UK-China Economic and Financial Dialogue
Paul Holmes Excerpts(1 week ago)
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Rachel Reeves
The best way to grow an economy is to boost investment in an economy. The truth is that, under the Conservatives, we were the only G7 economy where investment stood at less than 20% of GDP. That is the inheritance that our party was bequeathed by the Conservatives, but we are beginning to turn that around through the creation of a national wealth fund to leverage in private sector investment, through planning reform to get Britain building again, and through pensions reform to unlock £80 billion of investment to help small and start-up businesses to grow. We are turning things around after 14 years of failure from the Conservative party.
Paul Holmes (Hamble Valley) (Con)
While the Chancellor was in China securing her measly £600 million, borrowing rates reached the highest they have been since 2008. In 2024 she said that her Budget would be
“a Budget with real ambition, a Budget to fix the foundations…a Budget to rebuild Britain.”
How is that going, given that her mess has caused borrowing to be the highest it has been since 2008, making real working people in this country suffer?
Rachel Reeves
I am not sure whether the hon. Gentleman follows global financial markets, but borrowing costs have increased for countries around the world. What we saw under Liz Truss’s mini-Budget was unique to the United Kingdom, because it was only UK markets that were affected by the decisions of the Conservatives.
Christmas Adjournment
Paul Holmes Excerpts(1 month ago)
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Paul Holmes (Hamble Valley) (Con)
It is an honour to wind up this end-of-term Christmas Adjournment debate for the official Opposition. We have had a wide and varied range of issues raised during this debate, as well as a fantastic array of facts from constituencies across the United Kingdom. Members in all parts of this House have spoken about the issues that really need tackling, and about the pride they feel in their constituency and their constituents.
Might I give newer Members on the Government Benches a top tip—a genuine, non-partisan top tip? When they speak in these debates in future, they should know that this is the only time when they can speak on the Floor of the House to a Government Whip. They are able to tease that Whip, claim what they want for their constituency from them, and sometimes tease out where they think the Government might be going wrong. I encourage Members to tread gently, however, because if they do so—and I encourage them to; I used to do it to my right hon. Friend the Member for Daventry (Stuart Andrew)—the meetings without coffee will start again in January. They should enjoy themselves in this afternoon’s debate, though, and I know that they have.
The Whip responding, the hon. Member for Redcar (Anna Turley), will be making a list. She will be checking it twice. She will be looking to see which of her Members have been naughty or nice, and they never know, Santa Claus might be coming to a town near them. I note that the hon. Lady was chair of the all-party parliamentary group for bingo at one stage of her career. I wonder whether in her winding-up remarks, we will see a game of Labour bingo—“14 years”, “fixing the foundations”, “dire inheritance”. She should not be surprised if I shout “Full house” at her while she is winding up, because I am afraid that we will not be taking any of that broken record from the hon. Lady. However, it is a lot less broken than the record that I encourage Members on all sides of this House to buy as we approach the Christmas No. 1 competition: “Freezing This Christmas”, which is raising money for Age UK. I apologise to the Liberal Democrats for not endorsing the right hon. Member for Kingston and Surbiton (Ed Davey).
I will run through contributions made by Members from all sides of the Chamber. My hon. Friend the Member for Harrow East (Bob Blackman) mentioned that he has been elected Chair of the Backbench Business Committee, and opened this debate in his typically charismatic and factual way. He wears two hats, also being chairman of the 1922 committee. I can guarantee that he will not be receiving any communications from me over the next five years. He also said that my right hon. Friend the Leader of the Opposition is a winning candidate, and I look forward to her taking over as Prime Minister in five years’ time. We should respect the fact that she is the fourth female leader of the Conservative party—something that the governing party needs to take note of.
My hon. Friend also spoke about his campaign on London transport. That is what you get with Sir Sadiq Khan. Labour wants to bring in more directly elected Mayors by central diktat across the whole country. We on the Conservative Benches will absolutely hold Sadiq Khan to account for the dire services that he offers his constituents in London. Finally, my hon. Friend outlined his absolute commitment to the proscription of the IRGC—an issue that he has championed on both sides of this House. I know that he will keep pushing for that, and he is absolutely right to do so as he stands up for the great nation of Israel.
The right hon. Member for Walsall and Bloxwich (Valerie Vaz) mentioned the really important issue of accessibility for all funding for railway stations. All Members from across this House have over the last five years brought up cases of constituents. I have many times brought up my constituents and the funding for Hedge End and Swanwick; feasibility study money was allocated by the last Government. I ask the Minister on duty to request that the Department for Transport comes back to all Members who were promised that money in the last Parliament—it was allocated by the last Government—and outline where we are going with accessibility for all. The ministerial letters that I received did not say when the next steps would happen. I ask the Minister very politely, on behalf of my constituents, where we are on that project.
My hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) mentioned, in a heartfelt speech, all the volunteers across his constituency. He is absolutely right to pay tribute to the volunteers we all have in our constituencies, particularly in the NHS and the armed forces. They are a credit to our nation. They will be working across the United Kingdom this Christmas, and we all owe them a huge thank you.
