Oral Answers to Questions

James Murray Excerpts

Tuesday 8th April 2025 Commons Chamber

[Paul Waugh (Rochdale) (Lab/Co-op)]

1. What steps she is taking to help tackle tax evasion.

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

Closing the tax gap and ensuring that everyone is paying the tax they owe is one of the Government’s top priorities. The autumn Budget marked a step change to close the tax gap with the most ambitious package ever. The Government built on that in the spring statement, taking the total additional gross tax revenue raised per year to £7.5 billion by 2029-30.

[Paul Waugh]

The UK tax gap grew by a shocking £5 billion in 2023, in the dying days of the Conservatives, and former Chancellor Nadhim Zahawi was sacked for failing to declare an investigation by His Majesty’s Revenue and Customs into his tax affairs. I welcome the Treasury’s crackdown on tax avoidance. Does my hon. Friend agree that Labour’s prudence with a purpose will be shown by investing those taxes in the child poverty strategy this summer?

[James Murray]

I thank my hon. Friend for his remarks. He is right to say that the £7.5 billion of additional revenue from closing the tax gap is a huge boost to the public finances, which enables us responsibly to fund public services and deliver key priorities. Those priorities include free breakfast clubs at all primary schools in England. The first 750 of them are beginning this month via our early adopters scheme, which is worth £450 to parents and carers. To go further the Government will bring forward their comprehensive child poverty strategy as soon as possible.

[Ben Lake (Ceredigion Preseli) (PC)]

What steps are the Government taking to address the concerns of overseas companies that are evading VAT and online sales by fraudulently registering UK addresses?

[James Murray]

At the spring statement the hon. Gentleman will have seen the Government set out progress on measures in the autumn Budget to tackle a range of sources of tax avoidance and the tax gap. That includes prosecuting more fraudsters, introducing a new HMRC reward scheme for informants, tackling phoenixism and tackling the offshore non-compliance tax gap.

[Deirdre Costigan (Ealing Southall) (Lab)]

2. What steps she is taking through the spending review to help increase levels of economic growth.

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[Andrew George (St Ives) (LD)]

3. What assessment she has made of the potential impact of her tax policies on investment in second homes.

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

While short-term lets and second homes can benefit the tourist economy, we recognise that they can impact the availability and affordability of main homes in some communities. That is why we have enabled councils to charge a premium of up to 100% on the council tax bills of second homes, increased the higher rates of stamp duty land tax on the purchase of second homes and abolished the furnished holiday lets tax regime.

[Andrew George]

I am grateful to the Minister for that response, but I believe we can go further, because this is not about the politics of envy but about the politics of social justice. In Cornwall, it cannot be right that through the small business rate relief system, over £500 million of taxpayers’ money has gone into the pockets of holiday homeowners in the last 10 years. Many of those homeowners have flipped their second homes into the small business rating system to take advantage of that loophole. Will the Minister meet me so that we can find a more equitable way of spending public money that goes into first homes rather than second homes?

[James Murray]

I thank the hon. Gentleman for his remarks. I agree with him about the importance of taking the right action to tackle second homes. I understand he had a meeting with the Minister for Housing and Planning last week, and I would be happy to follow up any items that arose from that. Our plan to build more homes includes 4,500 new homes in every year in Cornwall, and I hope he will support those building plans too.

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

I wish to add my voice as an MP from Cornwall to say that some of the actions the Government have taken so far on second homes have been really helpful. The Renters’ Rights Bill will help with those evictions when people are flipping their houses. I also ask that we look at the loophole between council tax and business rates, and at the registration or licensing scheme on second homes, which the Government will hopefully bring in soon.

[James Murray]

I appreciate the concerns that second home owners may move to the business rates system. I emphasise that there are requirements that must be met before properties can be assessed for business rates. Those have recently been strengthened, but we will keep them under review.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

4. What steps she is taking with Cabinet colleagues to increase the affordability of new homes.

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[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

6. If she will meet farming representatives to discuss the potential impact of changes to agricultural property relief and business property relief on farmers. [R]

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

As the Minister with responsibility for the UK tax system, I have had several meetings with organisations on this matter since the autumn Budget last year. On 18 February, I and the Minister for Food Security and Rural Affairs met the National Farmers Union, the Tenant Farmers Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers Union, NFU Cymru, NFU Scotland and the Farmers Union of Wales.

