Oil and Gas High Price Mechanism Consultation
James Murray Excerpts(6 days, 7 hours ago)
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The Exchequer Secretary to the Treasury (James Murray)
Today, HM Treasury and HM Revenue and Customs have published a consultation on how the oil and gas fiscal regime will respond to future oil and gas price shocks once the energy profits levy (EPL) ends.
The EPL was introduced in 2022 in response to extraordinary profits made by oil and gas companies driven by global events, including resurgent demand for energy post-covid 19 and the invasion of Ukraine by Russia. The EPL will end in 2030, or earlier if the EPL’s price floor, the energy security investment mechanism, is triggered.
The Government are committed to ensuring that there is a new permanent mechanism in place to respond to future oil and gas price shocks. This new mechanism will form an integral part of the fiscal regime, responding only when there are unusually high prices. This will also ensure that the oil and gas industry has the certainty it needs on the future fiscal landscape helping to protect businesses and jobs now and for the future.
The consultation sets out the Government’s policymaking objectives and design options for a new mechanism inviting stakeholder feedback. The Government will work together with the sector and others to ensure we take account of as wide a range of views as possible during this consultation.
The consultation will remain open for three months, closing on 28 May. After this, the Government will consider findings before announcing the final design of the new mechanism in due course.
The Department for Energy Security and Net Zero has launched a separate consultation, “Building the North Sea’s Energy Future”, which sets out the framework for the future of offshore energy in the North sea to support our mission to become a clean energy superpower. This Government want to foster a leading offshore clean energy industry, which ensures good, long-term jobs, growth and investment across the North sea, in tandem with a sustainable transition from oil and gas. Both consultations are integral to the Government’s wider efforts to build the UK’s energy future while promoting economic growth and environmental sustainability.
The HM Treasury high price mechanism consultation can be found at the following link: https://www.gov.uk/government/consultations/oil-and-gas-price-mechanism-consultation
The Department for Energy Security and Net Zero’s “Building the North Sea’s Energy Future” consultation can be found at the following link: https://www.gov.uk/government/consultations/building-the-north-seas-energy-future
We look forward to receiving responses from stakeholders, industry and the public.
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Oral Answers to Questions
James Murray Excerpts(1 week ago)
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Munira Wilson (Twickenham) (LD)
The Exchequer Secretary to the Treasury (James Murray)
The Government have taken difficult decisions to repair the public finances, fund public services and restore economic stability. The Office for Budget Responsibility predicts that the employer national insurance contribution changes
“will reduce the level of potential output by 0.1 per cent at the forecast horizon”.
It also predicts that growth will pick up next year and that living standards will rise faster during this Parliament than during the last, and in the long term it expects the autumn Budget policies, if sustained, to increase the size of the economy permanently.
Monica Harding
My constituent Alison runs Stepping Stones nursery school, which has been operating in my constituency for 30 years, offering wraparound care to busy families. The increase in employers’ national insurance contributions alone will cost it £16,000 a year and it is still struggling with an increase in utility costs, while other nurseries in the area are also struggling and, indeed, closing. Headmasters, a hairdresser in Walton, is struggling with £15,000 of extra costs, owing primarily to this tax rise. Can the Minister explain to businesses in Esher and Walton how the Government’s national insurance policy will deliver growth or higher living standards, given that it seems to be doing neither?
James Murray
The Government’s decision to increase employer national insurance contributions was one of the toughest decisions that we took at the Budget, but it was necessary to restore stability to the public finances. It is only on the basis of having stable public finances and fiscal responsibility that we can boost the investment and growth that will make people across Britain better off.
Munira Wilson
As the poor growth figures show, the Chancellor’s jobs tax is really hurting businesses, not least in our hospitality sector. In my constituency, pubs such as the Eel Pie and the King’s Head, as well as the family-run restaurant Shambles, are really struggling with soaring costs and putting off hiring people. If the Chancellor will not reverse her jobs tax, will she at the very least consider extending the current 75% business rates relief for hospitality until the new system that she has announced is in place?
James Murray
The hon. Member speaks about business rates relief. We have to remember that the business rates relief for retail, hospitality and leisure was due to end entirely in April 2025 under the plans we inherited from the Conservative party. Despite the toughest of contexts, we decided to extend the 40% relief for another year before the permanently lower rates for retail, hospitality and leisure come in from April 2026.
Dan Tomlinson (Chipping Barnet) (Lab)
Does the Minister agree that planning reform is essential for higher growth and lower taxes? Is he, like me, concerned that the anti-growth Opposition we see before us in this House will vote against the forthcoming planning and infrastructure Bill, which is possibly the most significant piece of pro-growth legislation that this Parliament will see in decades?
James Murray
My hon. Friend is absolutely right about the centrality of planning reform to getting the economy growing. Indeed, one of the first actions that the Chancellor announced on taking office was to scrap the ban on onshore wind turbines in the planning system, which had been holding back our clean energy transition. I hope that some Opposition Members might take the opportunity during today’s questions to confirm that they will support our reforms to the planning system, because they are indeed vital to growth in this country.
Bill Esterson (Sefton Central) (Lab)
Does the Minister agree that it is in the interests of business to see waiting lists in the NHS reduced, roads repaired and the public finances fixed? Does he agree that if Opposition parties do not agree with Labour’s plans, they should set out how they would pay for such improvements?
James Murray
My hon. Friend is absolutely right that stability in the public finances is crucial to ensure that we boost investment and growth across the country. He is also right to point out that having public services back on their feet, after years of decline under the Conservative party in government, is essential not only to making people in this country healthier, more able to get around and better off, but to getting our economy growing, because it is on that basis that businesses will invest.
James Wild (North West Norfolk) (Con)
Even before Labour’s jobs tax comes into force, we can see the damage that it is doing. Three quarters of a million jobs in hospitality will be subject to employer national insurance for the first time, costing £1 billion. Given that major hospitality and retail businesses are warning that lower-paid and part-time workers will suffer most, will the Chancellor think again? Can the Minister at least commit that there will be no further increases during this Parliament?
James Murray
The businesses to which the hon. Gentleman refers, like businesses in all sectors of the economy, benefit from the stability that this Government have brought to the economy. He wants to talk about unemployment and the rate of jobs. We recognise that making changes to employer national insurance contributions was a tough decision that will have consequences, but the unemployment rate will fall to 4.1% next year and remain low until 2029. When taken together, the Budget measures mean that the employment level in this country will increase from 33.1 million in 2024 to 34.3 million in 2029.
Daisy Cooper (St Albans) (LD)
Health and wealth are two sides of the same coin, and we will not get economic growth without a healthy population. But as a result of the national insurance contribution changes, the Care Provider Alliance reports that 73% of social care providers will have to refuse new care packages from local authorities or the NHS, and that 57% will have to hand back existing contracts. What assurances can the Government provide to the huge number of people who are very scared that they will have to go without care and see their lives deteriorate?
James Murray
The hon. Lady makes an important point, but it is also important to point out that tough decisions on taxation must be made to fund the very services she is keen to support. On her specific point about these pressures, we announced at the provisional local government settlement a further £200 million for adult and children’s social care to support authorities in delivering key services. This will be allocated through the social care grant, which will bring the total increase in this grant in 2025-26 to £880 million, meaning that up to £3.7 billion of additional funding will be provided to social care authorities in 2025-26.
Daisy Cooper
Ministers will be aware of analysis from the Nuffield Trust showing that that additional grant is being dwarfed by the additional costs that the Government are introducing.
On the great British high street, we know that our high streets are beautiful features of our cities, market towns and villages, but hospitality, retail, beauty and other service sectors are saying that the combination of national insurance and other changes will be a real hammer blow. If high street shops start to close, that is bad for economic growth and bad for confidence. What mechanisms will Ministers put in place to monitor the impact of the national insurance contributions changes on the vibrancy and resilience of our high streets?
James Murray
All measures in the Budget were of course analysed by the Treasury and the Office for Budget Responsibility ahead of their announcement, and we keep in constant contact with industry representatives to see how policies are working in practice. I draw her attention to my earlier remarks to her hon. Friend the Member for Twickenham (Munira Wilson) about our business rates reform, which is a vital ask from the retail, hospitality and leisure sector. After years of chopping and changing from the Conservative party—changing reliefs from one year to the next, and offering no stability whatever to people in that sector—we are introducing permanently lower rates for the retail, hospitality and leisure sector from April 2026, and avoiding the complete end of relief that the Conservative party left in the in-tray when we arrived in office.
Kevin Bonavia (Stevenage) (Lab)
Julia Lopez (Hornchurch and Upminster) (Con)
The Exchequer Secretary to the Treasury (James Murray)
The Government are committed to keeping taxes on working people as low as possible, which is why we are not increasing the basic, higher or additional rates of income tax, employee national insurance contributions or VAT. The Government have published tax information and impact notes for tax policy changes made at the Budget, which give a clear explanation of the policy objective together with details of the tax impact on individuals. The OBR publishes an economic and fiscal outlook alongside the Budget, which sets out its assessment of the effects of Government decisions taken on tax.
Julia Lopez
Borrowing costs are soaring, the economy is weakening and we need to spend much more on defence. In those circumstances, can people be absolutely confident that to meet her fiscal rules, the Chancellor will not be raising income tax in the course of this Parliament?
James Murray
The OBR’s spring forecast will take place on 26 March and be accompanied by a statement to Parliament from the Chancellor. Ahead of the statement, the Government will not give a running commentary responding to forecasts and economic developments, but I reassure the hon. Member that the Chancellor’s commitment —indeed, the whole Government’s commitment—to our fiscal rules is non-negotiable.
Brian Leishman (Alloa and Grangemouth) (Lab)
It should not be working people who pay more tax, because wealth inequality is growing in the UK and improving living standards is ultimately what the Government will be judged on. Does the Minister see the merit in introducing an annual wealth tax of 2% on people with over £10 million-worth of assets, which would go an awful long way to raising £26 billion per annum to equalise society?
James Murray
I hope my hon. Friend will welcome the £200 million investment in the Grangemouth facility, which has already been spoken about today. I hope he will also support the Government’s decision to restore fiscal responsibility to public finances within the tough fiscal rules that the Chancellor set out at the Budget.
John Cooper (Dumfries and Galloway) (Con)
Sir Ashley Fox (Bridgwater) (Con)
The Exchequer Secretary to the Treasury (James Murray)
We have frozen the small business multiplier this year and we will be introducing permanently lower multipliers for retail hospitality and leisure premises from April 2026, which will benefit pubs. Meanwhile, they also benefit from our decision to increase the duty relief for draft products.
Sir Oliver Dowden (Hertsmere) (Con)
James Murray
As part of the reforms announced at the autumn Budget, we are modernising the system for people from overseas spending time in the UK with a new residence-based test. We are always looking at ways to encourage people from overseas to spend time in and invest in the UK and to help grow our economy.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I congratulate the Government on announcing the greatest level of financial sanctions last week. Does the Chancellor agree that keeping dirty money out of the City of London and homes and communities across our country is vital for our national security, as well as our economic stability?
Luke Taylor (Sutton and Cheam) (LD)
St Raph’s hospice in my constituency faces a £140,000 increase in staff costs due to the Government’s national insurance hike. That means the hospice will have to further cut staff services that take pressure off the NHS. Will the Chancellor think again and provide an exemption for healthcare providers from the national insurance rise?
James Murray
The Chancellor set out our Budget, and I set out during debates on the Finance Bill and related legislation exactly how we will implement the changes announced at the Budget. In the case of employer national insurance contributions, there are defined ways in which public sector organisations are reimbursed. The changes do not apply to hospices, as they are largely charities or are not directly part of the public sector. I also point him to the £100 million of extra investment that we have announced in improving hospices.
Dr Allison Gardner (Stoke-on-Trent South) (Lab)
Does the Minister agree that investment in the fifty500 midlands growth corridor will provide an excellent opportunity to deliver this Labour Government’s mission for growth and opportunity for all?
Jim Allister (North Antrim) (TUV)
With farmers protesting again in Westminster today, why is the Chancellor of the Exchequer running away from meeting farming unions from across this nation? Why do those who feed our nation not deserve some of the Chancellor’s time?
James Murray
Just two weeks ago, I spent a fair amount of time meeting representatives from the National Farmers Union and other representative organisations from different nations within the UK. I listened to their concerns and what they had to say. We have to be honest that we disagree. They do not agree with the Government’s policy, and I need to be direct about that because we had to take a number of difficult decisions at the Budget. But I do not apologise for the importance of balancing the public finances and sticking to our fiscal rules.
Amanda Martin (Portsmouth North) (Lab)
Next month will see a rise and an extension to the minimum wage. In Portsmouth North, there are 9,600 minimum wage workers—higher than the national average—leaving many in in-work poverty and in desperate need of a boost to living standards. What steps are the Government taking to help improve living standards for those low-paid workers?
