VAT Registration Threshold: SMEs

Gareth Davies Excerpts

Tuesday 24th June 2025 Westminster Hall

[Gareth Davies (Grantham and Bourne) (Con)]

It is always a pleasure to see you in the Chair, Mr Vickers. First, I congratulate my hon. Friend the Member for Mid Leicestershire (Mr Bedford) on securing this excellent debate. We arguably do not spend enough time in this place discussing small and medium-sized businesses, which account for some three fifths of employment and half of all turnover in the entire private sector.

The good thing about having a debate on this subject is that we have the Government in the room, rather than behind their keyboards. That is important, because I noticed while preparing for this debate that it comes hot on the heels of a written question on the same subject, which I am afraid to say received a textbook non-answer from the Treasury. My hon. Friend the Member for Mid Leicestershire asked a perfectly reasonable question: will the Chancellor make an assessment of the growth impact of increasing the VAT registration threshold? That was a pretty direct question, yet the Minister’s response completely ignored the point about growth and instead merely stated that the threshold was £90,000. While we are very grateful for the answer, this is something that I am sure my hon. Friend already knew. As my hon. Friend is in this Chamber, I gently suggest that the Minister provide him with a fuller answer.

In some senses, raising the VAT threshold on SMEs would be a tax cut, so there is cause for optimism, given the Government’s newfound enthusiasm for cutting taxes—for those who live in Mauritius. If the Labour party is happy to take 80% of Mauritian workers out of income tax altogether as part of their £30 billion Chagos surrender deal, I am pretty sure they will be sympathetic to taking British SMEs out of VAT registration.

Surely the Minister will remember that last year, when we were in government, the Conservatives raised the VAT registration threshold to the current £90,000. That took 28,000 businesses out of registration, which helped them to compete and grow, and it reduced their administrative burden. We also introduced policies such as business rate relief and full expensing to reduce costs and encourage investment in our country. Put simply, we backed British businesses to drive economic growth. Contrast that with Labour’s approach—it is trying but failing to balance the books on the back of British businesses. In its very first year in office, Labour has introduced the £25 billion hike, and the reduction in the secondary threshold of employer national insurance contributions; the rise in business rates, which the party had promised to abolish, by the way; the £5 billion-a-year burden of the Employment Rights Bill; and, let us not forget, the inheritance tax raid on family businesses.

[Mr MacDonald]

The hon. Gentleman mentioned the increase in the registration threshold from £85,000 to £90,000, which came after many years of it not being increased and is far below inflation. In your time in office, you did no favours for small businesses, as far as VAT is concerned. Would you agree with that?

[Gareth Davies]

I think the hon. Gentleman is accusing you, Mr Vickers, rather than me. I simply say to him that increasing the threshold made a big difference to the 28,000 businesses that were taken out of registration. I encourage him to speak to businesses in his constituency that benefited from what is essentially a tax cut, in addition to all the other measures that I mentioned that we introduced.

The contrast between what the Conservatives did in office and the approach of the Labour Government in their first year is quite stark, and the consequences are even starker. Insolvency rates are at a 15-year high, new registrations have fallen at the fastest rate since the financial crisis, payroll employment is falling, and inflation is well above target and will be higher for longer. It is no wonder that only 14% of companies with fewer than 10 employees have confidence in the Chancellor’s growth plans. According to one survey, just 29% of UK small businesses are now predicting growth this year. Meanwhile, the Federation of Small Businesses reported that its members now view the tax burden as their second biggest barrier to growth.

Here we see very clearly the vicious cycle that Labour has fallen into, just as it did in the 1970s: higher taxes and higher inflation, leading to lower growth and lower revenues, leading to still higher taxation. That is why, even though the Chancellor promised British businesses that she would not be back for more, she is now refusing to rule out even more taxes and tax rises in the autumn Budget. That is no wonder, because the National Institute of Economic and Social Research forecasts a £60 billion shortfall in the public finances—and that was before we had Labour MPs in open revolt about the slightly tiny welfare reforms and an unfunded commitment to increase defence spending by £40 billion.

In that worrying context, I hope the Minister can stand up and provide some certainty to SMEs by giving his assurance that the next Budget will not see a reduction in the registration threshold, or indeed an increase in the rate of VAT. I would like him to stand up and rule those out right now, for all of us to hear. I know that these assurances will fall short of the increase in the registration threshold that my hon. Friend the Member for Mid Leicestershire and other Members are looking for today, but it will provide more certainty if the Minister rules those things out.

I would also be grateful for an update on the so-called new business growth service, which the Government promised would be a “one-stop shop” for advice and support. That was supposed to launch in the first half of this year, but the Government’s industrial strategy has apparently now had to push that back to later this summer. Perhaps one reason for the delay is that the best advice a business growth service could possibly give anybody is “Do not vote Labour”. That is clear for us all to see.

SMEs probably have quite a lot of advice of their own for the Government, but unfortunately the going rate for speaking to a Labour Minister is apparently £55,000, and one has to endure the inevitable gloom of the Labour party conference. In the spirit of this debate, perhaps the Minister could confirm whether the price tag for meeting him is before or after VAT. Either way, like most Labour policies, I expect it will bring in less revenue than was first hoped.

[Mike Martin]

What is the going rate for meeting with a shadow Minister?

[Gareth Davies]

I am delighted that the Liberal Democrats are keen to meet us and are willing to pay for it. Perhaps we can speak afterwards, but his constituents can speak to me any time. We are always available, across the country.

This has been an excellent debate, with many views. It has highlighted the great importance of business to all our constituents, and I mean that seriously. The comments from colleagues on my side have illuminated the many different businesses that we have, whether it is Bloom Weddings, Chris and Annie’s business in the constituency of my hon. Friend the Member for Mid Leicestershire; the fish and chip shops Old Time Fisheries and Kirkgate Fisheries in Keighley and Ilkley, which no doubt provide fantastic fish and chips but are unfortunately reducing their hours, as my hon. Friend the Member for Keighley and Ilkley pointed out; or Carmela’s in the great constituency of my hon. Friend the Member for Broxbourne. All are having a hard time of it, but they remain excellent businesses. Some are, no doubt, places where we can all eat out.

