Taxes

Luke Evans Excerpts

Wednesday 12th November 2025 Commons Chamber

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

To put it in simple terms for those listening at home, the Chancellor raised taxes by £40 billion, she spent £30 billion and she borrowed £70 billion. Cumulatively, that will make people think, “How am I going to get the return on that investment if we are not growing the economy? How do I ensure that the interest will be paid?” That is why interest payments go up and we as a country end up paying more debt—because of the decisions the Chancellor has made.

[Sir Mel Stride]

My hon. Friend is absolutely right. If we borrow more money, we pay more for that borrowing. Of course, that has fed through to inflation. We know that inflation this year, according to the International Monetary Fund, will be the highest in the G7. The IMF also says it will be the highest in the G7 next year. The consequence of that in monetary policy is interest rates being higher for longer. Of course, if we have a mountain of debt and add to it ruinously, the cost of servicing that debt goes through the roof. It now stands at about £100 billion a year, rising to £130 billion at the end of the scorecard. That is more than twice what we spend on defence every year.

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[Sir Mel Stride]

My right hon. Friend is entirely right. The conclusion that one must draw on the mess that this Government have made of our economy is that it has become brittle, fragile and vulnerable to the kind of external shocks that it was able to withstand when the Conservatives were stewards of it.

While per capita growth is almost on the floor, unemployment is at a five-year high; as we know, every Labour Government in history have left unemployment higher on leaving office than it was on entering office. Inflation is high and business confidence is at rock bottom. In a recent survey, the Institute of Directors found that business confidence among its members was the lowest in history. My right hon. Friend the Member for South West Wiltshire (Dr Murrison) refers to covid—according to the IoD, business confidence is even lower now than it was during covid, when the economy contracted by more than 10% overnight. That is how bad business sentiment is out there.

[Dr Evans]

Was my right hon. Friend as surprised as I was to hear the Prime Minister say again today at Prime Minister’s questions that his No. 1 goal is growth, when all the evidence is pointing against it?

[Sir Mel Stride]

To be fair, I think the Prime Minister was referring to facial hair growth, rather than growth in the economy. They are distinctly different things.

[Dr Evans]

He is struggling on both.

[Sir Mel Stride]

Well, he may or may not be—it remains to be seen.

What all this ends up with, of course, is lost fiscal headroom. That is the story so far. We had a Budget last October with about £10 billion against the debt target; that vanishes, with 50% on top as well. It is rebuilt in the spring, and now it has all disappeared, and we are waiting to find out how deep that black hole is. We have entered something of a doom loop, with higher taxes destroying growth, leading to a loss of fiscal headroom, requiring—in the Chancellor’s terms at least—further tax increases, leading to further destruction of growth, and around and around we go.

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[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.

[Dr Evans]

The Chancellor set out in a speech only last year an absolute commitment not to raise taxes. She said, “We’ve set the spending envelope for this Parliament, we don’t need to increase taxes”. Yet here we are on the cusp of taxes going up. Is not the crux of this the fact that she cannot even stick to what she promised?

[Sir Mel Stride]

My hon. Friend is absolutely right. He will have heard the various quotations at the beginning of my contribution exactly to that effect.

The motion on the Order Paper asks a simple question. It is essentially this: even at this late stage, will the Government stand by their word, or will they dragoon those on the Benches behind them through the wrong Lobby tonight? If they vote with us, millions will heave a huge sigh of relief. If they vote against, the people will have their answer, and they will never forget.

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[James Murray]

We are back to questions about what will be in the Budget. The answer, again, is very straightforward. The Chancellor set out the values that will guide her in taking the decisions at the Budget on 26 November. She set out the challenges that we face, being straight with the British people about that. The details will all be announced by the Chancellor on Budget day in the normal way.

We know that there is much more for us to do as a Government, but we can see the tough choices we made last year showing early signs of progress. We are set to deliver the largest primary deficit reduction in both the G7 and the G20 over the next five years. Our stewardship of the economy has helped the Bank of England cut interest rates five times, meaning lower mortgage payments and cheaper borrowing for families and businesses; real wages rose more in the first 10 months since the election than in the first 10 years of the previous Government; and the average person’s disposable income is now £800 higher in real terms than just before the election, meaning living standards have begun to rise. We have increased public capital investment by £120 billion over the Parliament and supported the NHS to achieve a reduction in the total elective waiting list of more than 206,000 since July 2024.

[Dr Luke Evans]

We on the Conservative Benches have been struggling to get an answer on the question of the 50% reduction in integrated care boards, for which the expected redundancy bill is about £1 billion. Today, the Government have issued a press release that says that they have dealt with that. Yet in response to my written question on the subject, the Health Department said that it could not provide an answer because it does not know the numbers, so I have received a holding answer. How much will the redundancy payments cost, and will it come from the Health budget or the Treasury budget?

[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.

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[Charlie Maynard]

They are interested in what costs them money, and their mortgages are more expensive because of the decisions the Conservatives took three years ago—[Interruption.] Well, read the Financial Times.

Moving on, I suggest that the digital services tax is another way we should be looking at to raise revenues. We would increase it from 2% to 10%, which would raise roughly £4 billion a year and get some of the biggest and wealthiest corporations in the world to finally contribute their fair share of tax here in the UK. We would also increase gambling taxes, because gambling really beggars some of the most vulnerable in society. Of course, the biggest one of all is that we should rejoin the customs union with the EU. Nobody voted to leave the customs union, but we are now in a market that is more than seven times smaller than the one we used to be in. As somebody who founded and ran a business for 24 years, I know that that hurts. It has done huge damage to small, medium-sized and big businesses and we are living with that loss. The quickest thing we could do is to negotiate a new, bespoke customs union with the EU. This would unleash the potential of British business.

With every month and year that goes by, it becomes clearer just how economically damaging the previous Government’s Brexit deal has been. The OBR has forecast that it will harm economic growth, reducing long-term GDP by 4%. However, according to Frontier Economics, a much closer trading relationship with Europe—not even a customs union—could boost UK GDP by 2.2%. These are enormous numbers, so when we are looking around for solutions, there is one right in front of us. It stands to reason that a new customs union would probably raise more than £25 billion a year for the Exchequer. There it is. Grab it, please. With the autumn Budget just two weeks away, the Liberal Democrats’ message to the Chancellor is clear. Instead of asking hard-working households and struggling small businesses to pay even more tax, she must take growth seriously and repair our broken trading relationship with Europe.

[Dr Luke Evans]

The hon. Gentleman talks about the trading union, but if we were to go back into the EU, one of the things we would have to take is freedom of movement. How does that tally with the Lib Dems’ position on dealing with immigration?

[Charlie Maynard]

I think we should have all the economic benefits of Europe while controlling our borders and controlling movement—[Interruption.] Well, look at Norway, Switzerland and Turkey. There are lots of options out there. Let’s go and negotiate something that makes sense for us.

My final point is that we need an office for value for money—an effective regulator with proper scrutiny and proper teeth that really looks into our Budget. I ask the Government to take inspiration from the Swedish model of tax scrutiny. I understand that after introducing these changes 30 years ago, and aided by strong economic growth, Sweden has reduced its national debt from nearly 80% of debt to GDP to 32%. Meanwhile, our public debt is around 95%, which means that billions that we could be spending on our public services are instead going towards servicing our debt.

A key component is significantly strengthening the scrutiny powers of this Chamber when it comes to the Government’s financial management. The Chancellor’s practice of keeping the Budget secret until the day, at which point everyone else has to scramble to assess the detail and has no time to provide a proper, meaningful critique, is far from the best way to scrutinise the Government’s economic policy. This is not how many of our international peers go about their economic policy. Proper, detailed scrutiny of the Budget, as opposed to the wave-through regime we currently have, with no proper transparency before approval, needs to be addressed—

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[Sam Rushworth]

I have confidence in the Chancellor to produce a Budget that will do the things that my constituents need it to. What my constituents are asking for, and what they voted for at the general election, is change.

Look what the Conservatives did to our justice system: prisons are 99.9% full, and we have a court backlog that makes victims wait years for justice. We all know that our surgeries are crammed with these cases. Look at what they did to the asylum system, which has an enormous backlog. Whoever negotiated the contract on asylum hotels must have been the person who did the dodgy covid contracts, given the amount that they wasted. Millions a day were spent on hotels.

Look at what the Conservatives did to childhood. Contrary to what was said earlier, child poverty in our country has increased. The Institute for Fiscal Studies said that both relative and absolute poverty have increased. The pattern between 1997-98 and 2022-23 can be described as a U-curve; poverty fell under the 13 years of the last Labour Government, and then relative and absolute child poverty increased. Look at what that means for the communities I represent: 16 Sure Start centres closed; primary school budgets are below their 2010 levels; transport for college students is expensive, and their education maintenance allowance was cut; youth services, boxing gyms and swimming pools have closed; and social infrastructure has disappeared from our communities over the last 15 years.

These are real challenges, but the problem is not just with our public services. Because the Conservatives robbed the capital budget to pay for day-to-day spending, they left Britain in the slow lane. Cancelling Labour’s Building Schools for the Future project left our schools and public buildings infested with reinforced autoclaved aerated concrete. Cancelling nuclear projects left us reliant on expensive fossil fuels, which led to 11% inflation at one point under the Conservatives. Cancelling High Speed 2 to secure a media headline on the eve of a conference has left us without the critical transport infrastructure we need.

All these problems come with a higher social cost. When His Majesty’s Revenue and Customs staff are sacked, we get more tax avoidance and fraud. When people have to wait two years for a routine operation, businesses have a bigger sick bill. When prisons are not built and the police are cut, there is more crime. When civil servants were cut, the previous Government had to spend £3 billion on agency staff.

[Dr Luke Evans]

The hon. Gentleman has missed something from his list: the Government’s own assessment shows that when winter fuel payments are cut, it puts 50,000 people into absolute poverty and 100,000 people into relative poverty. A 2017 report by the hon. Member for Chipping Barnet (Dan Tomlinson), now the Exchequer Secretary to the Treasury, said that cuts to the payment would kill 4,000 people. Was that factored into the hon. Gentleman’s assessment when he went through the Lobby to vote on the measure?

[Sam Rushworth]

The only vote we ever had on the issue was a vote for or against an Opposition day motion. I was always clear that the original threshold that the Government set was far too low. I do not think that millionaires and asset-rich, wealthy pensioners should receive the payment. The policy, as it now stands, and as it will be for pensioners in my community this winter, is as it should be.

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[Stuart Anderson (South Shropshire) (Con)]

It is interesting to follow the hon. Member for Bishop Auckland (Sam Rushworth), who clearly has an ideology that he believes.

