Finance (No. 2) Bill
Judith Cummins ExcerptsWednesday 11th March 2026
(1 week, 3 days ago)
Commons ChamberRead Full debate Finance Act 2026 View all Finance Act 2026 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Report Stage Amendments as at 11 March 2026 - (11 Mar 2026)
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Judith Cummins)
With this it will be convenient to discuss the following:
Government new clause 6—Offshore income gains: savings.
Government new clause 7—Pensions: abolition of the lifetime allowance charge.
New clause 1—Report on fairness and scope of the loan charge settlement opportunity—
“(1) HM Revenue and Customs must, within 12 months of the passing of this Act, lay before the House of Commons a report on the operation and impact of any loan charge settlement opportunity established under section 25 of this Act.
(2) The report under subsection (1) must in particular consider—
(a) whether the terms of the settlement opportunity are available to individuals who have previously settled or fully paid liabilities arising from disguised remuneration loan arrangements,
(b) whether the terms of the settlement opportunity are available to individuals with disguised remuneration loan arrangements falling outside the loan charge years specified in Part 7A of the Income Tax (Earnings and Pensions) Act 2003,
(c) the extent to which any differences in treatment between these groups and those eligible for the settlement opportunity affect perceptions of fairness, and
(d) the potential impact of such perceptions on future tax compliance and trust in the tax system.
(3) The report must include—
(a) an assessment of whether extending more favourable settlement terms to the groups described in subsection (2)(a) and (b) would improve fairness and consistency, and
(b) any recommendations HMRC consider appropriate in light of that assessment.”
This new clause would require HMRC to report on the operation and fairness of the new loan charge settlement opportunity. It would consider whether more favourable terms are, or should be, available to those who have a already settled or fully paid liabilities, and to those with arrangements outside the loan charge years.
New clause 2—Report on implementation customer service standards in relation to sections 253 to 258—
“(1) The Commissioners must, within six months of the commencement of sections 253 to 258, lay before the House of Commons a report setting out—
(a) customer service standards for persons granted exemptions under regulations made under paragraph 14 or 15 of Schedule A1 to the Taxes Management Act 1970, including—
(i) maximum waiting times for telephone helpline calls,
(ii) minimum call answering rates,
(iii) maximum response times for written correspondence, and
(iv) availability of in-person support;
(b) measures taken to ensure adequate staffing and resources to meet those standards;
(c) data on actual performance against those standards in each quarter; and
(d) remedial action to be taken where standards are not met.
(2) The customer service standards published under subsection (1) must ensure that persons granted exemptions under regulations made under paragraph 14 or 15 of Schedule A1 to the Taxes Management Act 1970 can access support through non-digital channels with service levels comparable to those historically provided before the introduction of Making Tax Digital.
(3) The Commissioners must publish an annual report on compliance with the customer service standards established under subsection (1), and lay a copy of the report before the House of Commons.”
This new clause would require HMRC to establish and publish customer service standards for tax payers exempted from Making Tax Digital requirements due to digital exclusion.
New clause 3—Report on winter fuel payment charge and related compliance and collection measures—
“(1) The Commissioners for HM Revenue and Customs must lay before the House of Commons a report on the operation and effects of the charge applied to winter fuel payments where an individual’s income exceeds the relevant threshold, including the compliance and collection arrangements introduced under section 55 and Schedule 10 in relation to that charge.
(2) The report under subsection (1) must in particular consider—
(a) the effect of the charge on people whose income exceeds the threshold by a small amount, and any resulting behavioural impacts,
(b) the administrative complexity and proportionality of introducing a tapered abatement for winter fuel payments,
(c) the potential effect of updating section 7 of the Taxes Management Act 1970 so that a winter fuel payment charge becomes a notifiable liability for tax assessment purposes, including the operation of penalties for failure to notify, and the interaction with existing exceptions for liabilities reflected in PAYE tax coding adjustments or where a taxpayer has already been issued a notice to file a self-assessment return, and
(d) the operation and effectiveness of any new PAYE regulation provisions that allow winter fuel payment charges to be collected via tax code adjustments in year, and which allow HMRC to repay any overpaid income tax related to the charge via the tax code within the same year.”
This new clause would require HMRC to report to Parliament on the operation of the winter fuel payment charge, including its effect on people whose income exceeds the threshold by a small amount. The report would also cover the implications of updating section 7 of the Taxes Management Act 1970 to make winter fuel payment charge liabilities notifiable for tax assessment purposes.
New clause 4—Implementing the prohibition of the promotion of certain tax avoidance arrangements—
“(1) The Treasury must, within six months of the passing of this Act, consult and report on—
(a) how to ensure the regulations specified under section 156(2) of this Act can address the potential for harm to individuals and small businesses from the promotion online and via social media of tax avoidance arrangements by professionals and by social media tax influencers,
(b) the potential for detriment to individuals who are liable for tax arising from such promotions, and
(c) what steps HMRC should take to inform the public of the risks posed by online tax avoidance arrangements.
(2) The Chancellor of the Exchequer must lay before Parliament a report on the outcome of the consultation under subsection (1), including the steps they plan to take to address any issues identified.
(3) In this section, “tax influencer” means an individual who—
(a) is not a tax professional,
(b) promotes, markets or otherwise encourages participation in a tax avoidance arrangement, and
(c) does so by means of a social media service, where that promotion is carried out—
(i) in the course of a business or trade, or
(ii) in consideration of, or in expectation of, any payment or other benefit, whether from a promoter of the arrangement or from the social media service, or
(iii) with the intention of increasing engagement with, or the monetisation of, content relating to the arrangement.”
New clause 8—Impact of section 84 (General betting duty charge on remote bets)—
“The Chancellor of the Exchequer must, before 1 April 2027, lay before the House of Commons an impact assessment on the potential effects of the implementation of section 84 of this Act on the size of the illegal betting market.”
This new clause would require the Chancellor of the Exchequer to undertake an impact assessment on the potential effects of implementation of section 84 on the illegal betting market.
New clause 9—Impact of changes to gambling duties on the economy of Gibraltar—
“The Chancellor of the Exchequer must, before 1 April 2027, lay before the House of Commons an impact assessment on the potential effects of the implementation of sections 83 and 84 of this Act on the economy of Gibraltar.”
This new clause would require the Chancellor of the Exchequer to undertake an impact assessment on the potential effects of implementation of sections 83 and 84 on the economy of Gibraltar.
New clause 10—Review of operation of the carbon border adjustment mechanism—
“(1) The Treasury must, each calendar year for five years following the passing of this Act, undertake a review of the operation of—
(a) Part 5, and
(b) Schedules 16 to 19.
(2) A review undertaken under subsection (1) must be conducted in accordance with sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015.
(3) A review undertaken under subsection (1) must be completed as soon as reasonably practicable after the calendar year to which it relates.
(4) The Treasury must lay before Parliament a copy of each review carried out under this section as soon as reasonably practicable following the completion of the review.”
This new clause would place a duty on the Chancellor to conduct a post-implementation review of the operation of the carbon border adjustment mechanism one year after the implementation of the UK CBAM and every subsequent year.
New clause 11—Uprating of allowance amounts for agricultural property—
“The Chancellor of the Exchequer must, within six months of the passing of this Act, undertake and publish an assessment of the potential merits of uprating annually the relief allowance amount for agricultural property by the change in the value of agricultural land.”
New clause 12—Review of anti-forestalling provisions relating to Agricultural Property Relief—
“(1) The Treasury must conduct a review of the effects of the anti-forestalling provisions relating to Agricultural Property Relief.
(2) The review must, in particular, consider the effects of those provisions on—
(a) succession planning and intergenerational transfer of agricultural land and businesses,
(b) the viability and continuity of family-run farms,
(c) food security and domestic agricultural production,
(d) land management, environmental stewardship, and the condition of the countryside, and
(e) the availability of agricultural land for active farming.
(3) In conducting the review, the Treasury must consult such persons as it considers appropriate, including representatives of the agricultural sector.
(4) The Treasury must lay before the House of Commons a copy of the report within 12 months of the coming into force of the anti-forestalling provisions under this Act.”
New clause 13—Review of impact of Act on complexity of the tax system and administrative burdens—
“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report setting out the impact of the measures contained within this Act on the complexity of the tax system and the costs of tax administration.
(2) The report under subsection (1) must identify the measures in this Act which—
(a) add to the complexity of the tax system;
(b) reduce the complexity of the tax system;
(c) increase the number of individuals, businesses or other organisations liable for tax or for tax reporting;
(d) reduce the number of individuals, businesses or other organisations liable for tax or for tax reporting;
(e) increase the resources required for HM Revenue and Customs to administer the tax system and ensure compliance; and
(f) reduce the resources required for HM Revenue and Customs to administer the tax system and ensure compliance.
(3) The report must include an assessment of the impact of this Act on the complexity of the tax system, and on the time and cost of tax administration and compliance, for each of the following groups—
(a) pensioners;
(b) taxpayers on low incomes;
(c) personal taxpayers as a whole;
(d) self-employed people;
(e) microbusinesses;
(f) small and medium-sized businesses;
(g) large businesses;
(h) personal representatives who administer a person’s estate after their death;
(i) professional tax advisers; and
(j) HM Revenue and Customs.”
This new clause would require the Chancellor to conduct an assessment of the impact of the Act on the complexity of the tax system and on the time and cost of tax administration for taxpayers and their representatives, and for HMRC.
New clause 14—Review of impact on unemployment and youth employment—
“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before Parliament a report reviewing the impact of the provisions of this Act on levels of unemployment in the UK.
(2) The report under subsection (1) must, in particular, assess—
(a) the impact of the provisions of this Act on overall unemployment levels;
(b) the impact on employment levels for persons aged 16 to 24;
(c) the impact on rates of economic inactivity among young people;
(d) the effect on youth participation in apprenticeships, training, and entry-level employment;
(e) regional variations in youth unemployment arising from the provisions of this Act; and
(f) the impact on sectors with high levels of youth employment, including hospitality, retail, and the creative industries.
(3) The report must include an assessment of—
(a) the extent to which changes made by this Act have affected hiring decisions by small and medium-sized enterprises;
(b) any disproportionate impact on disadvantaged young people, including those from low-income households or with disabilities; and
(c) projected impacts over a three-year period following the passing of this Act.
(4) The Chancellor of the Exchequer must, following publication of the report under subsection (1), make a statement setting out what steps, if any, the Government proposes to take in response to its findings.”
This new clause requires the Chancellor to review and report on the impact of the Act on unemployment, with particular regard to young people aged 16 to 24.