My hon. Friend mentioned the men’s shed charities, which I know from personal experience have helped many men with mental health issues. I do not think we talk enough about that topic. I pay tribute to the men’s sheds across the country for the things that they build on behalf of community centres. We have some lovely flower beds in Hedge End village in my constituency that were built by such volunteers, and I pay tribute to them, too.
The hon. Member for Newton Aycliffe and Spennymoor (Alan Strickland)—this is testing my pronunciation of place names across the UK—is a dedicated champion of his constituency. Before we entered this place, we worked together in another sector, namely the social housing and housing association sector in the UK. He is a first-rate brain on housing policy in this country, and I hope that he is used by the Government to unlock the social housing that is much needed.
The hon. Member mentioned the armed forces parliamentary scheme. I declare an interest, in that I am a trustee of the scheme, and I encourage Members from across the House to take part in it. It is fantastic. We obviously honour the work that our armed forces do, and the scheme allows us to get closer to them, and to really listen to what they have to say about what they go through on our behalf, day in and day out.
As he does every time we have one of these end-of-term Adjournment debates, my hon. Friend the Member for Brigg and Immingham (Martin Vickers) raised really important issues in his constituency—particularly the direct train service to King’s Cross, which he has been bringing up consistently in this House since 2011. I say to him: keep going. I did not find him boring, and I look forward to his bringing up the issue in the next such debate, probably in the summer. I look forward to responding on that occasion, too.
The hon. Member for Luton South and South Bedfordshire (Rachel Hopkins) mentioned animals in her constituency, and a dog is for life, not just for Christmas. I hope that she buys her dog Maisie a big bone this Christmas. I see that she has Maisie on her phone.
My hon. Friend the Member for Keighley and Ilkley (Robbie Moore) is a dedicated and doughty champion of his constituents. He and I were elected to this House in the same intake, and I do not mind saying to him that his was a stand-out result for me on election night. He is a doughty and committed constituency MP, but his result surprised me—not because of any lack of ambition or lack of ability on his part, but just because winning his seat and getting through this election, which was very difficult for Conservatives, shows the dedication and the work that he puts in.
My hon. Friend mentioned a number of Conservative initiatives to fund programmes in his constituency that were ringfenced, and he wants to drive growth. I fear that growth will be damaged by some of the policies of this Government, but he is a tireless campaigner. I would like to know what was in Clara’s Closet, a shop that he mentioned. He was also right to pay tribute to Ian Hayfield, the chair of the town’s bid, who passed away a couple of days ago, and Members across this House send our condolences to his family.
The hon. Member for Woking (Mr Forster) championed McClaren, and outlined the local investment that such businesses, particularly F1 businesses, bring to his constituency, and he is absolutely right to do that. The hon. Member for Dartford (Jim Dickson) made a couple of puns about Christmas lyrics. I recommend that he stick to the day job of standing up for his constituents and focusing on solving issues. However, he brought some fun to this debate; that is entirely what such debates are meant for, and I hope that he is successful in lobbying Ministers for investment.
My hon. Friend the Member for Strangford (Jim Shannon) always comes to this House—well, he is here most of the time. He said that we all need to think of others at this time, and had a message of hope at Christmas. Whenever he stands up in this House, he offers us hope and shows us how we should be doing our jobs. I wish him and his family a happy Christmas.
The hon. Member for Guildford (Zöe Franklin) mentioned volunteers and special educational needs and disabilities children. When I am sitting here heckling the Labour party, she has often brought up that issue for her constituents, in her short time here. I know that she will continue to do so in her way, and I will work with her to make sure we improve on those issues.
May I take this opportunity to thank all of House staff for their unfailing help to all Members, particularly new Members? A record number of new Members came into the House. I would particularly like to mention—other members of staff should not take it personally—Godfrey, Daphne and Dawn in the Tea Room, who make my lunch and serve me tea very well. I have a lovely cup of tea after being in here, and I will have one after this debate. I particularly thank the Doorkeepers for putting me right when I have got lost, and putting up with my humour. I thank all staff, and I wish them a very merry Christmas. I wish you, Madam Deputy Speaker, the other Madam Deputy Speakers and Mr Speaker a particularly good Christmas, and a rest. I also thank my team, who help me and keep me on the straight and narrow: Steph, Emma, Dan and Charlie.
This debate shows that this really is a place of worthy ideals. It is a place for decency, and a place where we share a common bond: the privilege of representing our constituencies, places we care about, and our constituents, the fantastic people who make up this country. I wish my constituents in Hamble Valley a great Christmas. To all Members right across this House, I say: I look forward to seeing all of them back in the House in 2025, and I hope everybody has a very good rest.
Paul Holmes
The hon. Lady has plenty of time, but can I just say to her: one line, two lines, full house.
Anna Turley
Eyes down. [Laughter.]
To quote Lord Tennyson,
“The old order changeth, yielding place to new”.
In July, the people cast out the old and ushered in the new, and we will not fail them.
At this time, I know we all want to take a moment to reflect on our families, our communities and, perhaps, our faith. We should never forget that Christmas is not always a time for celebration and joy; for some, it is a time of great regret, sadness, grief and loneliness. For many, it is a time of mental stress and financial worry. We pray for peace and for an end to conflict and separation around the world. We think of our courageous armed forces around the world, those saving lives in conflict zones, the NHS and so many other key workers, for whom Christmas day is just another day at work. To everyone alone, or serving abroad, or in pain this Christmas, please know you are not alone, and that you are loved. That, surely, is the true meaning of Christmas.