As a Conservative, I believe in lower taxes, and that people have a better understanding than Governments of how to spend their own money. I want to see more South Shropshire constituents keep more of what they earn. Last year’s Halloween Budget hoicked taxes by £40 billion a year. It included a hugely damaging rise in employer national insurance contributions, which has added almost £1,000 to the cost of employing someone. We are stunting the wealth creators, and that is not acceptable. The Chancellor did that with one hand, and withdrew support from our suffering high streets with the other. Pubs will have to pay an extra £3,000 on average because of the changes to business rates, and they are feeling it.

The latest statistics have confirmed that economic growth has flatlined, despite the Chancellor’s promise to

“lead the most pro-growth, pro-business Treasury our country has ever seen, with a laser focus on delivering for the working people”.

How is that going? Since last year’s Budget, a huge number of people—the figure is approaching 180,000—are out of work. Jobs have been lost, and unemployment is up to 5%.

A year ago, the Chancellor told the country that she would not come back with any more tax hikes. The slate had been wiped clean. She clearly said on TV: “This is what I will be doing, and I will not have to come back.” No matter what reason they come up with, if the Government break that manifesto promise, I believe it will hurt them beyond what they believe possible. They have run out of road in their continual blaming of the previous Government. However, it seems almost certain that that is what will happen, so pensions, savings, cars and houses are all sadly in the frame for Labour’s Budget.

South Shropshire is a big rural constituency, so let us consider rural prosperity. The Chancellor’s policies have killed growth, fuelled inflation and reduced opportunities for South Shropshire residents. On average, productivity, earnings and ease of access to further education are all lower in rural than in urban areas. Closing those gaps could add billions to England’s economy. A stronger economy is needed to enhance public services. I agree with the hon. Member for Bishop Auckland that we need strong public services, but we cannot stifle private industry and businesses to get them.

The shadow Chancellor, my right hon. Friend the Member for Central Devon (Sir Mel Stride), has shown how huge savings can be made at the same time as cutting taxes for working people. If the shadow Chancellor and shadow Treasury team set out clear objectives, we should put party politics behind us and adopt some of them for the good of the country.

The family farms tax is crippling farmers in South Shropshire. I have a huge rural constituency—25% of my constituents work in the agriculture industry—and the tax is really hurting it. The Budget must reverse the cruel family farm tax, which needs to change. Farmer confidence has dropped to its lowest-ever level on record. More than 6,000 farms have already closed under this Government. That is concerning, and it is a threat to food security.

The Budget must also reverse some measures to release the stranglehold on the high street. Every Member would struggle to find a business in their constituency that says, “I am enjoying the measures that have been put in.” More than a thousand pubs and restaurants on our high streets have already gone—that is the equivalent to two every single day. That is an issue. I welcome the fact that a future Conservative Government would abolish business rates for thousands of retail, hospitality and leisure businesses. That would stimulate growth, and we could then invest in the areas where we need to.

[Dr Luke Evans]

This toxic concoction creates a cumulative cycle. The pubs that do survive have to reduce staffing and hours. In rural areas, that might increase loneliness and reduce opportunities for young people to get jobs. That cyclical nature means a spiral into decline. I am concerned about that in my area. Does my hon. Friend share that concern for his area?

[Stuart Anderson]

I certainly do. You raise a huge point—

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[Dame Caroline Dinenage (Gosport) (Con)]

It is a pleasure to follow the hon. Member for Harlow (Chris Vince). I thank him for cantering us through his mother’s career at HMRC—on behalf of the whole House, I thank her for her service, and I ask him to pass on our very best wishes.

Madam Deputy Speaker, as a near neighbour to my constituency, I am sure that you will know that the history of Gosport has always been umbilically linked to the fortunes of our armed forces. The town was effectively nationalised by the Royal Navy two or three centuries ago. As the size and structure of our defence base changed, with that, over many decades, went many of the jobs and livelihoods that depended on it. Job density on the Gosport peninsula is almost 50% lower than in the wider south-east region, which is an issue that I have spent 15 years as an MP trying to help drive solutions for. There is nothing more important to an area like mine than maintaining the conditions that give businesses the confidence to invest, employ and grow, but the overwhelming foundation stone for growth, and for the innovation and investment that will solve the productivity puzzle that the UK is facing, is that businesses need to be able to make long-term decisions and plan for the future.

Employers in my constituency, both large ones like StandardAero, QinetiQ and STS Defence and the numerous small and growing businesses, need to be able to rely on stable borrowing costs and to know that the cost of materials will not rise unsustainably in order to have the confidence to take on new staff and start apprenticeship programmes. Investors like those who took the plunge and moved to the Solent enterprise zone at Daedalus airfield, creating hundreds of local jobs in the process, need to know that if they put their capital at risk by investing, the Government will not reach in on a whim to take a large slice of any reward. The fact is that employer tax rises put all of that at risk. That is what we have seen since last year’s Budget and why local people are nervous about this year’s Budget too.

Tax fulfils two purposes: one, which the Chancellor knows well, is to raise revenue for the Government, but I am not convinced that she has given much thought to the other, which is influencing changes in behaviour. The pessimism and growth downgrades in our economy over the past year have provided hard and fast evidence that changes to the tax regime are at least as powerful at achieving the second goal as the first. Some £40 billion of tax rises very effectively mowed down those green shoots of post-pandemic recovery, but worse than that, they incentivised businesses in my Gosport constituency to make decisions that run in direct contrast to what our area needs. There are fewer employment opportunities and fewer chances for young people to build good-quality careers.

I have heard worrying stories about the impact that the employer national insurance rises announced in last year’s Budget of unintended consequences have had in my constituency. The common thread is that the national insurance change hit the businesses for which labour is the highest cost hardest, putting services that my constituents rely on every day at risk. A fifth of everyone who works in Gosport works in caring, leisure and other service occupations. Those are by far the biggest employment sectors, and account for almost three times the average for England, so my constituents felt the Chancellor’s national insurance rises the hardest.

[Dr Luke Evans]

My hon. Friend is making an excellent speech about what happened a year ago. Another problem is that all the kite flying in the Treasury at the moment means that people are now making decisions to withdraw their pensions schemes, not employ people and not invest. Is my hon. Friend seeing that in her constituency, as I am in mine? All that kite flying has real-world consequences, even before we get to the Budget in three weeks’ time.

[Dame Caroline Dinenage]

My hon. Friend is 100% right to point out that people are making knee-jerk decisions because of fear about what the Chancellor will do, and they are delaying business decisions that they might otherwise have made that would have brought growth to my constituency.

My constituency lies on the south coast. The stunning Solent coastline may mean that Lee-on-the-Solent, Stubbington and the wider Gosport area is a wonderful place to retire. As I often repeat, we have the largest proportion by percentage of veterans of any place in the United Kingdom, but that requires adequate health and care provision. However, care providers, whose main cost is personnel, are struggling.

The Nuffield Trust has calculated that the national insurance rise costs England’s 18,000 independent adult social care providers £940 million, which has severe consequences for the elderly and vulnerable people who need the service. One local provider, who operates a 44-bed care home offering residential care for the frail elderly and those living with dementia, suggested that they had no choice but to pass those national insurance rises directly on to their customers. As a result, one constituent told me that he was seeing an increase of nearly 8% in his brother’s care home fees.

At the other end of the spectrum, Hopscotch nursery, which looks after 1,900 children across our local region and provides fantastic care and support, told me that the jobs tax added £1 million to its overheads—that is a 10% increase, which means a 10% fee increase is being passed on to many of my constituents. Working parents need childcare, so working parents have to pay. What is the impact? Reduced household spending and a slower economy or, even worse, a parent dropping out of work to look after the children. Perhaps that is why we have seen growth flatline, borrowing costs rise and, this week, unemployment reach its highest level since lockdown.

On 26 November, will the Chancellor demonstrate that she has learned the lesson that tax rises that hit employers’ bottom lines have serious implications for our businesses, communities and economy? I would be shocked if she has not, but we are still hearing reports that hiring costs are going to increase yet again. None of the hospitality and retail businesses in my constituency will welcome that. After all, the sector has already seen 80,000 job losses.

I am particularly concerned for young people. A recent Telegraph article said that young people were giving up on Gosport because of the lack of employment opportunities. For many, a job in hospitality or retail is the first step on the route into work. Businesses in the sectors that take on so many young people across my constituency, from adult social care and childcare to hair and beauty, are telling me that they are not taking on more staff as a result of the Chancellor’s changes to national insurance contributions. In fact, the National Hair and Beauty Federation told me that, at the current rate of decline, there would be no new apprenticeships in that sector at all within the next few years. It is not a coincidence that this year my constituency saw the number of young people between 18 and 24 years old claiming unemployment-related benefits rise by 31%. So when the Government conduct their new independent review into why this is happening, they might want to start by looking in their own backyard.

When the Chancellor is considering the vast array of tax measures at her disposal to fill the £30 billion black hole, will she consider the impact on the employment of young people of any proposals to further penalise retail and hospitality businesses? She might even consider taking a Conservative growth policy, and announce that business rates will be scrapped for high street businesses such as pubs.

It is not only businesses that support growth. Across Gosport, Lee-on-the-Solent, Stubbington and Hill Head, many people dedicate their own time to volunteering, towards supporting sports clubs, charities, health forums and community organisations. Those groups are the backbones of our communities, but like any organisation they cost money to run. The Culture, Media, and Sport Committee, which I chair, has heard how increasing costs have impacted the ability of charities and voluntary organisations to deliver the services that local people rely on and love.

We often forget that charities face employment costs too. Despite 83% of charities recording an increase in demand for their services over the past 12 months, last year’s tax hike added a combined £1.4 billion to the wage bills of more than 44,000 charities. A huge amount of pessimism is growing in the sector. A third of charities are reducing their workforce as a result of the tax rises, and a similar number think that the sector is in an unhealthy space.

The increase might be easier to shoulder were it not for the parallel drop-off in funding streams. Tax rises mean less money for charitable giving, especially if the Chancellor is going to go after pensioners with her increase in income tax. I cannot stress enough how much tax rises have hurt and will continue to hurt the charitable sector, and the unintended consequences are huge. We have less charitable giving and fewer hours volunteered, as people work longer and salary sacrifice schemes are raided, while increased costs threaten jobs at national charities such as Oxfam, Scope and the National Trust, which face the loss of £50 million through restrictions on their ability to claim gift aid.

Sports clubs do a fantastic job of alleviating pressure on charities and the NHS, but they can also reduce the burden on the Chancellor to pay out-of-work benefits. On current estimates, spending on working-age disability and incapacity benefits is expected to increase by £25 billion to more than £70 billion by the end of this Parliament, and an estimated 148.9 million working days were lost due to sickness or injury in 2024. Physical activity can play such a vital role in the prevention of so many conditions, and so many of our sports clubs lean in, but the tax rises in last year’s Budget mean that the sector is in a precarious position and unable to meet its potential. The facilities that teams use to practise, play and socialise need staff as well as revenue streams. Tax undermines the work being done by our sports clubs to increase the take-up of physical exercise, reduce the burden on the NHS and keep our communities together.

