Dan Tomlinson MP: speeches

Speeches

• 12 Jan 2026 · Finance (No. 2) Bill · Hansard source

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  I am not able to comment on the specific figures that the hon. Gentleman raised, but overall the Government are spending significantly more on the NHS in this Parliament each year. That is enabled by the changes to taxation that we announced at this and previous Budgets. One of the challenges that the national health service has today is a result of under-investment in capital for too long, meaning that day-to-day spending is having to take more of the strain. So often in recent years capital budgets have been raided, including when, I should mention, the Conservatives and Liberal Democrats were in coalition. Cutting the capital budgets has left us in the difficult situation that we are in now, and this Government are seeking to turn that around.

• 7 Jan 2026 · Rural Fuel Duty Relief · Hansard source

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  I note, as I am sure others in the Chamber will, just how forensic is the hon. Member’s understanding of some of the small businesses in his constituency. That is to be very much commended. If he would like to write to me on that point, I would certainly like to raise it with HMRC. Of course, it is not appropriate for me as a tax Minister to get involved in individual tax affairs. That said, the general point is about administration, and the extent to which we are getting the balance right between ensuring that we stick to the rules as set out, and having an appropriate level of flexibility. That is something that I would happily raise with the Department, if he were willing to write to me. The hon. Member for North Devon and many others have suggested that the Government should increase the rural fuel duty relief in line with inflation. As I set out earlier, since the relief’s introduction, it has remained at 5p, but the main fuel duty rate has also remained at the same level—or, more recently, has fallen. I am aware that there are differences across the country, and there may have been differentials in the increase in fuel prices in some areas. However, the fuel costs are broadly the same as they were in 2011, if not slightly higher; it was roughly 130p for a litre then, compared with around 135p now.

• 7 Jan 2026 · Rural Fuel Duty Relief · Hansard source

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  It is a pleasure to speak under your chairship, Ms Furniss. I am grateful to the hon. Member for North Devon (Ian Roome) for securing this debate and speaking so passionately in support of rural communities and the people in his constituency, who I know he has much honour in representing. I thank him for securing the debate and giving Members on both sides of the House the chance to contribute on this very important topic. This Government recognise the importance of rural areas for the UK economy, and will continue to consider how they can best support those who live and work rurally. Although my Barnet constituency, which is in the very north of London, lacks the beaches and moors of the hon. Gentleman’s, it does contain 14 farms and have some rural areas, because of the large bit of green belt that extends into north London. Like all Ministers, I am fully committed to ensuring that the tax system works for everyone, whether they are in rural or more urban parts of the country. Fuel duty is an important source of Government revenue and provides vital funding for public services and infrastructure. It raised £24.4 billion in 2024-25; as has been mentioned, fuel duty rates have been frozen since 2011, with a further, temporary 5p cut introduced in 2022. Fuel duty rates are therefore now, in real terms, about 40% lower than they were in 2011. Pump prices are at their lowest level since 2021, before Russia’s illegal invasion of Ukraine led to soaring prices and the introduction of the temporary 5p cut. At the Budget, therefore, the Chancellor announced that the 5p cut would first be extended until the end of August, with rates then rising gradually, returning to March 2022 levels by March 2027. As well as that extension to the freeze, the planned increase in line with inflation for the coming financial year will not take place. Those decisions on fuel duty will save the average car driver across the country £49 in the coming financial year, compared with previous plans. The Government also recognise the importance of competition between retailers in the road fuels market. Liberal Democrat Members, including the hon. Members for North Cornwall (Ben Maguire) and for Newton Abbot (Martin Wrigley) and others, mentioned a pumpwatch scheme. Sadly, that reveals that we need to communicate even better about some of the ideas put forward by Government: at the Budget, the Chancellor confirmed that from spring 2026, UK consumers will be able to compare prices more easily through the Government’s new open-data fuel finder scheme, which I believe will achieve aims similar to those of the pumpwatch proposal. It will help to encourage competitive pricing among retailers and is expected to result in further savings for drivers of potentially up to £40 a year. The Government, however, are well aware that fuel costs can be higher in certain more remote areas, so the rural fuel duty relief scheme provides a 5p per litre reduction to benefit motorists buying fuel in those areas. The areas included in the scheme demonstrate certain characteristics, such as pump prices being much higher than the UK average, remoteness leading to high fuel transport costs from refinery to filling station, and relatively low sales meaning that retailers cannot benefit from bulk discounts. As mentioned by many Members, the scheme provides about £5 million in support per year, with about 165 fuel retailers registered with His Majesty’s Revenue and Customs to claim the relief. The hon. Member for St Ives (Andrew George) mentioned the administrative costs, and I am interested to hear more from him and from any businesses that have ideas about how I, as Minister with responsibility for HMRC, can seek to reduce any of the administrative burdens that those 165 retailers may face. One area included in the scheme is the EX35 postcode, which is part of Exmoor national park and in the constituency of the hon. Member for North Devon, who secured the debate. I confirm that the scheme in fact covers not just 11 or 12 constituencies, but 16—some of the postcodes sneakily cross over constituency boundaries, so that 16 Members of the House of Commons represent constituencies of which at least some elements are covered by the relief.