New clause 15—Notification of taxpayers affected by frozen thresholds—
“(1) HM Revenue and Customs must take reasonable steps to identify individuals who, as a result of—
(a) the freezing of the starting rate limit for savings under section 9 of this Act, or
(b) the freezing of the personal allowance or the basic rate limit under section 10 of this Act, will—
(i) become liable to income tax for the first time, or
(ii) become liable to income tax at a higher rate than in the previous tax year.
(2) HM Revenue and Customs must ensure that each individual identified under subsection (1) is provided with a written notification before the start of the relevant tax year.
(3) A notification under subsection (2) must—
(a) explain that the individual’s tax liability is affected by the freezing of income tax thresholds,
(b) state whether the individual will pay income tax for the first time or move into a higher tax band, and
(c) provide information on where the individual can obtain further guidance about their tax position.
(4) HM Revenue and Customs must publish, no later than six months after the end of each affected tax year, a report setting out—
(a) the number of individuals notified under this section,
(b) the number of individuals who became income taxpayers for the first time as a result of sections 9 and 10, and
(c) the number of individuals who moved into a higher tax band as a result of those sections.
(5) In this section “written notification” includes electronic communication.”
This new clause would require HM Revenue and Customs to notify individuals who, as a result of the freezing of income tax thresholds in the Act, will pay income tax for the first time or move into a higher tax band.
New clause 16—Review of the impact of tax changes on household finances—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of changes introduced by sections 9,10 and 69 on household finances.
(2) The assessment must evaluate how households across different income levels are affected by these changes.”
This new clause requires the Chancellor of the Exchequer to assess and publish a report on how the freezing of tax thresholds to 2030-31 impacts households at various income levels.
New clause 17—Report on impact of sections 9, 10 and 69—
“Within three months of this Act being passed, the Chancellor of the Exchequer must lay before the House of Commons a report setting out—
(a) the number of taxpayers who will pay income tax at each rate during each tax year between 2026-27 and 2030-31 under sections 9, 10 and 69,
(b) the number of those taxpayers who are pensioners or are of State Pension Age,
(c) comparative figures for each tax year since 2020-21,
(d) comparative projected figures for each tax year to 2034-35, and
(e) comparative figures with a scenario under which normal uprating policy had been implemented for financial years 2020-21 through 2030-31.”
This new clause requires the Chancellor of the Exchequer to assess how many people will be in each income tax bracket from 2026-27 through to 2030-31, together with comparative figures before and after that period.
New clause 18—Review of the effect of sections 63 to 68—
“(1) HM Treasury must carry out a review of the effect of sections 63 to 68 of this Act (Pension interests).
(2) The review under subsection (1) must include an assessment of—
(a) the impact of those sections on individuals’ pension savings and beneficiaries, including on estate values and inheritance tax liabilities,
(b) the administrative effects on personal representatives, pension scheme administrators, and HM Revenue and Customs, and
(c) any behavioural effects on how pensions are used during life and on death.
(3) HM Treasury must lay before the House of Commons a report setting out the findings of the review under subsection (1) no later than six months after the date on which sections 63 to 68 come into force.”
This new clause would require HM Treasury to review and report on the effects of Clauses 63 to 68 of the Bill, which introduce inheritance tax charges on unused pension funds and death benefits, including their impacts on individuals, administrators, and behaviour, and to publish the findings to Parliament.
New clause 19—Administration of inherited pension pots—
“(1) HM Revenue and Customs must review the tax administration arrangements relating to inherited pension pots.
(2) The purpose of the review under subsection (1) is to ensure that—
(a) inheritance tax and related tax checks do not cause unreasonable delays in the payment of pension death benefits to beneficiaries, and
(b) bereaved families are able to receive pension benefits within a reasonable period following a member’s death.
(3) In carrying out the review, HM Revenue and Customs must have regard to—
(a) the cumulative administrative burden placed on personal representatives, pension scheme administrators, and beneficiaries,
(b) the interaction between inheritance tax reporting, clearance processes, and pension scheme payment rules, and
(c) any evidence of prolonged delays in the payment of inherited pension benefits.
(4) HM Revenue and Customs must publish the outcome of the review, including any proposed changes to its processes or guidance, within 12 months of the passing of this Act.”
This new clause would require the Government to address delays in the payment of inherited pension pots by reviewing HMRC’s tax administration processes, with the aim of preventing prolonged waiting periods for bereaved families.
New clause 20—Review of cumulative impact on the hospitality sector—
“(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before the House of Commons a report assessing the cumulative impact on the hospitality sector of—
(a) the measures contained in section 86 of this Act, and
(b) changes to taxation and business costs affecting that sector introduced outside this Act since 2020.
(2) For the purposes of subsection (1)(b), changes to taxation and business costs include, but are not limited to—
(a) changes to employer National Insurance contribution rates or thresholds,
(b) changes to business rates, including reliefs and revaluations, and
(c) any other fiscal measures which materially affect operating costs for hospitality businesses.
(3) A report under subsection (1) must include an assessment of the impact of the matters listed in that subsection on—
(a) levels of employment across the United Kingdom within the hospitality sector,
(b) the number of hospitality businesses ceasing to trade,
(c) the number of new hospitality businesses established, and
(d) the financial sustainability of hospitality businesses.
(4) In this section, “the hospitality sector” means persons or businesses operating in the provision of food, drink, accommodation, or related services.”
This new clause would require the Chancellor of the Exchequer to assess and report on the cumulative impact on the hospitality sector of alcohol duty measures in the Act alongside wider fiscal changes, including employer National Insurance contributions and business rates.
Amendment 1, page 2, line 7, leave out clause 4.
This amendment removes the increase in dividend rates from the Bill.
Amendment 2, page 2, line 16, leave out clause 5.
This amendment removes the new savings rates of income tax from the Bill.
Amendment 3, page 2, line 21, leave out clause 6.
This amendment removes the new rates of income tax on property income from the Bill.
Amendment 4, page 4, line 31, leave out clause 7.
This amendment removes the property rates of income tax for 2027-28 from the Bill.
Amendment 5, page 5, line 20, leave out clause 10.
This amendment removes the freeze in income tax thresholds from the Bill.
Amendment 112, in clause 13, page 6, line 13, leave out from “means—” to “fifteenth” on line 16.
Amendment 113, page 6, line 20, leave out from “(1)” to end of line 23 and insert
“for “£3 million” substitute “£6 million””.
Amendment 114, page 6, line 27, leave out subsection (3)(d).
Amendment 115, page 7, line 1, leave out from “(1)” to end of line 4 and insert
“for “£30 million” substitute “£120 million””.
Amendment 116, page 7, line 5, leave out from “(2)” to end of line 13 and insert
“for “£30 million” substitute “£120 million””.
Amendment 117, page 7, line 10, leave out from “(1)” to end of line 13 and insert “for “250” substitute “500””.
Amendment 118, page 7, line 14, leave out from “(2)” to end of line 15 and insert “for “250” substitute “500””.
Amendment 119, page 7, line 25, leave out from “15 years” to end of line 27.
Amendment 120, page 7, line 28, leave out subsection (7).
Amendment 121, page 8, line 28, leave out sub-paragraph (4).
Amendment 122, in clause 14, page 8, line 36, leave out from “(5A))” to “, and” in line 38 and insert “, £20 million”.
Amendment 123, page 8, line 40, leave out from “company” to end of line 1 on page 9, and insert “, £10 million.”
Amendment 124, page 9, line 5, leave out from “section 252A)” to “, and” in line 7, and insert “, £40 million”.
Amendment 125, page 9, line 10, leave out from “company” to end of line 11 and insert “, £24 million.”
Amendment 126, page 9, line 15, leave out from “section 252A)” to “, and” in line 17 and insert “, £40 million”.
Amendment 127, page 9, line 19, leave out from “company” to end of line 21 and insert “, £24 million.”
Amendment 128, page 9, line 24, leave out sub-paragraph (b).
Amendment 129, page 9, line 38, leave out “that is not a specified Northern Ireland company”.
Amendment 130, page 10, line 4, leave out “that is not a specified Northern Ireland company”.
Amendment 131, page 10, line 10, leave out leave out subsections (6) and (7) and insert—
“(6) In section 186 (the gross assets requirement)—
(a) in subsection (1)(a) for “£15 million” substitute “£30 million”
(b) in subsection (1)(b) for “£16 million” substitute “£35 million”
(c) in subsection (2)(a) for “£15 million” substitute “£30 million”
(d) in subsection (2)(b) for “£16 million” substitute “£35 million””
Amendment 132, in clause 15, page 10, line 30, leave out from “(6A))” to “, and” in line 32 and insert “, £20 million”.
Amendment 133, page 10, line 34, leave out from “company” to end of line 36 and insert “, £10 million.”
Amendment 134, page 11, line 4, leave out from “section 331A)” to “, and” in line 6 and insert “, £40 million”.
Amendment 135, page 11, line 8, leave out from “company” to end of line 10 and insert “, £24 million.”
Amendment 136, page 11, line 14, leave out from “section 331A)” to “, and” in line 16 and insert “, £40 million;”.
Amendment 137, page 11, line 18, leave out from “company” to end of line 20 and insert “, £24 million.”
Amendment 138, page 11, line 23, leave out subsection (6)(b).
Amendment 139, page 11, line 34, leave out leave out subsections (7) and (8) and insert—
“(6) In section 297 (the gross assets requirement)—
(a) in subsection (1)(a) for “£15 million” substitute “£30 million”
(b) in subsection (1)(b) for “£16 million” substitute “£35 million”
(c) in subsection (2)(a) for “£15 million” substitute “£30 million”
(d) in subsection (2)(b) for “£16 million” substitute “£35 million””.
Government amendments 12 to 14.
Amendment 6, page 78, line 4, leave out clause 62.
This amendment removes the changes to the thresholds for Agricultural Property Relief and Business Property Relief from the Bill.
Amendment 7, page 78, line 11, leave out clause 63.
This amendment removes the imposition of inheritance tax on pension interest.
Government amendments 15 to 47.
Amendment 9, in clause 74, page 91, line 25, at end insert—
“(7) The Treasury must make regulations under subsection (1) within 60 days of the passing of this Act.
(8) Before making regulations under subsection (1), the Treasury must consult—
(a) organisations representing infected and affected individuals,
(b) the Infected Blood Compensation Authority, and
(c) bereaved families of victims who have died awaiting compensation.
(9) The regulations made under subsection (1) must make provision for identifying and assisting the estates of deceased victims in claiming inheritance tax relief, including—
(a) outreach to known affected families,
(b) assistance with evidence gathering where medical records have been destroyed,
(c) clear and accessible guidance in plain language, and
(d) a dedicated helpline staffed by trained caseworkers familiar with the infected blood scandal.