We do not yet know what the Chancellor plans to announce at the Budget in a couple of weeks’ time. Last year we saw £40 billion-worth of tax rises. It was the highest tax-raising Budget in a generation, and I know that many people in my constituency were shocked. That was not what the Government promised when they were in opposition or at the general election. We now fear that the Chancellor will go big on tax rises, despite categorically saying last year that she had wiped the slate clean and would not be coming back for more. My concern for my constituents is that they have seen no tangible benefit from last year’s Budget, just pain, and they will undoubtedly shoulder the burden whenever new measures are announced.

Stamp Duty Land Tax

Luke Evans Excerpts

Tuesday 28th October 2025 Commons Chamber

[Sir Mel Stride]

My hon. Friend is exactly right. The tax does precisely that. It stops people moving to where the work is, to get better jobs and further themselves. Who wants to move to one place and pay stamp duty, and then move to another to pay more stamp duty? It does not add up.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Is my right hon. Friend aware of the study by Jackson-Stops, which looked at people aged 55 and over to see how much abolishing stamp duty would help to move the market along? The study estimated that in the first year, abolishing the tax would allow 500,000 people to downsize to free up homes for families, and in the second year, 1.4 million. Stamp duty is a real blocker. Does he agree that that study shows the power of this policy?

[Sir Mel Stride]

My hon. Friend is absolutely right. The tax is a blocker on the aspirations of those who are growing their families and simply want to find a home with more bedrooms. Often, they cannot find those homes because empty nesters—those whose children have left home—are not prepared to face the huge, eyewatering stamp duty involved.

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[James Murray]

I had definitely been born by that time, Mr Speaker. I was doing my maths very rapidly, but I can be confident in saying that. I seem to have quite lost my way after your intervention, Mr Speaker, but let me return to the main thrust of the argument that I was making a few moments ago.

We are a serious Government who are a serious partner for the private sector, which is why we are investing in things that will get our country moving again. It is early days; the damage that the Tories did will take time to unpick and there will be more difficult decisions ahead, but since we came to power, this Government have announced £250 billion of new investment commitments, creating tens of thousands of jobs. The Bank of England has cut interest rates five times, meaning that someone on a tracker mortgage of just over £200,000 is already around £100 a month better off.

We have cut red tape and changed planning regulations so that we can deliver 1.5 million new homes over the course of this Parliament. We have acted to accelerate the construction of nearly 100,000 new homes, which were previously stuck. We were the fastest-growing G7 economy in the first half of this year. Most telling of all, since the general election real wages have risen by more than they did in the first 10 years of the Conservative Government.

The Conservatives’ answer to the nation’s challenges is always the same: austerity. They want to cut spending, increase debt and accept decline. In contrast, we will never accept austerity and we will never gamble with the public finances.

[Dr Luke Evans]

Another term for austerity is “living within your means”. That is what the British public understand, and that is the point we are trying to make in this debate. When the Government have needed to make difficult decisions, they have fallen short. Can the Minister explain why the Government are not living within their means?

[James Murray]

As the hon. Gentleman will know, the Chancellor’s fiscal rules say that day-to-day spending must be paid for through tax receipts. That is the definition of living within our means. Those fiscal rules were met at the first Budget last year and at the spring statement this year. They are an iron-clad commitment, and we will continue to meet those fiscal rules next month at the autumn Budget.

Those fiscal rules underpin our approach to the economy and to stronger public finances. We know that fiscal responsibility, which the previous Government abandoned, underpins a stable economy, and we need to secure our country’s renewal through public and private investment. We want to secure rising wages, support for businesses, more jobs, more homes and more opportunities in every corner of our country.

The motion before this House today simply is not serious. It is an admission from Conservative Members that after years in power and countless opportunities to reflect and learn from their mistakes, all they can come up with is the same failed solution: more unfunded tax cuts, more cuts to public services, more failure to invest, more austerity and more pain for the British people. That is what will keep them on the Opposition Benches for a very long time. We reject their recklessness, we reject their lack of ambition for our country and we reject this motion.

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[Daisy Cooper (St Albans) (LD)]

Our tax system is a mess. It is complicated and unfair. It is riddled with cliff edges that distort behaviours and create inequities, and there are exemptions that have not been reviewed for years. Council tax is outdated and hated. Inheritance tax and capital gains allow the super-wealthy to exploit loopholes while the squeezed middle picks up the tab. Business rates are a tax on bricks and mortar that penalise our high streets while online giants corner more and more of the market. IR35 is a sledgehammer to crack a nut for contractors, and research and development tax credits are in such a muddle that they are triggering lots of disputes, even for legitimate claims.

When any one of those taxes is tweaked, it causes problems elsewhere. Time and again, we see that when people want to do the right thing and pay the right amount of tax or query a tax issue, they call His Majesty’s Revenue and Customs, only to have the call handler hang up, or they contact the Valuation Office Agency and have to spend money on an expensive third party that specialises in disputes.

Stamp duty has all the hallmarks of a bad tax. It is a transaction tax and an extra cost that stops people from moving, when they might want to move to start a family, to take up a new job or to take on caring responsibilities. It prevents people from getting on the housing ladder, from upsizing and sometimes from downsizing. It gums up the housing market in a country where we simply cannot afford for that to happen. It disincentivises people from moving and holds back a dynamic economy.

[Dr Luke Evans]

The Liberal Democrat spokesperson is making some excellent points. Will she therefore support the motion?

[Daisy Cooper]

No—for all the reasons that I will come to. The hon. Gentleman was a fraction too early. Here’s the rub: stamp duty raises a lot of money, and that is presumably why the Conservatives did not seek to scrap it at any point during all their years in power.

Stamp duty for primary residences in England and Northern Ireland raised around £4 billion in 2023-24, and it is suggested that it will raise £9 billion in 2029-30. The Institute for Fiscal Studies estimates that the cost in 2029-30 will be around £11 billion, with the additional costs in Scotland and Wales taken into account. That means that abolishing stamp duty on primary residences would cost in the region of £36 billion to £44 billion in total over the next five years. For anybody who is not keeping up, that is almost the cost of the mini-Budget, just in slow motion.

The Conservatives say that they want all those cuts to come from public expenditure, but in this motion they do not say where those savings would come from. By my calculations, they could choose to scrap nearly the whole of the Ministry of Justice—given revelations in recent days about prisoners being let out wrongly, it feels like that may already have happened.

The Conservatives could instead decide to end all support for farmers by scrapping the entirety of the budget for the Department for Environment, Food and Rural Affairs, which reached £7.4 billion in 2028-29, including capital—[Interruption.] Well, it does not say that in the motion. Maybe they would want to do away with the cost of clearing the vast majority of the NHS maintenance backlog—a cost they would reach in a single year—or maybe they would want to scrap the £12 billion a year budget for special educational needs and disabilities. It is not clear in the official Opposition motion where the cuts would come from.

There is a strong case for looking at reforming or scrapping stamp duty all together, alongside other property tax reforms and moving to a land value tax. Indeed, some commentators suggest that scrapping stamp duty and council tax together and phasing in a land value tax over time could be one way to move ahead.

--- Later in debate ---

[Sir Ashley Fox (Bridgwater) (Con)]

All of us here want to improve the lives of our constituents, though we often differ in how we might achieve that. As a Conservative, I believe we do so by working with the grain of human nature, by allowing people the maximum amount of liberty to live their lives, by supporting families, by rewarding hard work, rather than penalising it, and by incentivising entrepreneurship and the creation of wealth. As legislators, we do that by keeping the size of the state under control, keeping borrowing low and reducing the burden on taxpayers wherever possible.

It is with regret that I see this current Labour Government increasing taxes, increasing borrowing, increasing the deficit and our national debt, and increasing the interest we pay on that debt. It saddens me that we have a Government whose answer, whatever the question, always seems to be more public expenditure. I am pleased therefore that not only will the Conservative party reduce taxes when we form the next Government, but will scrap one altogether.

Stamp duty is a bad tax. The current stamp duty regime means that anyone seeking to buy their first home or to move house faces an additional burden at one of the most important moments in their lives. By eliminating this tax on main homes, the Conservatives would be removing a financial barrier, which for many first-time buyers or young families makes the difference between owning their first home or not. My hon. Friend the Member for Windsor (Jack Rankin) alluded to that in his excellent speech. It would mean the dream of home ownership was made more accessible.

While stamp duty has been around since 1694, the current regime was introduced by Gordon Brown in 2003. When it came into effect, it charged a fixed percentage rate depending on the value of a house—the so-called slab system. It meant that when the price went from £250,000 to £250,001, people faced an enormous increase in the tax paid. The coalition Government, to their credit, reformed the tax so as to remove the tax from those purchasing a property for under £125,000. They eliminated the slabs in the model with a slice model. That made the tax better, but the core problems remain. Stamp duty makes it harder to purchase a house. It dissuades people from upsizing or downsizing, and therefore prevents a host of other economic activities associated with moving house. A vibrant housing market is vital to economic health. When more people buy and move, transactions increase, new homes are built, tradespeople are employed, and local economies benefit. The tax on each move discourages those transactions. People stay put because of the cost of moving, and that can lead to the housing market locking up. Scrapping stamp duty on primary homes will free up the market. That will have benefits not just for buyers and sellers, but for builders, developers, local services, and the whole national economy.

There is a fairness argument, too. Buying a home is one of the largest investments that most people will ever make, and to tax that moment seems not just counterintuitive but perverse. Removing the tax on a main residence signals a commitment to giving people a chance to grow, to aspire and to build their lives. Those are Conservative principles, and the announcement made by my right hon. Friend the Leader of the Opposition in Manchester recognised that. I entirely agree with my right hon. Friend that this change will create

“a fairer and more aspirational society.”

[Dr Evans]

My hon. Friend is making an excellent speech. Does he agree that when supply is tight, if we allow people to move more easily, the right people will be in the homes that are right for their time of life? An elderly couple in a five-bedroom house will make the choice to downsize, while a family can upsize to the right house. When supply is tight, that fits much better for us as a society.

[Sir Ashley Fox]

My hon. Friend has made a valuable point. This tax cut benefits not just the first-time buyer, but the family moving into a larger home and the empty nesters—I am almost one—seeking to move into a smaller house.

--- Later in debate ---

[Bradley Thomas (Bromsgrove) (Con)]

It is a pleasure to speak in this debate on this important topic, Madam Deputy Speaker. It is one that I am passionate about. I got involved in politics to make people’s lives better, and to be on the side of those who work hard, do the right thing and aspire for themselves and their family. That is the fundamental point at the core of this argument.