Dame Harriett Baldwin (West Worcestershire) (Con)
The art of taxation is extracting the largest amount of money with the lowest amount of squeaking from the goose. Yet the Chancellor will have heard the honking of the tractors on Whitehall today in response to her raising an amount of money that will pay for less than one day of NHS spending. Will she commit to reversing the family farm tax?
James Murray
As we have debated several times in this Chamber and Westminster Hall, the changes to agricultural property relief and business property relief retain a generous relief for people accessing those benefits within the taxation system. That means that people will get £1 million before inheritance tax is due, in addition to the existing nil rate band for spousal transfers. Over that, it is up to an effective rate of 20%, and any money due can be paid over 10 years, interest free.
Luke Murphy (Basingstoke) (Lab)
The Government’s recent £100 million investment in hospices, including St Michael’s hospice in Basingstoke, will help to modernise facilities, enhance digital services and provide more comfortable spaces for patients and their families. Given the vital role that hospices play in all our communities, will the Treasury continue to work with the Department of Health and Social Care to ensure the sector’s long-term financial stability?
James Murray
As my hon. Friend rightly points out, £100 million is being made available for hospices—£25 million in 2024-25 and £75 million from April 2025. That capital funding is intended to help charitable hospices in his constituency and elsewhere across the country to improve and modernise their facilities and physical estate.
Tim Farron (Westmorland and Lonsdale) (LD)
Britain is only 55% food secure. In these deeply uncertain times internationally, is it not time to change policy when it comes to agriculture? Is this not the day to get rid of the family farm tax, undo the 76% cut in basic payments and invest in the people who keep us food secure?
James Murray
As I have made clear to other hon. Members, the changes to agricultural property relief are a fair way to raise the money necessary to balance the public finances. Britain has excellent food security, and that is a priority for the Government.
Draft Double Taxation Relief and International Tax Enforcement (Belarus) (Revocation) Order 2025
Draft Double Taxation Relief (Russian Federation) (Revocation) Order 2025
James Murray Excerpts(1 week ago)
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The Exchequer Secretary to the Treasury (James Murray)
I beg to move,
That the Committee has considered the draft Double Taxation Relief and International Tax Enforcement (Belarus) (Revocation) Order 2025.
The Chair
With this it will be convenient to consider the draft Double Taxation Relief (Russian Federation) (Revocation) Order 2025.
James Murray
It is a pleasure to serve on this Committee with you as Chair, Dr Huq. The orders before us give effect to the suspension of the 2018 UK-Belarus and 1994 UK-Russia double taxation conventions in UK law. The orders revoke earlier legislation that previously gave effect to the treaties in UK law. The effect of the orders is that UK tax law will apply as if no treaty were in place with those countries from the new tax year, which begins on 1 April for corporation tax and on 6 April for income tax and capital gains tax, and for the equivalent taxes of Russia and Belarus.
The UK will tax UK-sourced income and gains without reference to the limits agreed in the treaty. Unilateral relief is available in UK domestic law to UK resident taxpayers, meaning that when a UK resident taxpayer has paid foreign tax, credit is available for the foreign tax already paid. That provides protection to UK resident taxpayers against the harmful effects of double taxation, and the rules apply wherever income or gains are not covered by a double taxation convention. However, benefits will no longer be available to residents of Russia or Belarus. The UK has decided to suspend the treaties in response to the actions of those countries, which have not been honouring their obligations under these conventions for some time.
In August 2023, Russia partially suspended its tax treaties with 38 countries, including the UK and other G7 countries that it termed “unfriendly.” Russia left in place only definitional and some administrative provisions, suspending all the articles concerning taxation of income, including those that contain limits on what can be taxed at source.
In March 2024, Belarus took action similar to Russia’s in relation to 27 countries, including the UK. It partially suspended the treaties, including the UK-Belarus treaty. Belarus suspended articles dealing with dividends, interest and capital gains, and then introduced higher rates of tax targeting foreigners in its domestic law.
Both Russia and Belarus have claimed that their action is in response to sanctions. Sanctions imposed on Russia and Belarus are a legitimate response to the illegal invasion of the sovereign nation of Ukraine. The sanctions are a reasonable and lawful response to Russian aggression, and to Belarus’s support and enabling of Russia’s actions. Their action to suspend material provisions of our tax agreement is therefore totally unjustified in international law.
The actions of Belarus and Russia are a material breach of the tax treaties and justify reciprocal action from the UK. In line with international law, the UK wrote to Russia and Belarus in December notifying them of our intention to suspend the treaties unless they remedied their material breach of the tax treaties within three months. Neither Russia nor Belarus has remedied their breach or returned to compliance. As a consequence, and in common with partner countries, the UK intends to suspend the tax treaties with Russia and Belarus unless they remedy their breach before the three-month deadline expires: on 24 March for Russia and 23 March for Belarus. They have been given ample time and opportunity to rectify their breach.
International law permits the UK to suspend the treaties in full. The UK has chosen this action as a proportionate response to the violation by Russia and Belarus of their obligations under the terms of their treaties with the UK. If either country comes back into compliance with its treaty obligations and remedies the material breaches, the UK can take steps internationally and domestically to give effect to a treaty again. But until such a time, the UK will apply domestic tax law without granting any of the limits agreed in the tax treaties in relation to payments of dividends, interest and royalties, and other types of income or capital gains arising in the UK.
The UK has been acting in lockstep with partners, including other G7 countries, ever since Russia and then Belarus unlawfully suspended provisions of the tax treaties. Countries including the United States, Canada, France and Germany have also suspended their tax treaties with Russia. Other partner countries have suspended their tax treaties with Belarus.
In summary, the orders give effect to the Government’s decision to suspend the UK’s double taxation conventions with Russia and Belarus in response to their material breach of treaty obligations. That means that Russian and Belarusian taxpayers will no longer be entitled to receive treaty benefits in UK law in circumstances where those countries have withdrawn benefits from UK resident taxpayers. UK tax law will apply from April, as though no tax treaty were in place with either Russia or Belarus.
I commend these orders to the Committee.
James Murray
I thank the hon. Members for Grantham and Bourne and for Wokingham for their contributions to this short but important debate.
In response to the shadow Minister’s question, I clarify that these orders do not terminate the treaties. Rather, they are a suspension under the Vienna convention. Had we chosen to terminate, it would not have taken effect until at least 2026. Suspension is therefore a quicker and more effective way to ensure balance in our obligations.
As I made clear in my earlier remarks, the UK has acted in line with the majority of our allies, including the G7, by suspending these treaties. The hon. Member for Wokingham asked about the timetable for suspending these provisions, and we believe that the Government have acted reasonably and responsibly by giving time for the other countries to come back into compliance with their legal obligations and to act consistently with other like-minded countries. None the less, I welcome his support for what we seek to achieve today.
The orders before the Committee will give effect to the Government’s decision to suspend the double taxation conventions with Russia and Belarus. This will prevent Russian and Belarusian residents from continuing to be entitled to benefits in circumstances where those countries do not grant benefits to UK taxpayers.
I am grateful to hon. Members for their contributions and for the united front across the House.
Question put and agreed to.
DRAFT DOUBLE TAXATION RELIEF (RUSSIAN FEDERATION) (REVOCATION) ORDER 2025
Resolved,
That the Committee has considered the draft Double Taxation Relief (Russian Federation) (Revocation) Order 2025.—(James Murray.)
Finance Bill
James Murray ExcerptsMonday 3rd March 2025
(1 week, 1 day ago)
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Graham Stuart
I said I would speak for six minutes and I have now spoken for six minutes, but interestingly I have not talked about the main topic I was going to touch on: oil and gas. I made my point in an earlier intervention, but I appeal to the Government because putting up taxes on oil and gas in the North sea will mean that there will be tens of thousands of job losses, and a loss of engineering and other capacity in this country, which is vital to the transition to net zero. In response to my interaction with the hon. Member for Barking (Nesil Caliskan) earlier, no one expects the tax take from this sector to go up in the coming years as a result of the measure; the tax take will go down. The rate can be put up to such a level that it means there will be a lower tax take; the hon. Member for Angus and Perthshire Glens (Dave Doogan) spoke powerfully about that as well.
The hon. Member for Barking appeared to accept that point, and she seemed to have a belief in the Minister on the Front Bench that they would listen if it turned out that that was a short-sighted move. If it means that we import more oil and gas from abroad—by the way, that almost always has a higher embedded carbon content than domestically produced oil and gas—that does not benefit the environment, it certainly does not benefit all the jobs that we would have in this country, and it loses us tax revenue. It is truly a crazy policy.
I appeal to Labour Members, especially the new Members, on this point. We heard from the distinguished economist the hon. Member for Loughborough (Dr Sandher) earlier, who was retreading his speech for about the fourth time, little realising it was supposed to be focused on these particular amendments—[Interruption.] Anyway, he did it with great good humour. But I would ask him to take his finely honed mind and address these issues. If the oil and gas policy is as crazy as every expert witness says it is, then he and others should suggest that the Government change course. The hon. Member for Barking said that the Government should consider changing course if the policy did not deliver what it was supposed to deliver, so I ask Government Members to support the amendments that we have put down tonight and oppose this ridiculous Bill. I look forward to hearing from the Minister.
The Exchequer Secretary to the Treasury (James Murray)
At the heart of the Prime Minister’s plan for change is our mission to grow the economy to put more money in people’s pockets. We are determined to make people better off. We know that investment and growth depend on the essential foundations of economic stability, fiscal responsibility and public services being on a firm footing, but this Government inherited a challenging and unsustainable set of future spending plans based on unfunded commitments that had not been shared with the OBR or the British people.
No responsible Government could have let things carry on as they were. That is why at the autumn Budget, my right hon. Friend the Chancellor set out the Government’s plans to fix the foundations of the economy and deliver change—a plan to protect working people, fix public services, including the NHS, and rebuild Britain. That has meant taking difficult decisions on tax, spending and welfare to repair the public finances and support investment in public services, and the Government have done that while protecting people’s payslips. We have also ensured that the UK is one of the best places in the world to grow a business, with corporation tax capped at 25% and reforms that will support small businesses and the British high street. This Finance Bill represents the next step in delivering on the autumn Budget by legislating for several key manifesto commitments, supporting businesses to invest and implementing reforms to the tax system.
I thank all hon. Members for their contributions during the debate; before I turn to the individual amendments, I will briefly address some of the points that they made. I thank my hon. Friend the Member for Loughborough (Dr Sandher) for setting out the importance of growth and making people better off, and for his thorough analysis of all the amendments and new clauses to the Bill, which I seem to recall. Perhaps that was in fact my hon. Friend the Member for Dartford (Jim Dickson), who did go through all the new clauses—I thank him for his contribution. I also thank my hon. Friend the Member for Barking (Nesil Caliskan) for being on the Finance Bill Committee, although I note her description that she “sat through” it, rather than thoroughly enjoying the episode.
I also thank Opposition Members for their contributions to the debate. The hon. Member for Bridgwater (Sir Ashley Fox) recognised that even in his view, he could agree with a few points in our Bill, which I welcome.
Sir Ashley Fox
I invited the Minister to explain how the Budget would improve the lot of farmers. In particular, I gave the example of the £5 million family farm that would incur an inheritance charge of £400,000. How will that family pay that out of an annual income of about £50,000? That is eight years’ income, with nothing to live on.
James Murray
The debate on this Finance Bill has to focus on matters that are within the Bill and in the new clauses and amendments. As the hon. Gentleman will know, and as Madam Deputy Speaker reminded him, he strayed rather outside the ambit of the Finance Bill by referring to important changes to agricultural property relief that are not dealt with by the Bill or by any of the new clauses or amendments. I gently point out that any of his constituents, whatever industry they work in, will see that the income tax on their earnings does not go up as a result of this Government keeping their commitment in that regard.
Dr Luke Evans
The Minister is right to point to the amendments in front of us. New clause 3 looks at household income specifically. If he is so confident in the measures he and the Chancellor are putting forward, why will he not accept new clause 3, which has the ability to show just how fantastic the Budget and the Finance Bill are from the evidence base that we have?
James Murray
I was hoping that the hon. Gentleman would again leap to the defence of Liz Truss, as he did just last week. Sadly, that was not to be the case in his intervention. I will come on to the new clauses in a moment; I am only halfway through thanking people on his side of the House for intervening, so I would be grateful if he would let me make a little progress.
The hon. Member for Wimbledon (Mr Kohler) spoke about his concerns that things will be unworkable when the wine easement ends, but it ended over a month ago. Our early indications are that firms, warehouse keepers and HMRC have adapted well to the new system, although I and my officials will carefully monitor the situation.