(10) The Treasury must, within 6 months of regulations under this section coming into force, and every 6 months thereafter, lay before Parliament a report on—
(a) the number of victims who have died since the previous report while awaiting compensation,
(b) the number of estates that have received inheritance tax relief,
(c) the average time taken to process claims for relief,
(d) any identified barriers preventing families from accessing their entitlement, and
(e) steps taken to expedite outstanding infected blood compensation claims.”
This amendment requires the Chancellor of Exchequer to make regulations under this section within 60 days of Royal Assent. It requires mandatory consultation with those directly affected, and a support service to help bereaved families navigate the system. It also places a six-monthly reporting requirement on the Government.
Amendment 10, page 94, line 4, leave out clause 77.
This amendment would maintain the existing zero-rating for the purposes of VAT on the full value of the lease of a vehicle to a disabled person supplied through the Motability Scheme.
Amendment 11, page 96, line 6, leave out clause 78.
This amendment would maintain insurance premium tax relief for all vehicles let to a disabled person and supplied through the Motability Scheme.
Amendment 101, page 103, line 29, leave out clause 86.
Government amendments 48 to 53.
Government amendments 56 to 61.
Amendment 8, page 442, line 2, leave out schedule 12.
This amendment would remove the changes to Agricultural Property Relief and Business Property Relief from the Bill.
Amendment 109, in schedule 12, page 442, line 20, leave out from “and” to end of line 23 and insert—
“(c) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”.
This amendment would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 110, page 442, line 29, leave out from “and” to end of line 32 and insert—
“(c) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% trust relief allowance available in relation to that occasion (see sections 124G to 124K),”.
This amendment would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 111, page 443, line 9, leave out from “and” to end of line 12 and insert—
“(b) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”.
This amendment would apply 100% agricultural property trust relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 89, page 444, line 16, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 102, page 444, line 16, after “£2.5 million” insert
“plus
(aa) the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
This amendment, and Amendments 103 to 107, would allow landlords to access 100% relief from inheritance tax where they have let land or farms to tenant farmers on secure agreements under the Agricultural Holdings Act 1986 or on agreements under the Agricultural Tenancies Act 1995 for 10 years or more.
Amendment 90, page 449, line 36, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 103, page 449, line 36, after “£2.5 million” insert
“plus
(aa) the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
See Amendment 102.
Amendment 91, page 450, line 25, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 104, page 450, line 25, after “£2.5 million” insert
“plus the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995”.
See Amendment 102.
Amendment 67, page 450, line 27, leave out “30 October 2024” and insert “1 March 2027”.
This amendment, along with Amendments 68 to 87 would remove the transition period in respect of the changes to agricultural property and business property relief and delay the implementation date so that the changes would take effect for transfers made after 1 March 2027.
Amendment 95, page 450, line 27, leave out “30 October 2024” and insert “6 April 2026”.
This amendment, with Amendments 96 to 100, would remove the transition period in respect of the changes to agricultural property and business property relief so that the changes take effect for transfers made from 6 April 2026.
Amendment 68, page 451, line 6, leave out “30 October 2024” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 96, page 451, line 6, leave out “30 October 2024” and insert “6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 92, page 451, line 22, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 105, page 451, line 22, after “£2.5 million” insert
“plus
(aa) the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
See Amendment 102.
Amendment 93, page 453, line 15, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 106, page 453, line 15, after “£2.5 million” insert
“plus the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995”.
See Amendment 102.
Amendment 94, page 453, line 17, after “£2.5 million” insert
“excluding the value of any joint interest in an agricultural or business tenancy that was made in a transaction at arm’s length between persons not connected with each other or that it was such as might be expected to be made in a transaction at arm’s length between persons not connected with each other.”
Amendment 107, page 453, line 17, after “£2.5 million” insert
“plus the value of any agricultural property subject to a tenancy under the Agricultural Holdings Act 1986, or a tenancy with a fixed term of 10 years or more without unconditional break clauses available to the landlord under the Agricultural Tenancies Act 1995,”.
See Amendment 102.
Amendment 69, page 453, line 23, leave out “30 October 2024” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 97, page 453, line 23, leave out “30 October 2024” and insert “6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 108, page 454, line 40, at end insert
“(But see subsection (2A).)
(2A) If the Treasury estimates that the value of agricultural land has increased by more than the percentage increase in the consumer prices index during the same period, then it must instead make an order by statutory instrument amending each relief allowance amount relating to agricultural property by the percentage increase in the value of agricultural land.”
Government amendments 54 and 55.
Government amendments 62 to 64.
Amendment 88, page 458, line 31, at end insert—
“(1A) In Section 227, leave out subsection (3)(a) and insert—
“(a) if the chargeable transfer was made on death and to the extent that it qualified for relief under Chapters I or II of part V of this Act, eighteen months after the end of the month in which the death occurred, or
(b) if the chargeable transfer was made on death and to the extent that it did not qualify for relief under Chapters I or II of part V of this Act, six months after the end of the month in which the death occurred, and””
This amendment would defer the period for the payment of inheritance tax on assets qualifying for payment by instalments by 12 additional months.
Amendment 70, page 460, line 8, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 71, page 460, line 9, leave out sub-paragraphs (2) and (3).
See explanatory statement for Amendment 67.
Amendment 98, page 460, line 9, leave out sub-paragraphs (2) to (4).
See explanatory statement for Amendment 95.
Government amendments 65 and 66.
Amendment 72, page 460, line 23, leave out “sub-paragraph (3) will not apply” and insert
“the transfer will prove to be an exempt transfer”.
See explanatory statement for Amendment 67.
Amendment 73, page 460, line 27, leave out from “paragraph” to end of paragraph 17(5)(b) and insert
“comes into force on 1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 99, page 460, line 27, leave out from “paragraph” to end of paragraph 17(5)(b) and insert
“comes into force on 6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 74, page 460, line 34, leave out “30 October 2024” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 100, page 460, line 34, leave out “30 October 2024” and insert “6 April 2026”.
See explanatory statement for Amendment 95.
Amendment 75, page 460, line 37, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 76, page 460, line 39, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 77, page 460, line 41, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 78, page 461, line 2, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 79, page 461, line 9, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 80, page 461, line 14, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 81, page 461, line 22, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 82, page 461, line 26, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 83, page 461, line 37, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 84, page 461, line 42, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 85, page 463, line 19, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 86, page 463, line 26, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Amendment 87, page 463, line 32, leave out “6 April 2026” and insert “1 March 2027”.
See explanatory statement for Amendment 67.
Dan Tomlinson
I am glad to return to the Commons to debate the Finance Bill on Report. Although I am sure that it would have been of interest to Members on both sides of the House, I am also glad that we have not just had a set of two 45-minute debates on the Ways and Means motions. The opportunity was there, but I am glad that Members did not take it in full. We now have ample time for this important Report stage.
I thank Members on both sides of the House for their contributions in Committee. I thank in particular the shadow Exchequer Secretary to the Treasury, the hon. Member for North West Norfolk (James Wild), for his scrutiny and challenge, and for the invitation to his wonderful constituency, which I hope to take up one day. As yet, no other Opposition Front Bencher has offered me such an enticing prospect as a visit to their constituency, but I look forward to those invitations.
Before I turn to individual amendments, I wish to reflect briefly on the Budget that was delivered in November by my right hon. Friend the Chancellor of the Exchequer. That Budget took fair and necessary decisions to deliver on the Government’s promise of change, to support cuts in the cost of living, to enable NHS waiting lists to continue falling, and to ensure that our national debt fell as a share of GDP and that borrowing falls over the course of this Parliament. As the Chancellor said in this place yesterday and on Monday, Government borrowing—public sector net borrowing—has fallen from 5.2% to 4.3% of GDP, which is a fall of 1 percentage point. That is very significant and means that our borrowing is coming down, as part of our plan to bring stability back to the public finances.
Dan Tomlinson
I thank the hon. Gentleman for his intervention and for his engagement in the Public Bill Committee. The loan charge is an important issue. I focused on it after receipt of Ray McCann’s independent review into the loan charge, which was commissioned by my predecessor. The scope of that review and the decisions made by the Government are such that only those who are directly affected by the loan charge will have the opportunity to take up the new settlement that was recommended by McCann, to which the Government have added a £5,000 further deduction. The Government’s position was that, because the loan charge was an exceptional decision made by the previous Government, it was right that the changes proposed by McCann would apply only to that group. There will be those who engaged in the use of disguised remuneration schemes from before 2010, and with them, as with all taxpayers, this Government are very clear that individuals do have a responsibility to pay their tax.
Amendments 54 and 55, and 62 to 66, are minor amendments to the definitions of business property qualifying for relief. They ensure that the replacement property provisions relating to reorganisation or amalgamation of unquoted shares reflect the new legislation, and that unquoted securities, such as loan notes, continue to qualify for relief only where they are part of a controlling interest in a company.
Amendments 15 to 47 to clauses 63 to 67 make a series of minor technical changes to ensure that the provisions on inheritance tax and pensions operate as intended. These ensure that excluded and exempt benefits are not subject to inheritance tax, nor to the new withholding and payment notices.
I am sure that Members from all parts of the House have enjoyed that run-through of those minor and technical amendments. I can provide them with the good news that that run-through has now concluded. I sincerely hope and expect that the proposed amendments will ensure that the legislation that was set out, and that has been discussed and scrutinised, works as intended, and that HMRC—the organisation that I am proud to be the Minister with responsibility for—has the powers to responsibly collect tax and revenue, which funds the vital public services on which our country relies.
I therefore commend new clauses 5, 6 and 7 and Government amendments 12 to 66 to the House, and I look forward to hon. Members’ contributions.
Charlie Maynard (Witney) (LD)
The Bill, and the Budget it derives from, demonstrates clearly that the Chancellor has implemented stealth tax grabs that will hit some of the lowest paid the hardest, through extending a freeze on income tax thresholds and the national insurance contributions increases which suppress employment and wages. It is full of short-sighted harmful decisions that the Liberal Democrats cannot support. Our amendments aim to highlight and reduce some of its more harmful impacts.
I will focus on four particular areas, the first of which is the impact of frozen income tax thresholds. New clauses 15 to 17 would secure additional information and analysis about their impact. As the worrying figures from the OBR suggest, continuing to freeze income tax thresholds will drag an extra 1 million pensioners into paying income tax for the first time by 2030-31, unless the Government act.
Social Security
Judith Cummins Excerpts(1 month, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Watch Debate Read Debate Ministerial Extracts
The Exchequer Secretary to the Treasury (Dan Tomlinson)
I beg to move,
That the draft Child Benefit and Guardian’s Allowance Up-rating Order 2026, which was laid before this House on 12 January, be approved.