My hon. Friend the Member for Windsor (Jack Rankin) made a great point when he said that this is a moral mission. It is a moral mission to be on the side of those who are aspirational, and to unlock the hopes and dreams of a generation who want a tangible stake in society but have great fears that they will never have it. Stamp duty, for many, is a tax on that dream home, on that bridge between where they are today and where they want to go tomorrow, particularly for their family.

We have heard a lot in this debate about first-time buyers, and it is right that we focus on them; it is particularly shameful that one of the first acts of this Labour Government was to lower the threshold at which stamp duty was imposed on those first-time buyers. But once a first-time buyer has been in their home for a few years and had a child, and maybe a second, and wants to move up the property ladder into a house that will better meet their needs, that is when this tax really starts to bite. Constituents have approached me to say that they are able to afford a mortgage on their next home, and have even identified one that they want to move into, but the stamp duty prevents them from moving.

What strikes me about this argument between the two sides of the House—and, in fact, between Opposition parties as well—is that many make the case that if we removed stamp duty, it would cause house prices to rise. If it was removed as a temporary measure, there would be a chance of that happening, but if it was removed in perpetuity, the housing market would regularise without a huge increase in prices. That is the key to unlocking the aspiration that so many have for themselves and their family.

I do not believe that Labour Members have particularly nefarious intent; I can only conclude that their position really does demonstrate the politics of envy. It is a fact of life that some in society will always have more wealth than others—the scale is always relative—but even if those at the upper end of the wealth scale benefit from the abolition of stamp duty, those further down the chain will also benefit. The great reality of this proposal is that it is universal in its application, so everyone will benefit.

This is fundamentally about unlocking mobility and the aspirations of so many. It applies not just to first-time buyers and those wanting to move up the ladder, but to those who want to downsize, whom we have heard so much about today. There are plenty of constituents across Bromsgrove and the villages who are asset-rich but cash-poor, and who are trapped in larger houses but would like to downsize, should the fiscal incentive be there for them to do so. Stamp duty, in the form of tens of thousands of pounds, is absolutely key in so many cases.

[Dr Evans]

A really important issue, especially for elderly people who are caught in a large home, is social care. We need to make sure that healthcare and support is there as people get older. If they find themselves trapped in a large house, how do we make sure that it is modified? That has an additional cost, which is often lost. Does my hon. Friend agree that freeing up such people to move offers them the benefit of saving money?

[Bradley Thomas]

My hon. Friend makes a valid and important point. That is one of the great peripheral benefits of this policy, should the Government embrace it, and I encourage them to look seriously at it. I encourage the Government to vote for this motion, even if only to show their intent, and even if they cannot implement it anytime soon.

We have heard about the stimulus effect. The typical spend of a family moving house is around £9,000. My hon. Friend the Member for Windsor pointed out that those employed in trades would benefit from saving that money. These are people who are not necessarily rich; they are hard workers who set their alarms in the morning. They are the very people who have aspiration for their family and want to be able to move up the property ladder.

One of the fundamental ideologies that have emanated from Labour Members is a denial of capitalism and the role that it plays in driving up prosperity. My right hon. Friend the Member for North West Hampshire (Kit Malthouse) made this point eloquently: capitalism is not something that we should be afraid of; it is the biggest driver of prosperity that the western world has known. Labour Members should embrace it with a little bit more vigour.

A point that I have to touch on, because it affects my constituency so profoundly, is the Government’s increase in housing targets. We Conservative Members are not anti-house building, but we believe that house building has to be proportionate. Bromsgrove and the villages is a 79% rural constituency. It really is the green buffer between Worcestershire and the urban sprawl of Birmingham. It is 89% green belt, yet our housing target has increased by a staggering 85%, whereas the housing target in adjacent Birmingham has decreased by over 30%. I have given various Ministers various opportunities to address this point of the Floor of the House, but no one has been able to do so yet, so I can only assume that, in the words of my hon. Friend the Member for Bridgwater (Sir Ashley Fox), the Government are “fiddling” the figures for political reasons. I would welcome it if the Minister could address the disproportionate burden that the Government’s housing targets are putting on rural areas, including Bromsgrove and the villages.

There is something that the Government could do to make the bitter pill of more housing easier to swallow, but they abandoned the idea on day one: make high-quality design a central tenet in the planning system. The previous Government opened the Office for Place, which is an advisory body that advises the Secretary of State on the quality of the built environment. Every single Government, regardless of political colour, should embrace the principles of good design, because they lead not just to good houses, but to better communities. If the Government can convey to communities that new housing is not going to impose red-brick monotony that erodes their sense of identity and character, there will be much more openness from communities to the house building agenda.

[Dr Luke Evans]

My hon. Friend makes an excellent point. One of the biggest concerns I have is that the Government have taken away the funding for neighbourhood plans. We know that neighbourhood plans give villages their say in where planned housing goes, but more importantly they deliver more housing. Does he believe it is short-sighted to take away that funding, which will compound the problem he is talking about—he is discussing the aspect of style and design—of getting communities to take on extra housing?

[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.

--- Later in debate ---

[Sir James Cleverly (Braintree) (Con)]

I thank my right hon. Friend the shadow Chancellor for setting out the opening case for the Opposition’s position on stamp duty. I feel particularly passionate about this policy, which is one I put forward when I was running for the leadership of the Conservative party. Like all good ideas, it has been embraced by my right hon. Friend the Leader of the Opposition. I am particularly glad—this is a key point—that my right hon. Friend the shadow Chancellor and his team have worked hard to make sure that cutting stamp duty is not just a headline, but a fully costed and set out policy.

The Leader of the Opposition has, I think very magnanimously, said that if the Government want to steal this idea and implement it now, they will get no opposition from us. I think that shows her typical generosity of spirit. The Government are clearly struggling to come up with credible economic plans of their own, so they are very welcome to steal our economic plans.

I have been struck by the positive nature of this debate. As Conservative colleagues have noted, the expected wall of thoughtless opposition to this proposal has not materialised at quite the scale we expected. It has materialised in some instances, but that is only to be expected. We heard in a number of speeches, and I will refer to some contributions as I go through my speech, that Labour Members recognise that stamp duty is a bad tax, a counterproductive tax and a tax that has a dampening, drag-anchor effect on the housing market. However, they went on to say, “But we need the money.” They are desperate for the tax revenues, which I think shows the fundamental challenge that, frankly, Labour is going to have to deal with in November. If the Government cannot agree to get rid of this damaging, counterproductive tax, what tax will they be willing to reduce? If they are going to say to the House that, basically, there is not a single tax in the British system that they are willing to cut, reduce or remove, then the mask has slipped. Under a Labour Government, this country faces ever-increasing taxes—that is basically what they are saying. They admit that this is a bad tax, but they are not willing to vote for its removal because they want to see—they need to see, are desperate to see—taxes going up. That was fundamentally the argument put by many Government Members.

[Dr Luke Evans]

Does my right hon. Friend agree that that is compounded by the Government’s position on spending reductions? We saw that on the Floor of the House, when the one attempt to make spending reductions was gutted mid-discussion, with proposals being pulled from a Bill that dealt with welfare. Therefore, the Government will not make any spending cuts either, which does not leave much else bar borrowing, in my estimation.

[Sir James Cleverly]

My hon. Friend is spot-on. That point was very well highlighted by my good friend, my hon. Friend the Member for Bridgwater (Sir Ashley Fox), who said that official Opposition felt that this damaging and counterproductive tax should be removed. As I have said, my right hon. Friend the shadow Chancellor has set out that that would be paid for by a reduction in the welfare bill—something that I know has universal support on our Benches. My hon. Friend the Member for Bridgwater highlighted that a reduction in welfare spending is not only something that we think is a necessary and good idea, but something that Labour Front Benchers used to think was a necessary and a good idea until, with great leadership, they were told by their Back Benchers to stop thinking that it was a necessary and a good idea, and to start thinking that it was a terrible idea. Such leadership from the Back Benches is something that I admire from that party. If only Labour Front Benchers had anything like the spine of the Labour Back Benchers, the country might not be in quite such a dire economic state.

Labour Members have basically said that they are unwilling to cut even the worst taxes because basically they want to see taxes go up. The Lib Dem position is yoga-like in its ability to bend—

[Dr Luke Evans]

Pretzel-like.

[Sir James Cleverly]

Yes, pretzel-like. One after another, the speakers on the Lib Dem Benches stood up and said, “We agree that this is a bad tax. We agree that this is a counterproductive tax. We agree that it is a tax that needs to go.” I, and I suspect others on the Conservative Benches, thought, “Here we go. Here is the crescendo, the pièce de resistance,” and that those speeches would end by saying, “Which is why you will see us in the Lobby with you, ensuring that the motion is passed.” But that is not what we heard.

--- Later in debate ---

[Lucy Rigby]

It is a tax, so obviously I do not love it, but what I find extraordinary is the Conservative party’s new-found hatred of taxation when they increased taxes 25 times in the last Parliament.

As I said, we heard from various hon. Members about their objections to this tax. I will not engage on the points made about the Budget, for obvious reasons, except to repeat that we are committed to a single major fiscal event per year where the Chancellor will set out any tax decisions in the usual way alongside the OBR’s forecast. That fiscal event will take place, as everyone knows, on 26 November, at which point there will be plenty of time to discuss and debate the decisions that the Chancellor takes in the Budget.

I want to speak to some of the points raised during the debate. We heard plenty from Conservative Members about why they want to abolish stamp duty. I think some points were made thoughtfully; I say that in a well-meant way. I am sorry to say, however, that we heard absolutely nothing from Conservative Members on their appalling economic record. We heard nothing from them on their appalling record on house building—save for the acknowledgment of the right hon. Member for North West Hampshire (Kit Malthouse)—nothing on the waste of public money from the fraud on their watch, and nothing whatsoever that could be described as fiscal responsibility.

We heard from some of my hon. Friends on the Labour Benches about the urgent need to build more houses in this country, given our appalling inheritance. That is the key way that we solve the housing crisis. I pay tribute to the thoughtful speeches of my hon. Friends the Members for Welwyn Hatfield (Andrew Lewin), for Milton Keynes North (Chris Curtis), for Crewe and Nantwich (Connor Naismith) and for North Warwickshire and Bedworth (Rachel Taylor), and to my hon. Friends the Members for Loughborough (Dr Sandher) and for Tipton and Wednesbury (Antonia Bance), who spoke powerfully of the consequences of the Conservative party’s mismanagement of the economy, which include food banks, poverty and, of course, the housing crisis.

I welcome the commitment of the right hon. Member for North West Hampshire. He talked about the need to build more housing and, indeed, about beautiful housing. I assure him that that is exactly the type of housing that this Government will facilitate being built—although I note that his colleagues took him straight back to opposing development no sooner had he made that point. I also welcome his mini-insight into the infighting of the last Government.

[Dr Luke Evans]

The hon. Lady may recall that it was a Labour Secretary of State who removed the word “beautiful” from the national planning policy framework. How does she expect to have those beautiful designs if that has been taken away as a standard within the guidance that her Government provided?