The Liberal Democrats have made some important points. The hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald) spoke about plumbers, and the hon. Member for Mid Dunbartonshire (Susan Murray) about the hair and beauty salons and high streets in Mid Dunbartonshire.

This is an important debate to have. I am reminded of the last election when one party had a key policy in their manifesto around VAT thresholds, and that was Reform. However, I am afraid that when it comes to the hard graft of making the case in this place, the party is, yet again, nowhere to be seen.

I hope we can all agree that our country is stronger because of the men and women who get up every morning, go to work and drive our economy forward, as the hon. Member for St Albans (Daisy Cooper) said. At the heart of every successful economy is the simple fact that prosperity begins small. It begins with the family-run café on the high street, the corner shop, the book shop and the local butchers, and the single parent who is just launching their dream from their spare room or their garage. These are not just businesses. These are stories of people who had an idea, stuck it out and made it happen. When we pile on more and more burdens, when taxes climb too high and regulation tangles dreams in red tape, we do not just make it harder to do business; the hope of what might be possible completely dims. A free society depends on free enterprise. When we get out of the way and support small businesses, we are not just fuelling the economy but lifting communities. My hon. Friend the Member for Mid Leicestershire believes that lifting the VAT threshold will help achieve that, and I look forward to the Minister’s response.

Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 20th May 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

Sacha Lord, Labour’s former night-time economy adviser, says that it is tougher for the hospitality industry today than it was even during the pandemic, but the Chancellor is ignoring his advice and pushing ahead with a cocktail of costs that the Night Time Industries Association has called a death sentence for our pubs, bars and clubs. Can the Minister and the Chancellor not see that the future of the industry is fatally undermined by their anti-growth taxation?

[Torsten Bell]

What is anti-growth is the Conservative party, which sat over 15 long years of decline and completely unprecedented economic stagnation. Our job is to support the hospitality and leisure sector more generally. That is why we are reducing red tape through the cross-Government licensing taskforce; why we are permanently cutting business rates, moving away from the year-by-year chaotic system put in place by the Conservative party; and why we are engaging all the time with the Hospitality Sector Council.

Draft Finance Act 2021 (Increase in Schedule 26 Penalty Percentages) Regulations 2025

Gareth Davies Excerpts

Wednesday 7th May 2025 General Committees

[Gareth Davies (Grantham and Bourne) (Con)]

It is a great pleasure to be here, Mrs Harris. This is a relatively straightforward instrument, and I am grateful to the Minister for setting out its detail.

Tackling the tax gap is critical, and I am pleased that, between 2010 and 2024—just to pick two years at random —the tax gap reduced from 6.2% to 4.8%. It is vital that we go further and do everything that we can to reduce that tax gap. The Finance Act 2021 introduced a new penalty regime for late submissions of returns and for late payment of tax. By revising minor parts of that Act, these regulations impose harsher penalties on the amount of tax outstanding for those paying VAT and those paying under Making Tax Digital for income tax self-assessment.

As I said, we will not oppose the measure, but I have a couple of questions for the Minister. First, what efforts is he making to improve HMRC customer services to help support taxpayers who are just seeking to do the right thing? Secondly, what communications will accompany the changes to further encourage compliance and bring down the tax gap even further, which is what we all want?

Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 8th April 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

We know that the Energy Secretary is against airport expansion unless it is in Doncaster, and we know that many Labour MPs are against airport expansion unless it is in Pakistan. To be fair, at least the Chancellor wants airport expansion actually in this country, but at the same time she is jacking up air passenger duty by as much as 16%. Only this Chancellor could be pro-airport, but anti-passenger. Labour’s Climate Change Committee wants to see air passenger numbers fall by 2030, so I ask the Minister: does he?

[Darren Jones]

No.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Gareth Davies Excerpts

Consideration of Lords message
Tuesday 25th March 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

I rise on behalf of the official Opposition to support Lords amendments 1B, 5B, 8B and 21B. It feels like only last week that we were all here, but it is clear that our colleagues in the other place feel as strongly as the Opposition do about these amendments, as they have returned them to us with a similar aim once again.

Lords amendments 1B, 5B and 8B seek to address two of the most serious consequences of the Bill that should concern and unite us all: that a rise in secondary class 1 national insurance could lead to a significant reduction in health and social care services, including our hospices, hitting the most vulnerable in our society; and could represent a complete hammer blow to the future aspirations and very survival of small businesses throughout the country.

We all know that the Chancellor has an addiction to creating fiscal black holes. First she used a fictional black hole, discredited by the Office for Budget Responsibility, as an excuse for her manifesto-breaking tax rises. This has led to more black holes, only this time they are very real because they are being felt out there in the real economy. The Bill before us today will create black holes in the finances of hospices, GP practices, farms, fruit shops, butchers, bakeries and businesses of all shapes and sizes, but especially the very smallest.

[Sammy Wilson (East Antrim) (DUP)]

Does the shadow Minister find it puzzling that the NHS will be exempt from these changes, yet the many services on which people depend for their health—dental services, social care and so on—will be hit by this rise in national insurance contributions? [Interruption.] No services will remain unaffected, so people will not experience the healthcare that they require.

[Gareth Davies]

It is rare that questions come with a musical accompaniment, but the right hon. Gentleman’s mobile ringtone made for a great effect. None the less, his point is the right one, which is that, whether it was intended or not, the rationale for the Bill is to “protect”—in the Government’s words—public services. I could say “bolster” public services if I were being generous. The fact is that the Government are taxing public services on which we all rely and he is absolutely right to emphasise that.

Lords amendments 1B and 5B seek to provide the power to exempt from both prongs of attack of the Chancellor’s jobs tax: care providers, NHS GP practices, NHS-commissioned dentists, NHS-commissioned pharmacists, and charitable providers of health and social care, such as hospices. And it is hospices specifically that I want to speak more about today.

Hospices are there at what, for many, will be the hardest moments of their lives. They provide vital physical and emotional support to individuals who are coming towards the final chapter of their lives and for their loved ones. In short, hospices are there to look after us at our most difficult time. So, whether through funding, charitable donations or legislation, they deserve our utmost support to continue in this task.

However, as I set out in Committee, this disastrous jobs tax will cost hospices up to £30 million next year alone. Hospice UK has repeatedly warned this Government that the Bill risks a reduction in hospice services, which will lead only to even greater pressure on NHS palliative care services.