Madam Deputy Speaker (Judith Cummins)
With this it will be convenient to discuss the following motion:
That the draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026, which were laid before this House on 12 January, be approved.
Dan Tomlinson
The draft Child Benefit and Guardian’s Allowance Up-rating Order sets the rates for both child benefit and guardian’s allowance, and will ensure that those benefits, for which Treasury Ministers are responsible and which are delivered by His Majesty’s Revenue and Customs, are uprated by inflation in April 2026. The draft Social Security (Contributions) (Rates, Limits and Thresholds Amendments, National Insurance Funds Payments and Extension of Veteran’s Relief) Regulations 2026 set the rates of certain national insurance contributions classes, and the level of certain thresholds, for the 2026-27 tax year. The regulations also make provision for a Treasury grant to be paid into the national insurance fund if required for the same tax year, through a transfer of wider Government funds to the NIF, and extend the veterans employer national insurance relief for two years, until April 2028.
Dan Tomlinson
The hon. Member is right: a range of reliefs in the national insurance system help particular groups, including young people and those who have served in our military. It is right that those reliefs are there, and I am glad that the Government took the decision to extend them by two years. The Government publish guidance on the way that the reliefs can be used. We aim to ensure that the guidance supports those who seek to employ young people and people who have served in the military, so that they are able to make employment decisions. Through the tax system, we want to support particular groups to be able to be employed. I thank the hon. Member for his question.
I turn to the detail of the Child Benefit and Guardian’s Allowance Up-rating Order 2026. As hon. Members will know, the Government are committed to delivering a welfare system that is fair for taxpayers while providing support for those who need it. These regulations ensure that the benefits for which Treasury Ministers are responsible, and which HMRC delivers, are uprated by inflation in April 2026. Child benefit and guardian’s allowance will increase by 3.8%, in line with the consumer prices index in the year to September 2025. Tax credits awards ended on 5 April 2025, so no changes to rates will be required.
I turn to the second set of regulations before us today. As announced at the Budget, the primary threshold and the lower profits limit threshold will be maintained at their current levels until April 2031. These regulations set the level for the 2026-27 tax year. Employees’ entitlement to contributory benefits, such as the state pension, is determined by their earnings being at or above the lower earnings limit. Self-employed people’s entitlement is determined by their earnings being at or above the small profits threshold.
These regulations uprate the LEL and the SPT. This is the usual process and maintains the real level of income where someone gains entitlement to contributory benefits. The upper earnings limit for employee NICs and the upper profits limit for self-employed NICs—the points at which the main rate falls to 2%—are aligned with the higher rate threshold for income tax. The thresholds will be maintained at their current levels, and these regulations set the levels for the 2026-27 tax year. As announced at the Budget last year, employer national insurance thresholds, including the secondary threshold, will also be maintained at their current levels.
We have already had a brief discussion about the employer NICs reliefs, including for under-21s, under-25 apprentices, veterans, and new employees in freeport and investment zones. The regulations that we are debating today keep the thresholds for those reliefs at their current levels. The regulations also make provision for the NICs relief for employers of veterans to be extended for two years until April 2028, during which time the Government will continue to consider the most effective way to support veterans into employment as part of the next spending review settlement.
Without these regulations, child benefit and guardian’s allowance would fall in real terms, and HMRC would be unable to collect NICs receipts. I hope that colleagues will join me in supporting them today.
Mark Garnier
The Minister is nodding, and I am sure he agrees with us on this point. Therefore, we welcome the fact that the Government have committed to extending this relief for the next two years.
However, I point out that the Government said in the Budget document:
“The government will extend the employer NICs relief for employers hiring veterans in their first civilian role to April 2028, from which point support for veterans into employment will be covered through spending review settlements rather than through this tax relief.”
The Government have committed to consult on which way would be best to do that, which is positive, and I hope the Minister is open to considering continuing this relief as an option if a suitable alternative cannot be found. In due course, it would be great if he or the Government could let us know what is being planned and on what timeframe, so we may understand what will be happening for veterans.
The child benefit and guardian’s order will uprate the allowances in line with CPI for the 2026-27 tax year. Again, we welcome the increases as these benefits are an important part of our welfare system. Guardian’s allowance is designed to provide further support to people who care for someone else’s child—for example, if the child’s parents have died. When these people step as guardians, they are incredibly important in the upbringing of young children, and we have a duty to support them so that they can ensure that the children they care for have the best start in life.
Although these state benefits are important, the Government are abandoning their responsibilities to tackle the wider benefits bill. In this debate last year, the former Exchequer Secretary, who is now the Chief Secretary to the Treasury, said:
“the Government are committed to delivering a welfare system that is fair for taxpayers while providing support to those who need it.”—[Official Report, 4 February 2025; Vol. 761, c. 716.]
When it came down to it, however, this Government did not take the opportunity to make those savings. Instead, it appears that they caved in to their Back Benchers, and we are now in a position where the benefits bill continues to balloon. According to The Times, even the Prime Minister has vetoed plans to reform the welfare system, simply to avoid the embarrassment of yet another U-turn. That is not fair to taxpayers, or to those who need support the most. In due course, I hope the Minister will set out when the needed benefit reforms will be brought forward and what steps he is taking to ensure that taxpayers’ money goes to those who need it most.
The Conservatives will not stand in the way of any of the statutory instruments before us today, but we look forward to hearing what the Minister has to say—not necessarily this afternoon, I stress—on the points I have raised.
Finance (No. 2) Bill
Judith Cummins ExcerptsTuesday 13th January 2026
(2 months, 1 week ago)
Commons ChamberRead Full debate Finance Act 2026 View all Finance Act 2026 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: Committee of the whole House Amendments as at 13 January 2026 - (13 Jan 2026)
Laurence Turner
I sit on the same Select Committee as my hon. Friend the Member for Edinburgh South West (Dr Arthur), and I know better than to speak for him. I have a degree of personal sympathy with the case that the hon. Member for Angus and Perthshire Glens (Dave Doogan) sets out. I also think there is something to be said for giving more powers to our councils, because these decisions—particularly when they relate to areas at risk of complex interactions between homelessness, lack of mental health provision and the sales of these at times dangerous products—are best made locally, in addition to national policy setting.
My final point is that there have been calls outside this place for uprating to be moved to a different inflation index, principally the consumer prices index or the consumer prices index with housing. That important matter has not been raised in this debate, so I will touch on it briefly. Although CPI and CPIH are both of use as macroeconomic indicators, RPI remains the only measure that is in general circulation and is updated regularly that actively seeks to measure the cost of living as it is experienced by working people. Criticisms can be made of the retail prices index, but it is important to place on record that in the early 2010s, regular changes to the methodology for RPI were discontinued. That is behind the formula gap that has led to the widening between the headline rates of RPI and CPI. I am not convinced that moving to a different rate at this time is appropriate, given some of the limitations of CPI and its twin CPIH, which we can discuss on another occasion.
The Office for National Statistics has been developing the alternative household costs indices measure. That is particularly useful, because it captures the different rates of inflation experienced by households of different income levels. I hope that in future we can look at the HCIs as an alternative means of uprating the various charges, levies and escalators that the Government apply. We are not in that place yet, and it is important that the ONS makes progress in this area.
On the whole, I welcome the Minister’s statement. Compared with some of the other debates we have had in this Parliament—particularly on the Product Regulation and Metrology Bill, where it was suggested that there was some secretive and sinister plot to change sales of the pint to some metric measure—this has in contrast been a sober debate. I look forward to voting for the Finance Bill tonight.
The First Deputy Chairman of Ways and Means (Judith Cummins)
I call the Liberal Democrat spokesperson.
Clause 1
Judith Cummins Excerpts(2 months, 1 week ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
The First Deputy Chairman of Ways and Means (Judith Cummins)
With this it will be convenient to discuss the following:
Clause 10 stand part.
Clause 69 stand part.
New clause 3—Notification of taxpayers affected by frozen thresholds—
“(1) HM Revenue and Customs must take reasonable steps to identify individuals who, as a result of—
(a) the freezing of the starting rate limit for savings under section 9 of this Act, or
(b) the freezing of the personal allowance or the basic rate limit under section 10 of this Act, will—
(i) become liable to income tax for the first time, or
(ii) become liable to income tax at a higher rate than in the previous tax year.
(2) HM Revenue and Customs must ensure that each individual identified under subsection (1) is provided with a written notification before the start of the relevant tax year.
(3) A notification under subsection (2) must—
(a) explain that the individual’s tax liability is affected by the freezing of income tax thresholds,
(b) state whether the individual will pay income tax for the first time or move into a higher tax band, and
(c) provide information on where the individual can obtain further guidance about their tax position.
(4) HM Revenue and Customs must publish, no later than six months after the end of each affected tax year, a report setting out—
(a) the number of individuals notified under this section,
(b) the number of individuals who became income taxpayers for the first time as a result of sections 9 and 10, and
(c) the number of individuals who moved into a higher tax band as a result of those sections.
(5) In this section ‘written notification’ includes electronic communication.”
This new clause would require HM Revenue and Customs to notify individuals who, as a result of the freezing of income tax thresholds in the Act, will pay income tax for the first time or move into a higher tax band.
New clause 4—Review of the impact of tax changes on household finances—
“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, publish an assessment of the impact of changes introduced by sections 9,10 and 69 on household finances.
(2) The assessment must evaluate how households across different income levels are affected by these changes.”
This new clause requires the Chancellor of the Exchequer to assess and publish a report on how the freezing of tax thresholds to 2030-31 impacts households at various income levels.
New clause 5—Report on impact of sections 9, 10 and 69—
“Within three months of this Act being passed, the Chancellor of the Exchequer must lay before the House of Commons a report setting out—
(a) the number of taxpayers who will pay income tax at each rate during each tax year between 2026-27 and 2030-31 under sections 9, 10 and 69,
(b) the number of those taxpayers who are pensioners or are of State Pension Age,
(c) comparative figures for each tax year since 2020-21,
(d) comparative projected figures for each tax year to 2034-35, and
(e) comparative figures with a scenario under which normal uprating policy had been implemented for financial years 2020-21 through 2030-31.”
This new clause requires the Chancellor of the Exchequer to assess how many people will be in each income tax bracket from 2026-27 through to 2030-31, together with comparative figures before and after that period.
New clause 13—Assessment of the impact of changes to the basic rate limit and personal allowance for tax years 2028-29 to 2030-31—
“The Chancellor of the Exchequer must, within three months of this Act being passed, publish an assessment of the expected impact on an average earner of the provisions of section 10.”
This new clause requires the Secretary of State to publish an assessment of the impact on the average earner of extending the freeze on the basic rate limit and personal allowance for the tax years 2028-29, 2029-30, and 2030-31.
