Finance Bill

Sarah Olney Excerpts

Report stage
Monday 5th February 2024 Commons Chamber

[Sarah Olney (Richmond Park) (LD)]

On behalf of myself and my Liberal Democrat colleagues, I express our sympathies to the King and his family, and our hope that his treatment will prove to be successful.

I will speak to amendments 1, 2 and 3, in addition to new clause 5. To reiterate, the Liberal Democrats are not supportive of the Bill, which is a deception from the Government after years of cruel tax hikes on hard-working families. The legislation maintains the Government’s unfair tax rises on working families through the freezing of income tax thresholds, fails to invest properly in our public services, such as the NHS, and takes none of the vital steps needed to grow the UK economy. Some of the measures in the Bill have worthy aims, but the context is important from the outset.

Amendments 1, 2 and 3 make further changes to the new R&D regime defined in the Bill. While the changes may be necessary and sensible clarifications, just last week, colleagues in the other place, sitting on the Economic Affairs Committee, reported their concern

“that the number of significant R&D changes made in the last 5 years has led to a perception of instability in the UK’s R&D tax relief regime and undermined the intended incentive effect of the relief.”

What businesses need more than anything is certainty and stability. The Government’s chopping and changing on R&D is indicative of a wider failure to create a stable and settled environment in which business can flourish.

Perhaps the clearest example of that has been the scrapping of the UK’s industrial strategy and the disbanding of the independent body overseeing it. This short-sighted step has robbed businesses of the stability they need to grow. The constant changes to the R&D relief regime are a clear example of how that lack of foresight and stability can undermine the aim of economic growth. Once again, I urge the Government, even at this late stage, to relaunch an industrial strategy. A proper industrial strategy can create the conditions for sustainable growth, including through effective and clear incentives for R&D investment, especially among SMEs, and ensure that the UK’s regulatory, R&D and tax frameworks are geared towards fostering innovation.

New clause 5 introduces an exemption to the energy generator levy for new plant investments. The Liberal Democrats believe that, although this may help to strengthen investment in renewable energy and contribute towards our net zero targets, the Government’s own assessment of the measure notes that it is unlikely to affect the retail price of electricity for households as energy prices remain tied to gas prices.

The Bill, and the autumn statement from which it arose, does nothing to help families with soaring energy prices or to put a proper windfall tax on the oil and gas giants. The Government continue to sit on their hands as businesses and families struggle with energy price inflation. A windfall tax on the super-profits of oil and gas producers could raise significant revenue which could have paid for a targeted package of support for those worst affected by the energy crisis, by doubling the warm home discount and investing in an emergency home insulation scheme. It remains clear that November’s autumn statement and the Finance Bill both represent a missed opportunity to address the crisis in energy prices.

To conclude, while the Liberal Democrats are supportive of certain measures within the Bill, such as the extension of full expensing, we cannot support any legislation that arises from such a deceptive and unjust autumn statement. Ultimately, British households are seeing the biggest fall in living standards since the 1950s, and households across the country are crying out for real support from the Government, for action on the cost of living crisis and investment in our NHS, but all we have heard is more stale announcements from a Conservative Government who are completely out of touch.

[Jim Shannon (Strangford) (DUP)]

I concur with the comments made by others about King Charles, on my behalf and that of the Democratic Unionist party and his loyal subjects in the United Kingdom of Great Britain and Northern Ireland—especially Northern Ireland. I pray, as I know you do, Mr Deputy Speaker, as well as others in the Chamber, for King Charles and for the royal family. I pray for a speedy recovery to his health. I pray, as we all pray, to the great healer, omnipotent over all, that his family will know the peace of the Lord as they support him at this time.

I thank all those who have contributed to this Bill debate, and I thank you, Mr Deputy Speaker, for giving me the chance to participate. Understandably, much of the Bill focuses on the measures that are needed to deliver the autumn statement. The Minister understands that—I would like to welcome him to his place. As he knows, I hold him in great respect, and look forward to his responses at the end of this debate.

For every public sector pay rise that is rightly awarded, money must be raised, and therefore we all support the principle of this Bill in theory. However, in practice, not many of us want to sign off on a Bill that raises taxes for those who are struggling at present. Obviously, as prices have risen, obligations have gone up correspondingly. Northern Ireland has been seeking a complete removal of the air passenger duty as a way of enhancing our connectivity and our attractiveness to international business investment. As a result, the rise in APD is disappointing. I know what the Minister’s response will be. We are all aware of what the renewal of Stormont means: it means that we can look at this matter ourselves. None the less, the renewal of the Assembly has also highlighted the issue of the allocation of finances. It is clear that an overhaul of the funding formulas for Northern Ireland is necessary to meet the need in the long term.

Before I left the office this morning, I heard the Secretary of State for Northern Ireland on the radio saying that he hoped that a new funding formula would be found for Northern Ireland. We on the Northern Ireland Affairs Committee have also put forward that view. It is matter that involves all parties. The hon. Members for Belfast South (Claire Hanna) and for North Down (Stephen Farry) join us in wanting the same. That is three of the political parties in Northern Ireland that want that formula. There are also labour Members who support the view, along with a number of Conservatives with some concerns. We are all pushing for a formula similar to the Welsh system. If that comes into place, we in Northern Ireland would benefit, and that is only fair and right. I am highlighting this because if we as a party wished to do something about air passenger duty in the Northern Ireland Assembly, or if a cross-party group were wishing to do the same, we would need to have that formula in place. As I say, we are looking for fair funding for the future.

The £3.3 billion that has been made available now is money that many of my constituents believe has been withheld, and that is welcomed. Ever mindful of the positivity that came out of the debate last week, I say let us be positive in looking forward—