I am reminded, as I finish, that one of England’s greatest Christmas literary figures, Charles Dickens, began his career here as a parliamentary reporter and sketch writer. So, like Tiny Tim, let me close by saying,
“God bless Us, Every One!”
Employer National Insurance Contributions
Paul Holmes Excerpts(1 month, 2 weeks ago)
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Mel Stride
No matter what points the hon. Gentleman may make, I am afraid he cannot get away from the fact that this Government are bearing down on growth, pressing up on unemployment, bearing down on employment and bearing down on living standards.
The OBR also says that real household disposable income by 2029 will be 1.25% lower than it was back in the spring, at the time of that forecast. We know the impact that national insurance is going to have on wages. It will press them down and it will further diminish living standards.
Paul Holmes (Hamble Valley) (Con)
Does my right hon. Friend the shadow Chancellor remember any Labour MP in the last general election standing on a fully costed manifesto that would mean economic growth was forecast to be lower than under the previous Government? Perhaps the hon. Member for Swansea West (Torsten Bell) should remember that Labour MPs stood on a manifesto that was apparently fully costed but then had different commitments. We had a faster rate of growth under the last Government than is projected under this Government.
Mel Stride
The simple fact is that, at the time of the general election, we had the fastest-growing economy in the G7. The simple fact is that the Labour manifesto said it would deliver precisely that, yet we have heard very little about that commitment in recent days and weeks—I wonder why.
Paul Holmes (Hamble Valley) (Con)
It is a pleasure to follow the hon. Member for Makerfield (Josh Simons). I rise to speak in favour of the motion on the Order Paper in the name of the Leader of the Opposition.
I do not rise to speak in this House because I think the Labour party’s Budget is vindictive, but I do think that the national insurance rise we are debating today is a proposal that runs right through the Labour party’s DNA. Labour drives down growth, when growth should be the No. 1 priority for public services. It taxes the wealth creators and the small businesses, it borrows and makes the economic situation worse, and it is always the Conservative party that has to pick up the pieces after Labour has targeted the poorest people and smallest businesses in our society and made them suffer.
Ultimately, the lack of growth that the Labour party and every Labour Member have signed up to means that public services will suffer, fewer jobs will be created and more businesses will close. I gently say to the Chief Secretary that he challenged us repeatedly to outline what we would do instead of this measure to make sure that we can fund public services, and I will tell him a few things that we would not do. [Interruption.] Well, I will tell him in a minute, and he can intervene and elaborate, and I will get an extra minute. As he asked me what we would do, I will tell him: we would increase growth, as was outlined by the OBR. We would have growth, and higher growth than this Government are proposing. However, what we would not be doing is borrowing as much as him and spending £9 billion on public sector pay rises for his trade union paymasters, funded from borrowing. Those are the things we would not do.
Darren Jones
The hon. Member tells the House that he would go for growth. How did that go when his party tried it last time?
Paul Holmes
I simply say—and the Chief Secretary should know this because he supposedly wrote the Budget that we voted on a couple of weeks ago—that growth forecasts were higher under the last Government than those of the Government for whom he is now leading in the Treasury. I say to the Government that business confidence is at the lowest it has been for years.
Torsten Bell
The hon. Member has raised the issue of business confidence, which I have heard a few times from Opposition Members. That leaves me pondering why, if businesses were so confident under the previous Government, we had the lowest private sector business investment in the entire G7, and the only country in the OECD that saw lower levels of private investment was Greece.
Paul Holmes
I know the hon. Gentleman liked to pride himself on being the oracle of economics when he led a think-tank, but if he looks at the bare facts of business confidence out there, he will see that it has been lower under the five months of the Labour Government than it ever was under the 14 years of the Conservative Government.
I want to mention some of the impacts that this measure will have on my constituency of Hamble Valley. There are 4,000 people employed in the hospitality sector in my constituency. Just last night, a business leader—a small business leader who owns three local venues—outlined to me that, because of the measures this Government have brought forward, he now has to find 5% extra of his total turnover to pay his taxes. That leads to a number of options: he can reduce staff count, meaning higher unemployment in my constituency and nationally; he can close venues, which again means lower employment and the death of our town centres—in every constituency, I remind Members—or he has to choose between not hiring local staff and stopping expansion, as every extra person he wants to take on will cost the business an extra £800 because of this national insurance contributions rise. That choice is facing businesses up and down the country, with lower growth, higher bureaucracy and higher taxes on the people who create jobs and wealth in every constituency in this country and drive the economy that we need to fund public services.
What is most damaging about the Government’s proposal is the catastrophic impact it will have on charities across this country. I defy any Labour MP to stand up in this Chamber and say that they are willing to bring in and happy to vote for a measure that will mean frontline services delivered through our charitable sector are cut. There are other options the Government can take, and they have chosen not to.
Paul Holmes
I am not giving way. [Interruption.] Well, I do not have time.
