight that the works on Buckingham Palace over the past 10 years have been carried out with efficiency and effectiveness. In fact, the National Audit Office took a look at the programme of work and was able to commend it for its effective use of taxpayer money, which is of course very important. Clause 1 delivers, therefore, the intended reduction in funding following the completion of that work, and implements the conclusions of the royal trustees review to establish a new baseline for future years.

Having reset the grant for 2027-28, clause 2 turns to the framework that will determine grant funding in future years. The grant has, since 2012, been linked to the performance of the Crown Estate. That underlying principle remains unchanged by the Bill. Clause 2 updates the percentage of Crown Estate profits used within that calculation, so that the framework remains appropriate after the grant has been reset through that bottom-up calculation. It sets the relevant percentage at 20.5%. Returning to conversations we had on Second Reading, I want to reassure Members that that figure is not arbitrary. It comes directly from the conclusions of the June 2026 royal trustees review, which assessed both the royal household’s expected expenditure requirements and the Crown Estate’s forecast revenues over the period 2031-32.

Clause 3 introduces targeted safeguards to ensure that the funding framework can continue to operate effectively in exceptional circumstances. This is to ensure that where royal trustees conclude that the amount produced by the statutory formula would result in the sovereign grant reserve falling below 10% of annual expenditure or exceeding 50% of annual expenditure, and where the existing framework can adequately correct that outcome, the trustees must explain that conclusion in their annual report and identify the new amount they believe would be appropriate. The Treasury must then implement that through regulations. This reform allows greater flexibility to prevent reserves becoming either too large or too small, and it means that action can be taken before reserve levels move outside of a sustainable range, rather than waiting until existing statutory mechanisms have been triggered.

The second mechanism is a limited power to increase the grant during a financial year in genuinely exceptional circumstances, and is intended as an emergency power. It can only be used when unforeseen circumstances arise during a financial year that cannot be reasonably addressed through the normal annual funding process. Clause 4 contains standard provisions relating to commencement and the short title of the Bill; I commend this and all other clauses to the Committee.

Finance (No. 2) Bill

Debate between Dan Tomlinson and Chris Vince

Report stage & 3rd reading
Wednesday 11th March 2026 Commons Chamber

[Dan Tomlinson]

I ask the hon. Member to consider whether his party wishes to identify £66 billion of expenditure cuts or borrow £66 billion more. I do not think that either option is what the British public want; they want us to bring borrowing down and get public finances under control, after they were spun out of control by Liz Truss and the previous Government. The public understand the need for fair and responsible increases in taxation to ensure that we can invest in our public services and in the future of our country.

[Chris Vince (Harlow) (Lab/Co-op)]

On taxation, does the Minister agree that this Labour Government’s decisions have meant increased spending on the NHS? A number of my Harlow constituents are self-employed, and the really long waits in A&E and for hospital operations were having a huge impact on their businesses and on their household finances.

[Dan Tomlinson]

I strongly agree with my hon. Friend. I thank him for making his representations again and for his ability to mention Harlow in his interventions. It is a fantastic part of the country, not too far from my constituency in north London, and I know just how strongly he seeks to represent it and to make sure that the public services in his patch—the local hospitals and schools—get the investment they need. That is why he and I are able to proudly support this Government’s decisions to bring the public finances back into good order, as well as to invest in our public services and to get borrowing down.

Of course, though, since the Budget, and particularly in recent days, the world has changed. As the Chancellor set out last week in responding to the Office for Budget Responsibility’s spring forecast, it is more important than ever that the Government continue to deliver on our economic plan. The choices that we have made at previous Budgets will fix long-standing issues in the taxation system, restore economic and fiscal stability, and lay the economic foundations that we need for higher growth and higher living standards across our fantastic country.

The Bill legislates to deliver on those choices, all while sticking to our commitment not to raise the main rates of income tax, employee national insurance contributions or VAT. We are also providing stability for businesses by keeping to important commitments in our corporate tax road map to keep our corporation tax rate at 25%—the lowest in the G7—rather than having it chop and change up and down, like it did during previous Administrations.

I thank all those who have submitted written evidence throughout the Bill’s passage. Following concerns raised by professional bodies and concerns discussed in the Public Bill Committee, I would like to take this opportunity to reiterate my reassurances to the sector that measures that directly impact tax advisers are intended to create a fairer tax advice market. I have heard concerns that tax advisers might be penalised if they file a client’s tax return late when their client has not provided their approval for filing the return on time. I want to clarify that these powers are not designed to penalise responsible tax advisers who act in good faith, and in that specific scenario, a tax adviser would not be penalised under His Majesty’s Revenue and Customs’ stronger powers. The Government are committed to ensuring that the tax system works effectively for everyone, which is why we are introducing a number of amendments on Report to ensure that the tax system is working effectively and as intended.

I turn to the first group of Government amendments. New clause 5 removes specific provisions that could prevent offshore income gains from being designated under the temporary repatriation facility, or TRF, to ensure that they can be designated as intended. The amendments also simplify the existing treatment of offshore non-reporting funds held by offshore structures for all taxpayers. New clause 6 introduces transitional provisions for offshore income gains arising before 6 April 2025.

Following the abolition of the lifetime allowance, new clause 7, as we were just discussing, ensures that multiple different regimes do not apply, providing clarity for pension schemes and members. It ensures that any necessary regulations can have a retrospective effect back to 6 April 2024, clarifies the scope of the original power, extends the power by a further three months and ensures that regulations are subject to the affirmative parliamentary procedure.

The Government are making a number of minor and technical amendments to help provide greater clarity and address important points that have been raised by stakeholders, particularly during the passage of the Bill. These amendments simply put the original legislative intent beyond doubt.

