Finance (No. 2) Bill

Debate between Lucy Rigby and Caroline Nokes

Committee of the whole House
Tuesday 13th January 2026 Commons Chamber

[The Economic Secretary to the Treasury (Lucy Rigby)]

It is a pleasure to open this second day of our Committee stage debate. Yesterday the Exchequer Secretary to the Treasury, my hon. Friend the Member for Chipping Barnet (Dan Tomlinson), explained how the Bill gives effect to a Budget that took fair and responsible decisions to stabilise and strengthen the public finances, address the cost of living and renew our public services. We are clear about the fact that we will not repeat the mistakes of the last Government. That means no return to austerity and no completely irresponsible unfunded spending commitments, both of which, unfortunately, were features of the Conservatives’ time in power. This Government wholeheartedly reject those failed approaches and choose a different path, one of fiscal responsibility and one that will strengthen our economy so that it delivers for people throughout the country. Today the Committee will consider a further set of important and targeted measures relating to pensions, gambling duties and alcohol duty, which reflect this Government’s commitment to a tax system that is fair, modern, and aligned with the realities of today’s economy.

Our approach to changes in gambling taxation is fair and proportionate, as the Committee will hear later this afternoon, and, as my right hon. Friend the Chancellor explained in her Budget statement, those reforms will contribute significantly to the Government’s efforts to lift an additional 450,000 children out of poverty. The pensions clauses will ensure that generous tax reliefs continue to support the core purpose of pensions, which is to help people to save for retirement. They address long-standing inconsistencies, and will ensure that pensions are not used primarily as a vehicle for passing on wealth free of inheritance tax, but instead continue to protect the vast majority of estates and maintain strong incentives to save.

I turn to clauses 63 to 68. Pensions enjoy significant tax benefits, with gross income tax and national insurance contributions relief costing £78.2 billion in 2023-24. It is therefore crucial to ensure that these reliefs are used for their intended purpose, which is to encourage saving for retirement and later life. Changes to pensions tax policy by the previous Government over the last decade led to pensions being used, and increasingly marketed, as tax planning vehicles to transfer wealth, rather than holding true to pensions’ primary purpose, which is of course to provide a way to fund retirement.

As hon. Members will know, there are also long-standing inconsistencies in the inheritance tax treatment of different types of pensions. Most UK-registered pension schemes are discretionary, meaning members can nominate whom they would like to receive death benefits, but the scheme trustees are not obliged to follow members’ wishes. Under existing rules, any unused pension funds and death benefits from discretionary schemes are not subject to inheritance tax. By contrast, some pension schemes are non-discretionary, and these are subject to inheritance tax under existing rules.

The changes made by clause 63 mean that most unused pension funds and death benefits payable from a pension will form part of a person’s estate for inheritance tax purposes from 6 April 2027. Clause 64 ensures that personal representatives are responsible for paying any inheritance tax due. Clause 65 means that personal representatives will be able to request that the pension scheme administrator withhold paying a proportion of benefits where certain conditions are met. It also allows both personal representatives and pension beneficiaries to make pension scheme administrators pay inheritance tax due on pensions directly to His Majesty’s Revenue and Customs—again, provided certain conditions are met.

Clause 66 makes some consequential amendments to the Inheritance Tax Act 1984 to ensure that the existing exemption for spouses and civil partners and the treatment of payments to charities continue to apply. Clause 67 changes the income tax rules for pensions to provide for the payment of inheritance tax, including in respect of direct payment by pension schemes. Clause 68 ensures that the changes take effect from 6 April 2027.

These clauses ensure that pensions are used, as I have said, for their core intended purpose, rather than as a vehicle for passing on wealth free of inheritance tax. They also remove long-standing inconsistencies and deliver on the Government’s promise to this country to build a stronger and fairer economy.

[The Second Deputy Chairman]

I call the shadow Minister.

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[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

With this it will be convenient to consider the following:

Clauses 84 and 85 stand part.

Schedule 13.

New clause 21—Review of the impact of sections 83 and 84: free bets and freeplays—

“The Chancellor of the Exchequer must, within six months of the passing of this Act, undertake an assessment of the impact of implementation of sections 83 and 84 of this Act in respect of the treatment of free bets and freeplays for calculating general betting duty on remote bets.”

New clause 25—Statements on increasing remote gambling duty and introducing a new rate of General Betting Duty—

“(1) The Chancellor of the Exchequer must, within six months of this Act being passed, make a statement to the House of Commons on the effects of the increase in gambling duties made under sections 83 to 84 of this Act.

(2) The statement made under subsection (1) must include details of the impact on—

(a) sports and horseracing,

(b) the number of high street betting shops,

(c) the gambling black market,

(d) the employment rate, and

(e) the public finances.”

This new clause would require the Chancellor to make a statement about the effects of the increase in gambling duties.