Of the more than 200 hospices across our country, around 40 provide care for children. These are children who are living with terminal illness, many of whom have an all-too-limited time left in this world. The organisation Together for Short Lives estimates that the Labour Government’s decision to raise national insurance will add almost £5 million to the annual cost of providing care for seriously ill children and their families. Let us be clear: this will mean that every children’s hospice in England alone will need to spend an average of £140,000 more just to maintain services for the children in their care, after paying the additional tax that this Bill will impose. The Government cannot seriously be demanding that staff and volunteers at charitable children’s hospices—the very people who already give their heart and soul to look after sick and dying children—fundraise their share of £5 million next year alone just to keep their lights on and their doors open.

At Treasury questions on 21 January, the Chancellor stated, in response to an excellent question from my Lincolnshire colleague, my right hon. Friend the Member for Gainsborough (Sir Edward Leigh), that the settlement for hospices announced by the Health and Social Care Secretary just before Christmas includes money to specifically “compensate” hospices for the national insurance increase. That is not correct, and I am pleased that at least this Minister has tried to acknowledge that point.

[Sir Edward Leigh (Gainsborough) (Con)]

When I visited staff at the much-loved St Barnabas hospice in Lincoln, which provides excellent palliative care, they told me that they are losing £300,000 a year. In the debates on assisted dying, we all agree that we want more palliative care. I just cannot understand the logic of what the Government are doing. I make one last appeal to them not to load this extra cost on to hospices.

[Gareth Davies]

My right hon. Friend has raised that matter at every single opportunity that he has been afforded, and he is right to stand up not just for St Barnabas, but for all hospices. However, I have to say that St Barnabas holds a particular place in the hearts of people in Lincolnshire. I know, as a Lincolnshire Member of Parliament, that it has been around for 40 years, employs 300 staff and treats more than 12,000 people across our county every single year. The fact that it is going to be hit with a cost worth hundreds of thousands of pounds for no good reason is unacceptable. I pay tribute to my right hon. Friend the Father of the House for raising that point so consistently. I hope that the Government will listen to him.

The settlement announced does not compensate St Barnabas, or any hospice, for the damage that the Government are doing, not least because we know that much of this money cannot be spent on facing down the additional running costs that this tax hike will bring. There is £100 million of capital funding, which has been set aside for buildings and equipment. Although that funding is welcome, it will not fill the national insurance blackhole that the Chancellor has created for the hospice sector, and she should not suggest otherwise. Today the Government have a chance to exempt hospices and other key areas of our health and social care sector from this tax hike, by accepting Lords amendments 1B and 5B.

In addition, Lords amendment 8B seeks to provide the power to exempt the smallest businesses—those with fewer than 25 full-time employees—from the proposed cut to the threshold at which an employer is required to pay secondary class 1 national insurance. The Chancellor has spoken a lot about growth, but growth has been consistently downgraded since she took office. Something that we, as Conservatives, know, and that she, as a socialist, does not know, is that that is because economic growth cannot come from the Floor of the House of Commons; it comes from the factory floors and bustling high street shop floors in each of our constituencies. It comes not from state-created quangos such as GB Energy, but from individuals who had an idea, stuck it out, made it work and saw it through. It comes from people in this country who, by seeking a better life through enterprise, create the jobs and services that make our country strong.

Those small businesses are being hammered, but not just by the national insurance hike. In less than a year they have already seen: business rates relief cut from 75% to 40%; aspiration penalised with changes to business property relief; and crippling new red tape through the Employment Rights Bill, adding a staggering £5 billion in additional costs. This is a potent and damaging combination of costs that many fear will mark the end. Lords amendment 8B gives the Government another chance today to change their approach, to throw our smallest businesses a lifeline—a chance of survival.

Finally, while our smallest businesses require specific attention, I made it clear last week that, sadly, this Bill does not discriminate. It will hit business groups of all types, across all sectors, in all parts of our country—from charities to cafés, from pharmacies to children’s nurseries and special educational needs and disabilities transport. We must understand the impact the Bill will have. That is why Lords amendment 21B requires the Chancellor to carry out a review of the impact of the Bill on a range of sectors of our economy within six months of its passing into law. I urge Members to support the amendment.

Tomorrow the Chancellor will come to this House to launch her latest attempt to reverse as much as possible of the damage of her Hallowe’en Budget of horrors. Despite the hopes and dreams of business owners across the country, we can be sure that her emergency Budget will not include scrapping this awful Bill. It is incumbent on all of us in this place to work to protect and support the most vulnerable in our society, and to take decisions that drive growth, backing the people out there who make it happen. They are the people who will be hit hardest by the Bill. The Government must change course.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Gareth Davies Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. This debate has to conclude within two hours of its start, so we will have a six-minute time limit, other than for Front-Bench Members. I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

I rise on behalf of the official Opposition in support of Lords amendments 1 to 4, 8, 10, 14 and 21.

Before I dive into the detail, I want to get a little nostalgic. One year and six days ago, I opened Second Reading of the National Insurance Contributions (Reduction in Rates) Act 2024, which cut national insurance for some 29 million working people across the country. What a difference a year makes. At the end of my speech that day, I posed a simple question to the shadow Minister, now the Exchequer Secretary, which was really bugging me at the time: how will Labour pay for all its many spending commitments? I asked specifically what taxes Labour would put up, and called for Labour to just be straight with the British people. Alas, no straight answer was forthcoming, but now we know the answer, don’t we? It is just a shame that Labour gave it to us only after the general election.

Labour promised not to raise national insurance, and that it was on the side of British business. It said that it would deliver economic growth; how is that going? The fact is that the Chancellor is delivering a £25 billion tax rise on jobs across the country. That will stifle growth, hold back British business, and harm public services. This Labour national insurance Bill will, unbelievably, take the tax burden to its highest level in history on the backs of working people.

We are debating a series of amendments tabled and voted through in the other place with the aim of mitigating at least some of the damage to three vital parts of our economy and our communities: healthcare providers, charities and small businesses. Lords amendments 1, 3 and 4 seek to exempt from the measures care providers, NHS GP practices, NHS-commissioned dentists and pharmacists, providers of transport for children with special educational needs and disabilities and charitable providers of health and social care, such as hospices, as we have heard. That is because we have been warned that as a direct result of the national insurance tax hikes, we could see fewer GP appointments, reduced access to NHS dentistry, community pharmacies closing, adults and local authorities paying more for social care, and young working families being hit with even higher childcare costs. We have to avoid that.

