Finance (No. 2) Bill

Sarah Olney Excerpts

2nd reading
Wednesday 17th April 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

After years of economic chaos, unfair tax hikes and millions of families suffering from the cost of living crisis, the Liberal Democrats will not be supporting the Bill today.

The Bill is yet more evidence that this Conservative Government have finally run out of ideas. For millions of families and pensioners facing soaring mortgage and rent payments, sky-rocketing energy bills and eye-watering food prices, the measures in the Bill will barely touch the sides. No real help with the cost of living, no plan for economic growth, no real support for our NHS and public services, and no end to this Conservative barrage of stealth taxes—is this really the best the Government have to offer? Thanks to this Government, the British public have endured the biggest fall in living standards since the 1950s. More and more people across the country are rightly saying that enough is enough. Instead of more empty promises, what they want is a general election as soon as possible, to get this tired Government out of Downing Street and our country back on track.

Recent weeks have seen desperate attempts from the Chancellor to convince people that he is cutting taxes, in a veiled attempt to deceive the British public, but everyone can see this for what it really is: a cynical deception that will be wiped out by frozen thresholds, the soaring cost of living and years of unfair Conservative tax hikes. Over this year and next, someone on average earnings will still be £383 worse off because of the Government’s freeze on the tax-free personal allowance. Despite that, the Conservatives now expect people to be grateful for their giving back just a small amount of what they have taken way. That shows that they are totally out of touch.

Meanwhile, the Government are completely failing to use their collected tax revenue in a fair way. For example, they have shown no interest in investing in the NHS. The economy cannot be fixed without fixing healthcare. We need to cut waiting times. We need to allow more of the 2.6 million people who are economically inactive due to ill health to return to work. On doorsteps across the country, people tell us time and again how they cannot get a GP appointment, expect an ambulance to arrive on time or see an NHS dentist. But instead of properly addressing this crisis, the Chancellor merely plugged a hole that he had blown in the NHS budget in the first place.

That is why the Liberal Democrats call on the Government to deliver serious investment for our NHS, recruit more GPs, fix our cancer services, bring down waiting lists and help people get the quality care they so desperately need. Unlike this Conservative Government, the Liberal Democrats will always stand for protecting our health services. The Chancellor either does not understand the damage done by his cruel cuts to public services or just does not care.

The Bill fails to introduce a proper windfall tax on the super-profits of oil and gas producers. That revenue could be used to fund energy support for the most vulnerable—to double the warm home discount or launch a proper home insulation scheme. It could be used to invest in British farming and bring down food prices for the long term. The legislation also fails to reverse tax cuts for big banks, a measure that could fund support for vulnerable mortgage-holders and renters. Worst of all, the Bill and the preceding Budget take none of the vital steps we need to grow the UK economy, such as launching an industrial strategy, reforming business rates and the apprenticeship levy, or reducing trade barriers for small businesses.

The Government have not just wrecked the economy; they have abandoned any strategy or plan for growth. Their lack of joined-up thinking has dire consequences for industry. Recently, we have seen the long and proud history of train manufacturing in the north-east jeopardised, with the Hitachi rail factory in County Durham put at risk of closure due to the Government not signing off an order from FirstGroup. That jeopardises some 800 jobs. The abandonment of the industrial strategy has real consequences for people across the country.

To conclude, although the Liberal Democrats welcome some measures in this Bill, such as changes to the high-income child benefit charge and the provision of tax reliefs for the creative industries, we simply cannot support a piece of legislation that fails to propose the solutions that we need to get our economy moving. In his spring Budget, the Chancellor could have proposed a fair deal for the British people and begun stimulating economic growth. Instead, he gave us more of the same: another underwhelming set of announcements from this Conservative Government, which is out of touch, out of ideas and nearly out of time. Right across the country, voters are sick and tired of this Conservative Government and are ready to vote for change at the next general election.

Finance (No. 2) Bill

Sarah Olney Excerpts

Committee of the whole House
Wednesday 8th May 2024 Commons Chamber

[Gareth Davies]

I was waiting for a four-hour speech and it never came—that was four minutes, but what a four minutes!

Let me thank hon. Members for their contributions to today’s debate. I will respond to some of the points that have been raised at the end of my remarks, but before doing so let me directly address some of the new clauses that have been tabled.

New clause 2 seeks the publication of a review into how the rate of corporation tax set by the Bill, as set out in clause 12, affects business investment and certainty, including what the effect would be of capping it at its current level over the next Parliament. I agree that it is important to regularly review and evaluate policy, and the Government keep all tax policy under review. The Office for Budget Responsibility produces regular forecasts, including of projected corporation tax receipts and business investment. These forecasts are based on the rates and thresholds that currently apply, and which clause 12 maintains from April 2025 to provide advance certainty to businesses. The latest of the forecasts already looks as far ahead as 2028-29 on the basis of the corporation tax rate, which currently stands at 25%, so no further action is required from the Government.

[Sarah Olney (Richmond Park) (LD)]

The Bill maintains the small profits rate of corporation tax at 19%, but does the Minister not agree that this is a drop in the ocean compared with spiralling costs in energy, staffing, borrowing and a host of other areas? The Chancellor could have used the opportunity to give small businesses a boost by reforming business rates, or by helping them with their energy bills through a proper windfall tax. Does the Minister support new clause 7, tabled by the Liberal Democrats, which would ensure that the Government must lay before the House a review of the impact of the small profits rate to look at whether it really helps small businesses to manage their costs.

[Gareth Davies]

I will give the hon. Lady the courtesy of addressing new clause 7 in due course. She is right to highlight that the new rate for small businesses will keep around 70% of businesses in the country at 19% when those that are most profitable move to 25%, but look at the entire package of support for small businesses. It shows that the Government are supportive of our high streets and small business entrepreneurs across the country, whether that is through the increase in VAT thresholds, the 75% rate relief for retail, hospitality and leisure businesses, or all the support that we provided during the covid pandemic and throughout the energy shock, including the energy bill relief scheme and the energy bills support scheme. I put it to her that we are behind our small businesses. We regard them as the engine of our growth, and we will continue to do everything we can to support them. I will come on to new clause 7 in a moment, if I may.

New clause 3 would require a review of the possible impacts of the energy security investment mechanism on energy profits levy revenues, and on investment decisions in the oil and gas sector. It would require this assessment to be made on the basis of the end date of the EPL falling before the end of the next Parliament.

The Government have already published the tax information and impact note, which sets out the anticipated impact of the energy security investment mechanism—the ESIM. This indicates clearly that the mechanism will give operators and lenders to the oil and gas industry confidence in the fiscal regime while the EPL remains over the next Parliament. Based on the OBR’s current price projections, the ESIM is not predicted to trigger before the end of the EPL in March 2029, and is therefore expected to have no impact on EPL revenues. In addition, should there be interest in calculating forgone revenue if the EPL were to end in a particular year, the OBR has published projected EPL revenues over the forecast period, and the impact of the EPL ending early can be calculated from this publicly available information that is there for all to see.