New clause 14—Assessment of the impact of the freezing of the personal allowance on those in receipt of the state pension for the tax years 2027-28 to 2030-31—
“(1) The Chancellor of the Exchequer must, before the start of the tax year 2027-28, publish an assessment of the impact of the freezing of the personal allowance on those in receipt of the state pension for the tax years 2027-28 to 2030-31.
(2) The assessment made under subsection (1) must include details on the estimated total income from tax receipts received in each tax year from individuals whose only income is the state pension.”
This new clause requires the Secretary of State to publish an assessment of the impact of the personal allowance on those pensioners whose only income is the state pension for the tax years 2027-28, 2028-29, 2029-30, and 2030-31.
New clause 15—Assessment of the impact of exempting from income tax pensioners whose sole income is the basic or new State Pension—
The Chancellor of the Exchequer must, within three months of this Act being passed, publish an assessment of the fiscal impacts of exempting pensioners whose sole income is the basic or new State Pension (without any increments) from paying small amounts of income tax.”
Dan Tomlinson
In opening debate on this second group of clauses, I want to reflect on why we are making changes to the tax system. I am looking forward to no interventions at all on this speech from Opposition Members—their interventions seemed to dry up in my last speech, so maybe they have now finished with them. Of course, we make these changes to modernise the tax system, to make it fair and fit for purpose and to adapt to a changing world, but we also make these changes so that we can raise the revenue to fund our public services. Yes, the Bill holds thresholds constant till the end of the decade, but in doing so contributes to our being able to renew our public services while maintaining the highest levels of public investment in four decades to stimulate economic growth and ensure that those with the broadest shoulders pay their fair share.
Dan Tomlinson
The hon. Member mentions the change to student loan thresholds that was announced at the Budget. The Government have looked at our taxation system in the round, and at our benefits system—for example, there are the changes to Motability—to ensure that we are raising the revenue that we need in a proportionate and reasonable way, and the measures that we are debating tonight enable us to do that. I will not let Opposition Members, who repeatedly voted to freeze thresholds until 2028 when they were in government, try to rewrite history as we debate these clauses.
The First Deputy Chairman of Ways and Means (Judith Cummins)
I call the shadow Minister.
Gareth Davies
I wish to speak to new clauses 13 to 15, which are in my name, but first I will cover what the clauses in this group mean for British taxpayers. If you will forgive me, Madam Chair, I will do so slightly out of numerical order. Clause 9 sets the starting rate limit for savings for tax years 2026-27 to 2030-31, keeping it fixed at £5,000. That is an important allowance for so many with relatively low incomes, including those who work part-time or are retired. Clause 69 fixes the various inheritance tax thresholds at their current level for a further tax year, 2030-31. Clause 10 freezes the basic rate limit for income tax at £37,700, and sets the personal allowance at £12,570 for tax years 2028-29, 2029-30, and 2030-31.
According to the Office for Budget Responsibility, the Labour Government’s freeze to income tax thresholds will raise around £7.6 billion in 2029-30 alone, and more than £12 billion in 2030-31. This is a £23 billion tax rise; clause 10 alone is a £23 billion broken promise. The OBR is clear: 920,000 more people will be pushed into the higher rate, and 780,000 more people will be pushed into income tax altogether. We have already heard the Minister try to explain away Labour’s breach of the promises that it made to the British people. The best the Chancellor can manage is to say that it is not her fault, because she was very clear in the small print—a technicality dressed up as an excuse. But people are not stupid. It would not be quite so embarrassing if the Chancellor herself had not proclaimed so theatrically in her first disastrous Budget that extending the threshold freeze would hurt working people. Yet here we are, and it is no surprise that the Prime Minister is breaking records for unpopularity. New clause 13 would ensure that the Government undertook an assessment of the impact of clause 10 on the average earner, because we all know that working people will be hurt very badly by this clause.
Gareth Davies
Exactly. I have nothing to add to that; the right hon. Gentleman puts it perfectly. New clause 14 would require a proper assessment of clause 10’s impact on state pensioners, and new clause 15 would require an assessment of the cost of the Chancellor’s so-called exemption from small amounts of tax—let her define that in a piece of legislation; I do not think she will be able to. Clause 10 is simple: another Labour tax promise has been broken and pensioners will pay the price. I hope that Members from across the Committee can see that and that they will vote with the official Opposition tonight.
The First Deputy Chairman of Ways and Means (Judith Cummins)
I call the Liberal Democrat spokesperson.
The First Deputy Chairman of Ways and Means (Judith Cummins)
With this it will be convenient to consider the following:
Amendment 42, in schedule 12, page 443, line 13, leave out from “and” to end of line 16 and insert—
“(c) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”
This amendment would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 45, page 443, line 13, leave out from “and” to end of line 16, and insert—
“(c) either—
(i) is attributable to property acquired before 31 March 2026, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”
This amendment would apply 100% business property trust relief where the property was acquired before 31 March 2026.
Amendment 43, page 443, line 22, leave out from “and” to end of line 25 and insert—
“(c) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% trust relief allowance available in relation to that occasion (see sections 124G to 124K),”
This amendment would maintain 100% business relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 46, page 443, line 22, leave out from “and” to end of line 25 and insert—
“(c) either—
(i) is attributable to property acquired before 31 March 2026, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% trust relief allowance available in relation to that occasion (see sections 124G to 124K),”
This amendment would apply 100% business property trust relief where the property was acquired before 31 March 2026.
Amendment 44, page 443, line 37, leave out from “and” to end of line 3 on page 444 and insert—
“(b) either—
(i) is attributable to property that has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),”
This amendment would apply 100% agricultural property trust relief where the property has been owned by the transferor for at least 10 years as part of a business that is actively operated by the transferor or a member of their family.
Amendment 47, page 443, line 37, leave out from “and” to end of line 3 on page 444 and insert—
“(b) either—
(i) is attributable to property acquired before 31 March 2026, or
(ii) if the value does not fall within (i), does not exceed the amount of the 100% relief allowance available in relation to that chargeable transfer (see section 124D),””
This amendment would apply 100% business property trust relief where the property was acquired before 31 March 2026.
Amendment 48, page 444, line 15, at end insert—
“(1D) Where the whole or part of the value transferred is treated as reduced by 50% under subsection (1), the resulting inheritance tax liability is chargeable only if, within 10 years of the relevant transfer, the agricultural land giving rise to the charge is either—
(a) sold (and the owner has not purchased agricultural land elsewhere), or
(b) ceased to be used for farming.”
Government amendments 24 to 26.
Amendment 3, in schedule 12, page 451, line 22, leave out “30 October 2024” and insert “1 March 2027”.
This amendment, along with amendments 4 to 23 would remove the transition period in respect of the changes to agricultural property and business property relief and delay the implementation date so that the changes would take effect for transfers made after 1 March 2027.
Amendment 31, page 451, line 22, leave out “30 October 2024” and insert “6 April 2026”.
This amendment, with Amendments 32 to 36, would remove the transition period in respect of the changes to agricultural property and business property relief so that the changes take effect for transfers made from 6 April 2026.
Amendment 4, page 452, line 3, leave out “30 October 2024” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 32, page 452, line 3, leave out “30 October 2024” and insert “6 April 2026”
See explanatory statement for Amendment 31.
Government amendments 27 to 29.
Amendment 5, in schedule 12, page 454, line 17, leave out “30 October 2024” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 33, page 454, line 17, leave out “30 October 2024” and insert “6 April 2026”
See explanatory statement for Amendment 31.
Amendment 40, page 455, line 31, leave out “2031” and insert “2027”
This amendment would begin indexation in 2027 rather than 2031.
Amendment 41, page 455, line 33, at end insert—
“(2A) If the Treasury estimates that the value of agricultural land has increased by more than the percentage increase in the consumer prices index during the same period, then it must instead make an order by statutory instrument amending each relief allowance amount relating to agricultural property by the percentage increase in the value of agricultural land.”
Amendment 6, page 461, line 2, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 7, page 461, line 3, leave out sub-paragraphs (2) and (3)
See explanatory statement for Amendment 3.
Amendment 34, page 461, line 3, leave out sub-paragraphs (2) to (4)
See explanatory statement for Amendment 31.
Amendment 8, page 461, line 17, leave out “sub-paragraph (3) will not apply” and insert
“the transfer will prove to be an exempt transfer”.
See explanatory statement for Amendment 3.
Amendment 9, page 461, line 21, leave out from “paragraph” to end of paragraph 17(5)(b) and insert
“comes into force on 1 March 2027”
See explanatory statement for Amendment 3.
Amendment 35, page 461, line 21, leave out from “paragraph” to end of paragraph 17(5)(b) and insert
“comes into force on 6 April 2026”
See explanatory statement for Amendment 31.
Amendment 10, page 461, line 28, leave out “30 October 2024” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 36, page 461, line 28, leave out “30 October 2024” and insert “6 April 2026”
See explanatory statement for Amendment 31.
Amendment 11, page 461, line 31, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 12, page 461, line 33, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 13, page 461, line 36, leave out “6 April 2026” and insert "1 March 2027”
See explanatory statement for Amendment 3.
Amendment 14, page 461, line 38, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 15, page 462, line 3, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 16, page 462, line 7, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 17, page 462, line 15, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 18, page 462, line 19, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 19, page 462, line 30, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 20, page 462, line 35, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 21, page 464, line 14, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 22, page 464, line 21, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Amendment 23, page 464, line 27, leave out “6 April 2026” and insert “1 March 2027”
See explanatory statement for Amendment 3.
Schedule 12.
New clause 1—Section 62: application in Northern Ireland—
“(1) The Chancellor of the Exchequer must, within six months of this Act coming into force, publish an assessment of the effects of the measures in section 62 as they apply in Northern Ireland.
(2) The assessment must consider—
(a) the number of estates in Northern Ireland expected to be subject to the reduction in agricultural property relief made under this Act,
(b) the potential benefits to farmers in Northern Ireland of exempting land used for agricultural purposes from the changes to agricultural property relief made under this Act,
(c) the potential costs to the Exchequer of exempting land used for agricultural purposes from the changes to agricultural property relief made under this Act,
(d) the impact of the measures on farm succession, land retention, and the viability of agricultural businesses in Northern Ireland, including any potential implications for the resilience and security of the UK’s food supply, and
(e) any other matters that the Chancellor of Exchequer deems appropriate.
(3) In subsection (2), “land used for agricultural purposes” does not include land that falls within the Financial Conduct Authority’s definition of a land-banking investment scheme.