[Dr Jeevun Sandher (Loughborough) (Lab)]

Would the hon. Member reverse this national insurance tax change? What spending would he cut to do so?

[Gareth Davies]

If the hon. Gentleman looks back at the record of proceedings on earlier stages of the Bill, he will see that we voted against it. If he looks at our record in government, he will see that we cut national insurance for 29 million people across the country. As I have said so many times in this place, why are we not debating the Government’s creation of an £8 billion quango in Great British Energy? Why are they spending £7 billion on a rebrand of the UK Infrastructure Bank? Why are they spending £9 billion on giving up our sovereignty to Mauritius? Let us start with those discussions; we can then have a real debate.

Lords amendment 2 recognises the role that the voluntary sector plays in the provision of essential services by seeking to exempt charities with an annual revenue of less than £1 million from the national insurance rate rise. Charities with an income of less than £1 million make up some 95% of registered charities and undertake vital work in all our communities, yet this Chancellor will force charity staff and volunteers across the sector to raise £1.4 billion more to cover this tax rise next year alone. Supporting this Lords amendment would prevent so many services provided by the third sector from being reduced, or even removed altogether.

Lords amendments 8, 10 and 14 seek to exempt the smallest businesses—those with fewer than 25 full-time employees—from the proposed cut to the threshold at which an employer is required to pay secondary class 1 national insurance.

[Jess Brown-Fuller (Chichester) (LD)]

The hon. Member mentions small businesses. Local hairdressers in my constituency have been in touch with me to say that given the difficult economic picture, these NICs rises will mean that they cannot take on apprentices this year. Does he agree that this NICs rise is a tax not just on business, but on education?

[Gareth Davies]

Absolutely. To be fair, I do not think the profound impact of this tax is appreciated by Labour Front Benchers. The hon. Lady has pointed out yet another area in which it will have an impact—tax on education. I could talk about the impact on universities as well.

[Sir Julian Smith]

Does my hon. Friend think that the Government have assessed the loss of tax revenue that will result from this measure? In North Yorkshire, almost all of the jobs that would have been created in small businesses over the coming year are now being repressed, leading to a loss of income for the Exchequer.

[Gareth Davies]

To answer simply, I do not think the Government did that assessment before announcing this tax rise, but with plummeting business confidence, declining economic growth and forecasts for economic growth that are consistently downgraded, the profound impact on businesses and growth—as I was saying—is clear for all to see.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

I listened carefully to your answer to the Minister’s question about what you would cut if this change were to be reversed. You have not been clear about whether you would reverse it, but I listened carefully to the answer, and what I heard you say—[Interruption.] I am so sorry, Madam Deputy Speaker. The shadow Minister referred to GB Energy and the National Wealth Fund. Will he clarify whether he is really saying that he wants to reverse record levels of investment in energy infrastructure and innovation jobs, and in jobs across this country, to stabilise our economy into the future?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I remind hon. Members that interventions should not be short speeches. The hon. Lady is absolutely right; looking at the Chair should hopefully prevent her from saying the word “you” repeatedly.

[Gareth Davies]

The problem with that intervention is that the chairman of GB Energy himself disagrees about the number of jobs that it will supposedly be creating. I have set out clearly some of the things that we would do differently, and the different choices we would make from the choices this Labour Government are making.

When we talk about small businesses, and about the impact of this national insurance tax increase on businesses as a whole, the Minister and other Labour Members incorrectly suggest that only the largest businesses will be forced to pay this jobs tax. As I have told them consistently in every debate we have had on this Bill, that is simply not the case. Village butchers, high street hair salons and community pharmacies are not what most people would regard as large businesses, yet businesses such as those will be hit. If the Government really want to ensure that our smallest businesses are exempt from at least part of this damaging tax, they should support the Lords amendments that are before us today.

[Sir Gavin Williamson]

We know that the Minister is having to defend the undefendable—he has got a certain Matt Hancock about him in how he does it with zeal. [Interruption.] Sorry, Madam Deputy Speaker. Does the shadow Minister agree that the people who are paying for these increases are taxpayers? They are people who are working hard. I was talking to a manufacturing business in my constituency that was going to give its employees a 4.5% pay increase, but can now only afford to give them a 2% increase. This money is coming out of the pockets of hard-working people.

[Madam Deputy Speaker (Ms Nusrat Ghani)]

I remind hon. Members that language should be respectful at all times.

[Gareth Davies]

The jungle awaits the Minister, clearly. My right hon. Friend is absolutely right; in fact, the OBR has clearly demonstrated in its analysis that 76% of this tax increase will be passed on to working people. That is a manifesto breach if ever I saw one. Not only that—the Institute for Fiscal Studies has made clear that this tax increase will not just have an impact on working people. It is the lowest-paid people in our country who will be paying for it, which is another under-appreciated and under-commented fact for the Labour party.

[Sir Roger Gale]

It is worse than that, is it not? The money that is being paid to bail out Demelza and Shooting Star children’s hospices is being generously donated by people who have already paid tax. Those working people are effectively being taxed twice on the money they are generously giving to support some of the most needy children in this country—needy in terms of health. Is that not absolutely appalling?

[Gareth Davies]

Yes, it is. My right hon. Friend is exactly right; the Government are giving a small amount with one hand and taking a larger amount with the other, but the bottom line is that it is all taxpayers’ money. It is a double tax on those people who now face the brunt of this tax increase.

[Tim Roca (Macclesfield) (Lab)]

Will the shadow Minister give way?

[Gareth Davies]

I will make some progress, if the hon. Gentleman will allow me, and then give way.

This tax, purely and simply, is a financial penalty on 940,000 businesses—that is how I look at it. The analysis shows that it is going to cost businesses an average of £26,000 per year per employer. Not content with ruining farmers’ futures through the immoral family farm tax, the Chancellor wants to hammer them with this Bill, too. She is going to make pubs, cafés and restaurants stump up more to cover her jobs tax, without regard for the impact on our high streets or the communities they serve. She is going to squeeze the creative industries, from theatres to film producers, in a desperate attempt to keep this circus on the road. It is crucial that we understand the impact that the Bill will have. That is why Lords amendment 21 requires the Chancellor to carry out a review within six months of the Bill’s impact on the sectors I have described as well as on farming, creative industries, hospitality, retail and universities.

