Finance (No. 2) Bill

Debate between Rachel Gilmour and Daisy Cooper

2nd reading
Tuesday 16th December 2025 Commons Chamber

[Daisy Cooper]

I could not agree more. My right hon. Friend chairs the Environment, Food and Rural Affairs Committee—a Labour-majority Select Committee—and he has navigated that issue so well over the last year. I say on the parliamentary record: all credit to him for his sterling efforts to draw attention to the issue.

If there had been any justification at all for the APR and BPR changes, it would have been that the Government were trying to crack down on loopholes, but as my hon. Friends have said, that has not happened as a result of these changes. The Prime Minister in effect admitted in front of the Liaison Committee yesterday that the Government were not even trying to do that. We all know that the measures will cause damage. Farming communities know it; Liberal Democrats know it; and Labour-majority Select Committees know it. This is just another short-term Treasury tax grab. Family businesses will be hit, too—the very businesses that support their employees through thick and thin; the very employers who provide employment in every corner of the country; the very family businesses that help the economy bounce back strongly after a crisis, giving our economy resilience. Why would a Government want to target our family businesses?

[Rachel Gilmour]

Does my hon. Friend agree that this is not a tax on passive wealth, but that it punitively, cynically targets productive enterprise? The Government expect to raise roughly £1.4 billion from the inheritance tax changes, but analysis by Family Business UK suggests that behavioural responses could produce a net fiscal loss of £1.9 billion by the end of the decade. Are these measures not anti-growth, and directly at odds with the supposed messaging of this Government?

[Daisy Cooper]

I wholeheartedly agree. It is so frustrating; in last year’s Budget and in this year’s Budget, the Government continue to say that they are pro-growth, and that growth remains their No. 1 mission, but measure after measure in those two Budgets is anti-growth.

Many of us have heard from family businesses in our constituencies and around the country. Many of them have told us that they have sat around the family dinner table and had deeply difficult and traumatic conversations, planning what to do with their business if they “die in the wrong order”, a phrase that some family businesses have used with me. Again, if they have to break up the business, they will probably end up selling it off to private equity companies. These are businesses that are household names and family favourites. It is another short-term Treasury tax grab, with no care for the consequences.

On the income tax hike for dividend, property and savings income, the Federation of Small Businesses sums it up:

“Hikes to dividend tax mean the Government continues to make investing in your own business one of the least tax-friendly things you can do with your money.”

At a time when we desperately need more business investment, that seems to be another short-sighted Treasury tax grab.

We desperately need growth. We Liberal Democrats have repeatedly banged the drum for growth with Europe. Brexit, we know, has been a disaster. Many of the Government’s own Ministers admit it, yet where is the strength of conviction needed to try to fix that? We now know that the previous Government’s failed Brexit deal costs the taxpayer around £90 billion a year in lost tax revenue. Just think about what the Government could deliver if they started to fix that. Just imagine what it would mean for people’s pockets and energy bills, and the money that they could have in their bank account at the end of the month. Imagine the change that the Government could deliver for households and high streets if they just started to plug that gap of £90 billion a year in lost tax revenue.

Our high streets are critical to our sense of community up and down the land, yet high-street hospitality businesses are getting hit once again. Last year it was the jobs tax; this year it is the higher business rates bills.