Oral Answers to Questions

James Murray Excerpts

Tuesday 21st January 2025 Commons Chamber

[Antonia Bance (Tipton and Wednesbury) (Lab)]

7. What steps she plans to take to help protect the steel industry from high-emission steel being diverted away from the EU to the UK following confirmation of the UK carbon border adjustment mechanism for 2027.

[The Exchequer Secretary to the Treasury (James Murray)]

The UK carbon border adjustment mechanism will be introduced in 2027. It will ensure that imports face a carbon price that is comparable with domestic products, giving UK industry the confidence to invest without its decarbonisation efforts being undermined. UK steel producers will continue to benefit from high levels of free allowances in the UK emissions trading system until at least the end of 2026, protecting them against carbon leakage via high-emission imports.

[Antonia Bance]

Newby Foundries and Alucast in my constituency of Tipton, Wednesbury and Coseley have raised with me the impact of the UK CBAM coming into effect later than, and differing from, the EU CBAM. This could threaten domestic steel production and make the export of metal products to the EU more difficult. Can the Minister please support the UK’s steel and metal finishing industries by reassuring me that the UK CBAM will not be weaker than the EU CBAM, and will he meet me and other steel MPs to discuss this?

[James Murray]

As I have set out, the UK CBAM will mitigate the risk of carbon leakage by placing a carbon price on some of the most emissions-intensive industrial goods imported into the UK, including in the iron and steel sector. The UK CBAM is designed for the UK context, and in some areas, its emissions scope is wider than the EU CBAM—in respect of indirect emissions, for instance. The first CBAM industry working group was held earlier this week, and I understand that a representative of the UK steel sector attended. I will make sure that my officials continue to engage with the industry sectors most affected, and I am very happy to discuss this further with my hon. Friend.

[Sir Gavin Williamson (Stone, Great Wyrley and Penkridge) (Con)]

Heavy industry, whether it is steel, ceramics or so many other areas, is totally dependent on low energy costs. The trajectory is that energy costs are rising, especially in industry, whether as a result of regulation or world markets. Many other countries are doing more to protect their heavy industries by making sure they can have low input costs for energy. What more can the Minister do to protect our heavy industry in the future?

[James Murray]

The No. 1 thing for industry and households is to bring down the cost of energy. That is why we are investing in renewable home-grown energy for the future, to make sure we have energy independence, energy security and, crucially, lower bills for those households and businesses.

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[Steve Darling (Torbay) (LD)]

22. What steps she is taking through the tax system to support the hospitality and tourism sectors.

[The Exchequer Secretary to the Treasury (James Murray)]

The Government announced a range of measures at the autumn Budget to support SMEs, including in the retail, hospitality and leisure sectors. They include more than doubling the employment allowance, freezing the small business rates multiplier, extending RHL relief to 40%, maintaining the small profits rate and reducing the duty on qualifying draught products, which represent 60% of alcoholic drinks sold in pubs.

[Bobby Dean]

The Labour manifesto committed to replacing the business rates system. However, last week at the Treasury Committee, the Minister seemed to rule out the kind of comprehensive reform that the Liberal Democrats and others have been campaigning for, and indicated that there might only be a tinkering around the edges of rates and reliefs. Can the Minister confirm today whether the Government still intend to replace the business rates system, or will they just be tinkering around the edges of this broken system?

[James Murray]

I think that retail, hospitality and leisure businesses, which are the backbone of our high street, might object to the idea of permanently lower tax rates as “tinkering around the edges”. That is a fundamental change that we want to bring in from April 2026 to make sure they have stability, certainty and permanently lower rates. Alongside it are our wider ambitions in the “Transforming Business Rates” discussion paper, which I invited the hon. Gentleman to read and respond to at last week’s Treasury Committee.

[Michael Wheeler]

I draw Members’ attention to my declaration in the register of interests.

Retail is an important part of the economy in my constituency, which includes many wonderful independent businesses. Will, who runs the excellent Wandering Palate in Monton, wrote to me about the challenges he is facing. Will the Minister outline the measures the Government are taking to support small business owners like Will in my constituency and across the country to enable our high streets to thrive?

[James Murray]

I thank my hon. Friend for his question and for referencing Wonderful Palate, the business in his constituency. I do not know the details of the rateable value of that property, but I point the owner to the fact that we are retaining small business rate relief, freezing the small business multiplier next year and extending the retail, hospitality and leisure relief in 2025-26. I also point the owner of that business and other businesses to our future plan, as I mentioned, to have permanently lower tax rates for retail, hospitality and leisure businesses with values of below £500,000, as well as to consider reforms to small business rate relief to better support businesses that want to expand into a second premises.

[Steve Darling]

What consideration have Ministers given to exempting the seasonal tourism industry from the national insurance hikes set to kick in this summer? That would benefit Paignton zoo and Splashdown in the Torbay constituency.

[James Murray]

We set out the details of our decision to increase the rate of national insurance contributions from employers and to reduce the threshold, and we have added the different benefit we will give, particularly to small businesses and charities, by more than doubling the employment allowance. The employer national insurance contribution changes were among the toughest we took in the Budget, but they were necessary to repair the public finances and deliver the economic stability that is so crucial for investment and growth.

[Mr Speaker]

We have had the former Chair of the Treasury Committee, so let’s now have the current Chair.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

My hon. Friend the Exchequer Secretary rightly said that small and medium-sized enterprises are a vital part of our high streets and our economy, and one of the biggest changes is, of course, the change to business rates. He was not tempted at the Select Committee last week to give more detail on the timeframe for that, but many businesses want certainty about business rates as they go forward. May I tempt him to give an indication of the Government’s thinking about how quickly this change might be introduced and whether the small business rate relief is likely to survive or to be subsumed into a new regime?