[Lucy Rigby]

I assure him that the houses will be beautiful and that we will build 1.5 million of them over the course of this Parliament. There was a brief reference to Nirvana from the Conservative Benches before a descent back into half-baked and unfunded plans, to which we on the Government Benches thought, “Well, Nevermind.”

Property Taxes

Luke Evans Excerpts

Wednesday 3rd September 2025 Commons Chamber

[Sir Mel Stride]

There is no doubt that under the previous Government there was a need to support the economy. That involved the expenditure of £400 billion, not least on the furlough scheme. I do not remember the hon. Gentleman’s party arguing at the time that we should not do that; in fact, it argued that we should go further still. The Conservative Government stepped in, supported jobs and saved us from going into mass unemployment that many feared would be worse than even in the 1980s, and I take great pride in that. But we are where we are now, and what the Government should be doing is growing the economy, stoking up business sentiment, getting taxes down and getting the economy moving, but they are doing precisely the opposite.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Is not the difference now that we are seeing stagflation—high inflation and the economy not growing as it should be? We are therefore seeing job losses and unemployment going up every month under this Labour Government. Unless they do something drastically different, it will only get worse, and that will impact on our growth prospects and therefore on the prosperity not just of our nation but of the individuals who work and try to thrive here.

[Sir Mel Stride]

My hon. Friend is absolutely right. We are seeing high inflation, anaemic growth, high gilt yields and a pound that has been plummeting in recent times. All those are signals flashing red on the dashboard.

Instead of getting a grip on spending and getting taxes down, the Government have been out there pitch-rolling yet more taxes. Over the summer, we have seen briefings to the press suggesting tax rises on property. The Labour party has an opportunity this afternoon to rule out those possibilities, and the Minister should do just that when he responds.

First, there has been a suggestion that there will be changes to the private residence relief under the capital gains tax regime. That would strike at the heart of our country as a property-owning democracy. People would be penalised simply for selling up and moving home. It would have clear implications by bunging up the property market, and clear economic implications by causing friction in the process of people moving from one part of the country to another, often in search of work. It would discourage downsizing, even though that would be beneficial in providing more homes for people to live in. Before the election, the Prime Minister said that there never was a policy of that type so it did not need to be ruled out, but let us rule it out just in case anyone pretends that there was such a policy. When he responds, will the Minister confirm that he stands by the words of the Prime Minister?

Secondly, there has been a suggestion of an annual tax on homes. What a tax on aspiration! What a tax on people who have saved hard and managed to get on the property ladder, but who will then be stuck with annual taxes. What about those who are asset-rich but income-poor and cannot afford to pay—are they expected to sell up? Will the Minister rule out that possibility and put people’s minds at rest?

If that was not enough, we hear that the Government may be considering changes to the gifting regime in inheritance tax. They are not content just to pulverise farmers and family businesses, and to see those businesses and farms broken up when they are passed on from one generation to another, because of the imposition of tax. In fact, it was a Labour Government in the 1970s who brought in the reliefs that this Government have chosen to abolish. The inheritance tax yield will double over this Parliament. The Opposition say, “Enough is enough.” We should not punish parents who wish to pass something on to their children. Socialists do not understand that we do not all stand as atomised individuals; we work together as families and communities. We care about each other, we care about the people we love, and it is right that we have the opportunity to pass something on to them.

--- Later in debate ---

[Sir Mel Stride]

The hon. Gentleman refers to cutting spending. His party attempted to cut spending, but entirely failed to do so. My point is that if he wants money to spend on public services, he needs to cut welfare and should worry about how to do so. I do not know how he voted when that was put to the test in this House, but if he in any way voted against his own Government and against getting on top of the welfare bill, he should ask his own question of himself.

As for those on low incomes, they are precisely the people who are now being devastated by the increase in national insurance. There is not just an increase in the rate, but a substantial reduction in the threshold at which national insurance kicks in, which has meant higher unemployment, in particular among younger workers, part-time workers, women and people getting that vital first job so that they can get themselves on a career path. They are the people whom the Labour Government are punishing most.

[Dr Luke Evans]

Is that not exactly the point—that the top 1% of earners pay almost 30% of income tax? If we lose them, we damage the people who need the support and the investment from the very taxpayers we have just scared off. Should not the reverse be happening? We should attract more people into this country to spend more money, so that we have more money for such services through tax collection.

[Sir Mel Stride]

My hon. Friend is absolutely right. I have already shared with the House the classic example of the number of people who have left this country because of a punitive tax regime and the costs of that.

--- Later in debate ---

[Sir Mel Stride]

It is a simple matter of logic that even if the hon. Lady’s assertion is true—I do not know whether it is or not—it does not contradict the point that I made.

[Dr Luke Evans]

Was it not the current Prime Minister who said

“not a penny more on your council tax”?

Is the shadow Chancellor aware of how that worked out?

[Sir Mel Stride]

In a word, badly.

--- Later in debate ---

[James Murray]

I am going to make some progress, because a few moments ago I said I would do so. I have been gently reminded by Madam Deputy Speaker that I really must live up to my promise on that front.

The right hon. Member for Central Devon asked me questions in his opening remarks—indeed, his colleagues have their sheets from the Whips, and they have been dutifully following up in their comments—but they are on matters that we cannot talk about today. There are of course other important facts that the right hon. Gentleman does not want to talk about, but the British people have not forgotten them. There is the £22 billion black hole in our public finances, which the previous Government hid from the light. There is the disastrous mini-Budget, which caused damage to households across the country and to our reputation around the world. We had stalled housing, unfinished infrastructure and public services brought to their knees by under-investment and disinterest. The Conservatives do not want to talk about those things because that is the legacy of the last Government. We found out just today that the right hon. Gentleman does not even want to talk about things happening in Conservative councils, as my hon. Friend the Member for Basingstoke (Luke Murphy) raised so importantly in his contribution earlier.

Now that the Conservatives are in opposition, the right hon. Gentleman’s party and Reform Members are talking Britain down. They want to claim that Britain is broken, but I believe that Britain is unbreakable. Our country is full of potential. It is home to hard-working people, brilliant businesses, world-leading universities and research institutions, cultural giants and the promise that if people work hard and contribute to the country, it will be a place where they can succeed. Yet undeniably, after 14 years of Tory mismanagement, far too many working people feel that the economy is stuck.

[Dr Evans]

Will the Minister give way?

[James Murray]

I have been asked by Madam Deputy Speaker to make some progress, so I will return to the hon. Gentleman a little later.

I hear from my constituents, as I am sure many other Members in the Chamber hear from theirs. They tell us that no matter how much effort they put in at work, their careful management of household finances and their diligent efforts to save for a brighter future, they do not yet feel that they are getting enough in return, and it has become harder to get ahead. At the same time, our roads and railways seem slow and less reliable and our classrooms seem fuller, while the NHS has a massive backlog. The root cause of all that is the chronic under-investment by the previous Government. That under-investment over many years has slowed our productivity growth to a rate not seen since the Napoleonic wars.

Taxes

Luke Evans Excerpts

Tuesday 15th July 2025 Commons Chamber

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

I am grateful to the shadow Chancellor for making that point. Does he believe that a humble toolmaker who happens to own a small business is a working person?

[Sir Mel Stride]

Indeed, my hon. Friend is absolutely right. We need to stand up for everybody—even our toolmakers.

Let us be frank: we have had to table this motion today, which seeks to do nothing other than reaffirm the commitments that the Labour party has already made, because of the litany of broken promises that I have just shared with the House.

--- Later in debate ---

[Sir Mel Stride]

It would be sensible for the hon. Lady to look at those on her own Front Bench and ask why they take these appalling anti-business decisions. The answer is that hardly any of them have any experience of private business or of setting up a company—in fact, not one senior Front Bencher from her party has that. That is unlike the Conservatives—whether that is myself; the shadow Home Secretary, my right hon. Friend the Member for Croydon South (Chris Philp); the shadow Business Secretary, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith); or others—who actually understand the real world of business.

[Dr Evans]

The shadow Chancellor makes a very good point. Is he surprised by the Federation of Small Businesses, which has come out and said that for the first time ever in its index—since records began in 2008—more small businesses will contract than will grow? Is he as worried as I am about what signal that sends to those small business owners who are trying to grow for our economy?

[Sir Mel Stride]

My hon. Friend is absolutely right. The reality is that if we tax something, we tend to get less of it. This Government have taxed business, so it is not surprising that the economy has been damaged as a consequence.

An often fair question asked of the Conservatives is: what would we do? Let me answer that question directly. First, we would have taken very different choices. We would not have loaded up taxation on businesses and stifled growth in the way that Labour has: we would have focused on productivity. We would not have come into office and given the train drivers 14% and the junior doctors 22% with no strings attached whatsoever. We were told by the now Health Secretary during the run-up to the general election that all we needed to do was get around the table with the unions and settle and the problem would go away—well, the junior doctors are back for more.

Oral Answers to Questions

Luke Evans Excerpts

Tuesday 1st July 2025 Commons Chamber

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

The Prime Minister, the Business Secretary and the Chancellor had the joy of coming to my constituency to see the MIRA technology park last week. They will have come via the A5. The previous Prime Minister talked about the funding that would be submitted via the A5, but in the spending review that money seems to have dropped, so will the Chancellor commit to the same funding for the A5 that we had from the last Government, because it is really important for my area?

[Rachel Reeves]

The irony is that the last Government made a lot of commitments but did not put any money into delivering them. That is the difference that this Government are making, with fully funded plans to upgrade transport. The Department for Transport now has its settlement and it will look at a number of projects. The mess left by the Conservatives is something we have had to sort out. The Conservatives have not backed any of the measures that we have taken to bring in more revenue, yet, as we have seen, they are very keen on spending the money. That is why we were left with a £22 billion black hole when we came into office a year ago.

Spring Statement

Luke Evans Excerpts

Wednesday 26th March 2025 Commons Chamber

[Rachel Reeves]

My hon. Friend is absolutely right about the importance of robust fiscal rules which, even in difficult economic circumstances, we will continue to meet through the decisions that I have set out today. The reason that economic stability is so important can be seen in what happened in the last Parliament, where a Government borrowed beyond their means. The people who lost out were not the wealthy but ordinary working people, who paid more in the shops and more on their mortgages and rents. This Government will never repeat the mistakes of Liz Truss and the Conservatives.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

The Chancellor has created a storm and is now complaining about the rain. She increased spending to £70 billion, she increased borrowing by £30 billion, and she increased tax by £40 billion, yet the economy shrank in January. She talked about change and the abolition of NHS England. In a written question I asked the Department how much that would cost, and it said that there would be some up-front costs but could not specify what they would be. Could she tell me the estimated cost of this top-down change to abolish NHS England?