[Lucy Rigby]

Clauses 83 to 85 and schedule 13 make changes to the gambling duties regime, to better reflect the modern gambling market and to raise more than £1 billion a year to support the lifting of the two-child benefit cap. I will first speak briefly to the broader context of the package, and I will then turn to each clause.

Gambling is a significant part of the UK economy, generating an annual gross gambling yield of around £16.8 billion in 2025, according to figures from the Gambling Commission. The industry has changed markedly in recent years, while the duty system has not changed since 2019. Most notably, there has been a structural shift from in-person to online gambling. Between 2015 and 2025, remote gambling grew by 80%, while land-based gambling has declined by 10%. At the same time, evidence of gambling-related harms has become even clearer.

The estimated cost to the Government and society of gambling-related harms in England alone is between £1.05 billion and £1.77 billion a year. NHS figures show that over 40% of gamblers using online slots, bingo or casino games are considered to be at risk, compared with less than 15% of those betting in person on horseracing. Referrals for gambling addition have risen sharply—NHS England has doubled the number of clinics for problem gambling. I am grateful for representations from so many MPs and campaigners on this matter, alongside those with constituencies where horseracing plays an important role in the community and, indeed, the local economy.

In the Budget, the Chancellor made it clear that changes to gambling taxation are fair, proportionate and for a purpose, as they will directly contribute to lifting an additional 450,000 children out of poverty. This Government are very proud of that. Unfortunately, the Opposition showed little regard for child poverty when they were in government, and it is entirely in character, albeit no less shocking, that they oppose this Government’s changes and would increase child poverty as a result. Reform UK is even more brazen.

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[Lucy Rigby]

As I said, employment is an important consideration that has been borne in mind for the purposes of this Bill, and there has been considerable engagement on all these issues. If the right hon. Member seeks further engagement, I am more than happy to have it.

I was just about to conclude.I commend clauses 83 to 85 and schedule 13 to the Committee.

[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the shadow Minister.

Budget Responsibility Bill

Debate between Lucy Rigby and Caroline Nokes

Committee of the whole House
Wednesday 4th September 2024 Commons Chamber

[The Second Deputy Chairman]

I call Lucy Rigby to make her maiden speech.

[Lucy Rigby (Northampton North) (Lab)]

I pay tribute to my hon. Friend the Member for Plymouth Moor View (Fred Thomas) on his fantastic maiden speech and to all hon. Members who have made such brilliant maiden speeches in this afternoon’s debate. It is a privilege to follow them and to make my own maiden speech in the context of such an important Bill.

Northampton has sent Members to Parliament since 1283, and it is the honour of my life to be among them as the Member of Parliament for Northampton North. One of those former Members, I am proud to say, was the trailblazing Margaret Bondfield—the first woman to serve in Cabinet in this country, the first to be appointed to the Privy Council and the first to chair the TUC. I hope, in the course of my time here, that we might find ways to see Margaret’s name given greater recognition and prominence, as I believe is due. Some 51 years after Margaret Bondfield’s arrival in this House, the good people of my constituency elected Maureen Colquhoun—a trailblazer herself in relation to many issues, including being the country’s first openly gay MP.

I want to pay particular tribute to my two immediate predecessors: Sir Michael Ellis and Sally Keeble. Sir Michael stepped down at the last election, having served Northampton North for 14 years and served the country as a Minister in multiple roles. He is also remembered locally for performing lifesaving CPR on a constituent having a coronary episode—I am more than aware that that sets me a very high bar for looking after my constituents. Like Sir Michael, Labour’s Sally Keeble served Northampton North for well over a decade and served her country in government too. Sally has many achievements—notable among them was the taking through of one of the last pieces of legislation under the previous Labour Government to protect developing countries from vulture funds. Sally remains a dedicated and committed public servant. I do not mind admitting that I spoke to plenty of residents during the election campaign who told me that while they really appreciated my doorstep pitch for their support, they would be voting for Sally Keeble.

I am aware of the examples of good service in this place that have been set for me, and I hope to live up to them, so I want my constituents to know that serving our community in Northampton will be my first and highest priority for as long as I remain in this place. This place could, in fact, be in my constituency, because Northampton has been the seat of Parliament on more than 30 occasions. King John even moved the Treasury to Northampton in 1205, when he fell out with a few people in London over something akin to the disastrous mini-Budget—an option that I suspect those supportive of the Treasury’s current location will be glad to know was not suggested, as far as we know, to the former right hon. Member for South West Norfolk.

We are a town of deep pride in both our present and our past. We are the largest town in England. We have buildings of neo-gothic splendour; strong communities; beautiful green spaces such as Eastfield Park, Abington Park and the Racecourse; and not one but two shoe armies: Premiership champions Northampton Saints, and the mighty Cobblers. Our boot and shoemaking industry has provided many Members of this House with their footwear over the years, including, I am proud to say, the former Prime Minister and Member for Sedgefield, who wore the same lucky pair of Church’s brogues at every Prime Minister’s questions for 10 years, which just goes to show where a good pair of Northampton shoes can get you.