Oral Answers to Questions
James Murray Excerpts(3 days, 2 hours ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (James Murray)
Thank you very much, Mr Speaker.
Through the spending review and the 10-year infrastructure strategy, the Government are funding at least £725 billion of infrastructure over the next decade. That includes investment in critical assets, such as £24 billion over the next four years to maintain and improve motorways and local roads and £7.9 billion over 10 years to maintain existing flood defences and invest in new ones. We have also committed to long-term maintenance budgets for public service infrastructure, with £10 billion of funding per year by 2034-35 to maintain and repair our hospitals, prisons, courts, schools and colleges so that providers can deliver cost savings by planning ahead.
Claire Young
The weight limit imposed on the M48 Severn bridge due to the deterioration of its supporting cables is having a big impact on local businesses and farmers who work on both sides of the Severn. National Highways estimates that it would cost up to £600 million to repair the bridge, with restrictions only postponing the inevitable. Will the Chancellor meet me to discuss the impacts and commit to providing the funding to get the bridge repaired and reopened for everyone as soon as possible?
James Murray
As was set out in the 10-year infrastructure strategy, £24 billion of capital funding between 2026-27 and 2029-30 has been allocated to National Highways, which is the organisation responsible for maintaining the M48 Severn bridge. The funding includes £1 billion to enhance local road networks and create a new structures fund, which will be used to repair a range of key local structures, such as bridges, flyovers and tunnels.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
Constituents in Marylebone want to see improvements to the railway engines that go into Marylebone station. Does the Treasury agree that more work can be done to ensure that the overall investment in those trains is supported by the benefits that accrue across the whole line, all the way down to Aylesbury, as investment in those trains will make a big difference to growth along the whole track?
James Murray
My hon. Friend is absolutely right to highlight the critical importance of investment in our railway infrastructure. We know that under the previous Government, we had chronic under-investment in the infrastructure across our country, and the railways bore the brunt of much of that neglect. We are determined to turn that around to ensure that we are investing in railway infrastructure to improve the quality of life for people and drive economic growth right across this country.
Mr Connor Rand (Altrincham and Sale West) (Lab)
Damian Hinds (East Hampshire) (Con)
The Chief Secretary to the Treasury (James Murray)
In my former role as the Minister with responsibility for the UK tax system, and on the Chancellor’s behalf, I have met farming representatives and farmers. Those discussions have included the National Farmers Union, the Tenant Farmers Association, the Country Land and Business Association, the Central Association of Agricultural Valuers, the Ulster Farmers Union, NFU Cymru, NFU Scotland and the Farmers Union of Wales. After listening, however, the Government continue to believe that the approach we have set out is the right one.
David Chadwick
Last weekend I attended the Sennybridge show, where I met young farmers from Brecknockshire who were recruiting new members and fundraising for good causes. There is one question to which they would like to hear an answer from the Chancellor: why are the Government targeting family farms for tax rises rather than going after the big banks, which are closing branches right across my constituency? Why should young farmers have to pay for the mess left behind by the Conservatives?
James Murray
The hon. Gentleman talks about good causes. I assume he would agree that the NHS is a good cause, that public services are a good cause, and that a stable economy that encourages investment in our country is a good cause to pursue. As hon. Members have said many times already, the Opposition parties, including the hon. Gentleman’s, are very happy to reap the rewards of spending and investment, but are totally incapable of taking any of the difficult decisions to raise the revenue necessary to support them.
Damian Hinds
Given the Prime Minister’s clear commitment to growth that benefits every community in every corner of the UK, his Ministers will no doubt be disturbed at polling showing that four fifths of farmers have postponed or delayed investment since the Budget. Is it not time for a rethink of this policy—if not on grounds of fairness, then on grounds of investment, productivity and economic growth?
James Murray
I have been involved in many debates in this House that the right hon. Gentleman has been a part of as well, and we have set out how the decisions we have taken mean the system coming in from April next year will maintain generous tax reliefs within the agricultural property relief and business property relief system, while also raising revenue in a fair way to support the public finances. That money for the public finances, as I and my right hon. and hon. Friends have said many times today, is crucial to have economic stability and to get our public services back on their feet.
John Cooper
The Chancellor elicited much public sympathy with her recent tearful appearance on these Benches, but over the summer I have had Dumfries and Galloway farmers in tears at the loss of the next generation of farming. A new Centre for the Analysis of Taxation report says that HMRC’s own figures indicate that these changes to taxes are unfair and unbalanced. Will the Minister please think again?
James Murray
The hon. Gentleman is wrong. The CenTax report he refers to is independent analysis demonstrating that, in its opinion, the reforms improve on the current position and are expected largely to meet the Government’s objective. In fact, the report validates the Government’s position.
Daisy Cooper (St Albans) (LD)
We Liberal Democrats oppose the family farm tax, but in the spirit of constructive opposition, last November I recommended and requested that Ministers look at the idea of a family farm test, such as the ones used in France and Ireland. Such a test would ensure that they could close the loophole on big equity companies exploiting land, but it would not cover family farms in the process. Since I raised that suggestion last November, have Treasury Ministers asked officials to look at it?
James Murray
As is the normal process in developing any policy, we consider a range of options, but we have decided that this gets the balance right: raising revenue in a fair way while offering generous reliefs within the agricultural property relief and business property relief system. Let me just say that, when I heard the hon. Lady stand up and begin a sentence with, “We Liberal Democrats oppose”, I was hardly surprised.
Rebecca Paul (Reigate) (Con)
Liz Twist (Blaydon and Consett) (Lab)
The Chief Secretary to the Treasury (James Murray)
In July, the Chancellor announced the better futures fund—the largest social outcomes partnership fund in the world—to break down barriers to opportunity for up to 200,000 vulnerable children and young people. The fund will boost pupil achievement, and could fund programmes to reduce reoffending or provide specialist workers for children struggling with exclusion, mental health or crime. The Department for Culture, Media and Sport is responsible for the design and implementation of the fund, and it is engaging extensively with other Government Departments, the impact economy, civil society sectors and local government partners over the coming months.
Patrick Hurley
The better futures fund is a big step forward in working with the impact economy; as the chair of the social, co-operative and community economy all-party parliamentary group for the social enterprise sector, I am really pleased to see how it can unlock extra resources from social investors, private businesses and philanthropy to tackle the country’s urgent problems. Will the Chief Secretary ensure that the principles behind the fund are matched with the targeted approach advocated by the Independent Commission on Neighbourhoods, to make sure that the money goes where it is best needed?
James Murray
I thank my hon. Friend for his support of what we are seeking to achieve through the better futures fund. He is absolutely right that the fund will be designed to ensure that the money goes where it is most needed and where it will have the biggest impact—principles I think we can all agree on. As I mentioned earlier, DCMS will be working extensively with other Departments, local partners and others to design the scheme and as it gets established.
Liz Twist
Our North East Mayor, Kim McGuinness, is taking child poverty seriously, with the recent announcement of £28.6 million for the north-east child poverty action plan, including funding for a local pilot to expand specialist youth provision and support to open up pathways to future employment opportunities. How will the Chancellor work with Mayor McGuinness from the earliest stages of development of the better futures fund to ensure that it meets the needs of children and young people in my constituency of Blaydon and Consett and across the north-east?
James Murray
I was pleased to meet Kim McGuinness just last week and to hear about the excellent work she is doing to champion the north-east. On the better futures fund more broadly, we know that the design must truly be a joint endeavour—it must be built up through an open dialogue with a range of different partners who will be involved in the delivery. I reassure my hon. Friend that DCMS’s stakeholder engagement includes mayoral strategic authorities, as they will be part of that process.