James Murray
I have been in routine contact with people from the wine industry throughout my time as Exchequer Secretary, and my officials are also in touch with the industry. As I said, the end of the wine easement happened at the beginning of February, and our early indications are that firms, warehouse keepers and HMRC have adapted well.
The hon. Member for Strangford (Jim Shannon) made a rare early speech during the debate, which rather took me by surprise. He raised his points with typical grace and forthrightness. I will address some of his points later in my remarks, but on the point about the impact of changes in the Finance Bill on some of the firms that export their spirits, I remind him that duty does not apply to exports. That part of the legislation would not be relevant to those considerations.
Graham Stuart
The Minister is gracious, if not always in the Whips’ best books. Does he expect pensioners who are solely reliant on the state pension to get drawn into tax and the need to produce a tax return? Has he made an assessment of that, and what kinds of numbers would there be?
James Murray
As the right hon. Gentleman will be aware, in the coming financial year 2025-26 the personal allowance will be above the level of the new state pension, so what he said should not apply when it is people’s sole income. However, there are already cases of individual pensioners who do owe tax; indeed, around two thirds of pensioners pay tax, because they also have private pensions. They pay via pay-as-you-earn or self-assessment.
I will not go into detail about the Government amendments to visual effects relief, because I assume they have the consent of the whole House. However, I will briefly speak to some of the amendments tabled by Opposition Members, as I feel I should address them. I will take together new clauses 1, 2, 3, 5, 6 and 8, which would require the Government to review the number of individuals receiving the full state pension and their income tax liabilities over the next four years, and to publish various impact assessments regarding the impact of changes to the energy profits levy, as well as the impact of the Bill on households, small and medium-sized enterprises, distilleries, wine producers and the hospitality industry.
The Government remain opposed to all of these new clauses, for the same reasons that I gave in Committee. First, the relevant information on those receiving the state pension and their tax liabilities is already published by HMRC, the Department for Work and Pensions and the OBR, and is publicly available.
Daisy Cooper
In new clause 8, which deals with alcohol pricing, we have made explicit that we are not just looking for an impact assessment of the tax that the Government intend to raise. It is about the estimate of administrative operational costs—that is, the red tape that is going to be put on the industry. Does the Minister agree that we need that impact assessment, and will he meet me to discuss how we can do it?
James Murray
The impacts of the changes to the alcohol duty and the energy profits levy have already been set out in the tax information and impact note that was published alongside the autumn Budget, so that information is already in the public domain. Information on the impact on households was also published alongside the autumn Budget in the “Impact on households” report, which demonstrated that households are on average better off in 2025-26 as a result of these decisions.
Finally, I will address the amendments tabled by the Opposition that deal with VAT on private school fees—several hon. Members have spoken about that matter. Amendments 67 to 69 would collectively remove clauses 47 to 49, which remove the VAT exemption for private schools and set out anti-forestalling provisions and the commencement date.
Ending the VAT tax break for private schools is a tough but necessary decision that will secure the additional funding needed to help deliver on our commitments, including those relating to education and young people. This policy took effect at the beginning of January, and I note that in his speech, the shadow Minister, the hon. Member for North West Norfolk (James Wild), did not say how his party would pay for its decision to reintroduce that tax break for private schools. The policy will raise £1.7 billion by the final year of this Parliament, so it is essential that the Opposition explain what they would cut from the schools budget, from education services, or from any other public services to pay for the reintroduction of that tax break. I will happily give way if the shadow Minister would like to make an intervention to place on record how he will pay for it. I do not see him leaping to his feet, so I will move on.
Finally in the debate we are having about VAT on private schools, the Government set out the expected impacts of this policy in the autumn Budget, so I do not believe that new clause 7—which would require the Government to make a regular statement on the impact of pupils with special educational needs and disabilities—is necessary. However, I take this opportunity to make clear that in developing this policy, the Government carefully considered the impact it would have, including on pupils with special educational needs and disabilities. I am sure that the hon. Member for St Albans (Daisy Cooper) and her colleagues will welcome the extra £1 billion next year for high needs funding that we have been able to announce thanks to our decisions on tax policy, including on private schools.
I hope I have set out why the Opposition amendments are unnecessary, and indeed why reintroducing the VAT tax break for private schools not only runs counter to the manifesto on which the Government were elected, but represents an unfunded tax cut from the Opposition—have they learned nothing? I therefore urge the House to reject those amendments, and I commend our amendments to the House. Again, I extend my thanks to all Members who have contributed to this debate.
James Wild
I beg to ask leave to withdraw the clause.
Clause, by leave, withdrawn.
New Clause 2
Energy (oil and gas) profits levy: impact assessment of increase in rate
“(1) The Chancellor of the Exchequer must, within six months of this Act coming into force, commission and publish an assessment of the expected impact of Sections 15 to 17 of this Act on—
(a) domestic energy production and investment;
(b) the UK’s energy security;
(c) energy prices, and;
(d) the UK economy.
(2) The assessment must examine the impact of provisions in this Act in comparison with what could have been expected had the energy (oil and gas) profits levy remained unchanged.”—(James Wild.)
This new clause would require the Chancellor to commission and publish an assessment of the expected impact of changes to the energy (oil and gas) profits levy on domestic energy production, the UK’s energy security, energy prices and the UK economy.
Brought up, and read the First time.
Question put, That the clause be read a Second time.
James Murray
I beg to move, That the Bill be now read the Third time.
At the autumn Budget, my right hon. Friend the Chancellor laid the essential foundations for boosting investment and growth to put more money in people’s pockets, the No. 1 mission of the Government under the Prime Minister’s plan for change. The Budget was built on robust fiscal rules, rules that put a stop to day-to-day spending being funded through borrowing and to get net financial debt falling as a share of GDP.
The Finance Bill delivers on our manifesto commitments by removing the outdated concept of domicile status from the tax system, increasing the capital gains tax rate for carried interest, increasing the higher rates of stamp duty for additional dwellings, introducing the 20% standard rate of VAT on private school fees, and changing the energy profits levy by extending the period over which it applies and adjusting its rate by 3 percentage points.
As we know, my right hon. Friend the Chancellor set out at Budget how the fiscal inheritance was far worse than we had expected. The Opposition, when in government, let public spending plans become unsustainable. They did not share this with the OBR or the British people. It fell to us to fix that mess when we took office. That is why we had to make an increase to capital gains tax, changes to inheritance tax thresholds and a plan to close the tax gap by a record package of £6.5 billion of additional tax revenue by the end of the Parliament.
I thank right hon. and hon. Members from across the House for their often helpful and insightful contributions to the debates during the Bill’s passage. I would like to thank officials at the Treasury and in Parliament for their work on the policies and the legislation that have led to the Bill whose consideration we are now concluding. The Bill plays a key role in delivering economic stability, repairing the public finances and laying the essential foundations for growth. It is through that growth that we will put more money into the pockets of people across Britain, and I commend it to the House.
High Street Bank Closures
James Murray Excerpts(1 week, 6 days ago)
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The Exchequer Secretary to the Treasury (James Murray)
It is a pleasure to serve with you in the Chair, Mr Stringer. I thank my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing this important debate. We can see from the number of Members who have intervened to raise concerns about their constituencies that this issue is widely felt across our country, and the issue resonates deeply with our constituents.
It is a priority of this Government to ensure that all citizens have appropriate access to banking across the UK. As hon. Members have alluded to, banking has changed significantly in recent years thanks to digital innovations, and many people can now bank more conveniently, at any time and in any place, without needing to go to a bank in person. In 2017, 40% of UK adults regularly used banking branches, but by 2022 that figure had fallen to 21%, and in the same year nearly nine in 10 adults used online banking or mobile apps, including, notably, 65% of those aged over 75.
However, the Government are committed to ensuring that everyone can benefit from banking services. At the autumn Budget 2024, the Chancellor announced funding of more than £500 million in 2025-26 to deliver digital infrastructure upgrades through Project Gigabit and the shared rural network. Those initiatives will drive the roll-out of broadband and 4G connectivity to support access to good internet and to plug connectivity black holes across the UK by 2030. More than 86% of UK premises can now access gigabit-capable broadband, which is a huge leap from July 2019, when coverage was just 8%.
Investing in digital infrastructure will improve access to digital banking services, but I assure hon. Members that the Government also understand the importance of face-to-face banking services in communities and high streets across the country. Many of our constituents are particularly concerned about the availability of cash and access to in-person banking services, so the Government are committed to ensuring that people and businesses across the UK have access to those banking services and that everyone can contribute to economic growth in local areas and thriving local high streets.
Gareth Snell
I thank the Minister for that point. His brief reference to access to cash is vital, but the word that was missing was “free”: access to free cash. One of the by-products of the closure of high street banks is that the cashpoints that remain tend to have a transaction fee, and that is particularly the case in the communities that can least afford it. That means that people in some parts of my constituency pay up to £3 simply to withdraw their money. For people who do not have a lot to start with, that is a huge barrier to getting the cash they need.
James Murray
My hon. Friend makes an important point about the barriers to people accessing cash—not merely the location of banking hubs or facilities, but financial barriers. There may also be transport barriers to people getting to banking hubs in the first place. I hope to address that briefly in the remainder of my remarks.
Graham Leadbitter (Moray West, Nairn and Strathspey) (SNP)
On that point, will the Minister give way?
Graham Leadbitter
On the point of geographic vulnerabilities, Aviemore, which many people will know as a major ski resort in Scotland, is pretty remote: it is on a major A-road, but it is in the middle of the Cairngorms. It has lost its last bank, and the nearest is Inverness, which is a 40-minute drive away—if someone has a car and it is not minus 10°, which is quite common in the middle of winter. Does the Minister agree that a degree of common sense needs to be applied by Link when looking at banking hubs—because that common sense is critical in making that assessment and it should not just be a tick-box exercise, as has been alluded to?
James Murray
The hon. Gentleman’s point relates to transport links and the accessibility of banking hubs. It links well to the comment from my hon. Friend the Member for Stoke-on-Trent Central (Gareth Snell), which is that a banking hub or banking service on its own might need further infrastructure around it to ensure that people can get there. I hope to address that briefly in just a moment.
The Economic Secretary to the Treasury is working closely with the industry to roll out 350 banking hubs—as my hon. Friend the Member for Blyth and Ashington mentioned—by the end of this Parliament. Banking hubs allow people and businesses to withdraw and deposit cash, deposit cheques, pay bills and make balance inquiries. Importantly, they also contain rooms where customers can see community bankers to carry out wider banking services, such as registering a bereavement or getting help with changing a PIN. The Government are committed to working with the industry to ensure that banking hubs meet customers’ needs.
Following rules laid out for the Financial Conduct Authority, the roll-out of banking hubs is determined in accordance with legislation. When a bank announces the closure of a branch or a material change of cash access, an assessment will be carried out by Link, which we have heard hon. Members refer to today and is the operator of the UK’s largest ATM network. That is an impartial assessment of a community’s access-to-cash needs. Where Link recommends a banking hub, Cash Access UK, a not-for-profit company funded by major UK banks, will provide it. The assessments take into account criteria such as population size, the number of small businesses, and levels of vulnerability. They also consider the distance to the nearest bank branch and the cost and travel time to get there on public transport. Importantly, where the announcement of a bank closure triggers an assessment, the branch cannot close until recommended services have been installed. Any member of the public—including Members of this House—can request an access-to-cash review directly, through the Link website.
My hon. Friend the Member for Blyth and Ashington and others have put on record their concerns about the criteria that Link uses to make the assessments. Those concerns are on record through this debate. Any decisions on changes to Link’s assessment criteria are a matter for Link, the financial services sector and the FCA, which oversees the access-to-cash regime. The FCA is required by law to keep its rules under review. It monitors the impact of those rules on an ongoing basis to ensure that they deliver the right outcomes for businesses and consumers.
Darren Paffey (Southampton Itchen) (Lab)
I thank my hon. Friend the Minister for giving way and my hon. Friend the Member for Blyth and Ashington (Ian Lavery) for securing the debate. On the point about the criteria, it is difficult to match some of what we know about our own constituencies with some of the criteria that Link deals with, which seem restrictive. Does the Minister agree that the Government have set a target of opening banking hubs, but the Link criteria are not meeting community needs and need to change? Does he agree that that is a priority?
James Murray
I thank my hon. Friend for his intervention. As I set out, the Government have committed to 350 banking hubs in the course of the Parliament, but any changes to Link’s assessment criteria are a matter for Link, the financial services sector and the FCA, under the rules set out in legislation.