• 7 Jan 2026 · Rural Fuel Duty Relief · Hansard source

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  I will happily do so, although I am sure that hon. Members would like me to make some progress, too.

• 7 Jan 2026 · Rural Fuel Duty Relief · Hansard source

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  That is not something that we are actively considering. That said, the details of the eVED scheme are to be consulted on in detail. We are still a number of years from its introduction, and there will be many fine decisions that need to be made in the coming months ahead of its implementation, and I note the representation that the hon. Gentleman has made today.

• 7 Jan 2026 · Rural Fuel Duty Relief · Hansard source

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  Other Members, including the hon. Member for Strangford (Jim Shannon), have asked the same question; I was going to come on to it, but I will happily do so now. As a Department, HMRC requires retailers to keep records evidencing that the 5p saving is being passed on to customers, but I would be happy to look in more detail at how that is done. Maybe we can catch a word in the Tea Room to discuss it in more detail, because the Government want to make sure that that is happening and that the 5p cut—although we can debate whether it should be higher—is passed on to consumers in full. The Members who spoke in the debate have deep knowledge of their constituencies and have often talked about their trust in their small local businesses, many of which will be running the garages or forecourts in the more rural areas, such as the middle of the moors. I must say that the hon. Member for Strangford is doing a very honourable thing in going to more expensive garages to support the local businesses. That is a very commendable act; I must say that it is not one I always engage in, as I like to find a good price, but I commend him on it. While fuel duty costs are broadly the same, I admit that they are slightly higher than they were in 2011. However, as foreshadowed by the Opposition spokesperson, the hon. Member for North West Norfolk (James Wild), the Chancellor keeps all taxes under review; decisions on future fuel duty rates and rural fuel duty reliefs will always be made in the round and in the context of the public finances. That said, I have noted with interest all the points made today and again thank the hon. Member for North Devon for securing this debate and giving me the chance, as the Minister with responsibility, to reflect on these important issues. A number of Members have also suggested that the Government should increase the number of areas in scope of a rural fuel duty relief—I can sense a potential Liberal Democrat local election campaign, although I would not possibly want to comment. I was going to say that neither I nor my predecessor, my right hon. Friend the Member for Ealing North (James Murray)—I checked—had received any formal representations to expand the coverage of the relief since the start of this Parliament, but of course I have received some comments on that during the debate. There are no current plans to amend the list of eligible locations but, if Members strongly feel that their constituencies fall into the categories in the scheme’s rules, I will always welcome representations, and they should feel free to write to me.