Alison Bennett (Mid Sussex) (LD)
The better futures fund rightly targets the needs of vulnerable children, and one such group are those who are subject to adoption or kinship arrangements. Last week the Department for Education announced that it would renew the adoption and special guardianship support fund for one year, but did not say that it would reverse the 40% cuts in per-child funding that were announced in the spring. Does the Minister agree that reversing those cuts is vital for protecting families and keeping children in adoption arrangements, and will he meet adoptive families from Mid Sussex so that he can better understand the benefits to the Treasury that investing in adoptive families will bring?
James Murray
The hon. Member asks about an important matter. As a constituency MP, I have met families who have an interest in the fund and who are in the process of adoption themselves, so I know on a personal level from my constituency work how important it is. What the Department for Education was able to announce last week was important in confirming the extension of the fund, which will offer some certainty to the affected families. I will continue to work with colleagues in the DFE to ensure that we are doing all we can to support those families, who are playing such an important role for their children and for society.
Jim Shannon (Strangford) (DUP)
I thank the Minister for a very positive answer and for that commitment. What steps are being taken and what discussions have taken place to ensure that vulnerable young people in Northern Ireland can benefit fully from the better futures fund, particularly in the areas most affected by educational disadvantage?
James Murray
We want to ensure that the better futures fund is targeted where it is most needed and that the investment is spent in a way that really improves life chances, in particular for young people and children who face some of the biggest challenges ahead. I note what the hon. Gentleman says about the area he represents and the part of the UK he comes from; it is something we will consider as we develop the details of the fund.
Bobby Dean (Carshalton and Wallington) (LD)
Lauren Edwards (Rochester and Strood) (Lab)
The Chief Secretary to the Treasury (James Murray)
The Government are investing £100 million to improve hospice facilities and a further £26 million of revenue funding to support children and young people’s hospices this year. That is the biggest investment in hospices in a generation. Details about the funding arrangements for 2026-27 will be set out by the Department of Health and Social Care in due course.
Helen Morgan (North Shropshire) (LD)
James Murray
As set out at the last Budget, we will introduce permanently lower tax rates for retail, hospitality and leisure businesses with rateable values below £500,000. The relief that we inherited from the previous Government was due to end entirely in April of this year. We extended it for one year to give us time to legislate for permanently lower tax cuts for pubs across this country.
Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)
I have been campaigning for a long time on the reinstatement of tax-free shopping for foreign visitors, particularly those from Europe. Recent evidence from business suggests that we are losing £6 billion of income from this potential change, and £500 million in extra VAT generated from those tourists. Will the Chancellor undertake to look at this matter again? The potential exists for those high-spending tourists to benefit our hard-pressed hospitality industry, and that could be a quick win-win for this country.
James Murray
This matter was looked at by the previous Government several times, and I understand that there was pressure for their Ministers to look at it again. They did so, and they came to the same conclusion, which was not to proceed with reintroducing it.
Lillian Jones (Kilmarnock and Loudoun) (Lab)
The Bellfield interchange is situated on the A77. Its location has significant strategic importance in the south-west trunk road network, connecting to the A71, the A75 and the A76, making it critical for transport and economic connectivity across the Ayrshire region and beyond. East Ayrshire council had previously submitted a bid to the levelling-up fund under the previous Tory Government to upgrade the interchange, but it was rejected. Given the Chancellor’s recent announcement of £66 million of UK Government investment in Scottish transport infrastructure, will my hon. Friend join me in calling on the Scottish Government to invest in and agree to vital infrastructure projects such as upgrading the Belfield interchange, to support the Ayrshire growth deal, to unlock growth, and to deliver jobs and prosperity across the region?
James Murray
I agree with my hon. Friend that it is critical that the Scottish Government use the funding they have received to invest in vital infrastructure projects that support growth and put more money in people’s pockets.
Several hon. Members rose—
Draft Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025
Draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025
James Murray Excerpts(4 days, 2 hours ago)
General CommitteesRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (James Murray)
I beg to move,
That the Committee has considered the draft Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025.
The Chair
With this it will be convenient to consider the draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025.
James Murray
It is a pleasure to serve under your chairmanship, Mr Stringer.
These two technical statutory instruments make practical changes that allow the Government to complete reforms to banking and wholesale markets regulation. Collectively, they ensure that our legislation for financial services remains effective and bring those areas of regulation in line with the model set by the Financial Services and Markets Act 2000. They do not introduce new burdens for firms and the changes have been widely supported by industry.
I will first address the Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025. Hon. Members will be aware that banks must hold capital buffers over and above minimum requirements to ensure that they can absorb losses yet keep lending, even in times of stress. This technical statutory instrument merely updates cross-references now that the buffer regulations have been restated under powers in the Financial Services and Markets Act 2023.
The process of bringing the buffers regulations in line with the FSMA model does three things. First, it revokes the 2014 capital buffers regulations, replacing necessary provisions with rules designed and maintained by the Prudential Regulation Authority and restating only limited elements that must stay in legislation, with minor operational tweaks. Secondly, it gives the PRA additional flexibility in setting the Basel-derived capital conservation buffer and the global systemically important institutions, or G-SII, buffer. Those buffers will now be set through PRA rule making rather than legislation, keeping to international standards while allowing flexibility. Thirdly, it keeps in statute the frameworks for the Financial Policy Committee’s countercyclical and other systemically important institutions, or O-SII, buffers, which will ensure that the FPC has a clear statutory basis on which to deploy these tools. It also tweaks the framework to improve its overall effectiveness. For example, the FPC may now adjust the countercyclical buffer off-cycle in an emergency.
I will now turn to the Markets in Financial Instruments (Miscellaneous Amendments) Regulations 2025. The markets in financial instruments directive, also known as MiFID, is an EU-inherited framework that governs the regulation of financial markets and the trading that happens on them. One part of the framework is the MiFID organisational regulation, which specifies how investment firms must organise themselves and operate their business.
At Mansion House 2024, the Chancellor committed to revoke the firm-facing regulatory requirements in the MiFID organisational regulation for the financial services regulators to replace in their rules. By delegating responsibility for setting the regulatory requirements to the Financial Conduct Authority and the Prudential Regulation Authority, the regulators will be able to use their day-to-day experience of supervising financial services firms to ensure the rules are tailored to the UK and proportionate for UK firms.
The MiFID organisational regulation also includes key definitions that investment firms rely on to interpret the regulatory perimeter. As such, it is essential to maintain those definitions in legislation. That is what the draft regulations do: they ensure that key definitions from the MiFID organisational regulation are maintained in legislation. That ensures that there will be no gaps in regulation when the MiFID organisational regulation is revoked and the regulators replace firm-facing provisions in their rules.
To conclude, the statutory instruments are a necessary step to complete reforms to our banking and wholesale markets regulation and to ensure that our regulatory framework remains coherent, effective and tailored to the needs of the UK’s financial sector. I welcome any questions and commend the regulations to the Committee.
Mark Garnier (Wyre Forest) (Con)
It is a great pleasure to speak in this incredibly dry debate about incredibly technical aspects of regulation. I am only disappointed not to see the new Economic Secretary to the Treasury make her debut today, although it is always nice to see the Chief Secretary.
Mark Garnier
Quite right. The hon. Gentleman’s leader is with the parliamentary Labour party right now, I think, which will be very exciting.
The regulations are technical, dry but welcome changes to the detailed firm-facing regulations and definitions in the MiFID organisational regulations and capital buffers regime. They follow the comprehensive changes to regulation and tax that the last Government introduced through the Edinburgh reforms, while helping to implement the announcements the Chancellor set out in her 2024 Mansion House speech.
We on the Conservative Benches will always support reforms that aim to make the UK financial market more competitive and growth-oriented. Our financial services are our biggest export and it is vital that we do everything we can to ensure we keep them competitive with their counterparts in Europe and the rest of the world, while at the same time ensuring the UK is a principal destination for international capital. Let me be clear that we support the considered approach being presented, which will allow us to embrace the regulatory autonomy that Brexit provides while keeping us relatively aligned to EU frameworks such as MiFID. That is important because although we need to innovate to maintain our competitive advantage, we must equally avoid trying to reinvent the wheel on financial services regulation.