[Mr Carmichael]

I thank the Chancellor’s human shield for that answer, but the fact that the Chancellor—who is sitting on the Front Bench—was not prepared to stand up and answer for herself demonstrates a distinct lack of respect for farmers, bordering on contempt. Will she not meet the farming unions, the banks, the professional organisations, and even the supermarkets themselves to hear why they all think her calculations are wrong? If the Minister wants to ask her before he stands up, I am sure we will all allow him a second or two.

[James Murray]

That was not the most dignified question from the right hon. Gentleman. On the Chancellor’s behalf, I have met numerous organisations about this matter, including those I listed a moment ago. I met the right hon. Gentleman himself when he came to the Treasury, and of course there have been extensive debates in this place. We may not agree on the way forward, but I do not think anyone can accuse us of not having listened.

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[Ms Diane Abbott (Hackney North and Stoke Newington) (Lab)]

13. What steps she is taking with Cabinet colleagues to support people on the lowest incomes following the spring statement 2025.

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

Helping people into good work and financial independence is at the heart of our approach to supporting people on the lowest incomes. That is why we have increased the national living wage by 6.7%, which is equal to £1,400 this year for someone working full-time. Our plan to make work pay will tackle the poor job security and working conditions that have been holding back our economy, and the pathways to work Green Paper announced an additional £1 billion investment in employment, health and skills support.

[Ms Abbott]

It is all very well for the Minister to talk about helping people into work, but is he aware of the many millions of people on personal independence payments who rely on them in order to work? Yet that PIP will be slashed as a consequence of the spring statement. Is he also aware that very many people would prefer the Government not to balance their books on the backs of some of the poorest and most vulnerable people in our society? Why are the Government rejecting a tax of just 2% on people with assets of over £10 million, which would raise over £24 billion?

[James Murray]

At the autumn Budget last year, the Chancellor announced a series of reforms to fix the public finances in as fair a way as possible, and make sure that the wealthiest in society pay their share of tax. The welfare reforms announced in the spring statement are principled reforms to help get people back into work, because work is the best way out of poverty. The reforms also provide support for those who need it and make sure that the system is sustainable for the future.

[Zöe Franklin (Guildford) (LD)]

Earlier this year, I spoke to members of my local Christians Against Poverty debt support team in Guildford, and they explained to me that they support many low-income individuals out of debt, but they are no sooner out of debt than they start accruing it again, because universal credit is insufficient to cover their basic needs due to the cost of living in areas such as Guildford. What work has the Minister done to assess whether universal credit levels are sufficient to cover the varied and increasing basic living costs across the country, and to prevent people on the lowest incomes from getting further into difficulty and debt?

[James Murray]

The Government have already taken action on the fair repayment rate, lowering the cap on deductions from universal credit to 15%—it was 25% before the autumn Budget last year. That will benefit 1.2 million households by an average of £420 a year, and 700,000 of the poorest families with children will benefit.

[Mr Speaker]

I call the shadow Minister.

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

Businesses have just been hit by the Chancellor’s £25 billion jobs tax, which will cost working families £3,500; also, business rates are nearly doubling for hospitality and retail businesses. How does imposing taxes that the Office for Budget Responsibility says will result in lower wages, higher prices and fewer jobs help growth and those on the lowest incomes, and will the Chancellor keep her promise not to come back with more taxes in this Parliament?

[James Murray]

The shadow Minister talks about business rates support. I remind him that if we had carried on with the plans inherited from the Conservative party, business rates relief would have ended entirely this month. It is only thanks to a decision of this Government that rates relief is continuing for this year, ahead of permanent reforms that will permanently lower tax rates for retail, hospitality and leisure premises on the high street from April 2026. That is thanks to a decision this Government made.

[Neil Duncan-Jordan (Poole) (Lab)]

14. What recent assessment she has made of the potential merits of introducing a wealth tax.

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

19. If she will make an assessment of the potential implications for her policies of the findings of Oxfam’s poll on taxation, published on 25 March 2025.