I will also point to the fact that customers have other options to access everyday banking and cash services. In particular, the Post Office deserves a mention for its extensive presence on the country’s high streets, which ensures that 99% of the UK population live within 3 miles of a post office. Through the Post Office banking framework, 99% of personal banking and 95% of business banking customers can access vital cash withdrawal and deposit facilities at 11,500 post office branches across the country.
We talked a lot about some of the issues with accessing banking services and banking hubs when they are open. It is important to note that in the autumn Budget, we announced £1 billion of investment in support of bus services, which will be crucial in connecting rural areas and small towns and helping people to get to their nearest banking services. In recognition of the fact that each community has individual needs, we have introduced the Bus Services Bill, which will put power over local bus services back in the hands of local leaders. We continue to take action to make sure that high streets and communities across the country can realise their full economic potential.
I again thank my hon. Friend the Member for Blyth and Ashington for securing this important debate. I welcome the support from him and other hon. Members for the Government’s important work to ensure access to banking for all, and to support our commitment to unlocking the full potential of high streets across the country.
Question put and agreed to.
UK-Andorra Double Taxation Convention
James Murray Excerpts(1 week, 6 days ago)
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The Exchequer Secretary to the Treasury (James Murray)
A double taxation convention with Andorra was signed in London on 20 February 2025. The text of the convention is available on HM Revenue and Customs’ pages of the www.gov.uk website and will be deposited in the Libraries of both Houses. The text of the convention will be scheduled to a draft Order in Council and laid before the House of Commons in due course.
[HCWS473]
Family Businesses
James Murray Excerpts(1 week, 6 days ago)
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The Exchequer Secretary to the Treasury (James Murray)
I thank the shadow Chancellor for opening the debate.
In their motion, the Opposition have set out a list of objections to the decisions that the Government have taken—or, in the case of the measurements around pints, decisions that shadow Ministers seem to have entirely imagined. They may be able to list their objections, but they are unable to accept responsibility for the damage that they did to our economy. Crucially, they are unable to offer any credible alternative. The motion makes it clearer than ever that the Conservatives have no vision, no ideas and no plan to deliver the change that our country needs.
In contrast, Labour is the party with a plan for change—a plan to restore economic stability, boost investment and drive growth across the UK to put more money in people’s pockets. We know that it is up to the Government to provide stability, security, fiscal responsibility, and to remove unnecessary regulation when it stands in the way of growth. It is businesses large and small—including family businesses and their workforces—that will create jobs and wealth and be the engines of growth in the economy. We know that pubs, shops, traders and services across the country not only play an important role in all our lives, but drive economic growth. Those businesses and their workforces are the backbone of our economy, and they need a Government who will take the right decisions in the national interest, even when they are difficult, to support our security and prosperity.
I briefly remind Conservative Members of the context in which the decisions have been made. That context is, of course, the inheritance that this country faced after 14 years of the Conservative party being in power.
Dr Evans
The context is that back in 2010 the then Government had to borrow £158 billion. Fast forward another decade, and we had something called the pandemic, when we had to borrow £400 billion on top of that. Collectively, that is a great big difficulty. Five years ago, when the pandemic happened, I sat in this Chamber listening to all the interventions asking for more spending. Does the Minister not agree that that is the problem the Conservative Government dealt with?
James Murray
The hon. Gentleman said that we had something called the pandemic; we also had a Prime Minister called Liz Truss and that had a pretty big impact on our economy. I know the shadow Chancellor is distancing himself from it. If his colleagues would like to leap to Liz Truss’s defence, I would welcome an intervention. No, they are not seeking to intervene. Funny that, Madam Deputy Speaker. Perhaps, in closing, one of the other shadow Ministers can defend Liz Truss’s record.
Dr Evans
The way I see it, the problem that Liz Truss had with her Budget was that she did not set out her workings. The problem with Rachel Reeves’s Budget is that she did, and the country and the world does not believe it. That is far more detrimental to the situation we find ourselves in because she cannot get out of that problem. That is the difference between Liz Truss and Rachel Reeves.
James Murray
Wow. I should let the hon. Gentleman intervene more often if he is going to say that the only problem with Liz Truss is that she did not set out her workings. I think the problem was rather more fundamental than that, as people across this country will attest.
Frankly, it is no wonder that Conservative Members want to bury their heads in the sand and try and pretend the last 14 years did not happen. It was 14 years of mismanagement and decline, along with jolts of disaster, digging ever deeper holes in our public services and our economic resilience. It was their decisions that led to their resounding electoral loss last year and it was their record in office that made necessary the difficult decisions that we had to face on entering government.
Paul Holmes (Hamble Valley) (Con)
I thank the Minister for handling this debate in his usual courteous way. May I take him back to something that he said in his remarks about hospitality businesses and pubs delivering economic growth? There is a small pub chain in my constituency that must find a third of its total turnover because of the actions of this Government, with the result that it may have to close a venue that supports a small village in my constituency. Is that the economic growth that he thinks he is delivering?
James Murray
I assume the hon. Gentleman refers to the changes around employer national insurance, to which I will come in my remarks.
Let me be absolutely clear about the context: no responsible Government could have let things carry on the way they were. That was simply not a tenable situation and I think Conservative Members know that. That is why at the autumn Budget, we took the difficult but necessary decisions on welfare, spending and tax, and those decisions were vital steps towards restoring economic stability and fixing and supporting the public finances. As I said earlier, while Conservative Members have taken every opportunity to say they oppose those choices, they have yet to offer any solutions of their own. Difficult decisions were necessary, so let me set out why we made some of the choices that we did.
Nick Timothy (West Suffolk) (Con)
The Labour party manifesto said that by the year 2028-29, it would increase spending by £9.5 billion a year. Why, then, did the Budget increase it by £76 billion—eight times more than the Labour manifesto said?
James Murray
As I am sure the hon. Member will know, upon entering Government and speaking to Treasury officials about the state of the public finances, we uncovered a £22 billion black hole, which was known to then Ministers but which the OBR was not informed about.
Nick Timothy
The Minister might have noticed that there is a bigger gap between £9.5 billion and £76 billion than £22 billion. His answer is clearly ridiculous. We are talking about such tax rises not because of the £22 billion fictional black hole, but because of the decision to increase spending by eight times more than the Labour party promised at the election. Will he accept that or not?
James Murray
The hon. Member’s comments are clearly ridiculous if he thinks the £22 billion black hole was fictional. It has real-terms consequences in terms of the pressure—
James Murray
I will make some progress as I have been very generous in giving way to the hon. Gentleman. He will know that his colleagues who were in government were aware of the in-year spending pressures and they chose not to share that with the Office for Budget Responsibility and thereby not to share it with the British people. That is the truth of what we inherited, and that is why we had to take difficult decisions.
I turn to some of the difficult decisions that we had to take in the Budget last year, because the Opposition motion refers to our decisions on business property relief. I assure hon. Members that the decisions we took on that and on agricultural property relief were not taken lightly. The Government recognise the role that those reliefs play, particularly in supporting small farms and family businesses, and that is why we chose to maintain rather than abolish them, which has meant maintaining significant levels of relief from inheritance tax beyond what is available to others. Indeed, the reliefs will remain more generous than the last time they were changed. The changes we are making mean that agricultural and business property reliefs will be better targeted and fairer.
According to the most recent data from His Majesty’s Revenue and Customs, 40% of agricultural property relief benefits the top 7% of estates making claims. It is a similar picture for business property relief, with more than 50% of business property relief claimed by just 4% of estates making claims. Those data bear out the fact that the benefit of the existing 100% relief on business and agricultural assets has become heavily skewed towards the wealthiest estates.
It is neither fair nor sustainable to maintain such a large tax break for such a small number of the wealthiest claimants, particularly in the light of the wider pressures on the public finances. That is why we are changing how we target agricultural property relief and business property relief from April next year. Individuals will still benefit from the 100% relief for the first £1 million of combined business and agricultural assets. On top of that amount, there will be 50% relief, which means that inheritance tax will be paid at a reduced effective rate of up to 20%, rather than the standard 40%. That sits on top of the other spousal exemption and nil rate bands, which apply more widely within the inheritance tax system.
Gregory Stafford (Farnham and Bordon) (Con)
Kilnside farm in my constituency, run by Bob Milton, is only 36 acres in total. It is a tiny farm, yet it will be subject to the new taxes. How can the Minister say that only 4% will be affected? Even the smallest farmers in my constituency will be hit.
James Murray
To correct the hon. Gentleman, I did not say that only 4% will be affected. We have set out that up to 520 estates claiming agricultural property relief, including those that also claim business property relief, are expected to be affected in 2026-27. That means that about three quarters of estates will be unaffected and will not pay any more inheritance tax. All the data on that has been set out in a letter from the Chancellor to the Treasury Committee, and if the hon. Gentleman looks at that document, he will see some of the stats that I refer to.
Rebecca Smith (South West Devon) (Con)
Of the 500 or so that the Minister has just explained will have to pay inheritance tax, does he have any idea what number are small businesses, compared with the large estates that he seeks to challenge in the legislation?
James Murray
The data that I refer to is based on claims data. This is an important point that comes up frequently when we have debates on agricultural property relief and business property relief. If one were to consider assets owned by farmers or other business owners, the actual value of the asset does not give a guide to what claim might be made against inheritance tax because that will depend on the ownership structure, on debt that might be owned or on what inheritances have happened earlier in people’s lives and so on. The only data that can give an indication of what impact the changes will have from April 2026 is the claims data.
The data that I referred to earlier and which I referred to in response to the hon. Member for West Suffolk (Nick Timothy) is the real claims data that HMRC has. That is the data on which we made decisions around this policy and which informs some of the Chancellor’s statistics in her response to the Treasury Committee, which the hon. Lady may like to consult.
Carla Lockhart (Upper Bann) (DUP)
In Northern Ireland, the Agriculture Department has indicated that almost half of all farms, and 75% of all dairy farms, will be impacted by the inheritance tax. When will the Minister start to speak with, and listen to, industry leaders? Quite frankly, the meeting last week was an outrage. He needs to sit and listen to industry leaders, who know the industry and are speaking on behalf of real farmers on the ground who will be impacted by this inheritance tax.
James Murray
The hon. Lady referred to meetings that I held last week, both with representatives of UK-wide organisations and those that represent other nations within the UK. There is a difference between listening to people and having to agree, because sometimes we listen and we disagree. That is the situation we found ourselves in after that meeting—we listened to concerns but we have a different approach. I have been setting out in this debate exactly why we have taken this decision.
Caroline Voaden (South Devon) (LD)
I recently surveyed all the farms in my constituency, and 85% of the people who responded said that they would be affected by this inheritance tax, mainly because of the cost of land in South Devon—practically all farms will be subject to it. When will the Government listen to the evidence that we are collecting from our farmers, which shows that their assessment that only 25% of farms will be affected is not correct?
James Murray
It is important to emphasise that the correct data to work out the impact of these changes is the claims data. That is what is available to HMRC, and it is the basis on which we have established how many farm estates are likely to be affected by the changes.
Wendy Morton
The point that we are trying to make is that the Minister is looking only at one dataset, not the big picture. We have spoken a lot about farmers, but the business property relief is about the whole of the business community. Will he not go away and have another look at this, taking account of all the evidence that, hopefully, he has been listening to since the announcement of this reckless policy?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the Minister continues, let me remind Members who have not understood the etiquette that they cannot just wander into a debate when someone is on their feet and try to intervene. They need to take part in the whole debate.
James Murray
I return to the point that I have made several times today: the way to understand how the policy on agricultural property relief and business property relief will work is to look at actual claims data—the claims as they relate to individual estates. The overall value of farms or businesses does not tell us exactly what the estate value will be through an individual claim. That is the correct way to approach it.
Several hon. Members rose—
James Murray
I will make some progress, because I have given way many times on this particular point. I have plenty more to get through and I am sure that other Members would like to contribute.
Depending on people’s individual circumstances, a couple will be able to pass on up to £3 million to their children or grandchildren free of any inheritance tax at all. If owners pass on their assets more than seven years before death, no inheritance tax will be due either. Where any payment is due, it can be paid over 10 years interest-free in most circumstances. That benefit is not seen anywhere else in the inheritance tax system.
I recognise, as evidenced today, that the inheritance tax reforms generate strong views, but reform is necessary given the fiscal challenge that confronts us. This is a fair approach that helps put the public finances back on a sustainable footing.
Several hon. Members rose—
James Murray
I am going to make some progress.
Let me move on to the changes to employer national insurance contributions, which is another of the difficult decisions that we had to take at the Budget. I recognise that the changes will have impacts, but asking employers to contribute more is the fairest way to restore fiscal stability and to provide essential services, such as our NHS, with the resources they desperately need. The rate of employer national insurance will increase from 13.8% to 15%, while the per-employee threshold at which employers start to pay national insurance, known as the secondary threshold, will be reduced to £5,000.