I push the Minister to look at the wider regulatory burden that MiFID II has placed on UK financial firms. Many in the sector think the reporting obligations, investor protection rules and governance standards have imposed significant compliance costs and operational complexity. Although the intention is noble, we can over-regulate and we must remember that risk will always be something that we cannot remove completely. That was highlighted in a submission by UK Finance to a recent House of Lords Committee inquiry that showed that the rules have constrained the City’s ability to innovate and grow capital markets.
Although we welcome the regulations, the Government now have the freedom to go further and simplify the onerous rules MiFID II introduced. Doing so would unlock growth in our financial services sector and help us to regain ground lost to competing hubs such as New York and to emerging financial centres in the EU. Nevertheless, we have to accept that the EU is our largest trading partner, so it is right that the changes do not significantly deviate from what was in place before. As I said, the UK deviating to a new regulatory regime would not necessarily help our cause.
We also welcome the fact that the changes will help to make the UK more responsive to emerging trends and risks. That is crucial as we seek to be competitive in an ever more volatile world and it would be remiss of me not to mention that many stakeholders feel the regulatory burden placed on them by the FCA and PRA is already too high and, in some instances, unnecessary. Although the changes should not increase that burden significantly, I hope the Minister and Treasury officials will be mindful of that when making changes in the future.
All together, we broadly welcome the technical changes that the regulations introduce as they will help to streamline capital market regulation and ensure legal coherence. I was going to ask some questions, but I think in the interests of time we can probably pass on that—we do not want to keep anybody waiting. I will leave it at that.
James Murray
I thank the shadow Minister for his speech, for his broad support for what we are seeking to achieve and for the brevity of his contribution this evening. I welcome his support and note the points that he raised. He asked what the Government are prioritising in considering which parts of MiFID to reform. The Leeds reforms announced that the Government are committed to continuing to review and reform the MiFID framework in partnership with the FCA and I can reassure him that, obviously, the Government will make changes where there are clear opportunities to remove burdensome requirements and cut costs for investment firms.
I think we all agree that the regulations support the UK’s transition to a modern, proportionate regulatory regime that upholds high standards while supporting the competitiveness of our financial services sector, which the shadow Minister spoke about. I thank him and other hon. Members for attending the Committee tonight.
Question put and agreed to.
Draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025
Resolved,
That the Committee has considered the draft Financial Services and Markets Act 2023 (Capital Buffers and Macro-prudential Measures) (Consequential Amendments) Regulations 2025. —(James Murray.)
Property Taxes
James Murray Excerpts(1 week, 2 days ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Chief Secretary to the Treasury (James Murray)
I thank the right hon. Member for Central Devon (Sir Mel Stride) for opening the debate. I can tell that he spent his summer polishing some of his rhetorical flourishes, which he has shared with us today, but I suggest that he could have spent his time rather better.
Thank you for your words of congratulation, Mr Speaker. It is a real honour to be here as Chief Secretary to the Treasury. May I put on record my tribute to my predecessor, now the Chief Secretary to the Prime Minister, my right hon. Friend the Member for Bristol North West (Darren Jones), for all his fantastic work, notably delivering the spending review? I welcome the Exchequer Secretary to the Treasury, my hon. Friend the Member for Chipping Barnet (Dan Tomlinson), to his new role. I thoroughly enjoyed the role myself, and I am sure that he will be excellent in it.
Conservative Members will appreciate that today’s motion, as tabled, simply cannot form the basis of a specific debate on individual tax measures. Members from across the House will know that the Government do not respond to speculation in advance of a Budget, which the Chancellor has today announced will take place on 26 November. This has long been the case: the shadow Chancellor knows it well and he knows that it would be irresponsible to engage in that speculation. Whatever political rhetoric he and his colleagues will use in today’s debate, and no matter how many variants of the same question they ask, I know that he will understand that I cannot engage with speculation about individual tax measures ahead of the Budget.
Jerome Mayhew (Broadland and Fakenham) (Con)
The hon. Gentleman says that he cannot speculate on individual tax measures, but will he deny that the No. 11 machine has been leaking these stories to the national press over the summer?
James Murray
I am not going to engage in speculation about tax measures or any of the mechanics around them. The hon. Member and his hon. Friends will simply have to wait until 26 November to hear the specifics of the Budget. At that point, I am sure that he and his colleagues will have plenty to say.
Sir Oliver Dowden
I genuinely congratulate the hon. Gentleman on his appointment as Chief Secretary to the Treasury. I have always found him to be an honest and straightforward speaker in the House and he deserves his position. On the point about speculation, can he confirm reports that the Government are looking again at welfare? Surely he will agree with me that, in any process of fiscal consolidation, one must look to tax rises and to spending cuts. There has been a lot of reporting about there being further measures on welfare, so will there be further measures on welfare under consideration—yes or no?
James Murray
I thank the right hon. Member for his kind words. As he will know, welfare measures are already going through Parliament and being investigated by my right hon. Friend the Minister for Social Security and Disability through the review that he is undertaking. This Government are determined to ensure that the safety net is there for the people who need it, and that the people who can work have the support they need to get and maintain a job.
Freddie van Mierlo (Henley and Thame) (LD)
What is not speculation is that the largest rise in property taxes happened under the Conservatives, when Liz Truss crashed the economy and increased interest rates for everyone in my constituency. Will the Minister speak to the fact that house prices are different in different parts of the country, and that must be reflected in Treasury thinking about tax and the Budget this year?
James Murray
The hon. Gentleman is right to remind everyone of the record under the short-lived Prime Minister, Liz Truss. I notice that Conservative Members do not refer to that themselves when evaluating the economic situation, but the British people will not forget it. On his wider point about housing across the country, we want to ensure that we are building affordable homes in every part of the country. One of this Government’s priorities has been to reform the planning system, to enable the building of 1.5 million homes and ensure that every community has those homes, so people have homes that they can afford to live in, in the area where they grew up, where they want to live or go to work. That is a central mission of this Government.
Harriet Cross
The fact that the Government hope to build all those new homes shows that they recognise the importance and value of a home to a family. The Minister says that he will not talk about specific tax measures, but does he recognise the principle that we should not tax people’s homes if we are a country that values home ownership?
James Murray
I gently remind the hon. Member that council tax—a tax on property—exists in this country, so the principle of applying some taxes to property is well established in the UK, and has been for some time. She is trying to tempt me to engage in more speculation, but as I said to the shadow Chancellor, I am not going to engage in speculation about what may or may not be in the Budget.
Chris Vince (Harlow) (Lab/Co-op)
I thank the Minister for giving way—he is always very generous with his time—and congratulate him on his well-deserved promotion. The Conservatives are not fans of tax, but sadly they are also not fans of supporting public services. Under their Government, thousands of His Majesty’s Revenue and Customs compliance officers, including my mum, were made redundant and we were not able to collect the right amount of tax that people owed. Is that partly why this Government inherited such a large financial black hole?
Madam Deputy Speaker (Ms Nusrat Ghani)
Order. Before the Minister responds, I will say that we have quite a few colleagues hoping to contribute, so interventions should be short. The Minister should be aware of that and consider how much longer he wishes to contribute.
James Murray
Thank you, Madam Deputy Speaker—the hint is taken.
I thank my hon. Friend the Member for Harlow (Chris Vince) for his intervention, and I thank his mother for her service to HMRC in the past. People at HMRC do an absolutely critical job in collecting the tax that is important in funding our public services and ensuring that our economy functions effectively. One of our priorities as a Government has been to close the tax gap that existed under the previous Government. At the Budget last year and in the spring statement earlier this year, we set out plans to raise an additional £7.5 billion in tax revenue as a result of hiring people to do those really important jobs, as well as investing in new technology and modernising the service to ensure that people pay the tax they owe.