Let us look at the hospice sector. Many Labour Members probably hoped that the parachute leads had been cut, but I raised £10,000 by jumping out of an aeroplane for the Mountbatten hospice in my constituency. Some 70% of its income is from charitable donations, and 24% of its income is delivered by the national health service. At no time when this Minister or any other Minister has stood up in this House have they apologised to the hospice sector for the cuts in services that will have to be delivered because of this measure. Mountbatten will have to find an extra £1 million in income just because of this measure, and that means more hospital beds being used by people who are unable to access hospice services. Ultimately, the NHS will be in further crisis because of the short-term measure this Government are taking through.
Chris Curtis
I thank the hon. Gentleman. I was looking at some research the other day that shows that parachute jumps end up costing the NHS more money because of the risk of injury than they raise for the charities concerned. Does he agree that, rather than parachute jumps, what our NHS needs is the £22.6 billion investment that has been raised by the Budget?
Paul Holmes
The last Government gave the highest amount of investment into the national health service ever. I happened to jump out of a plane because I was very keen to do so, as I am a bit of a thrill seeker but also because I wanted to raise money for a good charity. If the hon. Gentleman votes for the Government measure or against the motion this evening, he will be ensuring that hospices across this country are unable to deliver the services they want to deliver and, as homelessness charities have said, that £50 million to £60 million will be taken out of frontline services. That will be the impact of this measure. Charities across this country are going to suffer under this Government’s proposal, as will hospitals and wealth creators, and I say to every Member who votes against this motion to protect frontline services that their constituents will be watching.
We should not be surprised that, five months after taking office, the Labour party has reverted to type: tax the most vulnerable, tax small businesses and borrow on the public purse; with poorer public services out there and lower growth going forward. I cannot wait for its defeat at the next election and us fixing the problems.
The Exchequer Secretary to the Treasury (James Murray)
I thank all right hon. and hon. Members for their contributions during the course of the debate.
This Government were elected with an immediate and critical need to draw a line under the fiscal irresponsibility and economic mismanagement of the Conservatives. Since day one in office, we have been determined to deliver economic stability, and we have done so by fixing the public finances, introducing tough new fiscal rules, and getting the NHS and other public services back on their feet.
It is on those foundations that we will boost investment and drive long-term economic growth to make people better off. This is not an easy task, as the Chancellor has said, but fixing those foundations is what underpins all the difficult but necessary decisions we have taken. It is the goal of fixing the foundations of our public finances and the NHS that has driven our decision to make the changes to employer national insurance contributions that we have been discussing today.
In taking the difficult decisions at the Budget, the Chancellor has been determined to protect working people. That is why our Budget made no changes to income tax, rates of VAT or the amount of national insurance that working people pay. As a result of our Budget, people will not see a penny more on their payslips. However, a £22 billion black hole in the public finances cannot be fixed without taking any difficult decisions at all. The Conservatives in government hid their heads in the sand and ignored the fiscal realities. Now, both they and other Opposition parties are desperate to have it both ways. They say that they support extra money for the NHS, but they refuse to back the measures to fund it.
James Murray
I have been very generous over the past 48 hours in giving way in this Chamber, but I will not. My time is very limited, although I would like to hear more about the plane the hon. Gentleman spoke about earlier.
We have made the tough but necessary choices that this set of circumstances requires, which is why we have decided to raise employer national insurance contributions. The changes broadly return national insurance revenues as a proportion of GDP to the levels they were at before the previous Government’s cuts to employee and self-employed NICs, but they do so in a way that does not result in higher taxes in people’s payslips.
They also do so in a way that increases protection for small businesses and charities, because we have decided to more than double the employment allowance to £10,500 and remove the business size threshold. That means that from April 2025, all eligible organisations will be able to employ up to four people on the national living wage without paying a penny of employer’s national insurance. Over half of all employers will pay the same or less national insurance than they did before, but we acknowledge that the decision will have an impact for other employers. Employers will have a choice about how they respond to the changes, and some of those choices will be hard.
I do not have enough time to respond to all the points raised by hon. Members directly, but I will briefly respond to the right hon. Member for Beverley and Holderness (Graham Stuart)—he has been intervening all afternoon but he is no longer in his place. He asked about table 3.2 in the OBR report. I am sorry to disappoint him, but my answer is nowhere near as interesting as I suspect he thought it might be; the table was simply published in error and has now been corrected. The Government provide support for Departments and other public sector employees with the additional employer national insurance contributions liability, and separately we have provided an additional 3.2% increase to local government spending power, including £600 million of new grant funding for social care.
I thank all the other hon. Members who made contributions: my hon. Friends the Members for Makerfield (Josh Simons), for Stevenage (Kevin Bonavia), for North East Derbyshire (Louise Jones), for Uxbridge and South Ruislip (Danny Beales) and for Rother Valley (Jake Richards), and the hon. Members for Hamble Valley (Paul Holmes), for Hazel Grove (Lisa Smart), for Rutland and Stamford (Alicia Kearns), for Wokingham (Clive Jones) and for Hornchurch and Upminster (Julia Lopez).
I want to briefly respond to the point of order made earlier by the hon. Member for South Shropshire (Stuart Anderson) because I welcome the chance to repeat the fact that the OBR said in October that its March forecast would have been “materially different” had it known what the previous Government did not share with it at the time of the March forecast. I am confident that the Hansard record is correct. It specifically includes “materially different” in quotations and not the rest of my statement.