Amendments 12 and 13 ensure that clause 23 will apply only to general earnings for the tax year 2026-27 and subsequent tax years that are paid on or after 6 April 2026. Amendment 14 tightens the existing provisions under clause 24 to ensure that those rules do not catch legitimate agency structures.

Amendments 48 and 51 remove legislation that is not necessary under clause 43 and ensure that the TRF legislation works as intended, so that beneficiaries from overseas trusts are able to make designations in connection with offshore income gains.

Amendments 49, 50 and 52 are consequential amendments to schedule 3 and clause 43. They remove references to omitted legislation and insert wording to clarify reference to the Taxation of Chargeable Gains Act 1992.

Amendment 53 to clause 49 makes clear that a person concluding contracts on behalf of a non-resident company must be present in the UK when concluding those contracts in order to create a permanent establishment in the UK.

Amendments 56 to 61 to schedule 11 concern the rules preventing fund managers from circumventing the revised carried interest tax regime. These amendments ensure that the provision operates as intended, where two connected persons work in the same business, with each connected person only taxed on their own carried interest.

Agricultural Property Relief and Business Property Relief

Debate between Dan Tomlinson and Chris Vince

Monday 5th January 2026 Commons Chamber

[Dan Tomlinson]

We will not be going ahead with the hon. Member’s proposal of scrapping this change entirely.

[Chris Vince (Harlow) (Lab/Co-op)]

I put on the record my thanks to the farmers in my constituency of Harlow who have engaged really productively on the issue. In particular, I pay tribute to Richard and Jack Scantlebury of Great Canfield. Can the Minister talk further about how the record investment of £11.8 billion in sustainable farming can help to benefit farmers such as Jack and Richard in my constituency?

[Dan Tomlinson]

My hon. Friend is right that we are putting that amount in over the course of this Parliament to support innovation, agritech and all the things that farming businesses can and should do to invest and grow and to support their communities. That is the right thing to do, and it is turning the page on the chaos and the underfunding of previous years.

National Insurance Contributions (Employer Pensions Contributions) Bill

Debate between Dan Tomlinson and Chris Vince

2nd reading
Wednesday 17th December 2025 Commons Chamber

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

Thank you, Madam Deputy Speaker, for bringing the Front Benchers on both sides to heel at just the right time, before I make the closing remarks. It is a pleasure to close this Second Reading debate, and I thank all Members on both sides of the House for their contributions. I thank my hon. Friend the Member for Dartford (Jim Dickson) for his contribution and his brief foray—and it was brief—into broader points around the Budget, which I did appreciate. I will try to minimise doing so in my remarks.

The shadow Minister, the hon. Member for North Bedfordshire (Richard Fuller), raised a few points. While he is whispering over there, I will confirm to him that the costing provided by the OBR accounts for the dynamic effects of this policy. The costing itself has been certified by the OBR. The reason why the change does not come in for a number of years is because it will give businesses time to plan, which we think is an important thing to do when we are making significant changes to the pension system.

This is an important Bill, if small. This is an important debate to have, although it has felt somewhat rushed given that it has come after the many final-week statements and urgent questions today. But that has given me a bit more time to prepare some remarks, which I have hastily cut down from the 30 minutes I was planning; we will see whether we can make faster progress than that for the sake of all concerned.

In my extra time this afternoon, I thought I would attempt to shoehorn a Christmas theme into my closing remarks, given that this will be the last time the House divides before Christmas. Very briefly, I present “The Twelve Numbers of Christmas: the Salary Sacrifice Edition”. I start with 12 words from Baron Hammond of Runnymede on how some employees are, in his words,

“able to sacrifice salary…and pay much lower tax….That is unfair”.—[Official Report, 23 November 2016; Vol. 617, c. 907.]

The Whips can count, and I can see that they have counted that as 12 words—very good. It is clear that even 10 years ago the Conservative party was aware of issues with salary sacrifice schemes. They knew that we must ensure that significant tax reliefs totalling £75 billion a year are properly targeted. That is why we are capping pension salary sacrifice contributions at £2,000.

Let us be clear: we are not removing pension tax relief, just the ability for unlimited relief via salary sacrifice, which many people cannot access in any case. That brings me to my No. 11. Those earning £11, £12 or £13 an hour at the national minimum wage or the national living wage cannot make use of salary sacrifice schemes because if they sacrificed their salary, they would be paid less than the minimum. It is the richest who benefit the most from these schemes.

[Chris Vince (Harlow) (Lab/Co-op)]

rose—

[Dan Tomlinson]

I happily give way to my hon. Friend.

[Chris Vince]

It’s Christmas! I have been here the whole time, by the way, Madam Deputy Speaker.

The Minister talks about the impact on different earners. The Parliamentary Secretary to the Treasury mentioned that only one in five self-employed people actually gets a pension, and there was another statistic about low earners. Can the Minister reflect on that? We need to get more people signing up for a pension.

[Dan Tomlinson]

Some 4.4 million of the self-employed are also not able to save into salary sacrifice schemes; it is right that we make the scheme fairer for all.

Let me continue to run through my numbers. Some 10 million people have signed up to a pension since auto-enrolment, which has limited the need for salary sacrifice. There are more than 900 tax reliefs; this is one of a number that we are reducing to raise revenue fairly at this Budget. Without intervention, salary sacrifice would have cost £8 billion a year by the end of the decade. Instead, we will now raise £7 billion from this change over the course of the scorecard.

The change will affect those on higher earnings more: 60% of the contributions come from the top fifth of employees and just 5% of those earning less than £30,000 will be affected. We will give businesses time to plan—this is not coming in for a bit less than four calendar years.