At the same time, we firmly recognise the importance of small businesses, and we will protect the smallest businesses and charities by more than doubling the employment allowance to £10,500. That means that next year, 865,000 employers will pay no national insurance contributions at all. More than half of employers will see no change or will gain overall from this package, and employers will be able to employ up to four full-time workers on the national living wage and pay no employer national insurance contributions.
Employers will also be able to benefit from other employer national insurance contributions reliefs, including hiring under 21s and under-25 apprentices, where eligible. These changes broadly return national insurance contribution revenues as a proportion of GDP to the level that they were before the previous Government’s cuts to employee and self-employed national insurance, but in a way that does not result in higher taxes in people’s payslips.
The Opposition’s motion also refers to business rates. We want local shops and high streets to thrive again, which means we must act to support the businesses behind them, which have had to contend with changing consumer habits and significant economic headwinds in recent years. While online shopping is convenient and offers great variety, the high street brings people together. Hospitality businesses have played a key role in bringing people into town centres.
However, at present the business rates burden falls more heavily on property-intensive sectors, which is why business rates need rebalancing. From 2026-27, we therefore intend to introduce permanently lower tax rates for high street retail, hospitality and leisure properties with rateable values below £500,000. This will benefit more than 280,000 properties. At the same time, to make this tax cut sustainable, we will apply a higher rate to properties with a rateable value of £500,000 and above. That group represents less than 1% of all properties, but covers the majority of large distribution warehouses, including those used by online giants, helping to level the playing field for high street businesses.
Damian Hinds (East Hampshire) (Con)
The hon. Gentleman and other Ministers have constantly come back to the point about the higher rateable value commercial premises, saying that they include distribution centres for online giants. What proportion are they of the total?
James Murray
Data is being set out by the Valuation Office Agency, which should give the right hon. Gentleman the details that he requests, but I am happy to write to him with the details that are available. In order to sustainably fund a permanent cut for retail, hospitality and leisure properties below £500,000, we have to ensure that it is paid for. We are seeking to increase the rate on properties with a rateable value of £500,000 or more to ensure that it is sustainably funded. That will come in from April 2026.
Andrew Lewin
My hon. Friend is talking about the importance of sustainable funding, and I completely agree. It is fascinating that the last Government had a business rate relief system, which was a good one, but had nothing in the Budget for it at all, so they planned to cancel it entirely. That is why we are now in this situation.
James Murray
My hon. Friend is absolutely right to point out that, under the previous Government, there was a series of cliff edges and one-year extensions that provided no stability whatsoever to businesses trying to plan investment, hiring or expansion decisions. That is why we have decided to extend the relief that the previous Government were due to end in April 2025 for one further year, before introducing permanently lower rates from April 2026.
Dr Johnson
The Minister is talking about planning—I should declare an interest as a farmer’s wife—and says that 500 farmers will be affected. Of course, none of us can know who is going to die next year. While 500 farmers will be affected, there may be many, many more who might die and might be affected. There is a discrepancy between how many he thinks will definitely be affected—how many he predicts will die—and the actual number of people who may be affected and cannot plan their businesses accordingly, because they simply do not know. He argues that they can put their assets down a generation, but no one knows if there will be a car accident and the younger generation will be killed. He is simply taxing tragedy.
James Murray
I think I was following the hon. Lady point that in many cases no one knows when inheritance tax will be due, because people cannot predict the sad events that may happen in their lives. But it is clear that, in trying to work out the impact of changes to tax policy, the best source of data is the actual claims data for those reliefs in the past. That is exactly what we have used. We have looked at the HMRC data on actual claims under agriculture property and business property relief. That is what determines the data that I mentioned of up to 520 estates being affected in 2026-27.
Dr Johnson
My point was that the Minister may be correct that 520 estates will be affected, but others who may be affected will need to plan their businesses and lives accordingly. That is why so many more people are affected by his announcement than simply those who will die next year or the year after.
James Murray
I return to my point that three quarters of estates claiming agricultural property relief, or agricultural property relief and business property relief, will not pay any more inheritance tax in 2026-27 as a result of these changes. In terms of the extra inheritance tax liability, which is what the data about claims points towards, the data is clear that the majority of estates will not be affected. As I mentioned to several of the hon. Member’s colleagues on Conservative Benches, the data is set out in quite some detail in the letter that the Chancellor wrote to the Treasury Committee. If she has a look at the data in that letter, that might answer some of her questions.
I will briefly finish my comments in relation to business rates. I was thanking my hon. Friend the Member for Welwyn Hatfield (Andrew Lewin) for intervening to point out what we inherited from the previous Government: a situation where relief for retail, hospitality and leisure was chopping and changing year to year. Indeed, from April this year there was to be a cliff edge, so it would have gone away entirely—according to the plans we inherited from the previous Government, there was to be no relief at all after April. We therefore decided to extend the relief at a fiscally responsible level for a further year, ahead of our permanent reforms coming in.
While we are on the subject of hospitality, let me address the absurd notion in the Opposition’s motion—I do not believe the shadow Chancellor mentioned this in his comments—that the pint is under threat. The pint is part of our nation, and we do not need a new law to protect the pint any more than we need a new law to say that the sun must rise in the morning—I wonder whether the Opposition Members who drafted that part of the motion may have been close to a number of points when they did so. In any case, I am proud to reject the insinuation in their motion and to put on record—if it needs to be said—that pints are at the heart of our nation and, under Labour, they will stay that way.
Bradley Thomas (Bromsgrove) (Con)
The Government continually talk about how the Chancellor has shaved one penny off a pint, but many publicans in my constituency tell me that they are having to find an extra £2,000 a month for additional costs as a result of the Government’s Budget. Does the Minister accept that a penny off a pint is futile if there are no pubs left to drink in?
James Murray
What I accept, as I said earlier, is that our difficult decision on employer national insurance contributions will have impacts on different businesses across the country. But the hon. Member should welcome—businesses across the country will welcome this—the extra support that we have provided through draught relief to support those pubs to succeed. That is an essential part not just of our economic activity across the country, but of our social lives and enjoying pints. I know that enjoying pints matters very much to Opposition Front Benchers.
I will try to make some progress, because there is quite a lot to cover in the Opposition’s motion. On employment, the motion seeks to undermine the Employment Rights Bill, so let me directly address those points. The Bill is the first phase in delivering our plan to make work pay, supporting employers, workers and unions to get Britain moving forward to bring greater predictability to the lives of working people. While I recognise that the flexibility offered by zero-hours contracts, zero-hours arrangements and low-hours contracts can benefit both workers and employers, without proper safeguards that flexibility can be one-sided, and it is far too often the workers who end up bearing all the financial risk.
That is why we have committed to ending this one-sided flexibility, to ensure that all jobs provide a baseline of security so that workers can better plan their lives and their finances. That includes ending exploitative zero-hours contracts. We will deliver the commitment through two measures: first, a right to guaranteed hours where the number of hours offered reflects the hours worked by the worker during a reference period; and secondly, new rights to offer reasonable notice of shifts, with proportionate payment for shifts that are cancelled, moved or curtailed at short notice.
I will try to draw this to a close. [Interruption.] Opposition Members might not want to hear it but, out of respect to you, Madam Deputy Speaker, I will bring my remarks to a close. The motion exposes a Conservative party that is happy to object to the difficult decisions that we have taken but totally unable to offer an alternative plan of its own. The debate has also allowed me to set out, on behalf of the Government, how we are moving fast to take the sometimes difficult but necessary decisions to deliver our plan for change.
We are taking the right decisions to fix our public finances, to restore stability and fiscal responsibility, and to ensure that both businesses and their employees can work productively and securely to drive economic growth. The changes that we have begun making are essential for economic growth, so we reject the Opposition’s motion. We are determined to move further and faster to make people across the UK more secure and better off.
Madam Deputy Speaker (Ms Nusrat Ghani)
I call the Liberal Democrat spokesperson.
Crown Estate Bill [Lords]
James Murray ExcerptsMonday 24th February 2025
(2 weeks, 1 day ago)
Commons ChamberRead Full debate Crown Estate Bill [HL] 2024-26 View all Crown Estate Bill [HL] 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 February 2025 - large print - (24 Feb 2025)
The Exchequer Secretary to the Treasury (James Murray)
I thank all hon. Members who have contributed to the debate, and provided further detail about their amendments or concerns.
I start by making it clear that the Government have carefully considered all amendments throughout the passage of the Bill. Where we have agreed with the intent behind an amendment, we have worked hard to find an appropriate way forward. That was evidenced in the changes made by this House to ensure appropriate protections for our seabed. As a result of changes made to the Bill, the Crown Estate will now be required to seek the approval of the Treasury for any permanent disposal of the seabed. I thank the Opposition for a constructive debate on that matter. Alongside that, further changes made in the other place have helped to strengthen the Bill, including changes to require the appointment of commissioners with special responsibility for giving advice about England, Wales and Northern Ireland; a reporting requirement in respect of activities with Great British Energy; and a requirement relating to sustainable development. In that spirit, I have considered the amendments that are before us.
I thank the hon. Member for Ynys Môn (Llinos Medi) for tabling new clause 1, under which, within two years of the day on which the Act commences, the Treasury must have completed the transfer of responsibility for management of the Crown Estate in Wales to the Welsh Government. It would allow the Treasury, by regulations, to make provision about the transfer relating to reserved matters as necessary, and would require it to ensure that no person in Crown employment has their employment adversely affected by the transfer of responsibility.
I also thank the hon. Member for South Cambridgeshire (Pippa Heylings) for tabling new clause 4, to which her colleague, the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick), also spoke. It would require the Treasury to set out a scheme for transferring all Welsh functions of the Crown Estate commissioners to Welsh Ministers or a person nominated by Welsh Ministers. The Welsh functions would consist of the property, rights or interests in land in Wales, and rights in relation to the Welsh zone. As I set out in Committee, the Government believe that there is greater benefit for the people of Wales and the wider United Kingdom in retaining the Crown Estate’s current form.
New clause 4 would most likely require the creation of a new entity to take on the management of the Crown Estate in Wales—an entity that, by definition, would not benefit from the Crown Estate’s current substantial capability, capital and systems abilities. It would further fragment the UK energy market by adding an additional entity and, as a consequence, it would risk damaging international investor confidence in UK renewables. It would also risk disrupting the National Energy System Operator’s grid connectivity reform, which is taking a whole-system approach to the planning of generation and network infrastructure. Those reforms aim to create a more efficient system and reduce the time it takes for generation projects to connect to the grid.
Ben Lake
I am grateful to the Minister for outlining his concerns about devolving the Crown Estate to the Welsh Government—he listed a number of them. Am I right in saying that he believes that the devolution of powers from the Crown Estate to Scotland has fragmented the market, and is in some way to the disbenefit of people in Scotland?
James Murray
The matter that we are considering today, through the two new clauses that I have mentioned, is the proposal by Opposition parties for devolution to Wales. We are not analysing what may have happened in Scotland, historically; we are looking at the proposals put to us in those new clauses, which I am addressing.
To be clear, the cumulative impact of the changes that the hon. Member for Ynys Môn is suggesting in her new clause would likely be to significantly delay the pathway to net zero.
Liz Saville Roberts
The Minister said that the Bill would be beneficial to the people of Wales as it stands. Could he quantify that benefit, please?
James Murray
If the right hon. Member waits just a moment, I will come to some of the direct benefits for the people of Wales of retaining the Crown Estate in its current form.
It is important to emphasise that the Crown Estate’s marine investments are made on a portfolio-wide basis across England and Wales. Devolving to Wales would disrupt existing investments, as they would need to be restructured to accommodate a Welsh-specific entity. To devolve the Crown Estate at this time would risk jeopardising the pipeline of offshore wind development in the Celtic sea, which is planned for into the 2030s. The Crown Estate’s offshore wind leasing round 5 is spread across the English and Welsh administrative boundaries in the Celtic sea. It was launched in February last year and is expected to contribute 4.5 GW of total energy capacity—enough to power 4 million homes.
In addition to energy, the extensive jobs and supply chain requirements of round 5 will also likely deliver significant benefits for Wales and the wider United Kingdom. Lumen, an advisory firm to the Crown Estate, has estimated that manufacturing, transporting and assembling the wind farms could potentially create around 5,300 jobs and a £1.4 billion boost for the UK economy. Devolution would also delay UK-wide grid connectivity reform. The Crown Estate is using its data and expertise as manager of the seabed to feed into the National Energy System Operator’s new strategic spatial energy plan. On Wales, the Crown Estate is working in partnership with the energy system operator to ensure that its pipeline of Welsh projects—the biggest of which is the round 5 offshore wind opportunity in the Celtic sea—can benefit from this co-ordinated approach to grid connectivity up front.