I am grateful to have had the chance to respond on behalf of the Government to the questions that have been raised today. The decision to make changes to employer national insurance was not taken lightly. It was a tough decision for us to take. I recognise that while half of businesses and organisations will pay the same or less than before, others will face difficult decisions of their own. We have asked employers to make a greater contribution, and while we do not expect those affected to welcome that, I hope the majority will understand why we have done it.
The simple fact of the matter is that our country needed a Government prepared to fix the public finances, get public services back on their feet and restore economic stability. It is only through an ambitious and fiscally responsible approach that we can boost investment in growth, laying the path towards the brighter days ahead. The previous Government had completely lost sight of that.
My office in the Treasury building used to be that of Nigel Lawson. He once said:
“To govern is to choose. To appear to be unable to choose is to appear to be unable to govern.”
That very neatly reflects where the Conservative party has ended up now. Before, as the Government, the Conservatives had given up on effective governing, and since then they have given up on effective opposition. This vote today comes down to a choice: between irresponsibility on the Opposition Benches and a Government prepared to do what is needed to build a better future. It is this Labour party in government that is taking the tough but necessary decisions, with a once-in-a-generation Budget to wipe the slate clean and put our country on a better path. It is this Government that have restored economic stability, fixed the public finances and hardwired fiscal responsibility into the Budget-making process. It is this Government that are putting the NHS back on its feet, raising the national living wage and protecting people’s payslips, and it is this Government that will invest in our country, create wealth in every nation and region and make people across Britain better off. That is the choice today and that is why we reject the Opposition’s motion.
Question put.
National Insurance Contributions (Secondary Class 1 Contributions) Bill
Paul Holmes ExcerptsTuesday 3rd December 2024
(1 month, 2 weeks ago)
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Olivia Bailey
The hon. Member should go on Google.
In the months that have followed, I have been proud that this Government have been willing to make the hard choices necessary to protect our economic security, and have taken the long-term decisions necessary to fix the foundations of our country and finally prioritise our broken public services. We are investing in the NHS, rebuilding our crumbling classrooms and recruiting thousands of teachers to end the era of government by press release and empty promises. That is why I support this legislation.
Paul Holmes (Hamble Valley) (Con)
The hon. Lady stated that she was intimidated by her Budget. I should imagine that is very true—
Paul Holmes
Okay. Well, was she intimidated by her Budget? I take it that she would be intimidated by the growth that has been revised downwards, by business confidence crashing, and by private sector employers stating that they will have to let employees go because of the red tape put on businesses, all through this Government’s Budget.
Olivia Bailey
I ask the hon. Gentleman not to twist my words. I very clearly said that I was intimidated by the sheer scale of the mess that the Conservative party left our economy in, and the hard conversations I have had to have with my constituents because of how much harder that has made it to make things better for them.
Some of the bigger businesses in my constituency will find the changes difficult, and I thank those who have shared their views with me, but I believe that this was a fair choice, given the situation that we are in. Small businesses in my constituency will benefit from the changes, and there is also the benefit to all of us from our significant investment in public services. Hairdressers, beauticians, cleaners, independent shops and artisan bakers—the lifeblood of Reading West and Mid Berkshire —will stand to benefit from the expanded employment allowance, which will allow them to employ the equivalent of four full-time workers on the national living wage without paying any national insurance contributions on their wages.
Businesses in my constituency will also benefit from our reforms of business rates, our action to tackle late payments, our significant investment in roads and infrastructure, our plan to restore our high streets, our commitment to the lowest corporation tax in the G7, and, of course, our cast-iron commitment to protecting economic stability and growing our economy.
As we heard from my hon. Friend the Member for Basingstoke (Luke Murphy), the Conservatives want to have their cake and eat it. They say that they support investment in our public services, but they do not say how they would pay for it. They have perfected faux outrage, but they crashed the economy and left a huge mess for us to clean up. They are yet again unwilling to make tough decisions in the national interest, but we will not repeat their mistakes. We will fix the foundations of our economy and our public services, working hand in hand with our great British businesses, and we will get our future back on track.
Finance Bill
Paul Holmes ExcerptsWednesday 27th November 2024
(1 month, 3 weeks ago)
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James Murray
Every business knows that we can make investment decisions only on the basis of secure public finances and economic stability, which is why this Government’s first priority has been to wipe the slate clean of the mess we inherited from the Conservative party, to deliver economic stability and to provide the environment for businesses to make the investments on which we will grow the economy. That remains our No. 1 mission.
James Murray
I will make some progress.
As the Chancellor set out in the Budget, we believe that before making any changes to the tax rates that people pay, it is vital that we do everything we can to close the tax gap. That is why, in the Budget, the Chancellor announced a step change in our ambition to do so, with a package raising £6.5 billion of additional tax revenue by 2029-30. This package will ensure that more of the tax that is owed is paid, and that taxpayers are supported to pay the right tax first time. Our plan involves boosting the capacity of His Majesty’s Revenue and Customs to ensure compliance and reduce debt, alongside changes to legislation, some of which this Finance Bill delivers, to remove loopholes used to reduce tax liabilities.