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

This Government are committed to ensuring that the wealthiest in our society pay their fair share of tax. The Chancellor announced a series of reforms at autumn Budget 2024 to help fix the public finances as fairly as possible. Those reforms included increasing the rates of capital gains tax, increasing air passenger duty for private jets, and raising stamp duty for buyers of second or more homes.

[Neil Duncan-Jordan]

Analysis from a number of disability groups shows that the “Pathways to Work” Green Paper will have a detrimental effect on more than 3 million people, while polling from Oxfam shows that 77% of the public would rather the UK Government increased taxes on the very richest than cut the benefits of the poorest in society. Should we not be looking at raising funds from those with the broadest shoulders?

[James Murray]

As I made clear earlier, the Government have already made changes to make the tax system fairer, and to ensure that the wealthiest pay their fair share. The reforms to the welfare system are principled reforms to tackle perverse incentives that encourage inactivity. We need to support those in most need, get people back into work wherever possible, and protect the sustainability of the welfare system.

[Brian Leishman]

Let us be frank and not spin it: for 14 years, we saw austerity that ripped the heart out of communities; we then had a global pandemic, during which inequality was accelerated; and we are still feeling the effects of a cost of living crisis that is making ordinary people poorer. The public do not want cuts or austerity—they want an annual wealth tax on the very wealthiest in society. Is it not time we had a Government who do something different, give people what they want, and are willing to redistribute wealth for the benefit of many in society, and to improve living standards?

[James Murray]

I politely suggest that if my hon. Friend thinks we are imposing austerity, he has not read the Budget very carefully. It contains increases to revenue spending in all Departments—across the public spending envelope—and an increase in capital investment. We are ensuring that we build for the future while protecting our fiscal rules. Let me be clear: those fiscal rules are not a nice-to-have addition to the way we approach the economy. Fiscal irresponsibility has a huge cost, as we saw under the previous Government.

[Mr Gregory Campbell (East Londonderry) (DUP)]

We support the Government in trying to determine a fair level of tax, especially for the very wealthy. However, will the Minister establish, if he can, the number of people who might leave the country as a result of a wealth tax, and therefore pay no income tax whatsoever?

[James Murray]

The hon. Gentleman makes an important point: we need to ensure that the wealthiest in society pay their fair share, while also attracting talent from around the world to the UK to work, invest and help to grow our economy. It is on the back of that investment and economic growth that we will make people across the UK better off, and get more money into their pockets.

[Sir Julian Smith (Skipton and Ripon) (Con)]

15. What steps she is taking to ensure rural communities have access to banking hubs.

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[Vikki Slade (Mid Dorset and North Poole) (LD)]

T2. I have been contacted by many local businesses, including the Cross Keys pub in the Holt Heath nature reserve and the BEAR café in Wimborne. They are two different venues in two different locations, but both tell me that these are the most extreme trading conditions ever seen in hospitality. With national insurance, minimum wage and energy and food costs, will the Chancellor consider a reduction in VAT on hospitality sales to protect high streets and local producers and to save our communities?

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

I am unclear, given the hon. Lady’s remarks, whether she is opposed to the increase in the national minimum wage, but she should know that we have extended support for businesses in business rates relief this year, which would have been ended entirely under the plans we inherited from the previous Government, and there will be permanently lower multipliers for retail, hospitality and leisure premises on the high street from April 2026.

[Dan Tomlinson (Chipping Barnet) (Lab)]

T7. As a north London MP, I know that tackling the high housing costs in this city is a priority for my constituents. It is my belief that one route to that is investing in the country as a whole, so that we are not just flying on one London-shaped engine. To that end, did you know, Mr Speaker, that Leeds is the largest city in western Europe that does not have a tram or a mass transit system? That is a damning indictment of decades of economic failure. Will the Chancellor do all she can to ensure that the Leeds tram is built as fast as possible so that her constituents and mine can be better off?

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[James Murray]

I think that was a question about business rates reform. As the right hon. Lady will know, we published a discussion paper on transforming business rates. I am sure that the right hon. Lady will have read and responded to that, so I will look out for her consultation response in what we have received. Transforming businesses rates is about ensuring that we make the business rates system fit for the future to support investment and business growth right across the UK.