[Mike Martin (Tunbridge Wells) (LD)]

The shadow Minister has mentioned cafés, and when we have been debating this point previously in the House, I have mentioned Basil’s café in Tunbridge Wells. It now informs me that it is having to put its prices up because of the NIC rises. Does the shadow Minister think that we are going to see a bump in the inflation figures as a result of this tax?

[Gareth Davies]

I remind the House that inflation has already gone from 2% to 3% under this Labour Government, and in fact, the OBR scored the Hallowe’en Budget as inflationary. The hon. Gentleman is right that when these tax rises hit, they will be passed on through higher prices. I hope that that will not put pressure on inflation, but it will inevitably do so.

The combination of factors and how they are affecting businesses, including cafés, is not always appreciated either. The national living wage is going up. Conservative Members have welcomed that—we implemented the national living wage—but it is about the context in which it is going up: national insurance is on the rise and business rates relief for hospitality businesses and high street businesses is being reduced from 70% to 40%. All those things are compounding the impact on cafés, such as the one in the constituency of the hon. Member for Tunbridge Wells (Mike Martin). They will be devastated, inevitably leading to job freezes or job losses, which I will come to.

From healthcare to charities and small and medium-sized enterprises, I have made the consequences of this Bill clear since it began its stages in the House. Today, the Government have one more chance to change course, because what many people across the country want to know is this. What is this Bill for? We were told that it was a one-off tax rise to fix the foundations of the economy. We were told that there would be no more tax rises after this, yet we find ourselves just a week away from an emergency Budget, with speculation rife that other taxes may have to rise because the Chancellor will not meet her own new fiscal rules. Some are suggesting that Labour will break another pre-election promise and not unfreeze the income tax thresholds in 2028, but will rather extend the freeze to pay down their new debts. That surely cannot be true—the Minister himself gave me his personal assurance in this House that income tax thresholds would be unfrozen from 2028. I would like him to reconfirm that promise to me today, in order to end the speculation.

This is vital context for Members as we consider the amendments before us today. If more tax rises will be needed—if the original justification for this Bill is now void—why should we stomach the Bill’s terrible consequences? Why should Labour MPs have to go out and defend this to their constituents? Why should we allow the Government to punish the sectors that the amendments before us seek to protect? In fact, why must we stand here and see this entire Bill implemented at all?

One impact that hits every sector of our economy is the impact on jobs. Just yesterday, we heard Labour talk about the importance of lifting people out of welfare and getting them back into work, and it is right to do that. As Conservatives, we know that the dignity of work and the security of a regular pay cheque is what lifts us up as a country and lifts families out of poverty. The tragedy is that this Bill has caused so much concern and so much uncertainty that employment is already declining in anticipation of its passing. The Office for Budget Responsibility tells us that the Bill will depress workforce participation for years to come.

Put simply, this Government are cutting welfare to boost employment, while at the same time boosting taxes, which will cut jobs. No wonder business confidence has completely and utterly nose-dived. It is inexplicable and entirely avoidable.

[Dave Doogan (Angus and Perthshire Glens) (SNP)]

The shadow Minister says it is inexplicable, and I agree that on the face of it, it is. However, is one possible explanation for fiscal misadventure on this scale not that the Government Benches are filled with people who have scarcely any understanding of the real economy, much less what it means to try to start, run and sustain a business?

[Gareth Davies]

That is right, and it is an important point, because the decisions made by this Government are having such a profound impact on people in the real economy. I simply say to the British public that if they are unhappy with the decisions being made, they have to change the people making them. [Interruption.] Unbelievably, I am getting heckled on that point. The hon. Member for Hamilton and Clyde Valley (Imogen Walker) should get out and talk to the average businessperson in her constituency. She might quieten down significantly.

The Minister implied that the Government had no choice, and he still seeks to ask me what the Conservatives would do differently. Others on the Government Benches are trying that, implying that there is no other alternative. The Minister should look at the £70 billion of wasteful spending commitments that I have already listed, including the quangos, such as GB Energy, the pay-offs to the unions without any reform or productivity gains, and the billions of pounds being surrendered as part of the surrender deal to Mauritius. We have growth on the decline and inflation, debt and unemployment on the rise. We have a Chancellor on the brink, and confidence crumbling. We may not be able to kill this Bill, but we have our chance now to dent the damage. I urge Ministers and Members across the House to do the right thing and to support these amendments.

[Several hon. Members rose—]

Draft Double Taxation Relief and International Tax Enforcement (Belarus) (Revocation) Order 2025 Draft Double Taxation Relief (Russian Federation) (Revocation) Order 2025

Gareth Davies Excerpts

Tuesday 4th March 2025 General Committees

[Gareth Davies (Grantham and Bourne) (Con)]

It is a great pleasure to see you in the Chair, Dr Huq. It is also a great pleasure to see the Minister. It has been so long since we last saw each other—it must be at least two hours.

I am grateful to the Minister for laying these statutory instruments, which will revoke the double taxation conventions with Belarus and Russia. Russia fell out of compliance with all material provisions of its convention with the UK in August 2023, with Belarus following in March 2024. The UK did not immediately accept the suspensions and urged both countries to reverse their decisions and return to compliance with the conventions. However, given Russia and Belarus’s persistent refusal to comply with their international obligations, the UK has now rightly taken the decision to revoke both the 2018 and 1994 orders.

I am pleased to say that His Majesty’s Opposition support these statutory instruments, which are a proportionate and sensible step given Russia and Belarus’s continuing breach of their international obligations. Of course, the measures build on steps taken by the previous Government in response to the invasion of Ukraine and the non-compliance with international obligations. For example, back in March 2022, we suspended co-operation with Russia and Belarus on exchanging and sharing tax information.

We support today’s measures, but I end by asking for one small point of clarification. The conventions state that signatories must give six months’ notice to terminate the agreement. Has the UK provided that notice, or did Russia’s unilateral suspension of the convention mean that such notice was no longer required?

Oral Answers to Questions

Gareth Davies Excerpts

Tuesday 4th March 2025 Commons Chamber

[Mr Speaker]

I call the shadow Minister.

