Finance Bill

Baroness Coffey Excerpts

2nd reading & Committee negatived & 3rd reading
Wednesday 19th March 2025 Lords Chamber

[Baroness Coffey (Con)]

My Lords, I congratulate the noble Baroness, Lady Caine of Kentish Town, on her eloquent maiden speech. Both she and the noble Lord, Lord Eatwell, referred to the audiovisual industry, or the film and TV industry, and the noble Baroness was right to explain what a successful part of the United Kingdom this is. The noble Lord, Lord Smith, has been praised, understandably, but I extend some praise to George Osborne. He appeared in the credits of a “Star Wars” film, recognising that he took the opportunity to create tax credits that attracted the franchise back into Pinewood. Indeed, further changes have meant that Warner Bros set up a studio. I am sure that, when we are looking at a good film, we can recognise the contributions of all the parties that have been in Government in making sure that we have this thriving industry.

On thriving industry, it is important to think about how Finance Bills generally are there to attract investment and raise money, as well as to drive change in innovation and behaviour. I welcome that the 100% expensing has been maintained in this Finance Bill, which is a sensible approach.

Clause 56 builds on the Financial Services and Markets Act 2023. On a recent trip to the London Stock Exchange, organised by the Industry and Parliament Trust, I learned about PISCES. Stamp duty exemption is going to be important to attract investment in young companies, so that we make sure that we grow more businesses in this country, rather than just seeing them acquired abroad.

I welcome Clause 61, about agricultural property relief. Although I am not going to go into the farmers’ tax, because that is for another Bill, I welcome the environmental management agreements exemption that replaces the exemption for habitats in the Finance Act 1997. As Secretary of State for the Environment, I lobbied to try to make sure that landowners did not stop investing in nature because of this, and I am pleased that the Government have brought through the detailed regulations to make that happen.

However, in a number of other clauses, I am trying to understand the psyche of the Government and what they are trying to do to change behaviour. Clause 78 relates to the plastic packaging tax, which is just going up by inflation. The resources and waste strategy, which I principally authored, was intended to make sure that packaging materials had at least 30% recycled plastic and to drive activity towards that.

It would be worth while now to do a review of whether that has had the desired impact. In some of my discussions with food companies during the time of Covid regarding the challenge of the cost of living and what measures could be done there, several of the companies said, “Well, it would make more financial sense for our financial director to just pay the tax rather than make the changes”. To their credit, they kept to it, trying to reduce the use of virgin plastic, but I am concerned, with some of the winds that are happening in the world’s economy, about whether we might see any companies going back. So it would be worth while doing a review in that regard.

On Clause 76, landfill tax reform is a great example, which is cited around the world in environmental conferences, of a change in behaviour that has basically driven a lot of landfill more to recycling. There may be more to do on incineration, but it has been hugely successful. I noted the significant increase—I think it is about 24%—but I believe that is connected to the fact that we have had high inflation for a couple of years.

However, I was concerned about comments made by the Economic Secretary in the other place relating to Clause 79, and this is to do with the soft drinks levy. There is going to be a 27% uplift. Now, this tax initiative did make lots of firms reformulate, which is good for public health and for the prevention of issues later. However, the rationale given by the Minister was simply that, “Oh well, previous Governments hadn’t raised this since 2018”. Part of the issue is that in effect the tax had more or less done its job. I worry about this backdating approach simply because we have not caught up. I am not suggesting that the Government are going to do this, but, if we took the same approach to fuel duty, we would be looking at a 64% increase. So I hope the Minister will rule out any backdating measure.

I am conscious that we have an advisory time limit but I have one final point that has been strongly missing, and it comes back to farmers. Despite the fiscal plan on Labour’s website saying there will be investment in reducing tax avoidance, the Prime Minister and the Secretary of State, Steve Reed, have encouraged people to properly manage their tax affairs and advocated tax planning to minimise their tax liability. There is one gap, and that is connected to the tax treatment of double cab pick-ups. The original legal case relates to Coca-Cola. I am conscious that a lot of firms—I am particularly thinking of forestry and many rural farmers—are being hit by this. It really is not fair on them, relating to something that they have invested in to do their business. I ask the Government to think again in their next Finance Bill.