(4) In carrying out the assessment, the Chancellor of the Exchequer must have regard to—
(a) the average farm size and land valuation profile in Northern Ireland,
(b) the prevalence of intergenerational family farming in Northern Ireland,
(c) the interaction between agricultural property relief and devolved agricultural support schemes, and
(d) any disproportionate impact on rural communities in Northern Ireland.
(5) The assessment must be carried out following meaningful consultation with—
(a) the Department of Agriculture, Environment and Rural Affairs in Northern Ireland,
(b) representatives of farmers and land-based businesses in Northern Ireland, and
(c) such other persons as the Chancellor of the Exchequer considers appropriate.
(6) The Chancellor of the Exchequer must, within three months of publishing the assessment, lay before Parliament a statement setting out the steps the Government intends to take in response to the assessment’s findings.
(7) The Chancellor of the Exchequer must keep the operation of the measures in section 62 under review in light of the assessment and publish a further assessment within 18 months of this Act coming into force.”
New clause 6—Impact assessment of section 62 prior to implementation—
“(1) The Chancellor of the Exchequer must, within three months of the passing of this Act, lay before the House of Commons an assessment of the impact of implementation of section 62 on family-owned farms and businesses.
(2) The assessment made under subsection (1) must consider potential impacts on—
(a) business continuity,
(b) land use, and
(c) rural employment.”
New clause 7—Uprating of allowance amounts for agricultural property—
“The Chancellor of the Exchequer must, within six months of the passing of this Act, undertake and publish an assessment of the potential merits of uprating annually the relief allowance amount for agricultural property by the change in the value of agricultural land.”
New clause 17—Review of anti-forestalling provisions relating to Agricultural Property Relief—
“(1) The Treasury must conduct a review of the effects of the anti-forestalling provisions relating to Agricultural Property Relief.
(2) The review must, in particular, consider the effects of those provisions on—
(a) succession planning and intergenerational transfer of agricultural land and businesses,
(b) the viability and continuity of family-run farms,
(c) food security and domestic agricultural production,
(d) land management, environmental stewardship, and the condition of the countryside, and
(e) the availability of agricultural land for active farming.
(3) In conducting the review, the Treasury must consult such persons as it considers appropriate, including representatives of the agricultural sector.
(4) The Treasury must lay before the House of Commons a copy of the report within 12 months of the coming into force of the anti-forestalling provisions under this Act.”
Dan Tomlinson
As we come to the final group in today’s Committee stage on the Bill, I am pleased to open this important debate on clause 62, schedule 12 and the many associated amendments. As reiterated throughout the day, the Bill delivers on the choices made at this Government’s two Budgets. It delivers fair and necessary reforms that strengthen the foundations of our economy and provide a secure future for our country. The choice at those two Budgets was austerity and decline or investment and renewal, and on both occasions the Labour Government rejected austerity and chose renewal.
Clause 62, schedule 12 and Government amendments 24 to 29 make changes to agricultural property relief and business property relief in order to target them more fairly, contribute to the sustainability of public finances and fund public services. Under the current system, the 100% relief on business and agricultural assets is heavily skewed towards the wealthiest estates. According to HMRC data for 2021-22, 40% of agricultural property relief across the UK was claimed by just 7% of the estates making claims. That is £219 million in tax relieved from just 117 of the largest estates in the country, and it is a similar picture for business property relief: more than 50% of BPR was claimed by just 4% of the estates making claims. That is a striking £558 million in tax relieved from just 158 estates.
That contributes to the very largest estates paying lower average effective inheritance tax rates than the smaller estates, and significantly lower average effective inheritance tax rates than most people who end up paying IHT will pay. That is the status quo that those seeking to reverse the Government’s reforms in full wish to perpetuate. It is not sustainable and, in the Government’s view, it is certainly not fair to maintain such a large tax break for such a small number of claimants, especially in the context of the wider pressures on the public finances and public services.
Conduct of the Chancellor of the Exchequer
Judith Cummins Excerpts(3 months, 1 week ago)
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James Murray
My hon. Friend is right to point out that the OBR’s report contains a series of recommendations. It was, in fact, published within a few days of the premature publication. We are acting on its recommendations, including the recommendation that we should determine whether this has happened before, at previous fiscal events. While the OBR indicated that it might have happened earlier this year, at the time of the spring statement, it did not look into previous fiscal events, either under this Chancellor or under Chancellors in the last Government. We are looking into that to find out what happened.
More widely, beyond the EFO and the OBR, we put the utmost weight on Budget security, as I told the House last week. That is why, as I have told the House, a leak inquiry is under way, with the full support of the Chancellor and the whole team at the Treasury. In addition, the permanent secretary to the Treasury will conduct a review of its security processes, which will inform future fiscal events. The Budget security review will happen in the new year, and we will publish the outcome once it has concluded. More immediately, however, while recognising the seriousness of what happened with the OBR’s forecast, we remain fully committed to working with an independent OBR, and we recognise its vital role as a core part of our fiscal framework. The Government will soon launch a competitive external recruitment process to appoint a new chair, subject to the consent of the Treasury Committee. In the meantime, Professor David Miles and Tom Josephs will jointly lead the OBR until the new chair is in place.
I am happy to come here every day to explain the decisions that we took in the Budget in the interests of the British people. It is clear that the Conservatives do not want to talk about £150 off energy bills, freezes in prescription charges and rail fares, our investment in our NHS, and the fact that we are cutting debt. They do not want to confront the fact that this is a Budget that not only delivers for Britain, but does so in challenging times. It is a Budget that invests in Britain, supports the NHS, helps people with the cost of living, and gets our debt and borrowing down. It is a Budget delivered by a Chancellor who takes challenges head-on, makes the right decisions for our country, and meets the priorities of the British people. It is a Budget from a Government who will not let Britain’s future be defined by the failures of Governments past. This is a Budget that we are proud of, and we reject the Opposition motion.
Chris Vince
The right hon. Gentleman will be aware that the OBR was very confident that the Chancellor did not mislead in the statement she put out, and I am confident about that.
The Chancellor was consistent in her priorities for this Budget: tackling the cost of living crisis, bringing down waiting times and cutting borrowing. It cannot be right that £1 in every £10 is being spent on interest payments alone. We cannot go back to the austerity we have seen, with schools and hospitals that would literally fall apart.
I would like to finish with two quotes. The first is from Margaret Thatcher:
“I always cheer up immensely if an attack is particularly wounding because I think, well, if they attack one personally, it means that they have not a single political argument left.”
And finally, to quote Dickens:
“charity begins at home, but justice begins next door”.
Madam Deputy Speaker (Judith Cummins)
I call the Chair of the Treasury Committee, Dame Harriett Baldwin.
Several hon. Members rose—
Madam Deputy Speaker (Judith Cummins)
Order. We will start the winding-up speeches at 6.40 pm.
Graham Stuart
I have very limited time, so forgive me but I will not.
It matters because the Chancellor has a nearly £3 trillion debt to service, and because trust is everything. Because the policies that are being implemented and the promises that were made by the Chancellor are at such variance, the markets—unlike in any other western nation, I believe —have put a higher and higher cost on borrowing for this country. That has very real-world impacts. Investors from Beverley to Berlin need to believe what the Chancellor says. After all, “credit” comes from the Latin “credo”, meaning “I believe”. If that belief falters, borrowing costs rise and more of our taxes go to paying lenders instead of funding the priorities of the British people. When trust goes, growth goes. Investors hesitate, businesses hold back and families feel the pinch.
The Chancellor appears to have learnt nothing from last year’s Budget of broken promises. It was a Budget that brought higher unemployment, fewer businesses and lower growth. She did not learn from that first exercise. As the hon. Member for St Albans (Daisy Cooper) pointed out, the weakness of the jobs tax is not just that it will hurt growth; it does not even raise much money. It was peculiarly poorly thought through.
This year’s Budget repeated more of the same. The British people know that the way to tackle the cost of living is by getting people into work, not increasing the number of people on welfare; and by creating opportunity, not dependency. But Britain has a Chancellor who talks about helping working people while making it harder to work, to save and to succeed—and throwing the OBR under the bus while she is at it. That is not a vision for the future, and it is certainly not leadership; it is fantasy dressed up as policy, and the people of Beverley and Holderness can see right through it.
Labour came to power promising change. Unfortunately, change has been delivered, but it is not what we were promised. We have 280,000 more people on the unemployment register, more than 200,000 businesses have closed, and 5,000 people are signing off sick every single day, because of the decisions made by this Labour Government. People are angry about the impact of Labour policy, but my constituents tell me that they are particularly angry about feeling misled. I hope I have shown my own candour in addressing my earlier error, for which I apologise again. Can we Members of this House try to speak honestly and accurately, and not gaslight or mislead?
Graham Stuart
On a point of order, Madam Deputy Speaker. Last time I checked, this debate was supposed to be about the conduct of the Chancellor of the Exchequer. I know the Minister is relatively new to the Dispatch Box; perhaps he may need a little guidance.
Madam Deputy Speaker (Judith Cummins)
I thank the right hon. Gentleman for his point of order. I am sure the Minister has heard it and will return to his speech.
Dan Tomlinson
Indeed; I heard the point of order loud and clear. It is worth remembering that this is an Opposition day debate—I think it is within the remit to talk about the Opposition and the fact that they have lost all their players to the other team.
I also think it is time to move on from talking about process, because on this side of the House, we have a country to run, an economy to build and public services to mend. Instead of this subject, we could have talked about whether it is right to raise wages for those on the lowest incomes, but the Opposition did not want to bring that up. Maybe that is because wages have risen faster in the first 10 months of this Government than they did in the first decade of the Conservative Government, or maybe it is because it turns out that their latest policy is a real-terms cut to the living wage. We could have talked about the cost of living, but again, the Conservatives did not choose that as a topic because its mini-Budget crashed the economy and added thousands of pounds to mortgages, and since this Government have come to power, the Bank of England has cut interest rates.
Taxes
Judith Cummins Excerpts(4 months, 1 week ago)
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Madam Deputy Speaker (Judith Cummins)
I inform the House that Mr Speaker has not selected either of the amendments tabled. I call the shadow Chancellor.
Madam Deputy Speaker (Judith Cummins)
Order. I do expect Members to be here for slightly longer before intervening.
Sir Mel Stride
Madam Deputy Speaker, that is a great shame. The hon. Gentleman has not been here for any of the debate, but that does not mean that he might not have given the best possible intervention from the Labour Benches so far. Perhaps he may like to come in a little later.
We have a Government who are engaged in serial breaches, who have no backbone to take the right decisions, and who will always fold to pressure, including from their own Back Benchers—and all at the expense of businesses and hard-working people up and down our country.