[Dr Allison Gardner (Stoke-on-Trent South) (Lab)]

T8. Will the Minister join me in congratulating Goodwin International, which is building a multimillion-pound production unit in Newstead in Stoke-on-Trent South, creating up to 100 jobs in defence manufacturing? Does he agree that increased investment in defence spending will have a tangible impact on my constituents, fuelling jobs and local investment?

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[Margaret Mullane (Dagenham and Rainham) (Lab)]

Will the Minister introduce a 12-month delay to the incoming change in taxation for double-cab pick-up trucks? The manufacturers and their commercial customers feel that they have had insufficient time to adjust to the new changes this month. Can he share with us any impact assessment work carried out on the reclassification of double-cab pick-ups and what effect it would have on the sector in Britain?

[James Murray]

We have engaged with the automotive sector on this issue, and there are generous transitional arrangements in place to mitigate the impact. The Government have had to take difficult decisions, but at the autumn budget 2024 we prioritised long-term support for growth-driving sectors, including more than £2 billion over five years to support the automotive sector.

[Wera Hobhouse (Bath) (LD)]

Ineffective energy trading with the EU is a major barrier for global investors. According to Energy UK, we are losing out on £30 billion of investment in interconnectors alone. What will the Government do to improve our energy trading with the EU to unlock this vital opportunity?

[James Murray]

The Prime Minister’s plan for change sets out our ambitious but achievable target of clean power by 2030. The clean power action plan demonstrates the significant investment requirements to reach that target, including in renewable infrastructure, and the actions that we will take to facilitate that. We have already taken action to remove the de facto ban on onshore wind in England, approved major solar projects and delivered a record-breaking renewables auction.

[Josh Fenton-Glynn (Calder Valley) (Lab)]

The last Government left 4.5 million children in poverty, but, like many colleagues, I am alarmed that the impact assessment of the spring statement suggests that that number will rise, not fall. Will the Minister tell me when we can expect the results of the child poverty taskforce? Will they be delivered in time to influence decisions in the spending review?

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[Carla Lockhart (Upper Bann) (DUP)]

On 30 October, the Chancellor upended our economy through tax rises and punitive death taxes. She has delivered a devastating blow to family farms and small family businesses—the very backbone of our economy. When will the Chancellor recognise that she is elected by the people, for the people? Every day that she avoids engaging with the farming community is another day of wilful neglect. Our farmers are being driven out, not by market forces but by a Government blind to their struggles and deaf to their voices. When will she listen and speak with them?

[James Murray]

As the hon. Lady and I have discussed in several debates in recent months, the decision we took on agricultural property relief and business property relief was difficult, but it was the right and balanced one to ensure we protect family farms and small businesses while fixing the public finances in a fair way. Fixing the public finances is in the interest of every Member of this House and all the constituents we represent, because it underpins the investment we are putting into the future of this country and into getting the economy growing.

[Johanna Baxter (Paisley and Renfrewshire South) (Lab)]

Many thousands of my constituents in Paisley and Renfrewshire South work in and rely on public services that are on their knees after 18 years of under-investment by the SNP Government at Holyrood. Will my right hon. Friend set out how the views of my constituents will be reflected in the spending review?

[Tessa Munt (Wells and Mendip Hills) (LD)]

In July 2023, my constituent Alison claimed a refund of overpaid tax that was mistakenly paid twice. In February 2024, she was told that her claim would be assessed by 20 March, in July 2024 she was told that it would be by 22 October, and in December she was told that she could not have a date but that the department had definitely received her claim 16 months previously. She has heard nothing since. Will the Chancellor agree to meet me to discuss this very vexed situation for someone who has very little money, given that this claim is nearly 21 months delayed?

[James Murray]

I was sorry to hear about the hon. Lady’s constituent’s experience with, I assume, His Majesty’s Revenue and Customs. Even though, as the Minister with responsibility for HMRC, I cannot get directly involved in individual cases, I am happy to raise it with HMRC and make sure that it gives the matter proper attention to try and resolve it.

[Baggy Shanker (Derby South) (Lab/Co-op)]

Local businesses have huge potential to create local growth in our community. It was fantastic to see my right hon. Friend the Chief Secretary to the Treasury visiting Derby South earlier this year and engaging with business leaders. Does the Minister agree that continued engagement with business leaders is absolutely key to building the business confidence that we so desperately need and which was shattered by the previous Government?