That is why this Bill includes measures such as introducing capital gains on the liquidation of a limited liability partnership, closing a route increasingly used to avoid paying tax. The Bill reforms rules for overseas pension transfers, closing a gap that allows individuals to transfer significant pension savings overseas tax-free. And the Bill implements the cryptoasset reporting framework, tackling complex compliance cases where a significant proportion of offshore risk sits.
In our manifesto, we said that we would take on the tax gap, and that is what we are doing in government.
James Murray
My hon. Friend is right that every parent aspires to a high-quality education for their children, and that is exactly what this Government will achieve through the already announced £2.3 billion increase to the core schools budget for the financial year 2025-26, increasing per pupil funding in real terms. That includes £1 billion of additional funding for the special educational needs and disabilities system.
Paul Holmes
The Minister is dedicated to extolling the virtues of his manifesto. When he sat down to write the Budget with his right hon. Friend the Chancellor, did he recall whether the manifesto put to the country at the general election stated that growth forecasts under this Government would be lower than they were under the previous Government? Was the taxing of small family farms for a total revenue of £590 million in his manifesto? He is very keen on the manifesto, but did it outline that growth would be lower under this Government?
James Murray
I am keen on our manifesto, which delivered this Labour majority and this Labour Government. If the hon. Gentleman looks at the manifesto that we went into the election with, he will see the three words that open our pledges: “deliver economic stability”. After the mess that the previous Government made of the public finances, and the damage they did to our public services and our economy, that is crucial. Delivering economic stability, fixing the public finances and putting our public services back on a firm footing are essential to getting the investment and growth that our country badly needs.
Let me be clear about the VAT policy on private school fees: charging the standard rate of 20% does not mean that schools must increase their fees by 20%, because schools can reclaim VAT paid on inputs and reduce the cost to minimise the extent to which they need to increase fees. Many schools have already publicly committed to cap increases at 5%, or to absorb the full VAT costs themselves.
James Murray
Let me put these decisions into context for the hon. Gentleman. The increase equates to £1 more for people taking domestic flights in economy class and £2 more for those flying to short-haul destinations in economy class. None of the decisions are easy, but we have to take them to fix the public finances and to get our economy back on a stable footing.
James Murray
I will make some progress. That is the impact the changes have on domestic flights and short-haul destinations in economy class. However, in addition to the broad changes in air passenger duty rates, the higher rates for larger private jets will also increase by a further 50% to ensure they contribute fairly to the public finances.
The Bill also renews the tobacco duty escalator and enables His Majesty’s Revenue and Customs to prepare for the introduction of a new duty on vaping products. The Bill increases the soft drink industry levy over the next five years to reflect the 27% increase in consumer prices index inflation between 2018 and 2024, as well as increasing the rate in line with CPI each year from 1 April 2025. Finally, while the Bill increases alcohol duty for non-draught products, in line with retail prices index inflation, duty on qualifying draught products will be cut by 1.7% in cash terms to support pubs, and we will increase the duty discount on products that qualify for small producer relief from 1 February 2025.
The Chancellor has been clear that the Budget was a once-in-a-generation event, at which the Government took difficult but necessary decisions. By taking those tough decisions, the Budget delivers economic stability, sound public finances and stronger public services. On those foundations, we will work day in, day out across the rest of this Parliament to boost investment and growth.
Many of the measures to boost investment are being delivered outside of the Finance Bill, from the planning reform that we got under way within days of taking office to the creation of mega-funds for pension investments, which the Chancellor announced at Mansion House. The Bill introduces additional reliefs for our creative industries, for visual effects within film and high-end TV, which will play a key role in strengthening the UK as a global hub for film and TV. Likewise, the Bill introduces measures to support the transition to electric vehicles, through higher vehicle excise duty first-year rates for hybrid and internal combustion engine vehicles, which boosts the incentive for EVs, and by an extension of first-year allowances for electric cars and charge points until 2025-26.
Above and beyond any individual measures, the impact of the Bill and the Budget that it follows is to lay the foundation for greater investment and growth, through fiscal responsibility, stronger public services and economic stability. We have laid the foundations for creating wealth, jobs and opportunity in every part of this country, enabling people to meet their aspirations for themselves and their families, and making people across Britain better off.
Connor Naismith
We have heard lots of contributions from the Opposition Benches about the fantastic record of the previous Government, but that does not stand up to the lived reality of our constituents. That is exactly why we saw the result that we had in the general election. The sooner Opposition Members come to terms with that result, the better.
Connor Naismith
I am sorry, but I have given way several times already.
I welcome the Government going even further in the Bill to level the playing field and ensure that those with the broadest shoulders take the heaviest burden. That is why we need the legislation to close loopholes such as the non-dom status, change the furnished holiday lettings tax regime and provide more resources to HMRC to tackle the tax gap. That will help us address the financial black hole that the Conservative party clearly had no regard for, claims does not exist and has failed to apologise for. The Bill will allow us to fix what the Leader of the Opposition admitted today were broken foundations. I believe that the Government’s Budget and the Bill will be a vital starting point on a long road to recovery for this country. I commend the Government for their work and support this Bill’s progression through the House.
Jerome Mayhew
In a moment. If we add that all up, there would be £50 billion that could be spent on the frontline. However, the problem with the Labour party is that it takes money and spends it on inflation-busting wage rises for its union paymasters, but not on increasing and improving the outcomes for the people who use services. That is the big difference between the Conservative party and the Labour party. The focus of our spending is not the people providing the services; we are for the people who use those services—the people of this country.