[Gareth Davies (Grantham and Bourne) (Con)]

The Chancellor has lauded the new National Wealth Fund as a key part of the Government’s regional growth ambitions. The trouble is, it is not actually new; it is just the UK Infrastructure Bank with a new colour scheme and £7 billion it did not need. The Prime Minister announced at a recent Labour party political conference that he will allocate £200 million from the National Wealth Fund for Grangemouth, but it is supposed to be operationally independent. Will the Minister therefore confirm that that is still the case and that the full independent investment process was followed? Will he also confirm that the unexpected resignation of the National Wealth Fund CEO just days before that announcement is not connected?

[Darren Jones]

I find it odd that Members on the Conservative Benches do not welcome an additional £7 billion of investment into our economy; it is rather a testament to their poor performance on investment over many years in government. To answer the hon. Gentleman’s specific questions, I can confirm that each of the business cases for Grangemouth will have to go through the normal process for sign off, and that John Flint leaving the National Wealth Fund is not in any way connected to the decisions taken by this Government. We look forward to appointing his successor in due course.

National Insurance Contributions

Gareth Davies Excerpts

Tuesday 4th February 2025 Commons Chamber

[Gareth Davies (Grantham and Bourne) (Con)]

I welcome the opportunity to contribute on behalf of His Majesty’s Opposition. As the Minister said, the first statutory instrument sets rates, limits and thresholds for national insurance contributions for the 2025-26 tax year. It covers the rate of class 2 NICs, the small profits threshold, the rate of voluntary class 3 NICs, the zero-rate relief on secondary class 1 NICs for qualifying armed forces veterans—a Conservative Government legacy that we are very proud of—and the various upper secondary thresholds and the upper limits and thresholds that determine class 1 NICs.

These regulations also allow for payments of a Treasury grant not exceeding 5% of the estimated benefit expenditure for the 2025-26 tax year. This is to be made into the national insurance fund, with a corresponding provision for Northern Ireland. We welcome the uprating with CPI of the class 1 lower earnings limit and the class 2 small profits threshold, but the overall picture in these regulations is one of continuity, not of change.

The secondary threshold, however, is the exception. Although the regulations leave it unchanged, that will not last for very long. They will be overridden by the National Insurance Contributions (Secondary Class 1 Contributions) Bill, which is under consideration in the other place. It will cut the secondary threshold from a weekly level of £176 to £96 in the coming tax year, on top of raising the secondary class 1 NICs rate to 15%.

The disastrous, job-destroying consequences of Labour’s £25 billion tax on working people are well known by now, and have been debated in this place many times. They are also widely acknowledged, from the independent Office for Budget Responsibility to the left-wing Resolution Foundation. This time last year, when in opposition, the Minister put on record his concern over the distributional impact of the freezes on allowances, limits and thresholds, which his Government are in large part continuing. We accept that these are difficult decisions, but we took them to return the public finances to a sustainable footing in the aftermath of the double crisis of the pandemic and the energy price shock driven by the disgraceful invasion of Ukraine.

If the Minister was concerned about the distributional impact back then, and in particular about

“the post-tax income for low and middle earners”—[Official Report, Sixth Delegated Legislation Committee, 7 February 2024; c. 6.],

I wonder just how concerned he is now, in the context of his own party’s Budget. The Institute for Fiscal Studies has shown that the largest percentage increases in labour costs will be inflicted on lower-wage workers; meanwhile, as much as 76% of the additional tax burden will be passed on to those same workers in the form of lower real wages, according to the independent OBR. Does the Minister agree with the OBR and the IFS on the distributional impact of the NICs tax hike?

[Dr Luke Evans]

My hon. Friend has talked about context, which is really important. This is a finance SI, but the wider context is that another Bill is being brought forward—the Employment Rights Bill—that is estimated to cost £5 billion on top of existing tax measures in the Budget. Does he think that that will have a direct impact on people who are trying to find work? There is a chance, surely, that more people will be let go and made unemployed because of this potential cost and impact.

[Gareth Davies]

I completely agree with the point that my hon. Friend is making, which has also been made to me by several local businesses in my constituency. This is a double whammy. We have a tax increase that will increase the cost of doing business and affect the profitability of businesses and, in some cases, their survival; in addition, they are being hit with additional regulation, which businesses themselves, including the CBI, have made clear will add to the burden of regulation and make it less easy to hire people and, in some cases, to keep them. This double whammy, I am afraid, will result in job freezes at best, and, in some tragic cases, to job losses. I think we should all be very concerned about that.

To be fair to the Minister, he has in the past expressed great concern about the lower-paid in our society across all constituencies. Has he therefore undertaken his own distributional analysis of changes to national insurance rates, limits and thresholds in the round? If he has, does that analysis show anything different from what the OBR and the IFS have shown?

I would like to highlight the fact that the impact note for this specific statutory instrument predates the October Budget. I hope there is an updated impact analysis to consider the new context—surely there is. I would be grateful if the Minister could confirm that and show it to us.

Finally, I would be grateful if the Minister could confirm whether the Treasury is considering an extension of the veterans zero-rate relief beyond 2026, or whether that will now act as a final sunset date for the relief. He is absolutely right to say that we all have a part to play in highlighting this relief to businesses. We all want to see veterans hired in our country. My constituency has one of the largest populations of veterans, and I, with others on the Opposition Benches, will certainly join the Minister in doing anything we can to better inform businesses of this benefit. However, it would be good if he could confirm whether there are any plans or intentions to extend the relief beyond the 2026 point set out in the regulations.

As the Minister said, the second statutory instrument uprates child benefit and guardian’s allowance in line with CPI for the 2025-26 tax year. These benefits are an important part of our welfare system, and we welcome the vital support that they provide. However, as the Joseph Rowntree Foundation has pointed out,

“Work is the most important route out of poverty”,

and we agree. Between 2010 and 2024, Conservative Governments helped to create 4 million jobs. The proportion of children living in workless households fell from 16% to 10%. Even as employment increased, the proportion of all jobs considered low paid declined from 20% in 2010 to just 3.4% in 2024, which I hope the whole House welcomes and recognises.