Kit Malthouse
On a point of order, Madam Deputy Speaker. I seek your guidance. The Minister has said that he is unwilling to discuss what might be in the Budget with the House. He did not, however, deny that he may have done so with journalists, or that he may have authorised others to brief to the media what may or may not be in the Budget. In the absence of that denial, are we within our rights to demand that the House be privy to what those conversations contained, in the same way that the business pages of The Times may have been?
Madam Deputy Speaker (Judith Cummins)
That is not a point of order; it is a matter of debate. I can calm Members’ nerves by saying that it is not many more sleeps until Budget day.
James Murray
It is for the Health Department to set out the details in response to any questions that the hon. Gentleman has tabled. The point about the merger between NHS England and the Department of Health and Social Care is that it is a way of cutting costs and ensuring that that money is reinvested in frontline services. Rather than having duplicative structures within our system, we want to ensure that we are merging NHS England and the Department of Health to make those savings, which we can reinvest in patient care.
As I said, there are still many challenges ahead and we are impatient to see things improve. Globally, inflation remains high and confidence is low, deterring investment and hindering growth. As geopolitical uncertainty grows, we are also faced with a critical need to invest in our defence spending. Domestically, we must continue to cut NHS waiting lists, lower the cost of living and improve our country’s productivity. We must invest in our roads, transport, housing, infrastructure, public services, towns and cities and the businesses for which the last Government failed so completely to provide.
Conservative Members will see the Budget two weeks from today. They will have plenty of opportunity to scrutinise it and participate in a serious debate about it later this month. We will, of course, oppose today’s motion, which speculates on what the Budget might contain. The effort of rebuilding a country requires the contributions of everyone in that country. Together, we can renew the UK and build an economy that is fair and thriving. That is what this Government were elected to do and that is what the Budget in two weeks’ time will play its crucial part in achieving.
Stamp Duty Land Tax
Judith Cummins Excerpts(4 months, 3 weeks ago)
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Bradley Thomas
My hon. Friend is spot-on. That is incredibly short-sighted, and I think it will prove to be a false economy.
I urge the Government to embrace good design to provide a justification to my constituents for why they are pursuing the current house building targets in such a disproportionate way across the country. Most of all, I implore the Government to put at the centre of their fiscal plans the scale of ambition that hard-working people have every single day when they set their alarms and go out to work—they want to do the right thing for their families. The Government must realise that pulling the right fiscal levers and cutting the right taxes will stimulate the very activity that will drive the growth they are so desperate to achieve.
Spending Review 2025
Judith Cummins Excerpts(9 months, 1 week ago)
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Madam Deputy Speaker (Judith Cummins)
Order. I need to be able to hear, and I am sure our constituents also want to hear.
Rachel Reeves
The shadow Chancellor said:
“The credibility of the UK’s economic framework was undermined by spending billions…with no proper plan for how this would be paid for.”
I could not put it better myself. He could have gone a lot further. For example, he could not even bring himself to mention Liz Truss by name—Stride by name, baby steps by nature—but at least he has made a start. He also spoke about
“the death of what we might call the Age of Thoughtfulness.”
Speaking of the death of thoughtfulness, let me turn to the shadow Chancellor’s response to the spending review. He welcomed our nuclear investment of £30 billion, but he said it is not enough. He welcomed our defence investment of £11 billion, but he said it was not enough. He and his party opposed the decisions that this Government have taken to make those announcements possible by voting against the Budget in October. You cannot spend the money if you will not raise the money. That is a lesson from Liz Truss that he has already forgotten.
The shadow Chancellor complained about the level of investment that I have announced, ignoring the fact that the reason this investment is so important is because his party oversaw 14 years of cratering investment, stagnating wages and public service collapse. Let me remind him of what I said: the Tories’ fiscal rules guaranteed neither stability nor investment, and that is why I changed them, so we can get stability and investment. All their fiscal rules enabled was them to crash the economy, and the working people of Britain will never forgive them for doing that.
The Conservatives set themselves against investment in the renewal of Britain. They set themselves against NHS investment, free school meals, investment in skills, investment in carbon capture and storage, investment in transport in our towns and cities—investment in everything that we have set out today—and yet the British people voted for that investment. The right hon. Gentleman says that the Home Office budget involves an increase in asylum costs. It does not. Asylum costs are coming down under this Labour Government because we are deporting more people and getting them out of hotels. He says we are cutting police spending; we are increasing it by 2.3% a year in real terms. We have had no apology for the damage the Conservatives did to our economy and our public services.
Interest rates have been cut four times in the past 11 months; GDP was the fastest growing of all G7 economies in the first quarter of the year; business confidence is rising; 500,000 more people are in work; record investment has been made in Britain; real wages have increased more in 10 months than they did in 10 years of a Conservative Government; the national living wage has increased, giving 3 million working people a pay rise; and we have done all that without increasing taxes on working people. Those are the choices we have made. That is the difference we are making.
In the spending review today, we set out the spending that we announced in the Budget last year and in the spring statement—not a penny more, not a penny less. I said in the Budget and in the spring statement that public services must now live within the means that we have set, and we have achieved that. There will be a Budget later this year, and in that Budget we will set out all the fiscal plans in the round. But we have already drawn a line under the Tory mismanagement, with tax rises last year, and we will never have to repeat a Budget like that again because we will never have to clean up after the mess that the Conservatives made again.
The reason that this Labour Government have spent their first year fixing the foundations of our economy and stabilising our public finances is because it is what we had to do. The Government of which the shadow Chancellor was a part of left an unenviable legacy, which is why his party is, in his own words, “in a difficult place.”
We have made our choices. We are removing barriers to growth, which were untouched by the Conservatives in their 14 years in office; strengthening Britain’s security with the biggest real-terms increase in defence spending since the end of the cold war, which the Conservatives did not do in their 14 years in office; bringing our health service into the 21st century after 14 years of Conservative neglect; investing in Britain’s renewal to repair the damage done by the Conservatives in their 14 years in office; and, in stark contrast to the Conservatives’ 14 years of chaos, waste and decline, we are delivering on the priorities of the British people.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I congratulate my right hon. Friend on delivering this spending review—the first zero-based review in a very long time. It is vital that as taxpayers—the citizens—are looking carefully at their spending in this cost of living crisis, that Government do that too. We look forward to having the Chief Secretary to the Treasury before the Committee in two weeks’ time to consider the review in more detail.
I note from the figures that the Chancellor has made a good fist of ensuring that Departments have more than they did under the Conservatives in many cases, and I welcome her work to deliver on tackling child poverty, a scourge on our society. I note from my brief glimpse, however, that there is a smaller increase for the Ministry of Housing, Communities and Local Government than there would have been—there is the £39 billion over a decade for affordable social housing. Children living in poverty also face poverty of situation in many cases. Will she expand on how she and the Deputy Prime Minister will deliver that money to provide the social housing that so many children in poverty desperately need?
Rachel Reeves
I appreciate my hon. Friend’s welcoming of the breakfast clubs, free school meals and the capping of school uniform costs, which will help families living in poverty. The free school meals will, as she knows, lift 100,000 children out of poverty. She mentions the affordable homes grant, which will have its biggest ever increase. We have set that budget for 10 years to give certainty to the sector, so that it understands what is available. In addition, we have set out some social rent changes to give certainty to the sector to invest for the future.
Rachel Reeves
We as a Government were proud to be able to step in and save British Steel at Scunthorpe, and again I thank my hon. Friend the Member for Scunthorpe, but it is not just Scunthorpe. There are also opportunities in Sheffield and Port Talbot, because as we build this infrastructure—whether it is trams and trains, nuclear power or submarines—we want to use steel made in Britain. That is a really exciting opportunity, and the investments we are making in small modular reactors and fusion in Nottinghamshire and Derby create great opportunities for jobs. That is why we are also making a record investment in skills through the spending review, so that young people in North East Derbyshire and beyond can get access to the jobs that are being created.
Liz Saville Roberts (Dwyfor Meirionnydd) (PC)
Diolch yn fawr iawn, Dirprwy Lefarydd. The announcement of just £44.5 million a year for the next 10 years for Welsh rail is Labour’s flimsy fig leaf of an excuse for the multibillion and multi-decade scandal that is HS2. The money announced today is only significant if it matches what Wales will continue to lose from all England-only rail projects, up to now and in the future. Can the Chancellor guarantee that from now on, Wales will receive the full £4 billion HS2 consequential funding, or will she admit that her announcement on Welsh rail funding is nothing but smoke and mirrors?
Rachel Reeves
I thank my hon. Friend for making those representations to me and to the Secretary of State for Transport on the importance of better rail connections so that people in Bangor Aberconwy and across north Wales can better access good jobs and public services. That is why we have put in £445 million at the spending review.
Regional Growth
Judith Cummins Excerpts(9 months, 2 weeks ago)
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Darren Jones
I thank my hon. Friend for his brilliant lobbying on behalf of his constituents and the east midlands, and for welcoming the historic level of funding for transport announced today. He is right to point out that this is about not just transport infrastructure but the communities in which people live, livelihoods and the opportunities for them and their families. I know that he will continue to work hard with our brilliant Mayor Claire Ward in the east midlands to turn these numbers into stories that matter for people in his constituency and across the east midlands.
Madam Deputy Speaker (Judith Cummins)
I call Jayne Kirkham to ask the last question on the statement.
Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)
Thank you, Madam Deputy Speaker. I welcome the transport investment, which is needed in those city regions and spreads the wealth out. Cornwall also has ambitious transport plans, but does not have a large city region for 175 miles. It is very difficult to get public transport to our airport or a direct bus to our one acute hospital. I am also campaigning for a freight rail link for Falmouth, so I am heartened to hear that there will be more transport announcements in the spending review. Will the Chief Secretary to the Treasury confirm that that investment will go further down into the south-west? On investment more widely, he has talked about the National Wealth Fund, which we know is dealing in early-stage project development support in areas of the country. Will he confirm that those talks will also go wider than the city regions, so that places such as Cornwall that have political and business partnerships and a strong growth plan will be considered by the National Wealth Fund?
Bank Resolution (Recapitalisation) Bill [Lords]
Judith Cummins ExcerptsThursday 24th April 2025
(10 months, 3 weeks ago)
Commons ChamberRead Full debate Bank Resolution (Recapitalisation) Act 2025 View all Bank Resolution (Recapitalisation) Act 2025 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: Consideration of Bill Amendments as at 24 April 2025 - large print - (24 Apr 2025)
Mark Garnier (Wyre Forest) (Con)
I beg to move, That the clause be read a Second time.
Madam Deputy Speaker (Judith Cummins)
With this it will be convenient to discuss the following:
Amendment 1, in clause 1, page 1, line 20, at end insert—
“(2A) The Bank of England must not require the scheme manager to make a recapitalisation payment if it has directed the financial institution to maintain an end-state Minimum Requirement for Own Funds and Eligible Liabilities (MREL) exceeding minimum capital requirements.”