[Rachel Reeves]

It is really difficult to understand what the Conservative party want. Do they want to reduce the cost of admin and bureaucracy, or do they want to carry on with everything the way it was? We want to change things. That is why the transformation fund that I set out today includes £150 million for a voluntary exit scheme. We want more money on the frontline, not in the back office in a bloated bureaucracy that was left by the Conservatives.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Luke Evans Excerpts

Consideration of Lords amendments
Wednesday 19th March 2025 Commons Chamber

[James Murray]

I welcome the opportunity to consider the Lords amendment to the Bill. I thank Members of both Houses for their careful scrutiny and consideration of the Bill, and I place on record particular thanks to the Financial Secretary to the Treasury, Lord Livermore, for his invaluable support and for so expertly leading the Bill through the other place.

During consideration of the Bill in the other place, 21 amendments were made, 20 of which we will address today, but before I do so directly, let me remind both Houses of the context for the Bill. When we entered government, we inherited a fiscal situation that was completely unsustainable. We have had to take difficult but necessary decisions to repair the public finances and rebuild our public services. The measures in the Bill represent some of the toughest decisions that we have had to take as a result. To restore fiscal responsibility and get public services back on their feet, we needed to raise revenue, including through the measures that the Bill will introduce. Many of the amendments from the other place put at risk the funding that the Bill seeks to raise, so let me be absolutely clear: to support the amendments is also to support higher borrowing, lower spending or other tax rises. With that in mind, I now turn to the first group of Lords amendments.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

The Minister has talked about the growth mission, which is the Government’s raison d’être, but last week we found out that the economy had shrunk. Has he done any work to find out how much that 0.1% drop will cost the Government? It will have huge tax implications.

[James Murray]

As I have set out to the hon. Gentleman in a number of debates in recent weeks, the Government have had to take difficult but necessary decisions to restore fiscal responsibility after the completely unsustainable situation that we inherited from the Conservative party. That fiscal responsibility and economic stability are essential for greater investment in the economy, which is the bedrock of the growth that we are so determined to pursue.

--- Later in debate ---

[Dr Luke Evans]

I am grateful to the hon. Gentleman for giving way yet again. The National Pharmacy Association announced for the first time ever, in 104 years, that it is planning action by reducing services because of the implications of the Budget. One of its requests is the release of an independent report commissioned by NHS England on the future funding of pharmacies. Now that the Government are in charge of NHS England, will the Minister ask his colleagues in the Department of Health and Social Care to release that report before the consultations finish, so that the public and the pharmacies can see exactly what the financial situation in that independent report will be?

[James Murray]

Reports on work that the Department of Health and Social Care is carrying out are a subject for Ministers in that Department, but on the funding that I am speaking about, the final funding settlement will be announced in the usual way, following the consultation that is under way.

The NHS in England invests around £3 billion every year on dentistry, and NHS pharmaceutical, ophthalmic and dental allocations for integrated care systems for 2025-26 have been published, alongside NHS planning and guidance. On social care, the Government have provided a cash increase in core local government spending power of 6.8% in 2025-26, including £880 million of new grant funding provided to social care—funding that can be used to address the range of pressures facing the adult social care sector.

--- Later in debate ---

[James Murray]

I have set out the Government’s approach to supporting Departments and other public sector employees when it comes to the changes to employer national insurance contributions. As I said to the shadow Chief Secretary to the Treasury, the hon. Member for North Bedfordshire, we are taking the same approach that his Government took to the health and social care levy. We are talking about the wider pressures faced by organisations, be they GPs or hospices, and what we can do to support them and their processes. We are considering the pressures on them in the round. I have made a considerable number of points about Lords amendments 1, 4, 5, 9 and 13. In the light of those points, I urge the House to disagree with those amendments.

I turn to the Lords amendments relating to charities, local government and special educational needs transport. Lords amendments 2, 7, 12 and 16 seek to exempt charities from the changes to employer national insurance contribution rates and thresholds. The Government recognise the crucial role that charities play in our society. We recognise the need to protect the smallest charities; that is why we have more than doubled the employment allowance to £10,500 pounds, meaning that more than half of businesses, including charities with national insurance liabilities, either gain or will see no change next year.

As I have noted, it is important to recognise that all charities can benefit from the employment allowance. The Government provide wider support for charities via the tax regime; tax reliefs for charities and their donors were worth just over £6 billion in the tax year to April 2024. Again, the amendments would put much of the funding that the Bill seeks to raise for public services at risk, so supporting these amendments is support for higher borrowing, lower spending or other tax rises.

[Dr Luke Evans]

After yesterday’s announcement about benefit changes and benefit cuts, the Government have said that they want more people to go into work. A lot of help to get people into work is delivered by charities, so we are expecting a greater need for such charities. How will they cope if they are being taxed through further NICs? They will have to reduce their services and their ability to provide support, so there will be a gap in the market. Will the Minister explain how the Government intend to bridge that gap?

[James Murray]

I thank the hon. Gentleman for drawing attention to the very important reforms that my right hon. Friend the Secretary of State for Work and Pensions set out in this House yesterday, which are a crucial part of getting people back into work. Further details on interventions to help people back into work will be set out. We recognise that charities may, in some cases, provide that support, which is why many of the elements of support for charities in the tax regime remain so generous. There was £6 billion for tax relief for charities and their donors in the tax year to April 2024 through features that will continue in the tax year that we are entering. The employment allowance is more than doubling from £5,000 to £10,500, which will benefit all charities in this country. Charities, particularly small charities, will benefit directly from changes that we have made to the employment allowance. [Interruption.] Sorry, Madam Deputy Speaker—I thought you were going to intervene on me.

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[Dr Jeevun Sandher (Loughborough) (Lab)]

Thank you, Madam Deputy Speaker, for allowing me to rise to speak to Lords amendments 1 to 19. I want to speak about what makes a good tax system and, in particular, optimal tax theory, which is a topic that is as thrilling to me as it is no doubt to the entire Chamber.

A good tax system is defined by neutrality, simplicity and stability, as set out in the Mirrlees review. A tax system designed along those three principles will raise the maximum revenue with the minimum economic impact. Each of the amendments in isolation might seem reasonable, but together they introduce individual exemptions that make our tax system less neutral, less simple and less stable. The amendments would make our tax system worse.

Today, we are discussing raising national insurance contributions from the largest employers to fix our broken public services and invest in our prosperity. Three quarters of that £23 billion of investment is from the richest 2% of businesses, while we are reducing contributions from the 250,000 smallest businesses.

[Dr Luke Evans]

The hon. Member talks about simplicity. If that is the case, why is the Government splitting the NICs? They could have introduced an increase on employees at the same time as the increase on employers, but they have decided not to do that. That would have been a simple measure to raise taxes, without creating this complication. How does that tally with his theory?

Finance Bill

Luke Evans Excerpts

Report stage
Monday 3rd March 2025 Commons Chamber

[James Wild]

I will speak to new clauses 1 to 3, and amendments 67 to 69, tabled in my name. It is 124 days since the Chancellor delivered the first Labour Budget in 14 years—the so-called growth Budget—but it feels like longer. Inflation is up, taxes are up, borrowing is up, unemployment is up and energy bills are up. I could go on, but most tellingly of all, growth is down. The Bank of England has just cut its growth forecast for this year in half, to just 0.75%. Little wonder that business confidence has plummeted, with firms warning of fewer jobs, lower wages and higher prices. Instead of backing risk takers and supporting wealth creators, as the Conservatives do, this Finance Bill and the Budget attack enterprise and deliver lower growth, higher borrowing and higher taxes.

I turn to new clause 1, concerning pensioners. Millions of pensioners were left out in the cold this winter when the Government took away their winter fuel payments. Millions of people in receipt of only the state pension now face paying income tax on it.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

When the Government decided to take away the winter fuel payment, they said that people could apply for pension credit to try to get some support. The problem is that there are huge delays in getting pension credit. When the message was first put out, the delay was 84 days. Five hundred new staff have been brought in, but it is still 56 days, which is above the 50-day limit. Does my hon. Friend share my concern that people have now passed through winter and still do not have the funds to which they are entitled under this Government, and which are not there?

[James Wild]

I absolutely agree with my hon. Friend, who has done stellar work in drawing out of the Department the data on delays and waiting times. If everyone who is entitled to pension credit took it up, it would wipe out the savings that the Chancellor wanted, so the idea that she wanted all those people to take up pension credit is for the birds.

New clause 1 would require the Government to review how many people receiving the new state pension at the full rate will be liable to pay income tax in the coming years. At the general election, we were very clear that people in receipt of only the state pension should not pay income tax on it. However, recent forecasts suggest that an estimated 9 million pensioners will pay income tax on their state pension from April 2026. Pensioners cannot easily alter their financial situation, yet they were given just six months’ notice that they would lose their winter fuel allowance. They cannot be blindsided for a second time by the taxman.

In Committee, the Minister said that the relevant data was available, but I do not think that is correct, because the figures to which he referred do not break down the group we are talking about—recipients of the full rate of the new state pension. Will he commit to publishing data on how many people receiving the new state pension will pay income tax on it? This potential hit could not come at a worse time for pensioners, who have lost their winter fuel payments, because we learned last week that energy bills are going up yet again—a far cry from the £300 cut that they were all promised at the last election by the Labour party.

At the Budget, the Chancellor made much of her announcement that she would uprate the personal tax thresholds in line with inflation from 2028, but that is not legislated for in this Bill. The public are being asked to take the Government at face value, yet recent reports suggest that this promise may be dropped due to the impact of the Budget on growth and higher borrowing. Given the number of broken promises since the election, can the Minister reconfirm from the Dispatch Box the Government’s commitment to unfreezing those thresholds in 2028?

As well as pensioners, working people cannot afford the costs of this Labour Government. The Prime Minister promised at the election that he would not hit working people with higher taxes, and he then broke that promise with the £25 billion-a-year jobs tax.

--- Later in debate ---

[James Wild]

In short, no, I do not, which is why we voted against that previously. We should be maximising our home-grown energy, not undermining domestic production and choosing to rely instead on importers with higher carbon emissions.

[Dr Luke Evans]

I agree entirely with the shadow Minister. Only today, the Prime Minister said at the Dispatch Box that our economy is security, and security starts with our defence and looking after ourselves—and that includes energy security. Is it not ridiculous not to use North sea oil—our own reserves—to ensure that security? It is the cleaner side of oil and gas. Using our own reserves also comes with jobs, and prevents us importing oil and gas in a volatile world.

[James Wild]

Absolutely. I wonder if, when the Prime Minister was in Washington last week, he had the opportunity to talk to President Trump about home-grown energy and the importance of supporting the domestic sector. That is what we on the Conservative Benches certainly support. This is a sector with 200,000 high-skilled jobs, so it is important that we have an up-to-date assessment of the impact of what the Government are doing on our domestic energy production, energy security, energy prices and the UK economy. Unfortunately, we already see some of that impact: the US firm Apache has said that it will end its operations in the North sea by the end of 2029, blaming the extension of the profits levy for making it uneconomic to stay beyond then.