David Chadwick
If devolution presents such enormous barriers, why are the Government choosing to put the headquarters of Great British Energy in Scotland?
James Murray
GB Energy is for the benefit of the whole of the UK. It is absolutely right to locate its headquarters in Aberdeen, given the strong connection between Aberdeen and use of the assets of the North sea to generate power for the entire United Kingdom. In fact, the hon. Gentleman’s example underlines my point, which is that when different parts of the United Kingdom work together, we can achieve more than we can separately. I thank him for endorsing my point.
It would not make commercial sense to introduce a new entity, with control of assets only within Wales, into a complex operating environment in which partnerships have already been formed. Furthermore, the Crown Estate’s assets and interests in Wales are fundamentally smaller than its assets in England, and would likely not be commercially viable if their costs were unsupported by the wider Crown Estate portfolio. The Crown Estate can take a longer-term approach to its investments and spread the cost of investments across its entire portfolio. A self-contained, single entity in Wales would not have the same ability; neither would it benefit from the expertise that the Crown Estate has developed over decades of delivering offshore wind at scale. A devolved entity would be starting from scratch.
Liz Saville Roberts
The Minister has just told the House that Wales is too small and poor to benefit from the devolution of the Crown Estate. That is an extraordinary argument, and I am sure that the Welsh Government will share my amazement. Has he discussed that with his partners in Welsh Labour?
James Murray
I think the right hon. Member has misunderstood the point I was making. If we were to have a devolved entity, it would be starting from scratch midway through a multimillion-pound commercial tendering process, just at a time when the Crown Estate is undertaking critical investment in the UK’s path towards net zero—something I am sure she is keen to support.
The commercial viability of all three 1.5 GW floating offshore wind project development areas in the Celtic sea, which straddle the English and Welsh administrative boundaries, benefited from the Crown Estate’s significant investment of time, expertise and capital, which enabled their entry into the market. UK floating offshore wind, an emerging offshore technology that the Crown Estate is supporting, would be particularly vulnerable to market disruption.
It is important to underline that income generated by the whole Crown Estate benefits the people of Wales. As I have noted, the Crown Estate pays its entire net profits into the UK Consolidated Fund each year. That means that much of the revenue already supports public services in Wales, either by supporting UK Government spending in reserved areas or through the funding provided under the Barnett formula and the Welsh Government’s block grant funding.
Llinos Medi
As I mentioned in Committee, the Barnett formula is not a fair formula for Wales. In the Scottish model, £10 million was taken out of the block grant, but those communities received £103 million back. I think that is a fair exchange. Does the Minister not agree?
James Murray
The hon. Member has highlighted that the changes made in Scotland led to a reduction in the block grant to Scotland.
The focus of the new clauses is the proposal to devolve Crown Estate capabilities to Wales. As I am setting out, that would not make commercial sense when it comes to advancing greater energy capacity, or when it comes to increasing the Crown Estate’s net profit, which is of course reinvested in public services right across Wales and other parts of the UK.
I draw Members’ attention to the fact that in the other place, the Government supported the inclusion of clause 6, which requires the appointment of commissioners responsible for giving advice about England, Wales and Northern Ireland. That will ensure that the Crown Estate’s board of commissioners continues to work in the best interests of Wales.
Jim Shannon
I seek assurance that the ambitious net zero targets will not detrimentally affect the fishing sector. I remember some years ago there was talk of a wind farm just off the coast of Kilkeel, and the fishermen were concerned that it would be in one of their prime fishing sectors, where scallops were plentiful. If that continued, the fishing sector could lose out because the Government decided to push for net zero. I sought reassurance that Northern Ireland MPs would be able to contact the Northern Ireland commissioner directly, but I ask specifically for a wider assurance about the fishing sector in Northern Ireland—for Portavogie, Ardglass and Kilkeel.
James Murray
I thank the hon. Gentleman for his intervention about the impact on the fishing sector, and I can reassure him that the Crown Estate is committed to the sustainable management of the seabed. As with any developer, the Crown Estate’s proposals go through the standard planning approval process, which includes the relevant environmental assessments. Under the Crown Estate’s strategy, it has an objective to take a leading role in stewarding the natural environment and biodiversity. Key to delivering on that aim is managing the seabed in a way that reduces pressure on, and accelerates recovery of, our marine environment. Of course, the Bill will not impact directly on how much commercial fishing takes place in areas managed by the Crown Estate.
I pointed out that the inclusion of clause 6 in the Bill in the other place provided for the appointment of commissioners responsible for giving advice about England, Wales and Northern Ireland. The requirement to give advice to the board about Wales will be alongside the commissioners’ existing duties. That change will strengthen the Crown Estate’s ability to deliver benefits for the whole UK.
Hon. Members may not agree with the points I have made, but I hope that I have set out clearly why the Government believe that the existing structure remains the best approach, and I hope that hon. Members will feel that they do not need to press their new clauses to a vote.
New clause 2, which was tabled by the hon. Member for South Cambridgeshire, would require the Crown Estate to ensure that any decisions about marine spatial priorities are co-ordinated with the priorities of the Marine Management Organisation, and to consult any communities or industries impacted by the plans, including fishing communities. I confirm that the Crown Estate and the Marine Management Organisation already have well established ways of working together to ensure effective collaboration for marine spatial planning and prioritisation.
Pippa Heylings
We will not be pressing this new clause to a vote, but the new investment and borrowing powers change the context for the 2020 memorandum of understanding. I ask for reassurance that we might seek a new memorandum of understanding between the Marine Management Organisation and the Crown Estate.
James Murray
I thank the hon. Member for her intervention. As I said, the Crown Estate and the Marine Management Organisation agreed the statement of intent in 2020, and it is reviewed periodically to focus on priorities and opportunities for alignment. That may provide an opportunity for review in due course to ensure that it meets current aims.
In addition to the Crown Estate’s relationship with the Marine Management Organisation, there are various regulatory requirements on developers who lease areas of the seabed from the Crown Estate to engage with the Marine Management Organisation themselves. Those include requirements through marine licensing. Developers must obtain marine licences from the Marine Management Organisation for activities that could impact on the marine environment. That process involves consultation with statutory bodies and adherence to marine plan policies.
As part of a marine licence application, developers must conduct environmental impact assessments for projects that could significantly alter the environment. That includes consultation with the Marine Management Organisation and other relevant authorities. Developers are furthermore encouraged to engage with local communities, statutory bodies and other stakeholders throughout the planning and development process to address concerns and ensure compliance with marine plans. I welcome the indication from the hon. Member for South Cambridgeshire that she feels able to withdraw the new clause, and I hope I have gone some way to addressing the points that she made.
New clause 3, which was also tabled by the hon. Member, would require the commissioners to assess plans for benefits to local communities and coastal communities in respect of offshore activities before making any investment decisions. It would also require the commissioners to transfer at least 5% of the Crown Estate’s net profit to local communities impacted by its activities. As I set out in Committee, local communities benefit economically from onshore and offshore developments—for example, through job creation and increased business for local suppliers. Local communities will also benefit in the long term as the country transitions away from volatile fossil fuel markets towards clean, domestically produced power, enhancing Britain’s energy independence and security.
As I highlighted in Committee, the Crown Estate has specifically designed the leasing process for its offshore wind leasing round 5 in the Celtic sea to require developers to make commitments to deliver social and environmental value. Tender bidders must think about how their developments can encourage healthier, more resilient and more prosperous communities, creating lasting benefits that extend beyond the lifetime of wind farm leases. Those commitments will be monitored, reported on and enforced throughout the lifetime of the relevant round 5 developments.
As I have laid out before, the Crown Estate is committed to proactively working with local communities and partners to enable employment and skills opportunities. As I mentioned in Committee, it has invested £50 million through the supply chain accelerator to stimulate green jobs and develop a green skills pipeline. It is supporting development in the skills we need for the future, through measures that range from a GCSE in engineering skills for offshore wind, seed-funded by the Crown Estate and developed with Cornwall college, to a post-16 destination renewables course with Pembrokeshire college. It is also partnering with the employment charity Workwhile to create green construction apprenticeships.
The Crown Estate already works closely with communities, charities, businesses and the Government to ensure that its skills initiatives are sensitive to market demands and emerging technologies. While I respect the concerns reflected in new clause 3, the Government consider it important that the Crown Estate retains flexibility in how its skills initiatives are funded and delivered. That enables it to contribute to skills training in the best possible way, while—importantly—not conflicting with its statutory duty to maintain and enhance the value of the estate. On that basis, I hope that the hon. Member for South Cambridgeshire feels able to withdraw the new clause.
New clause 5 seeks to limit the ability of the Crown Estate to dispose of assets without Treasury approval, by requiring it to seek consent for disposals of assets totalling 10% or more of its total assets in a single year. It would also require the Chancellor to lay a report before Parliament within 28 days of being notified of disposals above that threshold. As the Government have set out both in Committee and in the other place, in our view imposing a limit on disposals would undermine the flexibility needed to enable the Crown Estate to operate commercially and meet its core duties under the Act. It is important to emphasise that the Bill is not intended materially to alter the independence of the Crown Estate. Requiring the Treasury to approve the Crown Estate’s ordinary business transactions, which may well be caught by the new clause, would encroach on the independence of the Crown Estate. That is inconsistent with the Government’s vision for the Crown Estate.
The hon. Member for North West Norfolk (James Wild) has concerns that the Crown Estate could choose to sell off critical or significant assets—indeed, he raised that point in Committee. I reassure the House that strong safeguards are already in place to ensure that the Crown Estate maintains and enhances the estate. The first is a legislative safeguard, namely the statutory duty on the Crown Estate to maintain and enhance the value of the estate, and the returns obtained from it, while having due regard to the requirements of good management. Those are set out in the Crown Estate Act 1961 and will remain unchanged by the Bill. The second is a requirement set out in the framework document that governs the relationship between the Treasury and the Crown Estate. That document is clear that the Crown Estate should inform the Treasury of any matters concerning spending, income or finance that are novel, contentious or repercussive. The Government’s view is that that captures any proposed sales of nationally significant assets—a point the shadow Minister raised. I recognise that he may not agree, but I hope he understands the Government’s position on the matter and, as a result, feels able to withdraw his new clause.
The shadow Minister also tabled new clause 6, which would require the Chancellor to lay before Parliament any partnership agreement between the Crown Estate and Great British Energy. As I made clear in Committee, partnership agreements are highly commercially sensitive. It is therefore right that any agreement is not made public or laid before Parliament, as to do so would likely prejudice the commercial interests of the Crown Estate or Great British Energy. I hope the hon. Member feels that he does not need to push the new clause to a vote.
I will consider amendments 1 and 4 together to try to make progress as speedily as I can, Madam Deputy Speaker. They would impose a legislative limit on the amount of borrowing that could be undertaken by the Crown Estate, and both would require the Government to introduce affirmative regulations, setting out a borrowing limit of no more than a 25% net debt-to-asset value ratio. I thank hon. Members for their contributions on this matter. The Government recognise that borrowing controls are an important consideration for the Bill. As such, the Government made available the Crown Estate’s business case, as well as the underpinning memorandum of understanding, which sets out the guardrails that will protect against uncontrolled or excessive borrowing. The key principle is whether a specific limit should be set in legislation. As I have set out previously, it remains the Government’s view that limits on borrowing are best set outside of legislation in a memorandum of understanding.
I have listened to the point made by the hon. Member for North West Norfolk that a limit outside legislation can be easily changed, but I reassure the House that the Bill has been carefully drafted to include strong controls, specifically the requirement for Treasury consent. Alongside that, the existing requirement for the Crown Estate to maintain and enhance the value of the estate, while having due regard for the requirements of good management, is maintained. Taken together, those elements provide clear guardrails around the ability of the Crown Estate to borrow.
Amendment 2, tabled by the hon. Member for South Cambridgeshire, would require any framework document published by the Chancellor of the Exchequer, the Crown Estate or the commissioners to define “sustainable development”. That definition would be required to include a reference to a “climate and nature duty”, which would mean
“a duty to achieve any targets set out under Part 1 of the Climate Change Act 2008 or under sections 1 to 3 of the Environment Act 2021.”
As I set out in Committee, the Government understand the intention behind amendment 2, but a key purpose of the 1961 Act was to repeal various detailed statutory provisions that had built up over the previous 150 years, which were hampering the effective management of the estate. By focusing the commissioners’ duties on enhancing the estate’s value and the returns generated, the commissioners have a clear objective on which they can be held to account. It is an important principle that giving an organisation too many objectives will make it far less effective than giving it clear and focused priorities, and, as I set out in Committee, the Crown Estate is a commercial business, independent from Government, that operates for profit. That mandate is unchanged by the Bill—[Interruption.]