This amendment seeks to prohibit the use of FSCS funds to recapitalise large financial institutions, defined as those which have reached end-state MREL.
Amendment 3, page 1, line 22, at end insert—
“(3A) No application to the scheme manager for recapitalisation payments may be considered by the Bank of England for a financial institution which has been directed to maintain an end-state Minimum Requirement for Own Funds and Eligible Liabilities (MREL) exceeding minimum capital requirements, unless permission has been given, through regulations, by the Chancellor of the Exchequer.
(3B) Regulations made by the Chancellor of the Exchequer, subject to subsection (4), shall be made through Statutory Instrument under the negative procedure.”
This amendment would ensure financial institutions that maintain an end-state Minimum Requirement for Own Funds and Eligible Liabilities exceeding minimum capital requirements are excluded from the provisions of the Bill, unless permission has been given through regulations.
Amendment 4, page 2, line 3, at end insert—
“(5A) As a further objective to the special resolution objectives in section 4 of the Banking Act 2009, when discharging its functions in respect of the exercise of recapitalisation payments under this section, the Bank of England must observe the competitiveness and growth objective.
(5B) The competitiveness and growth objective is facilitating, subject to aligning with relevant international standards—
(a) the international competitiveness of the economy of the United Kingdom, and
(b) its growth in the medium to long term.”
This amendment would place a further objective on the Bank of England to consider the competitiveness and growth of the market before directing the recapitalisation of failing small banks through a levy on the banking sector.
Amendment 2, in clause 5, page 4, line 14, at end insert—
“(2B) The code must include guidance to the Bank of England on the exercise of its functions in relation to building societies to ensure that, in circumstances where the use of a recapitalisation power may result in demutualisation, due consideration is given to the impact of such demutualisation on members and on the mutuals sector.
(2C) In preparing the guidance required under subsection (2B), the Treasury shall consider the feasibility of selecting a purchaser from the mutuals sector as a means of avoiding demutualisation, provided such a purchaser meets the resolution objectives.”
This amendment seeks to ensure that, where possible, the selection of a purchaser from the mutuals sector is considered to avoid demutualisation, provided this aligns with the Bank's resolution objectives.
Mark Garnier
Before speaking to new clause 3 specifically, let me reiterate that the Opposition welcome the Government’s decision to carry over the legislation from the previous Parliament, and that the principles underpinning the Bill continue to enjoy strong cross-party support. We all want and need confidence in our banking sector, yet the failure of Silicon Valley Bank UK exposed a gap in our resolution framework for smaller banks. Unlike larger institutions, they do not hold the bail and bond mechanism known as MREL—the minimum requirement for own funds and eligible liabilities—reserves to facilitate recapitalisation in the event of a crisis. By providing the Bank of England with new tools to manage small bank failures, the Bill remains both prudent and necessary to protect financial stability and public funds.
Moving on to the amendments we have tabled on Report, I want to make it clear that our approach is constructive and focused on strengthening the Bill, not obstructing its progress. As the Bill has made progress through both Houses, our intention has been to address a series of smaller but none the less significant issues that we believe require further attention. I appreciate that this might be a conversation we can continue in today’s debate, or beyond it, and I would certainly welcome conversations with the Minister, who has been incredibly open to direct conversations in her usual pragmatic style, to further discuss these matters.
We have three measures selected for discussion today. I will speak first to new clause 3, which addresses a critical gap in the Bill’s scope: the protection of credit unions. These community-focused institutions have seen significant growth in recent years, driven in part by the eradication of predatory payday lenders, and they continue to provide a vital role in delivering affordable finance to those underserved by traditional banks.
Membership of credit unions rose from 1.89 million in 2019 to 2.14 million in 2024—an increase of more than 260,000. However, while their importance has grown, their inclusion in our resolution framework has not kept pace. The Financial Services Compensation Scheme has paid £10.1 million in compensation to credit union depositors over the past three financial years, primarily due to small-scale failures, underscoring their potential vulnerability and the need for a tailored approach as the sector expands.
The growth of credit unions is a success story, but it demands proportional safeguards. The Bill, however, excludes credit unions from its recapitalisation mechanism. While their smaller size and unique nature may differentiate them from banks, questions remain. How does the current resolution regime account for credit union failures as the sector scales up? Is there scope to develop a mechanism that protects members without imposing undue burdens on these community institutions? New clause 3 seeks clarity on this matter, requiring the Minister to produce a report outlining how the resolution framework can be adapted to protect credit unions, ensuring that their growth does not outstrip their regulatory safeguards. The vast amount of legislation for credit unions was written back in the 1970s. The previous Government made significant reforms for credit unions through amendments to the Financial Services and Markets Act, and I welcome the common bond reform consultation, which closed last month.
I know that the Government are giving the sector serious consideration, and I am sure the Minister will agree that this is not about applying bank-style rules to mutuals, but about recognising their unique role and risks. Credit unions are more than financial institutions; they are engines of financial inclusion. They often serve small, working-class communities, whom I know the Government want to support specifically. As the sector evolves, so too must our approach. We must ensure that our regulatory framework grows. I hope the Government will support this amendment, which simply seeks to look more clearly at the options available when a crisis happens.
Amendment 2 seeks to address a concern that has been raised with me by the mutual and building society sector. These institutions are not relics of the past, but vital components of our financial ecosystem. Although the first known building society was set up in 1775 by ordinary working people helping themselves to build their financial resilience and get a home of their own, they remain current today. Building societies today hold more than £360 billion in assets and provide mortgages for more than 3 million people in the UK. They represent a significant proportion of the housing market and are a trusted source of savings for millions more. They provide a clear and important diversification in our financial markets, offering a clear alternative to shareholder banks.
The Labour party stood on a clear manifesto commitment to double the size of the co-operative and mutual sector, which the Opposition agree is a very good policy. Today presents a good opportunity for Labour Members to demonstrate that commitment to the sector by enshrining in the Bill a requirement that the Bank of England consider the risk of demutualisation when using the mechanisms enshrined therein. There is a genuine fear in the building society sector that, without proper safeguards, the recapitalisation mechanism offered by the Bill could inadvertently become a back door for demutualisation. When a mutual institution faces resolution, the selection of a purchaser from the plc sector risks permanently dismantling its mutual status, undermining the very ethos that makes these institutions unique.
Our amendment would provide a proportionate solution, requiring the Bank of England to consider the impact of demutualisation on members and the sector as a whole, while also exploring the feasibility of selecting a mutual sector purchaser, if one exists and meets the resolution objectives. This is not about privileging mutuals at the expense of financial stability; it is about ensuring that the Bank’s resolution tools do not inadvertently homogenise our financial landscape. Silicon Valley Bank demonstrated the need for agile resolution frameworks, but it also highlighted the importance of preserving institutional diversity.
Mutuals and building societies often serve communities and demographics that larger banks frequently overlook. Their potential loss would leave gaps in financial inclusion and weaken the resilience of the sector. Importantly, without the millions of mortgages provided by the building society sector, particularly for first-time homeowners, Labour’s house building plans would be simply impossible.
I hope the Minister appreciates that our amendment strikes a careful balance between safeguarding financial stability and honouring our commitment to a pluralistic banking system—one where mutuals continue to thrive as a cornerstone of community-focused finance. I remind Labour Members that it will be much harder to double the size of the mutual sector if, in the event of a failure, recapitalisation defaults towards the banking sector. I hope the Government will therefore demonstrate their manifesto commitment to the mutual and co-operative sector by voting today for new clause 3 and amendment 2.
There remains genuine concern—shared across this House and reflected in the debates in the other place—over the risk of the recapitalisation mechanism being applied too broadly and potentially capturing larger banks that already hold substantial loss-absorbing resources, such as MREL. We continue to believe that the mechanism should be limited in scope and targeted at smaller banks that do not have the same capacity to manage their own failure. Amendment 1 would limit the use of the mechanism to what it was always intended to be: a mechanism for smaller banks outside the MREL regime.
I appreciate that new clauses 1 and 2 have already been ruled out of scope, but it may be worth noting a couple of points on these measures. I wish to place on the record today that the Opposition believe the time has come for a review of how we set the threshold for MREL, as well as the protection ceilings for depositors under the Financial Services Compensation Scheme. The current static nature of MREL thresholds disproportionately affects smaller and mid-sized banks, particularly challenger banks. By indexing MREL thresholds to inflation, we can ensure that the regulatory framework remains robust over time without stifling competition. These institutions often operate on tighter margins and face significant barriers in meeting rigid capital requirements, hindering their ability to scale and compete effectively with larger incumbents. While we appreciate that the Bank of England’s consultation on MREL closed earlier this year, we hope that the Government will consider these points. Threshold limits should not stay static with time.
Likewise, we welcome the Government’s recognition of the need to review the Financial Services Compensation Scheme deposit limit. The recent announcement of the increase of the deposit protection scheme from £85,000 to £110,000, although very welcome, is certainly overdue. It is worth noting that if the limit had kept pace with inflation, it would be nearly two thirds higher, at around £140,000, according to the Federation of Small Businesses. It is worth noting that only 4.6% of Silicon Valley Bank’s UK deposits were insured by the Financial Services Compensation Scheme—
Madam Deputy Speaker (Judith Cummins)
Order. May I just remind the hon. Gentleman that we are discussing what is in scope, rather than what is not in scope and has not been selected?
Mark Garnier
My apologies, Madam Deputy Speaker. These are points that we feel are worth noting, but I take your comments.
I will turn to amendment 3, tabled by the Liberal Democrats. Although we share the intent behind the amendment, which mirrors the Conservatives’ amendment on MREL limits for banks, there is a critical difference in its approach that gives us pause. Like us, the Liberal Democrats recognise that end-state MREL banks should not be the primary target of this legislation. However, their amendment introduces a requirement for a statutory instrument under the negative procedure that we believe would create more problems than it solves.
Our concern lies in the potential impracticality of this approach. Banking crises can unfold rapidly, as we saw with Silicon Valley Bank UK, where decisions were made in a matter of hours, not days. A statutory instrument subject to the negative procedure becomes law the moment the Minister signs it, which is a good thing, and it remains in law unless either House rejects it within 40 sitting days. That creates a window of uncertainty. If Members were to pray against the statutory instrument, particularly in a hung Parliament, it could trigger market instability, which is precisely what this Bill seeks to avoid, so although we agree with the principle of limiting the Bill’s scope, we worry that the mechanism could tie the hands of a future Chancellor, hindering their ability to respond swiftly and decisively in a crisis. For those reasons, we cannot support the Liberal Democrat amendment.