James Murray
I am going to make some progress, because a few moments ago I said I would do so. I have been gently reminded by Madam Deputy Speaker that I really must live up to my promise on that front.
The right hon. Member for Central Devon asked me questions in his opening remarks—indeed, his colleagues have their sheets from the Whips, and they have been dutifully following up in their comments—but they are on matters that we cannot talk about today. There are of course other important facts that the right hon. Gentleman does not want to talk about, but the British people have not forgotten them. There is the £22 billion black hole in our public finances, which the previous Government hid from the light. There is the disastrous mini-Budget, which caused damage to households across the country and to our reputation around the world. We had stalled housing, unfinished infrastructure and public services brought to their knees by under-investment and disinterest. The Conservatives do not want to talk about those things because that is the legacy of the last Government. We found out just today that the right hon. Gentleman does not even want to talk about things happening in Conservative councils, as my hon. Friend the Member for Basingstoke (Luke Murphy) raised so importantly in his contribution earlier.
Now that the Conservatives are in opposition, the right hon. Gentleman’s party and Reform Members are talking Britain down. They want to claim that Britain is broken, but I believe that Britain is unbreakable. Our country is full of potential. It is home to hard-working people, brilliant businesses, world-leading universities and research institutions, cultural giants and the promise that if people work hard and contribute to the country, it will be a place where they can succeed. Yet undeniably, after 14 years of Tory mismanagement, far too many working people feel that the economy is stuck.
James Murray
I have been asked by Madam Deputy Speaker to make some progress, so I will return to the hon. Gentleman a little later.
I hear from my constituents, as I am sure many other Members in the Chamber hear from theirs. They tell us that no matter how much effort they put in at work, their careful management of household finances and their diligent efforts to save for a brighter future, they do not yet feel that they are getting enough in return, and it has become harder to get ahead. At the same time, our roads and railways seem slow and less reliable and our classrooms seem fuller, while the NHS has a massive backlog. The root cause of all that is the chronic under-investment by the previous Government. That under-investment over many years has slowed our productivity growth to a rate not seen since the Napoleonic wars.
Jim Dickson (Dartford) (Lab)
Does the Minister agree that it is thanks to the tight fiscal rules that this Government have introduced and the changes in the Budget that since the election my residents in Dartford have seen an investment in the lower Thames crossing? They have wanted that for 15 years, and it was not delivered under the last Government. They have also seen a £25 million hospital rebuilding project at Darent Valley hospital and a £1 billion structures fund from the Department for Transport, which will repair the ruined Galley Hill Road in my constituency. Is it not thanks to the Government’s rules and Budget changes that we are seeing those changes?
James Murray
My hon. Friend is absolutely right. It is only thanks to the fiscal rules that the Chancellor introduced at last year’s Budget and our decisions—the right decisions—to ensure that those fiscal rules are non-negotiable and that we keep to them at every stage that we have been able to boost investment by £120 billion over the course of this Parliament in many projects, including those that he mentioned and those in constituencies right across the country. That is the right thing for our country.
We were just talking about chronic under-investment. We are tackling that through ensuring that the Government invest across the country and by encouraging private-sector investments to get businesses across Britain growing.
Alison Taylor (Paisley and Renfrewshire North) (Lab)
Will the Minister give way?
Alison Taylor
Does the Minister agree that taxation is intrinsically linked to economic growth and that there are already green shoots of recovery in the economy, with three trade deals and five interest rate cuts?
James Murray
My hon. Friend is absolutely right; economic growth is of course critical to our plans. She points to the trade deals that we secured. She and other hon. Members will know that the UK was the fastest-growing G7 economy in the first half of this year. There is much more for us to do, but we are showing that because of the right decisions that we have taken we are starting to move in the right direction.
Tim Farron
I do not want the Minister to speculate, but I want him to consider something. We talked about people not paying taxes. A significant minority of owners of second homes in my constituency let their property out for just a few days a year; as a result, they can claim to be a small business and pay no council tax or business rates. People on the minimum wage in my constituency are subsidising those people who pay no council tax at all. Will he change that situation to protect our communities?
James Murray
I congratulate the hon. Gentleman on an inventive way of encouraging me to speculate on tax measures. I am aware of the issue that he points to, and I thank him for raising it in this context, but I am not able to make any decisions on taxation at the Dispatch Box today.
Let me go back briefly to the broader context. It is absolutely crystal clear from the opening remarks of the right hon. Member for Central Devon, and from what all his colleagues have said so far, that Conservative Members are still in total denial about any responsibility they have for the situation that the country finds itself in. They act as if being behind the wheel for 14 years is irrelevant to where we find ourselves now. It may be that they think that if they do not talk about it, the British people may forget the last Government’s responsibility for getting us into the current situation, but the British people know that the Conservatives did this to our country. That is why the British people put their faith in us at the last election.
While there is clearly more to do to bring down inflation and the cost of borrowing, it is clear that we have turned a corner by taking the right decisions for our country. We have taken the decisions to address the black hole in the public finances, fix our foundations and clear up the mess that we inherited from the previous Government. As a consequence, as I mentioned a moment ago, in the first half of this year we were the fastest-growing economy in the G7; we outpaced France, Germany, Japan and the United States.
Since taking office, this Government have welcomed around £100 billion in investment into the UK, with 384,000 jobs being created over the same period. We have cut red tape and changed planning regulations to deliver 1.5 million new homes over the course of this Parliament. We already have nearly 100,000 new homes on large developments that were previously stuck in the planning system or simply not progressing as fast as they should be; they are now being given the support that they need to make that progress quickly. In just over a year, the Bank of England has cut interest rates five times, which means that someone on a tracker mortgage of just over £200,000 will be better off by around £100 a month. Crucially, real wages have risen more in the time since the last election than they did in the first 10 years of the previous Government.
The choice at the next Budget is clear. Over 14 years, the last Government made wrong choices time and again. They, their many Prime Ministers and many Chancellors all embraced the cycle of austerity, debt and decline, and we will never repeat that. We will continue to invest in Britain’s renewal, using every power at our disposal to drive forward an economy that works for working people. As I said, the Government do not respond to speculation, especially ahead of a Budget, and in any case we are not writing a Budget this far out.
The Budget that the Chancellor delivers in November will be carefully considered and designed to get the balance right between making working people better off and raising enough money to fund our public services and getting the country moving once again through investment and growth. Of course, it will also undergo proper scrutiny by the OBR. I was going briefly to address the taxes mentioned in the motion, but I suspect that I should skip over that part of my speech. [Interruption.] I am getting a gentle indication from you, Madam Deputy Speaker, that I have come to the right conclusion.
If we are to get this country moving again, investment from both businesses and Government is essential. We must therefore strike the right balance in our tax system, so that we can put more money in the pockets of working people while supporting the private sector to invest and grow and funding our public services. Members on both sides of the House will have their own views on what the right balance is, and I look forward to hearing those views today. I thank all hon. and right hon. Members in advance for their contributions.
Several hon. Members rose—
HMRC Transformation Roadmap
James Murray Excerpts(1 month, 3 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (James Murray)
At spring statement 2025, the Government committed to publishing a transformation roadmap setting out the future direction of the tax and customs system. Today, the Government deliver on that commitment.
The HMRC transformation roadmap outlines the Government’s vision for a more efficient, modernised, and automated tax and customs system. This will enable HMRC to collect more of the tax that is due, while enabling taxpayers and businesses to focus more on what matters to them—contributing to the Government’s mission in their plan for change to boost economic growth.
The plans laid out in the roadmap will enable everyday tasks, processes and compliance to happen with less effort. This will happen through simplified policies and procedures, the application of new technologies like artificial intelligence (AI) and the introduction of more digital self-serve options for taxpayers that give them greater control and offer quicker solutions to their queries.