I am getting vibes from the Whip, Madam Deputy Speaker, so I might not respond as fully as I had hoped to some of the remaining amendments. However, I will address amendment 5, which I know matters to several Labour Members who have spoken to it. Amendment 5, tabled by my hon. Friend the Member for Mid and South Pembrokeshire (Henry Tufnell), would require the commissioners, when keeping the impact of their activities under review with respect to clause 3, to have regard to the UK’s net zero targets, regional economic growth and resilience of energy security. I thank my hon. Friend for the discussions that he and I had on this topic both before Committee and last week. A version of the amendment was debated in Committee. I particularly thank my hon. Friends the Members for Truro and Falmouth (Jayne Kirkham), for St Austell and Newquay (Noah Law) and for Camborne and Redruth (Perran Moon) for engaging with me on this matter, and setting out so clearly what is important to them in the constituencies they represent.
Although I understand the sentiment behind my hon. Friend’s amendment, it is perhaps helpful to set out the context behind clause 3. The clause was supported by the Government in the other place, as it sought to clarify and enhance the accountability of the Crown Estate to deliver on environmental, social and economic outcomes. Clause 3 will require the commissioners to keep under review the impact of their activities on the achievement of sustainable development in the United Kingdom. I emphasise that the public framework document, which governs the relationship between the Crown Estate and the Treasury, will be updated in light of that clause, and will include a definition of “sustainable development”, as I have set out several times. The Crown Estate will continue to include information on its activities in its annual report, which is laid before Parliament. The Government’s intention throughout the passage of the Bill has been to ensure that it can stand the test of time without need for regular updates. That, in part, is why the term “sustainable development” was adopted.
I hope I have addressed some of the concerns raised by hon. Members, although I regret I was not able to address all the amendments with quite the level of detail I had hoped. As I made clear earlier, the Government have carefully considered all amendments throughout the passage of the Bill, and I hope that hon. Members will understand the approach we are taking. I thank my hon. Friends the Members for Reading Central (Matt Rodda), for Wolverhampton North East (Mrs Brackenridge), for Harlow (Chris Vince), and for Rushcliffe (James Naish) for powerfully setting out the benefits that the Crown Estate and measures in the Bill will provide to people in their constituencies and across the country. I hope all hon. Members will understand the approach we are taking, and support our targeted and measured changes to ensure that the Crown Estate is able to operate independently, commercially and in the national interest.
Llinos Medi
Diolch, Madam Dirprwy Lefarydd. The Government have tried to explain how devolution and the creation of a Welsh Crown Estate would undermine investor confidence, but that has not been the case for the devolved Scottish Crown Estate, which has raised £700 million from offshore wind investments since 2022. A devolved Crown Estate could lead to greater alignment and integration with the economy in Wales, as has been the case in Scotland. With a well-managed transition, there is no evidence that disruption would occur. Devolution would also offer opportunities to strengthen the role of the local supply chains to be used and to actually see the 5,300 jobs that the Government claim will be created for the people of Wales.
I remind hon. Members that it is projected that child poverty numbers will reach 34.4% in Wales in five years’ time, at the end of this decade, but the Joseph Rowntree Foundation says that the forecast in Scotland is 19.8%. I refer hon. Members to the words of a former Secretary of State for Wales, Lord Peter Hain. He recently said that opposing devolution of the Crown Estate
“reflects old, centralised, conservative, anti-devolution Whitehall thinking.”—[Official Report, House of Lords, 14 October 2024; Vol. 840, c. 18.]
Labour promised us that a Labour Government in Wales and a Labour Government in Westminster would benefit the people of Wales. This Labour Government do not show any ambition for the people of Wales, and I ask every Member who wants to see the best for Wales to join me in the Aye Lobby.
Question put, That the clause be read a Second time.
James Murray
I beg to move, That the Bill be now read the Third time.
The Crown Estate is an independent commercial business with a varied portfolio of assets across London, and with marine, rural and urban holdings. It operates for profit and competes in the marketplace for investment opportunities. However, it is governed by legislation that has not changed since 1961. That is why the Bill is focused on modernising the Crown Estate by removing limitations that, if unchanged, would hamper its ability to compete and invest as a commercial business.
The central aim of the Bill has been to ensure that the Crown Estate has a sustainable future for decades to come. Through these targeted and measured changes to its founding legislation, particularly in respect of its investment and borrowing powers, the Government are building on the Crown Estate’s strong track record of success in creating long-term prosperity for the nation. The changes will ensure that the Crown Estate has flexibility to support sustainable projects and preserve our heritage for generations to come. Crucially, the measures will unlock more long-term investment, helping to drive growth across the UK.
The Bill has been strengthened and improved in its passage through both Houses. It has been amended to require the Crown Estate’s board to include commissioners with special responsibility for giving advice about England, Wales and Northern Ireland. That will ensure that the Crown Estate continues to work in the best interests of the UK. There have also been changes to strengthen its transparency and accountability, for example through the requirement for the Crown Estate to report on its activities under the partnership with Great British Energy, and the requirement to keep its activities under review with regards to the achievement of sustainable development.
I thank all hon. Members and all noble Lords in the other place for their thorough consideration and scrutiny of the Bill, and for the many and varied amendments that have been tabled and debated. I also thank everyone who has played a role in getting the Bill to this stage, including my colleagues in the Treasury, Members from across the House who took the time to provide scrutiny, all the parliamentary staff who worked on the Bill, and the officials in my Department who have put in a significant amount of time and effort. I am grateful for the broad support for the Bill from across all Benches. It will ensure that the Crown Estate can operate successfully for many more decades to come. I commend the Bill to the House.
Bank Closures: Rural Areas
James Murray Excerpts(2 weeks, 1 day ago)
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The Exchequer Secretary to the Treasury (James Murray)
I commend the hon. Member for North Dorset (Simon Hoare) for securing this debate. He has ensured that the views and concerns of his constituents have been heard by Ministers this evening, and he has set out the particular dynamics of the role of banking hubs in rural communities. The fact that he received so many interventions from other hon. Members underscores how important this issue is to constituents across the country, and I thank him for securing this important debate.
It might be helpful if I outline some of the context around this issue. In recent years, people across the UK have reaped the benefit of the transformations of the UK’s banking sector, particularly the enhanced accessibility and convenience afforded by remote banking. For example, in 2017 40% of UK adults regularly used a bank branch, but by 2022 only 21 % of UK adults did so, and almost nine in 10 banked online or used a mobile app. Notably, that includes 65% of the over-75s. However, the Government recognise that those changes have presented considerable challenges for others.
Bank branch closures can have a particular impact on rural communities given the distances to alternatives—indeed, we heard examples of that from the hon. Member for North Dorset, and other hon. Members who intervened to highlight specific cases and to draw the House’s attention to the challenges facing their constituents. I assure hon. Members, and the people they represent, that this Government understand the importance of face-to-face banking, and banking access, to local communities and high streets. Our objective is to ensure that people and businesses have access to banking services, supporting local communities and local economic growth. Work on that is well under way, and we are working closely with banks to open 350 banking hubs by the end of this Parliament. My right hon. Friend the Chancellor marked the opening of the 100th banking hub in December, and more than 200 hubs have been announced in total.
Jim Shannon
The hon. Member for North Dorset referred to 14 banks closing, and I referred to 11 closing. When it comes to the criteria for agreeing where those bank hubs will be, will the Minister reassure me that those constituents who have lost the most banks will be those who get more banking hubs when the opportunity comes through?
James Murray
The hon. Gentleman highlights how this issue affects communities right across the UK, and in a moment I will turn to the criteria by which the locations of banking hubs are decided—hon. Members have raised that important issue, and put on record their concerns and feelings about it.
Banking hubs offer counter services provided by post office staff, which allows personal and business customers of more than 30 banks and building societies to withdraw and deposit cash, deposit cheques, pay bills and check their balance. They also, crucially, contain rooms where customers can see community bankers from their bank to carry out wider banking services, such as registering a bereavement or help with changing a PIN. As the hon. Member for North Dorset pointed out, banking hubs offer more than just access to cash—that is an important point regarding why such hubs can bring so much to an area that has otherwise lost its local banks.
Community banking hubs can clearly contribute a great deal to local areas where existing banks have closed, and decisions over the opening of a hub are guided by the Financial Conduct Authority’s regulations. In response to the question from the hon. Member for Strangford (Jim Shannon), it may be helpful for me to briefly outline how the FCA’s process works. When a bank announces a closure, Link, the operator of the UK’s largest ATM network, conducts an impartial assessment of a community’s access to cash needs. Link considers criteria such as population size, the number of small businesses and levels of vulnerability, as well as the distance to the nearest branch, and the cost and time taken to get there via public transport.
Should Link recommend a banking hub, Cash Access UK, a not-for-profit entity funded by major UK banks, will implement it. Crucially, a bank branch cannot close until any recommended services are in place. Additionally, individuals, including Members of Parliament, can directly request an access to cash review via the Link website. In collaboration with industry, the Government remain committed to advancing the roll-out of these hubs.
It is worth pointing out that customers have alternative options for accessing everyday banking services. Notably, 99% of personal and 95% of business banking customers can conduct their banking, including taking out and depositing cash, at over 11,500 Post Office branches nationwide. The Post Office, as several hon. Members have mentioned, has a duty to serve rural communities, with the Department for Business and Trade requiring that 95% of the total rural population across the UK be within three miles of a Post Office. Therefore, where communities might be too small for a banking hub, as may be the case for some of the rural communities we are focusing on this evening, individuals and businesses can still access essential services at their local Post Office.
Helen Morgan
Have the people who have developed these regulations considered that three miles is a very long way for those who do not drive or have access to a car, or where there is no bus service? That is certainly the case for large numbers of people in North Shropshire and, I am sure, the other rural communities mentioned during the debate. People have set up their lives to be able to access the services that are available, but if those services are taken away and put somewhere else, they are unlikely to be able to get to that location, which is really problematic. Will the Minister consider reassessing the criteria, so that banking hubs are placed where banks were previously located so that people can still access them?
James Murray
The hon. Member is correct that people need to be able to get to banking hubs, and I will address that point later in my speech.
More broadly, this Government are committed to improving the quality of life for people living and working in rural areas, so that rural communities and businesses can realise their full potential. A prosperous rural economy will be underpinned by improvements in rural connectivity, as the hon. Member for North Shropshire (Helen Morgan) pointed out, and access to a diverse range of services. In the autumn Budget of 2024, the Government therefore announced funding of over £500 million next year to deliver digital infrastructure upgrades through Project Gigabit and the shared rural network. That investment will drive roll-out of broadband and 4G connectivity to support access to good internet in rural areas across the UK.
We have also confirmed investment of over £1 billion to support and improve bus services and keep fares affordable. In recognition of the fact that each community has individual needs, we have introduced the Bus Services (No. 2) Bill to put power over local bus services back in the hands of local leaders. Every region in England, including the rural communities at the heart of this debate, will benefit. Taken together, these investments will help improve access to banking services, whether digital or in-person. More broadly, they will help to deliver economic growth more evenly across the country, helping rural areas to thrive.
In closing, on behalf of the Economic Secretary to the Treasury, my hon. Friend the Member for Wycombe (Emma Reynolds), I again thank the hon. Member for North Dorset for his continued work in highlighting this important topic. I assure him and other hon. Members that this Government are steadfast in their commitment to supporting rural communities in their access to banking services, and I thank him again for raising his constituents’ concerns in the House tonight.
Question put and agreed to.
Inheritance Tax Relief: Farms
James Murray Excerpts(1 month ago)
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The Exchequer Secretary to the Treasury (James Murray)
It is a pleasure to speak in this debate with you in the Chair, Dr Murrison. I begin by extending my thanks, as other Members have, to my hon. Friend the Member for South Norfolk (Ben Goldsborough) for opening today’s debate. I recognise his commitment to making sure that his constituents’ opinions are heard here today. I also thank all other hon. Members who have contributed to today’s debate for setting out their views.
I appreciate that some Members disagree with either the principle or the detail of the changes that the Government have announced to agricultural and business property reliefs. It is important to be able to debate this issue here today, given the public interest in this topic. I am aware of the strength of feeling, both within the room today and outside, including from the almost 150,000 people who have signed this petition. I understand, as the petition sets out, that there are concerns about the impacts of the reforms to the reliefs, particularly on working farms.
I will seek to address the points that hon. Members have raised in a moment, but, first, I would like to emphasise the fact that the decision to reform agricultural and business property reliefs was not taken lightly. It was one of many tough decisions that we had to take at the autumn Budget in 2024, given the incredibly challenging fiscal position we inherited from the previous Administration.