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At Davos, the Chancellor said that she would amend these proposals as they made the UK less attractive, but frankly, the damage has already been done. The Chartered Institute of Taxation has warned that, given the lack of proper consideration and consultation, the amended proposals still leave uncertainty, which will be counterproductive if it is the Government’s intention to encourage those people to stay and to allay the concerns of those looking to invest in the UK.

[Dr Luke Evans]

The shadow Minister is absolutely correct. At Davos, the Chancellor said she had listened to that community. Why would she make changes for that community, but not the farming community, the pensioner community, the pupils at private schools or the SEND community, or indeed working businesses such as pubs, restaurants and charities, who are all seeing tax increases? Why was that community listened to, when no others were? Does he have any idea why that could be the case?

[James Wild]

My hon. Friend invites me to get inside the head of the Chancellor, but I am not sure I would be able to do that. All I know is that the other groups that he mentions should also be listened to. The Chancellor has shown herself to be particularly tin-eared on the impact of these changes on family farms and businesses, hence there is, tomorrow, yet another protest. I read over the weekend that another brave Labour MP has come out and said he opposes the changes and wants to see reforms—perhaps some of the other Labour MPs are here to speak to say that they too stand with the farmers in their constituencies.

To conclude, the Prime Minister and Chancellor set growth as the mission for this Government. They inherited an economy growing at the fastest rate in the G7, but the choices they have taken in the Budget and in this Finance Bill have stopped growth stone dead. They have hiked taxes, undermined business confidence, pushed up inflation and hit working people and pensioners. Later this month, we will get the economic and fiscal forecasts, but what we can already see is a Labour Government committed to higher taxes, higher spending and higher borrowing, and we are all paying the price.

--- Later in debate ---

[Dr Sandher]

I am sure the Government will consider these measures in the round, but more broadly, of course, it is about building many more homes. Some 40% of 18 to 34-year-olds are living with mum and dad, and we are starting to fix that in this Budget, including by providing a 20% increase in the affordable homes programme, which is a stepping stone to building 1.5 million new homes.

[Dr Luke Evans]

I am grateful to my Leicestershire colleague for giving way. He will know that housing targets and housing numbers have gone up in Leicestershire—the figures in my patch are up by 59% and 73% respectively. However, the figures for Leicester city are dropping by 31%. Why is that happening when Leicester has brownfield sites and the best connections? If we need houses everywhere, should we not see them being built in cities as well, rather than just in the countryside?

[Dr Sandher]

The housing formula has rightly been changed to where the need is greatest. In my constituency, for example, planning permission has not been approved to replace derelict factories on brownfield sites with new homes. I have seen too few homes being built and too many things being rejected. I am proud of this Government’s aim to build new homes, and I have full faith in the formula. We need more homes everywhere, including in both of our constituencies.

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[Jim Dickson]

If I might make a little progress before the right hon. Gentleman intervenes once more, that would be lovely.

Opposition Front-Benchers have tabled new clauses 1 to 8, which would require the Government to undertake a number of reviews of the impact of measures in the Bill, ranging from a requirement for the Chancellor to commission and publish an assessment of the expected impact of changes to energy, oil and gas profits levy on domestic energy production, the UK’s energy security, energy prices and the UK economy to a requirement on the Chancellor to publish an assessment of the impact of the changes in the Bill on the finances of households at a range of income levels. I gently remind Opposition Members that much of the information requested is already available. Details on tax liabilities are published by HMRC, the Department for Work and Pensions and the Office for Budget Responsibility, and the impacts of the changes set out in the autumn Budget are published in documents including the tax information and impact notes and the “Impact on households” report.

[Dr Luke Evans]

While we as politicians can read and scrutinise those real impacts, when pensioners who will have to pay tax on their state pension come to the hon. Gentleman’s surgeries—they will have to do a tax self-assessment or pay it back—how will he explain to them exactly what is going on? They will not have the technical ability—many will, but some will not—to understand why they are being taxed.

[Jim Dickson]

I thank the hon. Gentleman for his intervention. He seems remarkably well informed already about the impact of the changes in the Budget, and I imagine that hon. Members across the House will be similarly well informed.

The Leader of the Opposition has outlined her desire for a British equivalent of Elon Musk’s Department of Government Efficiency. I wonder how she can square that desire with the new clauses, which, if passed, would seem to duplicate work already done by the Government. That is hardly a model of efficiency—more like playing politics.

--- Later in debate ---

[James Murray]

The debate on this Finance Bill has to focus on matters that are within the Bill and in the new clauses and amendments. As the hon. Gentleman will know, and as Madam Deputy Speaker reminded him, he strayed rather outside the ambit of the Finance Bill by referring to important changes to agricultural property relief that are not dealt with by the Bill or by any of the new clauses or amendments. I gently point out that any of his constituents, whatever industry they work in, will see that the income tax on their earnings does not go up as a result of this Government keeping their commitment in that regard.

[Dr Luke Evans]

The Minister is right to point to the amendments in front of us. New clause 3 looks at household income specifically. If he is so confident in the measures he and the Chancellor are putting forward, why will he not accept new clause 3, which has the ability to show just how fantastic the Budget and the Finance Bill are from the evidence base that we have?

[James Murray]

I was hoping that the hon. Gentleman would again leap to the defence of Liz Truss, as he did just last week. Sadly, that was not to be the case in his intervention. I will come on to the new clauses in a moment; I am only halfway through thanking people on his side of the House for intervening, so I would be grateful if he would let me make a little progress.

The hon. Member for Wimbledon (Mr Kohler) spoke about his concerns that things will be unworkable when the wine easement ends, but it ended over a month ago. Our early indications are that firms, warehouse keepers and HMRC have adapted well to the new system, although I and my officials will carefully monitor the situation.

Family Businesses

Luke Evans Excerpts

Wednesday 26th February 2025 Commons Chamber

[Mel Stride]

As the party that increased the personal allowance, doubling it between 2010 and the present day, taking millions of people out of tax altogether, and that brought in the national living wage, we have done a great deal to support the lowest paid in our society in particular.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

The point is about the culmination of all the changes the Labour Government have brought in. This Government have indeed raised national insurance, and may need to do so again in future. However, the key point is what the ramifications of all these changes will be—the living wage change, the cuts to business rate relief, the red tape being introduced with the Employment Rights Bill and the national insurance contributions going up. That toxic concoction will kill off growth. That is the problem. Does my right hon. Friend agree?

[Mel Stride]

My hon. Friend is absolutely right. It is not as if the Government were not warned about these issues. In its reports, the OBR made it extremely clear that while the headline figure to be raised through the national insurance contribution changes is £25 billion, the net figure will be far less because of the behavioural impacts that necessarily follow when jobs are taxed—one does not need to have spent a decade at the Bank of England to know that. National insurance increases lead to fewer jobs, lower wages and higher prices.

Of course, this Government are piling on the regulation with their Employment Rights Bill. We know that this will increase the risk of employing people at a time when the employment market itself is softening and putting an end to flexible working practices, which not only benefit many businesses but suit many people, particularly younger people and those who are more elderly. Given that, it is astonishing that the Chancellor has launched a tax raid on family businesses.

--- Later in debate ---

[Mel Stride]

My hon. Friend is absolutely right. That is where the dearth of experience of entrepreneurship on the Government Front Bench really shows. We see this not just with BPR, but with agricultural property relief. Family farms will be broken up, with years and generations of people struggling and working hard, whatever the weather, to grow businesses and provide the food that we need torn asunder with a stroke of the Treasury’s pen.

[Dr Luke Evans]

In an interview, the Prime Minister said that the reason for doing this to farmers was to be able to give them the NHS that they might need. Only a week later, the £10 million fund that was there to support the mental health of farmers had been taken away. It must stick in the throat of farmers when they are told that they are not a priority, that food security is not a priority, and that they will now not have the health service in place, despite having to pay the tax that is about to come into force.

--- Later in debate ---

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

I thank the shadow Chancellor for opening the debate.

In their motion, the Opposition have set out a list of objections to the decisions that the Government have taken—or, in the case of the measurements around pints, decisions that shadow Ministers seem to have entirely imagined. They may be able to list their objections, but they are unable to accept responsibility for the damage that they did to our economy. Crucially, they are unable to offer any credible alternative. The motion makes it clearer than ever that the Conservatives have no vision, no ideas and no plan to deliver the change that our country needs.

In contrast, Labour is the party with a plan for change—a plan to restore economic stability, boost investment and drive growth across the UK to put more money in people’s pockets. We know that it is up to the Government to provide stability, security, fiscal responsibility, and to remove unnecessary regulation when it stands in the way of growth. It is businesses large and small—including family businesses and their workforces—that will create jobs and wealth and be the engines of growth in the economy. We know that pubs, shops, traders and services across the country not only play an important role in all our lives, but drive economic growth. Those businesses and their workforces are the backbone of our economy, and they need a Government who will take the right decisions in the national interest, even when they are difficult, to support our security and prosperity.

I briefly remind Conservative Members of the context in which the decisions have been made. That context is, of course, the inheritance that this country faced after 14 years of the Conservative party being in power.

[Dr Evans]

The context is that back in 2010 the then Government had to borrow £158 billion. Fast forward another decade, and we had something called the pandemic, when we had to borrow £400 billion on top of that. Collectively, that is a great big difficulty. Five years ago, when the pandemic happened, I sat in this Chamber listening to all the interventions asking for more spending. Does the Minister not agree that that is the problem the Conservative Government dealt with?

[James Murray]

The hon. Gentleman said that we had something called the pandemic; we also had a Prime Minister called Liz Truss and that had a pretty big impact on our economy. I know the shadow Chancellor is distancing himself from it. If his colleagues would like to leap to Liz Truss’s defence, I would welcome an intervention. No, they are not seeking to intervene. Funny that, Madam Deputy Speaker. Perhaps, in closing, one of the other shadow Ministers can defend Liz Truss’s record.

[Dr Evans]

Will the Minister give way on that point?

[James Murray]

Yes—on Liz Truss’s record.

[Dr Evans]

The way I see it, the problem that Liz Truss had with her Budget was that she did not set out her workings. The problem with Rachel Reeves’s Budget is that she did, and the country and the world does not believe it. That is far more detrimental to the situation we find ourselves in because she cannot get out of that problem. That is the difference between Liz Truss and Rachel Reeves.

[James Murray]

Wow. I should let the hon. Gentleman intervene more often if he is going to say that the only problem with Liz Truss is that she did not set out her workings. I think the problem was rather more fundamental than that, as people across this country will attest.