This transformation will also enable HMRC staff to spend more time helping taxpayers who are in vulnerable circumstances, digitally excluded, or have complex tax affairs. It will free up more of their time to support businesses who are seeking greater certainty over their plans for investment and growth.
I have set the Department three clear priorities to drive these changes forward: improving day-today performance and the customer experience; closing the tax gap; and reforming and modernising the tax and customs system. As part of all three priorities, the Government will continue to simplify tax administration to make it easier for taxpayers and their representatives, all while reaffirming HMRC’s charter standards.
HMRC’s transformation roadmap details the actions that HMRC will take to achieve these ministerial priorities and some of the changes that taxpayers and businesses can expect to see. It is informed by insight and feedback from external stakeholders, who will continue to play a key role in supporting and challenging HMRC as it delivers this ambitious package.
Improving day-to-day performance
HMRC’s day-to-day performance depends on the quality of services provided to taxpayers and their agents. These days, most taxpayers want to interact with HMRC digitally, especially for simple tasks. This means HMRC must improve digital services to give taxpayers greater control over their tax affairs and minimise the need for taxpayers to call or write to them.
As such, the roadmap outlines HMRC’s plan for a minimum of 90% of customer interactions to be digital by 2030. HMRC will become digital first, while continuing to support those who need extra help. Taxpayers who are in vulnerable circumstances, digitally excluded, or have complex tax affairs will continue to be able to access support through existing channels, including phonelines.
Closing the tax gap
The Government have funded a significant increase in HMRC’s compliance and debt workforce, including investment for 5,500 new compliance officers and 2,400 debt management officers. Its workforce will have access to improved tools and receive training to identify those at risk of non-compliance and to recover more of the money owed.
For the most stubborn compliance risks, closing the tax gap necessitates changes to process and policy, including digitalisation, use of automation and integration of AI. HMRC will also tackle tax evasion and other offences, increasing the number of annual charging decisions to 600 a year by 2030, with a focus on tackling frauds that are most harmful to taxpayers and the tax and customs system.
Intermediaries such as tax advisers and software providers play a crucial role in administering the tax and customs system, enabling compliance and trust. Taxpayers should have confidence that any intermediary they choose will help them get their tax right, and HMRC will take steps to raise standards in the intermediary market to stop the minority who cause disproportionate harm to the tax system.
Reform and modernisation
Reform and modernisation of HMRC are fundamental to improving day-to-day performance and closing the tax gap. They will ensure HMRC is an agile department, able to adapt to the changing nature of the wider tax and customs system.
To achieve this, HMRC will modernise its IT infra-structure, making use of innovative technology and AI, robust data capabilities—including new legislation to support cross-Government data sharing—and a highly skilled workforce.
HMRC will also modernise the way it delivers change, empowering people throughout the organisation to explore innovative solutions, embedding “test and learn” approaches, and adopting best practice from the private sector.
HMRC is committed to reporting progress against the deliverables in the roadmap, including through its standard reporting. The roadmap includes a list of metrics to demonstrate progress against each of the three priorities. The roadmap will be regularly reviewed and updated as HMRC, in collaboration with external stakeholders, delivers the future of tax and customs administration.
The HMRC transformation roadmap can be found at: https://www.gov.uk/government/publications/hmrc-transformation-roadmap
[HCWS868]
Draft Finance Bill 2025-26: Tax Documents
James Murray Excerpts(1 month, 3 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (James Murray)
The Government are committed to engaging with interested groups when developing and legislating for tax policy, and we are today publishing draft legislation ahead of potential inclusion in the next Finance Bill.
This will allow for technical consultation on the application of tax policy in legislation and provides taxpayers with greater predictability over future tax policy changes. Alongside this, the Government are making announcements in a small number of technical areas of tax policy to ensure the effective maintenance of the tax system.
The final contents of Finance Bill 2025-26 will be decided by the Chancellor at the next Budget. The Government are also publishing a consultation and a number of tax-related summaries of responses to consultations which have already been conducted.
Publication of draft legislation
Closing the tax gap
The Government are determined to close the tax gap and make sure everyone pays the tax they owe. This is fair, essential for a well-functioning economy, and will help to keep taxes on working people as low as possible.
At autumn Budget 2024 and spring statement 2025, the Government announced the biggest ever package of measures to close the tax gap, including those set out below.
Tackling tax non-compliance in the umbrella company market: the Government are publishing draft income tax legislation to make recruitment agencies accountable for pay-as-you-earn on payments to workers supplied via umbrella companies. Where there is no agency, this responsibility falls to the end client. Regulations giving effect to this measure for national insurance contributions purposes will be laid separately. The legislation creates a joint and several liability, allowing His Majesty’s Revenue and Customs to pursue the agency or end client for payroll taxes that an umbrella company fails to pay on their behalf. This measure will reduce tax non-compliance, raising around £500 million in 2029-30, create a level playing field for compliant businesses, and protect workers from unexpected tax bills.
Enhancing HMRC’s powers, tackling tax advisers facilitating non-compliance: the Government are publishing draft legislation to improve the efficiency and effectiveness of powers that allow HMRC to tackle tax advisers facilitating non-compliance by their clients. This will strengthen HMRC’s powers to collect information from tax advisers, issue penalties where there is evidence of wrongdoing, and publish information about tax advisers where they are subject to sanctions. These measures will help close the tax gap by deterring tax advisers from facilitating non-compliance, and making non-compliant tax advisers responsible for their impact on the tax system.
Modernising and mandating tax adviser registration: the Government are publishing draft legislation which will mandate tax advisers to register with HMRC and meet minimum standards, before being able to interact with HMRC on behalf of clients. The changes will take effect from April 2026.
Closing in on promoters of marketed tax avoidance: the Government are publishing draft legislation for a package of measures to close in on promoters of marketed tax avoidance, whose contrived schemes leave their clients with unexpected tax bills. The package includes new powers for HMRC to focus on those who own or control promoter organisations and strengthening the disclosure of tax avoidance schemes regime.
Charity compliance measures: the Government are publishing draft legislation to change the rules for when donations to charity become tainted and what types of investments are acceptable for charitable tax relief, and changing the rules covering how tax relieved income must be spent for charitable purposes. These measures will support the Government aim of closing the tax gap through strengthening compliance powers to challenge abusive arrangements and poor compliance. They simplify the current tax rules by equalising treatment across all investment types and deal with receipts and expenditure in the hands of the charity. The changes will take effect from April 2026.
The Government will make greater use of data and technology to help individual taxpayers and businesses pay the right tax first time, while making tax digital will help people pay their tax quickly and easily.
Better use of new and improved third-party data to make it easier to pay tax right first time: the Government are publishing draft primary legislation alongside a summary of responses document. This follows the publication at the spring statement of a consultation to make better use of new and improved third-party data to make it easier to get tax right first time.
Making tax digital: the Government are publishing legislation to come into force from April 2026 covering:
Streamlining end of year process for MTD for income tax: draft primary and secondary legislation to streamline the MTD for income tax end of year filing journey. It will require taxpayers using MTD to deliver end of year returns through MTD-compatible software. This delivers a better filing experience for users.
Finalising design of MTD and exempting and deferring certain groups from digital requirements: draft primary and secondary legislation to exempt or defer small groups of taxpayers from MTD for income tax who may face disproportionate barriers to operating MTD or for whom operating MTD for income tax is impracticable. It also makes various minor, technical or policy changes to ensure MTD and penalty reform work as intended.
Lowering the income threshold to £20,000: draft secondary legislation extending MTD for income tax to sole traders and landlords with income over £20,000 from April 2028. This will help ensure more businesses are able to adopt new digital ways of working, supporting their productivity and growth.
Putting the tax system on a fairer and more sustainable footing
At autumn Budget 2024, the Government announced measures to deliver key manifesto commitments, alongside other measures to fix the public finances through a fairer, more sustainable tax system.