Rachel Taylor
Does my hon. Friend agree that, until we improve the living standards of ordinary working people, we will never drive up the profitability or sustainability of family farms? It is the Conservative party, with its Budget choices, that devastated our rural communities, and only a Labour Government will focus on improving living standards for every single person living in my constituency of North Warwickshire and Bedworth.
James Murray
I thank my hon. Friend for her intervention. She is absolutely right about the importance of repairing the public finances and supporting public services, for her constituents in North Warwickshire and Bedworth and indeed for all of our constituents across the country.
I noted that, in her contribution earlier, my hon. Friend made a point about what this Government are doing to support the profitability of the farming sector. She may have seen that, at the Oxford farming conference in January, the Secretary of State for Environment, Food and Rural Affairs set out the Government’s long-term vision. That includes reforms to use the Government’s own purchasing power to make sure that we are buying more British food, planning reforms to speed up the delivery of infrastructure, and work to ensure supply chain fairness, which will help people involved in the farming industry and more widely, across her constituency and those of other Members here today.
As I said, the decision that we took to reform agricultural property relief and business property relief was one of the difficult but necessary decisions that we needed to take on tax, welfare and spending to restore economic stability, to fix the public finances and to support public services, including an NHS in crisis. We have taken those decisions in a way that makes the tax system fairer and more sustainable.
The reforms to agricultural property relief and business property relief mean that, despite the tough fiscal context, the Government will still maintain significant levels of relief from inheritance tax beyond what is available to others. The Government recognise the role that these reliefs play, particularly in supporting small farms and businesses, and, under our reforms, they will continue to play that role.
The case for reform is underlined by the fact that the full, unlimited exemption, as introduced in 1992, has become unsustainable. Under the current system, the benefit of the 100% relief on business and agricultural assets is heavily skewed towards the wealthiest estates. According to the latest data from HMRC, and as hon. Members have mentioned, 40% of agricultural property relief benefits the top 7% of estates making claims—that is 117 estates claiming £219 million-worth of relief.
Dave Doogan
On the point the Minister just made about the notional value of estates, I think I can help him, because that is where he is going wrong, and where he has taken his Government up an agricultural cul-de-sac. When it comes to agriculture, what is important is not the notional value of the estate, but how someone came by that estate—whether they used billions of pounds of money on which they should have been paying tax in order not to pay tax, or whether they inherited the family farm from the generation that went before. That is the differentiation that the Treasury should be making. The value is irrelevant; the Minister should focus on the nature of the inheritance or acquisition.
James Murray
What has driven the Government in making the decision to reform agricultural and business property relief is the overwhelming priority of fixing the public finances in a fair and sustainable way. That is why the statistics to which I just referred, about how agricultural and business property relief have come to be used in recent years, are important for understanding the context in which we decided that the time for reform was now.
James Murray
I will respond fully to the point made by the hon. Member for Angus and Perthshire Glens (Dave Doogan) first. As I was saying before he intervened, the data from HMRC, to which other Members have referred, shows that 40% of agricultural property relief benefits the top 7% of estates. It is a similar picture for business property relief, more than 50% of which is claimed by just 4% of estates—that equates to 158 estates claiming £558 million in tax relief. Given the wider pressures on the public finances, we do not believe that that is fair or sustainable, and we felt it was appropriate to reform how the reliefs operate.
Graham Stuart
To follow up on the earlier question that I channelled in the Minister’s direction, will he say something about the average profitability of family farms? That puts this in context.
James Murray
Earlier in the debate, we heard that the average return on capital is 0.5%, but I am sure that the right hon. Gentleman will be aware that 10% of farms in England have made a return on capital of 10%, so it is perhaps a more complicated picture than the one presented earlier. Similarly, farm business income, which is net profit, shows a wide variation. In designing the reforms, we obviously considered the fact that those who have assets on which they currently claim agricultural or business property relief still need to have generous relief. That is inherent in the design of the reforms that we are proposing: there is full 100% relief for the first £1 million of assets—above other nil-rate bands, spousal transfers and so on—and then effectively an unlimited 50% relief thereafter.
Graham Stuart
I thank the Minister for his answer and for telling us about the variation, which I am sure is there, but will he provide the average or median, to give us a sense of the situation for the vast bulk, rather than the top 10%? What does the average or median look like? What is the reality for most farms up and down this country?
James Murray
I thank the right hon. Gentleman for his further intervention. In understanding how the reliefs are reformed, the important point is to focus our conclusions on the data on claims. In understanding how many estates are likely to be affected by the changes, the data that matters is the data on claims. That is why the information that I was setting out around where the bulk of the relief currently goes is based on claims data. In a moment I will come to some other statistics that were referred to in the debate.
James Murray
I will make a little progress, and then take interventions in a second.
The data that I just referred to on where the relief currently goes—I was going to address in a moment the data on how many estates making claims we think will be affected in 2026-27—is based on actual claims, so we believe it is the right data on which to base the reforms.
James Murray
I will take interventions in a moment, but let me make a little progress. Based on the statistics I have just set out, which show where the bulk of the benefit from agricultural property relief and business property relief has been going, we felt it was appropriate to reform how those reliefs operate. That is why the Government decided to change how we target agricultural property relief and business property relief from April 2026. As I have said, we are doing so in a way that maintains significant tax relief for all estates, including for small farms and businesses, while making sure that we repair the public finances.
Under the reforms that we have announced, all individuals will, of course, be able to access the general nil-rate bands and spousal exemptions that apply within the inheritance tax system. On top of those allowances, any business and agricultural property within people’s estates will benefit from 100% relief on a further £1 million of combined assets, except in cases of shares designated as “not listed” on the markets of recognised stock exchanges. Beyond the £1 million of full relief, a further 50% relief will apply with no limit. That means that any inheritance tax paid will be at a reduced effective rate of up to 20%, rather than the standard 40%.
Mr Carmichael
Does the Minister not understand that by penalising family farming at the same time as offering the 20% threshold, he leaves a situation in which purchasing land is still an attractive option for those who wish to shelter their wealth? He penalises those he wants to protect while protecting those he seeks to penalise.
James Murray
I thank the right hon. Gentleman for his intervention, but let us consider those who will still have generous protection from inheritance tax under the reformed system that we have announced. I point the right hon. Gentleman towards the fact that the reliefs in the reformed system, when taken together with the spousal exemptions and the nil-rate bands, will mean that, depending on people’s individual circumstances, up to £3 million can be passed on by a couple to their children or grandchildren, free of any inheritance tax.
Ben Lake
There has been much debate about the discrepancies between the estimate of the Treasury, which states that some 500 farms will be affected every year, and the estimates from the NFU, the Farmers’ Union of Wales, the CAAV, the AHDB—I could name a few more. Is the Minister not concerned, and should it not give the Government pause for thought, that the Central Association for Agricultural Valuers has estimated that in Wales alone the proposals will make an extra 200 family farms subject to an inheritance tax liability? If we are to believe the Government’s estimates, that would constitute 40% of the UK total.
James Murray
I am about to come to some of the statistics to which the hon. Gentleman and others referred. I do not have much time, so I will make a little progress before answering some of those questions.
On the point of how the nil-rate band and spousal exemption allowances work together, anything beyond the nil-rate band, the spousal transfers and the 100% full relief will receive unlimited 50% relief, and heirs can spread any payments due over 10 years, interest free. That is a benefit not seen anywhere else in the inheritance tax system.
James Murray
I will make some progress and turn to the impact that the reforms will have on taxpayers, because there has been a lot of discussion of the impacts, and of the numbers that various Members have highlighted during the debate. As the Government have set out in recent months, in ’26-27 up to 520 estates claiming agricultural property relief, including those that also claim business property relief, are expected to pay more as a result of this change. That means that around three quarters of estates claiming agricultural property relief, including those that also claim business property relief, will not pay more tax as a result of the changes.
James Murray
I will make some progress.
The Liberal Democrat spokesperson, the hon. Member for Glastonbury and Somerton (Sarah Dyke), asked how the figures were arrived at. The figure to which I referred—520 estates likely to be affected in ’26-27—comes from taking the historical data and projecting it forward using economic determinants. She may have seen the letter sent by the Chancellor to the Treasury Committee in November, which set out how that calculation was done. I suggest that all Members read that letter to understand the basis for that 520 number.
The statistics also show how many estates claiming business property relief are likely to be affected. Around three quarters of estates claiming business property relief alone, excluding those only holding alternative investment market shares, will not pay any more inheritance tax in 2026-27. The Office for Budget Responsibility has been clear that it does not expect this measure to have any significant macroeconomic impacts.
I recognise the disagreement over this policy, but Ministers and officials have been listening carefully to the views of the farming sector and rural communities. Ahead of the Budget, there was media speculation that the Government were going to abolish the reliefs altogether. In reaction to that speculation, the Treasury received and considered several representations from the farming sector with views on retaining the reliefs. I responded to a debate on the matter in this very room on 17 October.
James Murray
I have only a few minutes left, so I will not.
I have also participated in several meetings with farming bodies since the autumn Budget 2024, and I am meeting farming bodies again shortly to discuss their concerns further. At the same time, it is important to recognise that other organisations have called for the reliefs to be abolished or restricted. Commentators have highlighted that the reliefs currently contribute to an inheritance tax system that means that the very largest estates pay lower effective tax rates than smaller estates. As the Institute for Fiscal Studies has set out since the Budget, the changes we announced will still leave farmland much more lightly taxed than other assets.
I want to address as many of the points that Members made during the debate as possible, but it is worth saying first that it is important to see the changes in the context of wider support for farmers and the rural community. The Budget committed £5 billion to farming over the next two years, including the biggest budget for sustainable food production in our history. It committed £60 million to help farmers affected by the unprecedented wet weather last year, and we are protecting farms and rural businesses by committing £2.4 billion over the next two years to rebuild crumbling flood defences.
We will also continue to provide existing support for the farming industry in the wider tax system. That includes, for example, the exemption from business rates for agricultural land and buildings, and the ongoing entitlement for vehicles and machinery used in agriculture to use red diesel, as the hon. Member for Dumfries and Galloway (John Cooper) mentioned.
On the point made by the right hon. Member for Orkney and Shetland (Mr Carmichael) about the inheritance tax treatment of Scottish agricultural leases, the Government are aware of the issue and officials have already discussed it with their counterparts in the Scottish Government. There is an existing provision in the Inheritance Tax Act 1984 that deals explicitly with the Scottish agricultural leases. Section 177 of the Inheritance Tax Act means that Scottish agricultural leases passed down on death are not included in the value of the estate.
James Murray
I have only a few moments, so I will not.
My hon. Friend the Member for North Northumberland (David Smith) asked about introducing a working farmer test. I draw his attention to the fact that a test where relief was provided only if, among other things, the individual received 75% of their income from agriculture did exist in the UK for a short period, between 1975 and 1981. It was removed, however, because of concerns about its impact on the availability of land for tenant farming.
Finally, I will address an issue raised by a number of Members, including the hon. Members for North Cornwall (Ben Maguire) and for Chester South and Eddisbury (Aphra Brandreth), about mental health among the farming community. The Government are committed to supporting farmers and agricultural workers in accessing the support they need to protect their mental health. DEFRA already works with a range of farming charities including the Royal Agricultural Benevolent Institution and Yellow Wellies, which was mentioned by the Liberal Democrat spokesperson. Those organisations have highlighted the mental health challenges for farming communities more generally.
To conclude, as we have heard, the reforms to inheritance tax generate strong views, and I understand that. I recognise that a small number of estates will have to pay more tax, but the reform of the reliefs is necessary given the fiscal challenge that confronts us and the fact that the bulk of the cost of the reliefs had become skewed towards the wealthiest estates. We must put our public finances back on a stable footing and repair our broken public services. We are doing so in a way that involves tough decisions but is as fair as possible and preserves significant relief from inheritance tax for small farms and businesses.
Julia Buckley
On a point of order, Dr Murrison. The manner in which the shadow Minister described the view that a farmer was better off if he committed suicide before April 2026 was highly irresponsible. This is a public debate on a very emotive subject. It is televised and it is being shared across social media in real time. This is not the moment to encourage anyone to consider suicide. Farmers’ anxiety and concerns about mental health are running high, and this is the moment to engage constructively with the Treasury, and with farmers and the NFU, who have been in dialogue, to seek the transition to tapered support that I referred to in my intervention, to avoid the very scenario that the shadow Minister repeated.
Every Member here cares for our farmers; it is the reason that has brought us all from different parties together to discuss this matter in a respectful manner. In the interests—[Interruption.] Dr Murrison, may I finish? In the interests of mature and responsible debate, will the shadow Minister kindly correct the record to show that he does not condone suicide but encourages constructive dialogue?