[James Murray]

I thank the Chair of the Select Committee for her questions. If she did not succeed in tempting me at the Select Committee, I doubt she will succeed today, but I can reassure her that the decisions we have set out about introducing the permanently lower business rate for RHL—retail, hospitality and leisure—properties below a £500,000 rateable value will be coming in from April 2026. Specifically in relation to small business rate relief, I can confirm that the Government are committed to retaining that. One of the options we are looking at in our “Transforming business rates” discussion paper is how to support businesses that want to expand into a second premises, thereby growing the business, because at the moment there is the cliff edge where they lose small business rate relief.

[Mr Speaker]

I call the shadow Minister.

[Richard Fuller (North Bedfordshire) (Con)]

Confidence on Britain’s high streets is sliding faster than the Chancellor will be down the ski slopes of Davos later today. With retail sales down—rather than up, as expected in the run-up to Christmas—and with the British Retail Consortium saying that two thirds of stores will raise prices to cover her national insurance increases, when will the Minister accept that the Chancellor’s economic strategy of raising taxes and increasing regulations is not working?

[James Murray]

I am glad to know that the shadow Minister’s morning was well spent cooking up that line about the Davos ski slopes. What he will know, and what sectors across the economy will know, is that having a stable economy is a prerequisite for the investment we need to get the economy growing. That is why we had to take difficult decisions at the autumn Budget, including those to increase the rate of employer national insurance contributions. Alongside that increase, however, we more than doubled the employment allowance and set out our plans to have permanently lower tax rates for high street RHL properties from April 2026.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

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

[James Murray]

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

[Frank McNally (Coatbridge and Bellshill) (Lab)]

T1. If she will make a statement on her departmental responsibilities.

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[Olly Glover (Didcot and Wantage) (LD)]

T2. The Local Government Association estimates that the Budget’s increases to employer national insurance contributions will cost local councils an extra £637 million per year. The Government’s funding settlement for councils in relation to that of £515 million will leave them with a gap, putting key services such as social care, pothole repairs and leisure facilities at risk. Will the Chancellor commit to fully finding that gap for local councils, rather than them having to look for savings?

[The Exchequer Secretary to the Treasury (James Murray)]

During the passage of the National Insurance Contributions (Secondary Class 1 Contributions) Bill, we set out clearly how the scheme would work to reimburse costs for public departments or local government. That measure is in line with what the previous Government attempted to do with the health and social care levy. Where third-party private contractors are engaged, those costs will be considered by local government or other public sector organisations in the round.

[Brian Leishman (Alloa and Grangemouth) (Lab)]

T4. The previous Conservative Government decided to back an INEOS project in Antwerp, with a £600 million loan guarantee. I have spoken with the current the Secretary of State for Energy Security and Net Zero and the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Rutherglen (Michael Shanks) about that, and I have been told that the Government have no plans to stop that money, even though INEOS plans to close the Grangemouth refinery, with the loss of thousands of jobs. Why is there £600 million for Antwerp and not Grangemouth, and why would the Government allow that to happen and not use the £600 million as leverage with INEOS, to avoid Scottish job losses?

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[Mr Speaker]

Order. Mr Lowe, topical questions are meant to be short and punchy. I am sure that you are very good at that normally.

[James Murray]

One of my key priorities as Exchequer Secretary and the Minister with responsibility for HMRC is to oversee a programme of transformation at HMRC to improve its customer service, to digitise the service, to close the tax gap and to ensure that we have the modern, reformed service that we need for the future.

[Steve Witherden (Montgomeryshire and Glyndŵr) (Lab)]

T5. I draw Members’ attention to my entry in the register of all-party parliamentary groups. During the covid-19 pandemic, 3.8 million self-employed UK taxpayers were shamefully excluded from Government financial support. Many, including pregnant women and war veterans, were forgotten about by the Conservative party. Will the Minister meet me to discuss how to address the unfairness faced by so many during the pandemic?

[James Murray]

As my hon. Friend set out, decisions on eligibility for covid-19 financial support were taken by the previous Government. The current Government have no plans to assess the financial compensation scheme, but the covid-19 inquiry has recently launched its module to investigate the economic response to the pandemic. The Government are committed to learning from its findings.

[Sir Edward Leigh (Gainsborough) (Con)]

When I visited St Barnabas hospice in Lincoln recently, the chief executive told me that it was having to pay £350,000 extra every year to cover the national insurance increase. I do not expect an answer now, but as we all agree that palliative care is so important and we want to encourage it, and the Terminally Ill Adults (End of Life) Bill started its Committee stage today, will the Government keep that increase for hospices under review?

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[James Murray]

We have been clear since the Budget that the decision to raise employer national insurance contributions was one of the toughest we have taken as a Government, and we recognise that it has consequences for businesses. However, we think all businesses will benefit in future from the economic stability that this decision will bring; it will drive investment and growth across the country.

[Chris McDonald (Stockton North) (Lab)]

T9. Will my right hon. Friend join me in congratulating Intasite, a technology business in Stockton that is celebrating its 10th anniversary with 40% growth? Does she agree that our industrial strategy will help businesses to invest and grow in Teesside?

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[James Murray]

What we accept is that the difficult decisions we took at the Budget enabled extra funding to be put into the NHS. GP surgeries have had a funding settlement that considers all the pressures on them in the round.

[Sonia Kumar (Dudley) (Lab)]

My constituency has a proud industrial heritage, with manufacturing still worth £1 billion a year to the local economy from sectors that account for nearly 10% of the UK’s total economic output. What steps have the Government taken to promote the growth of the manufacturing sector and ensure that towns like Dudley continue to build on their industrial traditions?