The tax treatment of carried interest: the Government are publishing draft legislation to introduce a revised tax regime for carried interest, a form of performance-related reward received by fund managers. This revised tax regime will sit wholly within the income tax framework, with carried interest treated as trading profits and subject to income tax and class 4 national insurance contributions. The changes will take effect from April 2026.
Technical amendments to residence-based tax regime: the Government will bring forward technical fixes to legislation contained in the Finance Act 2025 that replaced the special tax rules relating to domicile. These changes are to ensure that the legislation works as intended. As examples, these technical changes to legislation will include:
Inheritance tax spousal election for non-long term resident spouses: ensuring the election correctly lapses after 10 consecutive years of non-residence have passed;
Section 690: ensuring that the present inclusion of treaty non-residents on a concessionary basis is placed within legislation; and
Temporary repatriation facility: ensuring that the legislation works as intended for offshore income gains and migrating trusts (trusts which were previously settled overseas but are now UK resident).
The Government will set out further details on these amendments in due course.
Inheritance tax, unused pension funds and death benefits: the Government are publishing draft legislation to bring most unused pension funds and death benefits within the value of a person’s estate for inheritance tax purposes from 6 April 2027. Following technical consultation, and in line with the current treatment of pensions already in the scope of IHT, personal representatives, rather than pension scheme administrators, will be liable to report and pay IHT. All death in service benefits payable from a registered pension scheme, including those in scope of IHT under existing rules, will be excluded from the value of an individual’s estate for IHT purposes. This supports the Government objective to build a fairer tax system by removing distortions which have led to pension schemes being increasingly used and marketed as a tax planning vehicle to transfer wealth, rather than for funding retirement. It also removes inconsistencies in the IHT treatment of different types of pensions.
Inheritance tax, agricultural property relief and business property relief: as announced at autumn Budget 2024, the Government are publishing draft legislation to reform these inheritance tax reliefs from 6 April 2026 to make them fairer and more sustainable. In addition to existing nil-rate bands and exemptions, the current 100% rates of relief will continue for the first £1 million of combined agricultural and business property to help protect family businesses and farms. The rate of relief will be 50% thereafter, and in all circumstances for quoted shares designated as “not listed” on the markets of recognised stock exchanges, such as AIM. The changes will take effect from April 2026.
Changes to employee car ownership schemes: the Government are publishing draft legislation which is intended to bring employee car ownership schemes into scope of the benefit in kind rules as company cars. This legislation ensures employees receiving vehicles through these arrangements pay company car tax, ensuring fairness with other taxpayers. The changes will take effect from October 2026.
Maintaining the tax system
The Government are continuing to ensure the tax system operates effectively and delivers on our commitments.
Benefit in kind tax for plug-in hybrid electric vehicles: the Government are announcing that if a new emissions standard for plug-in hybrid electric vehicles is introduced in Great Britain, it will help to mitigate the significant increase in benefit in kind tax that would result from higher carbon dioxide emissions figures.
The Department for Transport will, in due course, consult on introducing the Euro 6e emissions standard for cars and vans in Great Britain from April 2026. The standard already applies in Northern Ireland from January 2025. Where the standard applies, this change will significantly increase the BiK tax due on PHEV company cars, which is linked to CO2 emissions.
The Government recognise that while it is right that higher emitting vehicles pay more tax, company cars continue to play an important role supporting our transition towards zero emission vehicles and the decarbonisation of transport. Subject to the consultation outcome, the Government intend to legislate for an easement that will apply UK-wide between April 2026 and April 2028 to help mitigate the benefit in kind tax impact. In Northern Ireland, the easement will also apply retrospectively to January 2025 in order to ensure consistency across the UK.
Private intermittent securities and capital exchange system: following the announcement on 15 May 2025, the Government are publishing draft legislation to allow employers, with their employees’ permission, to amend existing enterprise management incentive and company share option plan contracts to include a PISCES trading event as an exercisable event, without losing the tax advantages the schemes offer.
Trader provided free legislation, inland border facilities: the Government are publishing draft legislative amendments to existing trader provided free legislation. This will mean that all border locations will be responsible for providing and funding their own customs infrastructure. This measure will affect border locations where this infrastructure is currently provided and funded by the Government at inland border facilities.
Land remediation relief: land remediation relief is a 150% corporation tax relief aimed at incentivising the regeneration of brownfield land and reducing the pressure to develop greenfield sites; the Government are today publishing a consultation that seeks views on the design and impact of land remediation relief as part of the Government support for brownfield development.
Technical fixes
We are also publishing legislation to ensure the effective functioning of tax legislation.
Technical updates to pillar 2 rules: the Government are publishing draft legislation to make technical updates to the UK’s pillar 2 rules in response to stakeholder feedback and to maintain consistency with the latest internationally agreed commentary to the OECD model rules.
Application of overseas restriction for research and development expenditure credit: the Government will legislate to ensure that the overseas restriction operates in Northern Ireland as intended. This legislation will apply to claims made on or after 30 October 2024. The changes will take effect from April 2026.
[HCWS875]
Tax Exemptions: Grenfell Support Scheme and Horizon Convictions Redress Scheme
James Murray Excerpts(1 month, 3 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (James Murray)
The Government will legislate to ensure that payments made under the Grenfell Support (Restorative Justice) programme are exempt from income tax. This legislation will apply retrospectively from 5 June 2024, when payments from the scheme started.
His Majesty’s Revenue and Customs will exercise its collection and management discretion and will not collect income tax that may have been due on any payments made from 5 June 2024 to the date the legislation takes effect.
Exempting these payments from income tax means that tax credits claimants who received a payment up to 5 April 2025 should not have seen a reduction in their tax credits award. While no tax credits awards would have been reduced automatically, claimants who reported this payment to HMRC as part of their income for tax credits purposes can contact HMRC to determine whether their tax credits award was correct. HMRC is exploring options to proactively contact those tax credit customers who have received any payments under the Grenfell Support (Restorative Justice) programme.
The Government will also legislate to exempt compensation payments in the expanded Horizon convictions redress scheme. This was expanded on 3 June 2025 to include postmasters with convictions overturned by a court, postmasters who were prosecuted for alleged offences committed while the Horizon system was in use but did not face criminal convictions, and postmasters who received a caution, or in Scotland received an alternative to prosecution or a purported alternative to prosecution from the Post Office, for an alleged offence involving the Horizon system.
The Government are committed to maintaining the tax treatment of the Horizon convictions redress scheme. Therefore, the Government will legislate to formalise the tax exemption and ensure that no income tax, national insurance contributions, capital gains tax or inheritance tax will be payable for redress received under this scheme.
[HCWS827]
Taxes
James Murray Excerpts(1 month, 4 weeks ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (James Murray)
I listened very carefully to the shadow Minister. He has clearly been taking theatrical lessons from his colleague the shadow Chancellor, the right hon. Member for Central Devon (Sir Mel Stride). Indeed, I have listened to all his colleagues during this debate, and frankly they have quite some cheek. They speak from the Opposition Benches, yet they failed to reflect honestly, even once, on why they are on that side of the House.
The reason why the Conservatives are in opposition is that they not only ran our public services into the ground, but had given up on fiscal responsibility, which is critical for stability, investment and growth. When we won the election last year, it was our task to restore that responsibility and fix the £22 billion black hole in the public finances, which was a legacy of the previous Government’s waste and delay. [Interruption.] I know they hate to be reminded of it, but that is the truth. That is what we inherited. As my right hon. Friend the Chief Secretary to the Treasury said in opening the debate, we acted on that without delay on taking office. At last year’s Budget, the Chancellor acted decisively to stabilise the public finances and lay the foundations for investment in growth after 14 years of Tory decline. Rather than shirking responsibility, we took the necessary decisions to raise taxes and made the necessary choices to ensure that our NHS, schools and other vital public services received the funding they needed to get back on their feet.
