Finance Bill

Debate between Scott Arthur and Adrian Ramsay

2nd reading
Wednesday 27th November 2024 Commons Chamber

[Adrian Ramsay]

Perhaps the right hon. Gentleman would let me make a little more progress first, please.

A wealth tax would go a long way towards funding the public services that our economy relies on and to delivering nature and climate-friendly policies that will benefit us all. For example, by maintaining the winter fuel allowance for pensioners, while investing in the roll-out of the street-by-street insulation programme, we could bring down household bills and carbon emissions and at the same time support the most vulnerable households with energy bills over the winter months, preventing hundreds of avoidable deaths. There are also nature-based solutions that would help to protect against the flooding chaos and misery caused, for example, by Storm Bert recently. Preparedness or adaptation is often neglected when it comes to climate action, yet this week has demonstrated what a difference it can make.

A wealth tax could see charities and not-for-profit health and social care providers, for example, exempted from the planned increases in national insurance contributions for employers, in recognition of the significant work they do in our communities and the significant further strain that this planned change will put them under. As Community Action Suffolk has warned, this financial challenge may be a step too far for some organisations that

“deliver vital services keeping Suffolk residents safe and well”,

and reduce pressure on other public sector systems, including the NHS.

The Government have taken, or have sought to take, some steps towards taxing wealth in addressing the real problem of very wealthy people investing in farmland to avoid paying inheritance tax. However, the way in which they have gone about doing so is resulting in huge problems. It is clumsy because it is impacting on small farms that may, on paper, have assets worth several million, but if the farmer is not actually earning any income, or very little, they never actually see the benefit of that.

The Exchequer Secretary is back in the Chamber, and I would ask him whether, in considering the agricultural property relief—I know it is planned for a further year’s Budget, so there is time for the Government to look at this—he will look at the work of tax analyst Dan Neidle. Dan Neidle has highlighted that the Government’s own intentions of rightly clamping down on tax avoidance will not be met under the current plans, which will impact far more small, ordinary farms than the Government have admitted. His proposals include an alternative suggestion for meeting the Government’s stated aim of clamping down on tax avoidance, not affecting ordinary farmers.

[Dr Arthur]

Too often we find that the Greens talk a good game, but when it comes to making decisions, whether on pylons or inheritance tax, they begin to get a little bit nervous, so I would be interested to know the hon. Gentleman’s view. While he may have concerns about the threshold that has been set for inheritance tax for farms, where does he think it should be set?

[Adrian Ramsay]

First, I have welcomed the measures in this Budget on non-doms and capital gains tax, and I have argued for the Government to go much further and be much bolder with a genuine wealth tax on the very richest. I am very happy to set out the measures I want, which are bolder than the Government’s, to raise capital. On farms, as I say, I would urge the hon. Member and the Minister to look at the work of people such as Dan Neidle, which suggests ways in which the Government could better achieve their own stated aim of rightly preventing people who often have no interest in farming from investing in farmland in order to avoid inheritance tax.

I spoke to many farmers last week, as I am sure did Members across the Chamber, and those with ordinary farms in my constituency told me that typical Suffolk farms of 320 acres may be worth £3 million to £5 million on paper, but if they are always in the family—if they are never sold and those farmers are earning very little income—they are not realising the benefit of that. The farmers I spoke to were extremely distressed about how much pressure they are under for generating very little income, with all the work they do and want to do for our natural environment. We need to look at the detail of what is being proposed, while welcoming the main aim of clamping down on tax avoidance that the Government are setting out.

I make these points conscious that the Government chose to table an income tax charge motion on Budget day, thereby restricting scope for amendments to the Bill today. I wish to put on record my disappointment at that decision, because an “amendment of the law” motion would have demonstrated a commitment to a much broader debate, greater scrutiny, and a healthy willingness to engage with alterative views. I expected better on that, as I know did my constituents. Although I will seek to amend the Bill to take account of the compelling case for a wealth tax, the scope for doing so has been deliberately and unnecessarily constrained by the Government in what Ruth Fox of the Hansard Society called a decision to prioritise

“ministerial control and convenience over robust parliamentary scrutiny.”

Before concluding my remarks, I wish to mention one other aspect of the Bill that relates to the urgent climate action we need to take. That must be about scaling up renewables, but it is also about the transition away from fossil fuels. Hidden in the Bill and the Budget is the Government’s intension to subsidise carbon capture and storage—a fig leaf for new fossil fuel projects—and failing to end the obscene subsidies, including tax reliefs, that are handed out to the oil and gas sector. I hope to pick that up further, and for it to get more scrutiny as the Bill progresses.