Labour has never left office with unemployment lower than it found it, and within four months of its first Budget unemployment is on the rise, with the number of workers on payrolls dropping by the most we have seen since the peak of the pandemic. Meanwhile, the OBR says that Labour’s jobs tax will weigh on real wages. With inflation also expected to rise in the near term, and many of the Minister’s Back-Bench Labour colleagues no doubt taking the view that child benefit provision is not generous enough, have the Government prepared an assessment of the impact of their Budget measures on levels of child poverty over the next 12 months, and in particular of the impact their jobs tax may have through higher unemployment and lower pay? Finally, is the Minister confident that this uprating will cancel out any adverse consequences of the Budget, such as those I have raised?

Finance Bill (Third sitting)

Gareth Davies Excerpts

Committee stage
Thursday 30th January 2025 Public Bill Committees

[James Murray]

Clauses 58 to 60 make changes to strengthen the conditions that must be met for transfers of shares into an employee benefit trust to be exempt from inheritance tax. An employee benefit trust is a trust that provides benefits and rewards to employees of a company, often in the form of shares in the company. Under certain conditions, such shares are exempt from inheritance tax. All or most employees need to be capable of benefiting from the trust for the inheritance tax exemption to apply, so it cannot be limited to shareholders of the company or family members, for example.

In 2023, the previous Government launched a consultation on employee ownership trusts and employee benefit trusts. The consultation set out concerns that such trusts were increasingly being used as a tax planning vehicle for shareholders and their families, rather than for a wider class of employees. At the autumn Budget, the current Government responded to that consultation and announced changes to strengthen the conditions that must be met for the transfer of shares into an employee benefit trust to be exempt from inheritance tax.

The changes made by clause 58 will mean that restrictions on shareholders and their family members benefiting from an employee benefit trust must apply for the entire lifetime of the trust. The clause will address cases in which the trust deed allows individuals who are closely connected with a shareholder to benefit after the participator’s death. The clause ensures that the Government’s position is explicitly clear in legislation. The change will come into effect on Royal Assent.

Previously, family members of the shareholder who were excluded from benefiting from the capital of the trust could still receive income payments from the trust. The changes made by clause 59 will ensure that no more than 25% of employees who can receive income payments from an employee benefit trust may be family members of the shareholder. This reinforces the original policy intent of employee benefit trusts to reward and motivate a wide group of employees.

Previously, an individual could set up a company, immediately make a transfer of shares to an employee benefit trust, and obtain an inheritance tax exemption. The changes made by clause 60 will mean that shares must have been held for at least two years before being transferred into the employee benefit trust. The provision will take into account shares held prior to any share reorganisation, and will strengthen protections against employee benefit trusts being used purely for inheritance tax planning purposes.

Clauses 59 and 60 are treated as having come into effect for transfers of value to new and existing trusts on or after 30 October 2024. The clauses will ensure that the tax treatment of employee benefit trusts is consistent with the original policy intent of rewarding and motivating employees, while minimising opportunities for abuse. I commend them to the Committee.

[Gareth Davies (Grantham and Bourne) (Con)]

It is, as always, a great pleasure to see you in the Chair, Ms Vaz.

As the Minister set out, clauses 58 to 60 make amendments to requirements for inheritance tax exemptions involving employee benefit trusts. Clause 58 provides that restrictions on shareholders and connected persons benefiting from employee benefit trusts will now apply for the lifetime of the trust. Clause 59 provides that no more than 25% of employees who receive income payments from an EBT can be connected to the shareholders in the company. Clause 60 provides that shares will now need to have been held for at least two years prior to being transferred to the EBT.

As the Minister said, the measures follow on from the consultation launched in 2023, which we referred to when we discussed clause 31 and employee ownership trusts. Although we will not oppose the clauses, I would be grateful if the Minister could comment on one specific issue that was raised during the consultation on the changes. In response to the measure introduced by clause 59, concerns were raised at consultation on behalf of smaller companies using EBTs that may now be forced to exclude certain employees from participating in share scheme arrangements in order to comply with the new requirement. What was the Minister’s assessment of that particular impact? Is he content that the benefits of the changes outweigh that particular risk cited in during the consultation?

[James Murray]

I welcome the Opposition’s support for the clauses, which build on the consultation that started when they were in office. The shadow Minister’s question related to what effect the changes might have on small businesses in particular. I will try to answer now, but he is free to contact me if he feels I have not covered his point fully.

The changes we are making to employee benefit trusts will not have an adverse effect on small businesses, because the original policy intent of exempting transfers of value to employee benefit trusts from inheritance tax was to encourage businesses to reward and motivate a wide range of employees. To qualify for the exemption, conditions need to be met that ensure that EBTs that benefit only shareholders and their families, or other people closely connected to shareholders, do not receive preferential inheritance tax treatment. Given that that is the aim in the principles behind the clauses, I am confident that they will not have the adverse effect that the shadow Minister fairly raised. I hope that provides him with some reassurance.

Question put and agreed to.

Clause 58 accordingly ordered to stand part of the Bill.

Clauses 59 and 60 ordered to stand part of the Bill.

Clause 61

Agricultural property relief: environmental management agreements

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[James Murray]

As the hon. Lady knows, because we have debated this many times, the data that we have published, based on His Majesty’s Revenue and Customs data, shows that the large majority of small farms will not be affected. I am sure she knows well the statistics on the 530 farms affected by the reforms to APR and business property relief in ’26-27, because she will have seen them in the Chancellor’s letter to the Treasury Committee and we have discussed them many times in this place.

Clause 61 relates specifically to land managed under certain environmental agreements, and was a measure proposed by the last Government. If the hon. Lady allows me to continue explaining why the clause is important, she might feel able to support it, given the benefits it will bring. The clause was welcomed by the sector, and the Government agree with the approach. I can confirm that there have been no changes to the design outlined by the previous Government in March 2024, which is why I hope to get the Opposition’s support for the clause.

As a result of the changes made by clause 61, from 6 April 2025 APR will be available for land managed under an environmental agreement with or on behalf of the UK Government, devolved Governments, public bodies, local authorities or approved responsible bodies. This includes but is not limited to the environmental land management schemes in England and equivalent schemes elsewhere in the UK, as well as any agreement that was live on or after 6 March 2024.