I thank all the hon. Members whom the shadow Minister mentioned in his summing-up speech, as well as my hon. Friends the Members for Glasgow East (John Grady), for Kensington and Bayswater (Joe Powell), for Bolton West (Phil Brickell), for Rugby (John Slinger), for Alloa and Grangemouth (Brian Leishman), and for Loughborough (Dr Sandher).
Many hon. Members spoke about the choices that we have had to make as a Government. Let me be clear that while many of the decisions on tax have been difficult—we recognise that they have had consequences—we took every opportunity to make them as fair as possible. That is why, at last year’s Budget, we decided to end non-dom tax status and tax breaks for private school fees. It is also why we increased air passenger duty on private jets, raised stamp duty for those buying second homes, extended the oil and gas levy, and chose to raise capital gains and inheritance tax. It is why His Majesty’s Revenue and Customs implemented the biggest package of measures to close the tax gap that this country has ever seen. Those measures will ensure that everyone, including the wealthiest, pay the tax that they owe.
Those choices have been the right ones to restore the public finances and get public services back on their feet, yet the Conservatives, the Lib Dems and Reform—who surprisingly are not here—all voted against our Finance Act 2025, which started to put our choices into action. They have refused time and again to support the decisions we have taken on tax, while refusing to say what funding for public services they would oppose as a result. The choices I have mentioned and other difficult choices we have made, such as the decision around employers’ national insurance, have been necessary to meet our fiscal rules.
Let me be clear why those fiscal rules are so important, and why, under this Government, they will always be non-negotiable. The fiscal rules introduced by the Chancellor last year are this Government’s assurance to the markets that we will live within our means and pay our Government debt. They are not only crucial to keeping debt payments under control, but enable us to invest in the future of our country. Thanks to the Chancellor’s fiscal rules—the stability rule and the investment rule—we have been able to boost capital investment by £120 billion, compared with the previous Government’s plans. That investment will improve transport infrastructure, deliver more social and affordable housing, bring down bills through energy security, unlock further private sector investment and, most importantly, improve the lives of working people across Britain by making people better off.
Without our plans to balance the books and get debt falling, our £120 billion of extra investment would not be possible, and taxpayers would see ever more of their money being spent on debt interest payments. We have taken the tough but fair and necessary choices to repair our public finances, so that we can rebuild our schools, our hospitals and our frontline services across the country.
As many right hon. and hon. Members have said today, if Conservative Members disagree with our approach, maybe they can tell us whether they would cut spending on schools, hospitals or defence, or perhaps they can tell us which taxes they would raise instead. Rather than do that, the Conservatives and Reform are competing with each other to inherit the mantle of Liz Truss. They both blindly make unfunded promises on tax—promises that we all know would force up interest payments for families across Britain and cause economic chaos, which would hit working people hardest. The British people want security, stability, public services that work again, and more money in their pocket, and only Labour Members and this Labour Government are prepared to take the decisions that are necessary to make that happen.
Question put.
Disability Premium Compensation Scheme: IncomeTax Exemption
James Murray Excerpts(1 month, 4 weeks ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (James Murray)
The Government will legislate to ensure that payments made across the UK under the Department for Work and Pension disability premium compensation scheme are exempt from income tax. This legislation will apply retrospectively from December 2024, when payments from the scheme started.
[HCWS815]
Legislation Day: Finance Bill
James Murray Excerpts(2 months, 1 week ago)
Written StatementsRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (James Murray)
The Government are committed to developing and legislating for tax policy in a way that achieves long-term economic stability and supports economic growth.
The Government are committed to a single major fiscal event each year, through which the Budget is delivered. Following the Budget, relevant tax policy measures will be legislated for in the Finance Bill or another appropriate legislative vehicle.
The Government will publish draft clauses for the next Finance Bill, covering pre-announced policy changes, on 21 July, along with accompanying explanatory notes, tax information and impact notes, responses to consultations and other supporting documents. All publications will be available on the gov.uk website.
[HCWS779]
Oral Answers to Questions
James Murray Excerpts(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Bobby Dean (Carshalton and Wallington) (LD)
The Exchequer Secretary to the Treasury (James Murray)
His Majesty’s Revenue and Customs uses a range of data sources to monitor the wealthy population. International exchanges of information, including the common reporting standard and US Foreign Account Tax Compliance Act data, offer opportunities to develop deeper insight into the international financial affairs of some of the UK’s wealthiest taxpayers.
Bobby Dean
The Minister will no doubt be aware of reports of the so-called exodus of millionaires. Those reports are from “high profile individuals” and city spokespeople, but there are rarely hard numbers behind them. Are Treasury Ministers able to verify the Tax Justice Network’s research that says that just 0.3% of millionaires have exited the UK and that that number has remained low and stable over the past decade, and will they publish their own figures as well?
James Murray
When considering fiscal measures or financial changes, the figures that matter are those provided by the Office for Budget Responsibility. The OBR has certified that the non-dom reforms that the Government have implemented will raise £33.8 billion in total revenue, and that figure accounts for some non-doms who are ineligible for the new regime choosing to leave the UK.
Dr Jeevun Sandher (Loughborough) (Lab)
Public investment makes us all more prosperous, but clearly that public investment, in our roads, rail and energy infrastructure, needs to be paid for. Will the Minister set out how we are funding that public investment by taxing the very richest people in this country?
James Murray
My hon. Friend is absolutely correct that our changes to the non-dom reporting regime are essential to raise billions of pounds to support the public finances and get our public services back on their feet. I contrast that with some of the proposals set out by opposition parties. Indeed, Reform UK’s plans are for a tax cut for foreign billionaires.
Mark Garnier (Wyre Forest) (Con)
In her Budget last year, the Chancellor tucked away about £10 billion over the next couple of years from reform to the non-dom tax regime. It is important to remember that the OBR said in its fiscal outlook that that figure was “highly uncertain”, and a high-level survey by Oxford Economics found that fully two thirds of non-doms are considering leaving the country in the next couple years as a direct result of those policies. That implies not an increase of £10 billion but a decrease of £8 billion. The Chancellor has created a fiscal black hole of £18 billion with just one policy alone. In this week of heroic U-turns from the Government Front Bench, will the Minister confirm whether they will be axing this tax? When will it finally be condemned to the history books?
James Murray
I am not really sure whether there was a policy suggestion in that comment or not. As the shadow Minister will know, the fiscal black hole that we had to address when we won the general election was the £22 billion black hole that the Conservatives left after their mismanagement of the economy. As I said, the Office for Budget Responsibility has confirmed that our reforms to the non-dom regime, with our removal of non-dom tax status, will raise £33.8 billion over the five years of the forecast. It is the OBR’s figures that we will trust in that regard.
Rachael Maskell (York Central) (Lab/Co-op)
Deirdre Costigan (Ealing Southall) (Lab)
The Exchequer Secretary to the Treasury (James Murray)
The spending review announced significant investment into clean energy to strengthen our energy security and our economy. That includes over £8.3 billion for Great British Energy and Great British Energy Nuclear and £14.2 billion for Sizewell C.
Deirdre Costigan
Although my constituents in Ealing Southall are no doubt sweltering in today’s heat, they are worried that come winter, they will again face eye-watering energy bills to heat their homes. The previous Government left us with the leakiest homes in Europe, slashing grants for loft and cavity insulation. Can the Minister set out the work that this Labour Government are doing not just to support the clean energy sector, but to upgrade my constituents’ homes to take that clean, cheap energy and bring down bills in Ealing Southall?
James Murray
My hon. Friend is an excellent advocate for her constituents in Ealing Southall, and I am sure that many of them will benefit from our warm homes plan, which will see £13.2 billion invested across this Parliament. That investment will be allocated to schemes to support the roll-out of heat pumps, alongside energy-efficiency measures and other low-carbon technologies. This will help with environmental goals, but crucially, it will cut bills and tackle fuel poverty.