Frankly, it is no wonder that Conservative Members want to bury their heads in the sand and try and pretend the last 14 years did not happen. It was 14 years of mismanagement and decline, along with jolts of disaster, digging ever deeper holes in our public services and our economic resilience. It was their decisions that led to their resounding electoral loss last year and it was their record in office that made necessary the difficult decisions that we had to face on entering government.

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[Bradley Thomas]

I agree wholeheartedly. That strikes at the heart of the Government’s lack of appreciation for what fundamentally drives the economy.

[Dr Luke Evans]

To be fair to the Government, we may not know what their CVs show, so there could be business experience but it is just not on their CV.

[Bradley Thomas]

My hon. Friend raises a very valid point, but let us look at the facts. The Government will attempt to tarnish the Conservatives’ record, but in July Labour inherited the fastest growing economy in the G7, with unemployment at near-record lows and inflation at the Bank of England’s target. We have seen a complete reversal of that, in part because the choices the Government made in the Budget have destroyed that progress. The Government’s Budget and fundamental overall approach threaten the future of family businesses through new red tape—we have the family business tax, the family farm tax and the national insurance job tax. Businesses know that they are paying more and the Government know that businesses are paying more, and I do not know how some Labour Members have the gall to sit there and think that their position is one of honesty and credibility when it comes to growing the economy.

A business in my patch has got in touch with me. Jack and his family run an apprenticeship training provider. Jack said,

“My parents left school with no qualifications and over the last 50 years have worked hard paying their way getting on and building a good life and business for us as a family. Since 2007, they have been majority shareholders and owners”

of a business called Birmingham Electrical Training, for which Jack is also a director. He goes on to say that they

“currently are the 2nd biggest provider of electrical apprenticeships in the UK”

and

“train 700+ apprentices in partnership with 275 local and national…contractors, many of which reside and work within”

the west midlands region. They

“hold a department of education contract and are recognised by the Electrical Industry in providing a crucial role in training the next generation of electricians”.

That is a pertinent point when the Government are pursuing policies like the ludicrous clean heat market mechanism, which will require a step change in the number of electrical contractors to deliver on the Government’s net zero folly.

Jack makes this point:

“There is no way that I would be able to afford £800k worth of tax to access the business I have helped build and grow over the past 10 years”

as a result of the changes announced by the Chancellor to inheritance tax. He will personally be liable for £800,000 that he will not be in a position to pay. That jeopardises one of the family businesses that form the backbone of the country’s economy. He asks,

“Why would the government want to destroy family businesses, which are crucial to helping local people and provide the growth in the economy in the years to come?”

That is not an isolated case. The Confederation of British Industry and Family Business UK have warned that changes to business property relief could lead to up to 125,000 job losses and reduce economic output by £9.4 billion, as their analysis found that average family businesses would cut investment by a staggering 16.5%, reduce headcount by 10.2% and lose turnover of 7.4%. That recognises the fact that the Government do not appreciate the fundamental positive benefits to wider society of promoting small businesses and their long-term financial viability. The Government are making the UK a hostile destination for investment, both large and small. They must work to ensure that our country is the most attractive destination possible for businesses to invest and grow and to make us wealthier.

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[Laurence Turner (Birmingham Northfield) (Lab)]

I draw attention to my declarations in the Register of Members’ Financial Interests. It is a pleasure to follow my constituency neighbour, the hon. Member for Bromsgrove (Bradley Thomas). I will just say that the clean heat market mechanism that he spoke about, which is causing concern to a business in his constituency, was of course brought forward by the last Conservative Government.

I will start by talking about the Employment Rights Bill, because some of us have just spent two months in Committee going through it line by line. I thought that the House might want to hear about some of the opinions and positions put forward by the Opposition during that process. The Opposition tried to exempt millions of workers in some of the lowest paying sectors from protection against harassment at work. We heard from the shadow Minister that he does not believe that public sector employers should offer facility time at all. The Opposition attempted to block better contracts for teaching assistants and other low-paid members of school support staff. A witness who was presented as representative of business opinion had previously said that lockdowns would kill far more people than covid. I do not think that the motion or the party putting it forward is a credible voice of economic growth or business.

[Dr Luke Evans]

The independent Regulatory Policy Committee looked at the Bill back in November and said that eight out of the 23 categories were “not fit for purpose”. Was that discussed? Given that the committee is independent, does the hon. Member give that point any credit when it comes to discussing the Bill?

[Laurence Turner]

One of the pleasures of the Committee is that we have 970 pages of transcript where those matters were discussed at length, and the Government are indeed bringing forward further impact assessments on those points.

Looking at my constituency and, indeed, the constituencies of all Members of the House, the economic record that we have inherited is one of pallid economic and wage growth. After 15 years, average real wages in Birmingham Northfield are £300 lower a month than they were in 2010. The costs of delayed and cancelled NHS appointments, crime that goes without investigation and shortages in key teaching posts are borne not just by our constituents, but by businesses. We should say this clearly: public services create value. Businesses and the people who work for them need strong public services to sustain themselves and grow.

When I recently met small businesses on Northfield high street, we had—as you would expect, Madam Deputy Speaker—a serious and robust discussion about a whole range of Government policies and policies enacted by the previous Government, but the first issue raised was crime and antisocial behaviour. Anyone who has been a victim of crime can attest to the devastating impacts that it can have on a person or business.

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[Nick Timothy]

The hon. Gentleman is a little confused. Public spending is not increasing faster than I expected; it is increasing faster than his party told the country. That is the point.

The Treasury might not be what it once was, but even if we believed what the Minister said about the fictional black hole, which the Office for Budget Responsibility has disowned, £9.5 billion plus £22 billion does not reach even half of the £76 billion in extra Labour spending. I am not sure whether the Minister is listening, but he can intervene if he wants to explain himself at this point—he clearly is not.

What do we get for these extra taxes? The Home Office budget is being cut by 2.7% in real terms compared with last year. The Department for Transport budget is being cut by 2.5%, and its capital budget is being cut by 3.1%. That is economic illiteracy. This amounts to taxsterity —tax rises and spending cuts—to go with stagflation, or stagnation and inflation. That is Labour economics.

[Dr Evans]

To be fair to the Labour Government, they have seen a surplus in self-assessment tax receipts, at £15 billion. The problem is that the OBR was expecting that to be £21 billion. We therefore have the prospect of them trying to find where we get that extra money from. The Government need to set out whether they are going to break their fiscal rules, cut public spending again, or increase taxes. Does my hon. Friend have any inclination on what they might choose, because I certainly have not heard anything?

[Nick Timothy]

Based on Labour’s track record, one would always bet on tax rises rather than fiscal responsibility.

The bond markets have taken a single look at the Chancellor’s fiscal plans and increased Britain’s borrowing costs, which means another Labour tax rise for all of us. Not one word in the speeches we have heard from Labour Members today recognised the cumulative damage caused by their Government’s policies. There is the national insurance jobs tax, hiking the cost of hiring staff by £900 for an employee on the average salary and costing businesses £25 billion in total. There is the business rates relief cut, from 75% to 40%, meaning that businesses will spend £2.7 billion extra a year by 2026-27.

There is the Employment Rights Bill, which, as I said, will cost businesses £5 billion a year, and probably more once the Government finally get their impact assessments right—normally Governments produce an impact assessment before a Bill is published, not after it has passed through all its stages in the House of Commons. There is the Energy Secretary, who wants to increase the carbon price higher than Europe’s and, according to the National Energy System Operator report that he constantly endorses, up to as much as £147 per tonne of carbon dioxide by 2030. As industry is lining up to tell the Government, that is yet another jobs killer. There are also, of course, the changes to business property relief that we have discussed today, which will cost £1.25 billion in lost revenue and mean 125,000 jobs lost by 2030.

Inheritance Tax Relief: Farms

Luke Evans Excerpts

Monday 10th February 2025 Westminster Hall

[Ben Goldsborough]

I thank the right hon. Gentleman for his intervention; I will cover that later in my speech.

Since being elected as the MP for South Norfolk, I have made a conscious choice to sit around as many farmhouse tables as humanly possible. It has been clear to me that South Norfolk needed politics to be done differently and, instead of being on broadcast mode, I have done all I can to listen, engage and try to deliver for all constituents in my little slice of Norfolk. I know that many of my colleagues on the Government Benches have done exactly the same.

Not all conversations have been smooth but, as I said to my recent meeting with the NFU’s Norwich and Loddon branch, I will never shirk away from my responsibility to be their voice in Parliament and to raise their views with Ministers. Today, I have had the opportunity to do that as a member of the Petitions Committee, and I welcome the opportunity to lay out the arguments I have heard over the past few weeks in preparation for this debate.

[Dr Luke Evans (Hinckley and Bosworth) (Con)]

Listening is really important. I have heard from my local farmers that they are caught between thinking, “Is this a mistake?” and thinking, “Is this done on purpose?” Did the Government mistakenly not realise that they were going to bring all these family farmers into inheritance tax and agricultural change? Or, worse still, was it planned all along as a way to get the land for housing and some of the net zero targets? Either could be true. Does the hon. Gentleman have a preference over which one it is? Farmers want to know whether it was a mistake that should be rectified or it is an ideal policy driven by the Government.

[Ben Goldsborough]

I am about to share the testimonies of my local farmers in South Norfolk. All too often as politicians we are keen to take the limelight for ourselves instead of listening to those on the ground who want us to put forward their opinions, which is what I am about to do.

One of my local farmers, Will, asked me to share his words:

“The government’s decision to make major changes to APR and BPR”—

business property relief—

“will spell the end for many family farms. Before this announcement, agriculture was already going through a difficult period and for many farmers, this news has left them without hope.”

Another farmer, Robert, wished for me to say:

“We are trapped with no way to mitigate against the effects of this cruel tax. Farming is who we are, it’s in our blood, it’s all we want to do.”

And another farmer, Tim, requested that I share this:

“I have spent my entire working life trying to build this farm up and have added about 200 acres in my time. I see myself as a custodian of the land which I know like the back of my hand and I feel responsible for it…to have to sell would be devastating and would go against all that I have worked for.”

Will, Robert and Tim all fear the significant consequences of the proposed APR changes on smaller family farmers, and I believe that their views are shared by many farmers who have historically operated under a 100% agricultural property relief system. There is no getting away from their genuine concerns and I know that, in his response, my hon. Friend the Minister will address those feelings in the sensitive manner required.

There can be no doubt that the arguments that land values are artificially high due to APR have credence. It is also undeniably true that we see non-farmers buying land for tax-efficiency reasons. Neither of those trends are positive but, to be clear, that does not mean that farmers are wrong when they raise concerns about paying a large one-off inheritance tax bill with anything other than the land they need to keep their heads above water, even if the bill is spread over 10 years.

The proposed policy change has arguably pointed to a fundamental issue for agriculture, which is the annual profitability of British farms. There is significant work for the Government to do to ensure that farms up and down the UK become more profitable during this Parliament, and I know the Minister is working hard on that.