Paul Holmes
My hon. Friend is making a typically eloquent and excellent speech. I challenged a number of Labour Members to outline that public services can be invested in if, in addition to some of the tax-raising mechanisms they have chosen, we have economic growth. Will my hon. Friend outline how much growth has been cut by under the Government’s proposals compared with ours? Am I correct in thinking it is 0.7% over the Parliament?
Jerome Mayhew
My hon. Friend is entirely correct: over the course of the forecast period, the Office for Budget Responsibility estimates that growth will be cut by 0.7%. It is worse than that, however, because we also have an increase in taxes on businesses of £25 billion through the national insurance contributions, which the OBR tells us will be paid for overwhelmingly by reduced pay for workers, amounting to £7.5 billion. It also forecasts that more than 50,000 full time-equivalent jobs will be lost as a result of the policies that Labour Members plan to vote for.
Jerome Mayhew
The hon. Gentleman’s intervention was not on the point that he rose for, but there is one thing that he does not mention, and that is the covid impact. [Interruption.] Hon. Members can laugh about it, but we spent £400 billion supporting the economy and the people of this country in a once-in-a-century impact on our economy.
Paul Holmes
Does he agree with me that there seems to be a collective amnesia among colleagues on the Labour Benches? If we had taken their advice during covid, when we were making reasonable decisions, not only would we have seen the longer lockdowns that the now Prime Minister was calling for, but more economic damage, which they now deny ever happened in the first place.
Jerome Mayhew
My hon. Friend is absolutely right, and there is a point worth making here. Since covid, the private sector has improved productivity by about 6%. Productivity in the public sector has yet to improve, although before the general election it was starting to do that.
Oral Answers to Questions
Paul Holmes Excerpts(2 months, 3 weeks ago)
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Rachel Reeves
I am sure the right hon. Gentleman told them about the £22 billion gap in the public finances that his Government left, which has required the difficult decisions this Government have had to make to clean up the mess left by the Conservative party.
Paul Holmes (Hamble Valley) (Con)
With the promised £300 cut in energy bills not materialising, the winter fuel payment scrapped for pensioners, and now the bus cap lifted for working people—whatever definition of that term the Chancellor is using today—can she honestly say that living standards will improve for everybody under this Government?
Rachel Reeves
On the bus price cap specifically, the hon. Member will know that the previous Government put no money in to extend that cap. We have put money in to ensure that the bus price cap remains at an affordable level for people, unlike the previous Government, who just had short-term gimmicks.
VAT: Independent Schools
Paul Holmes Excerpts(3 months, 1 week ago)
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Damian Hinds
I will take one more intervention before making progress, so as not to try your patience too much, Mr Speaker.
Mr Speaker
It is not that my patience is being tested, but I do worry when shadow Secretaries of States cover a subject at length. I understand, but we need to get on, because lots of Back Benchers are desperate to get in. In fact, we have a very eager Opposition Whip coming in now.
Paul Holmes
You will find out, Mr Speaker, that I will not test your patience. I want to take my right hon. Friend back to the point he made about the Education Secretary’s tweet, which I thought was disgraceful. [Hon. Members: “Where is she?”] The divisive language behind that tweet was a disgrace, given the many independent schools that work hard and play by the rules. Does my right hon. Friend agree that the embossed notepaper that the Secretary of State focused on is sent to many children who are being sponsored through bursaries or scholarships, and whose parents work hard to give their children the best education? The Education Secretary should apologise for that disgraceful tweet.
Damian Hinds
I am grateful to my hon. Friend, who, as ever, makes important points. I too am disappointed that the Education Secretary is not with us for this important debate. I will make progress, Mr Speaker, because I do not want to go on longer than I should.
To be clear, we want to talk first and foremost not about revenue, but about education, schools and children—all children. [Interruption.] No, I have been talking about schools and children throughout. If the Government insist on ploughing on with this divisive policy, they must at least exempt certain groups of children for whom it would be especially unjust or counterproductive to impose this tax. Surely, schools that charge the same as, or even less than, the average cost of a school place were not in the Government’s sights when they devised this scheme. There are small religious groups that have no state sector provision for their denomination. Why should they be disadvantaged? The continuity of education allowance exists expressly to support families who are serving our nation in the armed forces. Surely they should be protected.
The Government acknowledge the role of centres of advanced training and performing arts schools that come under the music and dance scheme, because, again, there is no equivalent specialist schooling available in the state sector. Then there are the many children who receive special educational needs support, including those with an education, health and care plan, whether or not they are at the school named in the plan, and those children who are applying for a plan.
Winter Fuel Payment
Paul Holmes Excerpts(4 months, 1 week ago)
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James Murray
Thank you, Madam Deputy Speaker. The hon. Member who just intervened, and indeed everyone on that side of the House, might like to reflect on what the legacy of the last Government truly was. It was one of irresponsible overspending, of uncosted commitment after uncosted commitment, and of Ministers running away from taking difficult decisions. As a direct consequence, when we came to power we were faced with a £22 billion black hole in the public finances for this year alone.