Robbie Moore (Keighley and Ilkley) (Con)
This week, the 19% tariff on imports of US ethanol falls to zero through the 1.4 billion litre quota negotiated by this Labour Government, which represents the size of the UK’s entire ethanol market. That will have a hugely damaging impact on our rural economy, UK jobs and the NHS, with Government effectively offshoring the benefits of ethanol production and its by-products to the US. What conversations are the Chancellor and her team having with this green energy sector, in which a huge number of jobs are now at stake in Teesside and Hull?
James Murray
Of course, our colleagues in the Department for Business and Trade are having conversations with those businesses and industries that may be affected. I hope the hon. Member welcomes the trade deal that we got with the US—an economic deal that is so important for our prosperity and will see us being the only country to avoid some of the tariffs that are affecting all other countries around the world.
Gareth Davies (Grantham and Bourne) (Con)
It is becoming clear that one year in, the public still do not know what Labour is all about, and the same could be said for its so-called National Wealth Fund. Not only has the National Wealth Fund invested less equity in clean energy than before its costly £7 billion rebrand, but it is also now rightly subject to a Treasury Committee inquiry, at which expert witnesses could not name a single thing it is doing differently. The CEO of the British Business Bank now says the Government did not understand what they were setting up. Can the Minister tell us why the National Wealth Fund has invested less in clean energy than before the costly rebrand and why the Government U-turned on incorporating the British Business Bank?
James Murray
The shadow Minister forgets to mention the fact that we have had £30 billion of investment in green energy since the general election. I am sure he has consulted the spending review documents closely—I know he is a diligent shadow Minister in that regard—and he will have seen the investment that we are putting into Great British Energy, Sizewell C, small modular reactors, fusion, nuclear R&D, the warm homes plan, and carbon capture and storage. All of this is to make sure we improve our energy security and bring down bills for good.
Jim Shannon (Strangford) (DUP)
Sally Jameson (Doncaster Central) (Lab/Co-op)
The Exchequer Secretary to the Treasury (James Murray)
We very much recognise the social and cultural value of horseracing, which is why on-course betting is exempt from duty, and horseracing is the only sport to receive a Government mandated levy. We are consulting on measures to simplify gambling duty and improve compliance. No decision will be made on rates before the Budget, and we are working with the horseracing sector to identify unintended consequences and mitigations.
Sally Jameson
I refer Members to my entry in the Register of Members’ Financial Interests. In Doncaster, we are incredibly proud of our historic racecourse, which is home to the iconic St Leger festival. As someone who has attended the racecourse for a number of events throughout my life, I can say that it is part of our local community and brings thousands of jobs. Will the Minister confirm that he will continue dialogue with the horseracing industry, noting that it brings 85,000 jobs to the country nationally and is the second largest spectator sport in the country, and identifying that this is very different from online casinos and games of chance?
James Murray
It is excellent to hear my hon. Friend speak so passionately about Doncaster racecourse and the wider sector, and I reassure her that we will absolutely continue close dialogue with the horseracing industry on these proposals. I and my officials are working closely with the horseracing sector to identify any unintended consequences and possible mitigations. We intend to continue those conversations with the industry, and we welcome further engagement.
Alex Easton (North Down) (Ind)
How do the Government assess the implementation of a flat rate in terms of improving fairness and simplification for all involved, reducing administrative costs and encouraging compliance?
James Murray
One of the principles behind the reforms that we are looking to make to the gambling duty is to tackle issues of compliance by simplifying the system. The consultation is open at the moment, and I encourage the hon. Gentleman, and anyone else who is interested in contributing towards that, to make their views known.
Nick Smith (Blaenau Gwent and Rhymney) (Lab)
Andrew George (St Ives) (LD)
The Exchequer Secretary to the Treasury (James Murray)
The year before we came to power, the tax gap stood at £47 billion. That is unacceptable, which is why we announced the most ambitious-ever package of tax gap measures in the Budget, and went even further in the spring statement. We are now forecast to raise £7.5 billion from the tax gap in 2029-30, including by recruiting 5,500 more compliance officers, investing in better technology and closing loopholes. We will bring forward further measures to close the tax gap in the autumn Budget.
Joe Powell
As the Minister is no doubt aware, an increasingly common issue on our high streets is phoenixing. That is where a shop unit continues to trade while cycling through multiple limited companies every few months, none of which pays corporation tax, VAT or business rates. Can the Minister encourage officials at His Majesty’s Revenue and Customs to walk along Whitehall, just a few hundred metres from this Chamber, and take a look at whether the series of Harry Potter-themed gift shops across London—which have been accused by “London Centric” of doing exactly that—are playing by the rules? Will they ensure that tax enforcement supports legitimate small businesses on our high streets?
James Murray
My hon. Friend is a powerful campaigner and advocate for tackling those who do not play by the rules. While I am unable to comment on individual taxpayer affairs because of my position, I very much recognise the issue. We are determined to tackle this problem, and HMRC is working across Government on enforcement action, including work with Companies House and the Insolvency Service to tackle phoenixism.
Andrew George
Does the Minister agree that instead of handing £500 million of taxpayers’ money to those who are entitled to small business rate relief, which is what has happened in Cornwall over the past 10 years, it would be far better to invest that money in desperately needed first homes for local families in desperate housing need, rather than give it to second home owners? Would he be prepared to meet me, so that we can establish a better method of achieving housing justice through tax policy?
James Murray
I am happy to hear from the hon. Gentleman about how he will support our home-building plans in his constituency and across the country. We know that the most important thing to tackle the housing crisis is to support the reforms that this Government are making to the planning system to make sure we can build 1.5 million new homes and invest £39 billion in our 10-year affordable homes programme—the biggest in a generation.
Brian Leishman (Alloa and Grangemouth) (Lab)
The Exchequer Secretary to the Treasury (James Murray)
There is £200 million available, and the Government will look at all proposals for investing it.
Ms Stella Creasy (Walthamstow) (Lab/Co-op)
The main beneficiaries of Brexit have been printers, because of all the extra paperwork that the previous Government created. The National Audit Office has estimated that their border arrangements have cost us £4.7 billion and rising, and the single trade window will add to the red tape. Does the Chancellor agree that the best way to reduce the paperwork requirements in the first place is to do a good deal with Europe, and will she update us on her progress on that?
James Murray
My hon. Friend will have seen the Prime Minister’s work to reset relations with the EU. She mentions the single trade window, and it is the Government’s intention to deliver that. More widely, the Government are committed to minimising the administrative burdens and frictions experienced by businesses trading internationally.
Jack Rankin (Windsor) (Con)
Greg Smith (Mid Buckinghamshire) (Con)
A recent freedom of information request has revealed that, for a number of schemes, HMRC has settled with large corporations for just 15% of what was owed. With the loan charge review ongoing, does the Chancellor agree with me that individuals should be treated no differently from the large corporations for which this precedent has been set?
James Murray
I thank the hon. Gentleman for his question; he has engaged with me about the loan charge previously. As he knows, there is an independent review of the loan charge at the moment, and I think it is important that I as a Minister do not comment on that. Let the independent reviewer complete his work and report back to us as a Government.
Emily Darlington (Milton Keynes Central) (Lab)
The loan charge scandal was absolutely awful and has devastated the lives of tens of thousands of people. It failed to be addressed under the last Government. Can the Minister please tell us what he is doing to make sure people are not still being sold this illegal product?
James Murray
I thank my hon. Friend very much for her question. I can reassure her that, alongside the loan charge review, the Government have published a consultation on a comprehensive package of measures to close in on the promoters of marketed tax avoidance schemes. As we know, these contrived schemes both deprive public services of funding and leave their clients with unexpected tax bills.
Esther McVey (Tatton) (Con)
Does the Chancellor believe that the changes she has made to employer’s national insurance contributions will lead to higher levels of employment, or will they lead to higher levels of unemployment?