The Government are fully committed to increasing the uptake of environmental land management schemes in England, and we are providing the largest ever budget of £1.8 billion for this in 2025-26. The changes made by clause 61 will ensure that the tax system is not a barrier to uptake, thereby supporting farmers and land managers to deliver, alongside food production, significant and important outcomes for the climate and environment. I commend the clause to the Committee.

[Gareth Davies]

As the Minister said, clause 61 brings land managed under an environmental agreement—be that with the UK Government, devolved Governments, public bodies, local authorities or approved responsible bodies—within the scope of agricultural property relief.

I am afraid we have here Labour taking with one hand and providing far less with the other. For the £5 million, which we welcome, that they will give back to farmers each year with this measure, they will take away some £500 million a year through the family farm tax, if the Office for Budget Responsibility’s highly uncertain costings are to be believed. Many farmers, and bodies such as the National Farmers Union, have raised concerns about this. The Chartered Institute of Taxation has queried why the relief remains limited to schemes entered into with public authorities, rather than allowing enterprising landowners to enter into other schemes. I would be interested to hear the Minister’s thoughts on that, but we will not oppose the measure.

[James Murray]

I thank the hon. Gentleman for his support for the measure. He made wider points about reforms to agricultural property relief, which we have debated several times. The clause focuses in a targeted way on environmental land management schemes.

The hon. Gentleman asked why private environmental land management that is outside of agreements is not included. I confirm that relief will be available for land managed under an environmental agreement with or on behalf of the UK Government, devolved Governments, public bodies, local authorities or approved responsible bodies. This will ensure that the extension of the relief applies only where there are high, verifiable environmental standards.

Question put and agreed to.

Clause 61 accordingly ordered to stand part of the Bill.

Clause 62

National Savings Bank: statements from HMRC no longer to be required

Question proposed, That the clause stand part of the Bill.

--- Later in debate ---

[Gareth Davies]

The Minister may think that this is a minor issue—and he will be pleased to know that I agree with him. [Laughter.] I am just waking everybody up. The requirement is redundant and we will not oppose the clause.

[James Murray]

I applaud the hon. Gentleman’s theatre in delivering his response, and welcome his support.

Question put and agreed to.

Clause 62 accordingly ordered to stand part of the Bill.

Clause 63

Rates of alcohol duty

--- Later in debate ---

[The Chair]

Does the shadow Minister wish to speak?

[Gareth Davies]

My hon. Friend the Member for North West Norfolk will speak to this clause, Ms Vaz.

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

I apologise for the confusion on our side, Ms Vaz. The Committee will be pleased to know that I have lots to say on this clause, so we can all settle in for a while.

Clause 63 increases the headline rate of alcohol duty in line with the retail price index, provides a reduction to the rates for draught alcoholic products and cuts to the rates paid by eligible small producers. The Government have also chosen not to extend the temporary easement for certain wine products. I say at the outset that His Majesty’s Opposition is a strong supporter of the broader alcohol sector, and we have some concerns about the impact that some of the provisions will have on important sectors. As well as speaking to clauses 63 and 64, I will speak to new clause 4, which stands in my name and that of my hon. Friend the Member for Grantham and Bourne.

In 2023, the previous Government introduced a progressive strength-based duty system following the alcohol duty review, which was the biggest review of alcohol duties for more than 140 years. The new and simplified alcohol duty rates system was based on the common-sense principle of taxing alcohol by strength, with the aim of modernising the existing duties, supporting businesses and meeting our public health objectives. That was the first time that public health objectives had been inserted into the alcohol duty system. The reforms also introduced two new reliefs: the draught relief to reduce the duty burden on draught products sold at on-trade venues, and small producer relief.

At the autumn statement 2023, the previous Government froze alcohol duty rates until August 2024, and that was extended until February 2025 at the following Budget. According to the OBR, alcohol duty receipts are expected to raise £12.4 billion this year, falling by 0.6% compared with last year as the rates remain frozen, but receipts are then forecast to increase by 5% a year on average, to reach £15.9 billion by the end of the Parliament.

Pubs make a huge contribution to our culture, economy and communities. When the Conservatives were in government, we recognised that and introduced a raft of supportive measures, including draught relief, small producer relief and the Brexit pubs guarantee, which I am sure all hon. Members remember and welcome. I therefore welcome the increased draught relief from February, from 9.2% to 13.9%, and the fact that the relative value of small producer relief will be maintained. Although we welcome the inclusion of both reliefs, the increase to draught relief will mean that beer duty on a 5% pint of beer is reduced from 54p to 53p—a 1p saving. I fear that drinkers will not be toasting the Exchequer Secretary over that.

Turning to whisky—although it is a little early in the day for me—as the hon. Member for Inverness, Skye and West Ross-shire set out, Scotch whisky is one of our most iconic and successful industries. Some 43 bottles of scotch whisky are exported per second and the industry supports more than 66,000 jobs across the UK, many of which are in rural areas. The decision to uprate duty rates by RPI has been met with deep concern by the industry—indeed, the Scotch Whisky Association said that it represents a broken commitment, after the Prime Minister claimed last year that his Government’s trade strategy would

“back Scotch producers to the hilt.”

That sounds rather like the promise that he gave to farmers, which Labour’s family farm tax has broken. The managing director of Diageo said:

“This betrayal will leave a bitter taste for drinkers and pubs, while jeopardising jobs and investment across Scotland.”

I would be interested to hear the Minister’s response to those comments. Have the Government calculated the risk to jobs in the sector more widely?

A similar picture is painted by the cider industry, which supports more than 11,500 jobs and attracts more than 1 million tourists each year. The National Association of Cider Makers has raised fears that raising the headline rate, alongside the national insurance increases and the family farm tax, could put elements of the UK cider industry at risk. Has the Minister calculated the cumulative impact that these tax rises will have on the sector?

At this point, we should consider the wider context in which we are discussing these increases. Time and again we hear about the Budget placing a range of cost pressures on the hospitality industry, which is a key contributor to the UK economy. According to UKHospitality:

“In the past six years, hospitality has increased its annual economic contribution by £20 billion to £93 billion.”

The tax rises in the Budget, including the £25 billion a year jobs tax, will make it much harder for the industry to succeed. Just look at the impact of recent measures. Colliers, a professional property services company, reported that cutting the hospitality business rate relief from 75% to 40% means that restaurants will face a bill of, on average, over £13,000 a year, up from £5,500.