Paul Holmes (Hamble Valley) (Con)
I am genuinely grateful to the Minister for giving way. He is a Minister at the Treasury, so I am hoping he will be able to outline some of the facts and answer my question. He will outline today that the saving made by cutting the winter fuel payment is £1.1 billion. If everybody accepted the means-testing that he is proposing, it would cost £3.3 billion, so can he outline to the House, despite the bluster that he has just made about saving money for the great British people, how it will save money when it will cost more under his proposals?
James Murray
I thank the hon. Gentleman for his intervention. The announced savings include an assumption of an increased take-up of pension credit, which is in line with the highest levels ever achieved. Frankly, if more people are taking up pension credit when they are eligible for it, we should welcome it because it means that support is being targeted at those in greatest need.
Paul Holmes (Hamble Valley) (Con)
The change that the Government announced this morning will mean than 18,300 of my constituents will go without their winter fuel payment this Christmas. In the brief time that I have, I will set out why I believe that is just the start from the Government.
The first reason is that cutting winter fuel payments for poorer pensioners is a political choice, not a necessity, despite what the Leader of the House says. Over the election period, Labour said that it would not cut the winter fuel payment. It has broken its promise to the British people, and they will remember that. Labour also said that it would possibly do more, although it has denied that it would not do more. Today’s measures will save £1 billion, as I outlined in my earlier intervention, but Labour has awarded inflation-busting pay rises of £9 billion to its union paymasters.
Peter Swallow
Can the hon. Member explain to the House and to his constituents why he would not back fair pay rises for teachers, nurses, prison officers and members of the armed forces in his constituency?
Paul Holmes
I will not take any lectures from the hon. Member, but I say to him that I always defend pay rises for people in this country who deserve them, which is exactly what the Conservative Government did. What our Government did not do was award inflation-busting pay rises of 22% to the people who paid for our general election campaign, increasing inflation in this country. I believe that people deserve pay rises, but that should be done within a responsible fiscal envelope. The Labour Government simply have not done that.
As we heard from the Chancellor earlier, the measures that she has announced will cost more than the savings generated from scrapping the winter fuel payments—that is a shambles. The Government have done this at a time when energy bills will increase by 10%, despite the Labour party’s promise in Opposition that it would freeze energy bills—another broken promise that pensioners will have to face this Christmas. The Government have also refused to rule out scrapping the 25% single occupancy discount for pensioners and single people. If that goes ahead, they will deprive pensioners of another £600 on average. That is a political choice and a cost of living bombshell that this Labour Government—supposedly the party of hard-working people—will impose on vulnerable and poorer pensioners across the country.
Labour Members have a choice this afternoon and going forward. They should reverse the cut, stand up for the thousands of people in their constituencies who will be made poorer by the Government, and reject the measures that they outlined earlier. Let me put it this way: 18,000 people in my constituency rely on the winter fuel payment, as do thousands of Labour Members’ constituents. When we go to the ballot box in four years’ time, I look forward to Labour Members standing up and explaining to those pensioners why they made them poorer.
Public Spending: Inheritance
Paul Holmes Excerpts(5 months, 3 weeks ago)
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Paul Holmes (Hamble Valley) (Con)
The Chancellor spent the election campaign saying that she was going for growth through investing in infrastructure. Instead, she is cutting it, while funding inflation-busting pay deals and scrapping pension benefits for the worst-off. Does she agree that in the battle for the two faces of the Labour party, the face of tax rises, borrowing and boom and bust won, and the British people—hard-working people—will ultimately lose under her leadership?
Rachel Reeves
There is nothing pro-growth about making unfunded spending commitments. There is nothing pro-growth about a lack of respect for taxpayers’ money. We will continue to provide the winter fuel payment for the poorest pensioners, those in receipt of pension credit.
Rachel Reeves
I thank the hon. Gentleman for his questions, and for persevering for so long. I fully agree that the focus should be on frontline public services. We have committed ourselves to back-office efficiency savings of 2% in all Government Departments, and a reining in of consultancy and Government communications spending. Those things got out of hand under the last Government, and we will rein them in.
May I end by saying this? We have been here for two hours, and in that time not a single Conservative Member on either the Front Bench or the Back Benches has apologised for the state of the public finances and the state of our public services. That says all we need to know about the outgoing Conservative Government, and they should never have their hands on power again.
Paul Holmes
On a point of order, Madam Deputy Speaker. May I raise a significant issue that I am concerned about, in relation to the Chancellor’s statement? [Interruption.] The Chancellor obviously does not want to stay in the Chamber to hear this.
In the course of her remarks, the Chancellor appeared to indicate that the Government had knowingly laid wrong or misleading estimates before the House on Thursday last week which differed significantly from what she has presented today, one working day since those estimates were laid. This, if true, is of serious concern. What steps can we take to ensure that the Government retract either the estimates laid or the document that they produced today, and can you tell me whether this possibly constitutes a breach of the ministerial code?
Madam Deputy Speaker (Caroline Nokes)
The hon. Member will know that the Chair is not responsible for the content of contributions made by Ministers, but I am sure that his concern has been heard on the Government Benches. I am sure that if an error has been made in this instance, the Minister will seek to correct it as quickly as possible. It is for the Government to decide on the estimates that they put before the House.