• 7 Jan 2026 · Rural Fuel Duty Relief · Hansard source

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  I am always glad to take interventions. The hon. Member’s point is noted and I acknowledge his request. I ask Members to get in touch if they believe that an area meets the criteria. As the hon. Member has noted, there are not hard and fast rules here—there are not specific criteria within each of the categories that are considered in the round—and the Government do not intend to change to having hard and fast rules. I would be worried that that might lead to more complexity and change within the system, meaning that if one area’s prices tipped slightly above or below, we might get into contestation of whether the additional costs of transporting fuel to certain places tips over or above the threshold. I hope that Members who have views on where relief should be extended to will bear with the current, less-rigid process. I was going to say, in a slightly light-hearted way, that the hon. Member for Witney (Charlie Maynard) suffers somewhat in tax policy debates, in that I know his constituency well, having been born and brought up in west Oxfordshire. As part of my joyful travelling to and from seeing my family there, I often fill up in his constituency, which is often cheaper than doing so in north London. I noted that the hon. Member was magnanimous in calling for the scheme to be extended not to west Oxfordshire, but instead to other areas represented by his Liberal Democrat colleagues. I should mention the important speech made by my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton)—he will have to teach me how to pronounce his constituency, as that was the first time I have said it. His is one of the constituencies that does benefit from the relief. I am glad to hear Labour Members talking clearly about the benefits that the relief provides for constituents in some of the most rural parts of the whole country. Again, I commend the hon. Member for St Ives for his engagement with businesses. We heard about the garage on the Isles of Scilly and how it gets petrol to and from. I think I have covered most of the points raised. If Members have a burning desire to ask me to clarify something, I will, but I am sure we all want to make some progress. Let me make a couple of further points before I conclude. The fuel duty system supports rural areas in other ways as well. Households and non-commercial premises are entitled to use red diesel for heating and electricity generation, which includes off-grid homes in remote and rural locations that have limited alternatives. Red diesel is subject to fuel duty, which is 10.18p per litre compared with the 52.95p for diesel used on roads. Farmers also retain the entitlement to use red diesel in machinery and vehicles used for agricultural purposes after that was withdrawn from most sectors under the previous Government in 2022. Several Members discussed the need to ensure that public transport maintains a level of affordability. At the end of the last year, the Government confirmed a long-term investment of over £3 billion over the next three years to support local leaders and bus operators across the country to improve bus services for millions of passengers. That includes multi-year allocations for local authorities under the local authority bus grant. From 2026-27, we have revised the formula to include a rurality element for the first time to ensure that the additional challenges of running bus services in rural areas are taken into account. I was surprised that there was no mention of potholes in a debate about transport, but I know that they are of particular concern to those in rural areas that are more prone to frost, meaning that ice gets inside the tarmac and the road breaks up. By 2029-30, the Government will have committed more than £2 billion annually for local authorities to repair, renew and fix potholes on their roads. That doubling of funding since we took office will mean that we can exceed our manifesto commitment to fix an additional 1 million potholes a year by the end of this Parliament. The Opposition spokesperson mentioned the electric vehicle decision that the Government announced at the Budget. We remain fully committed to the electric vehicle transition, which will drive growth and help the country to meet its climate change objectives. Our public charging network is growing rapidly. We had more than 87,000 public charge points as of December last year, and, in the year ending 1 October 2025, the number of charging devices in rural areas had increased by 26%. In addition, the Government announced at Budget 2025 the immediate roll-out of a package of support worth £3.6 billion to help motorists to switch to cleaner and greener cars, to support the automotive sector through the transition to EVs, and to bolster British industry. The Government are dedicated to supporting and promoting rural areas, particularly by providing support for transport costs, such as through the rural fuel duty relief scheme. I very much look forward to further discussions—perhaps even further correspondence—over the course of the Parliament about how we can continue to do that. I thank the hon. Member for North Devon for securing the debate and all Members in the Chamber for their contributions.

• 6 Jan 2026 · The Corporation Tax Act 2010 (Part 8C) (Amendment) Regulations 2025 · Hansard source

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  My understanding is that the majority of companies that are affected are likely to be awarded simple rather than compound interest, but I am sure there will be some cases—I am not privy to the individual details; as the tax Minister, that would not be appropriate—where compound interest potentially could be applied. On the second point, the right hon. Member is raising a broader issue about why a tax rate is applied at all here, and about the incentive structures. One thing that this Government are seeking to do in the way that we oversee HMRC is to bring more focus on its delivering for taxpayers and providing value for money for us all. I now sit as the chair of the HMRC board, with an intense focus on scrutinising the work of the Department. As the Minister responsible, when cases are brought to my attention, I always ensure that HMRC is treating taxpayers fairly and proportionately. My understanding is that when the specific change around the application of 45% interest was made back in 2015, there was a concern that without the changes made in part 8C, those payments would be taxed at the lower corporation tax rate that applied at the time the payments were due to be made, and because the payments may have accrued over many years, when the rate of corporation tax was much higher, companies receiving that interest would receive a significant financial benefit relative to the counterfactual, at the expense of the public purse. That is why the decision was made in 2015 to apply the rate of interest in such a way. The right hon. Member raised a point about retrospection. The regulations will not apply to those businesses that have already settled and reached an agreement with HMRC, but he is right to point out the shift here—we are moving the time window to the end of the period, when a final decision has been made, rather than the start.

• 6 Jan 2026 · The Corporation Tax Act 2010 (Part 8C) (Amendment) Regulations 2025 · Hansard source

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  I beg to move, That the Committee has considered the Corporation Tax Act 2010 (Part 8C) (Amendment) Regulations 2025 (S.I. 2025, No. 1253). It is a pleasure to serve with you as Chair, Ms Lewell. The regulations before the Committee today amend part 8C of the Corporation Tax Act 2010. These changes are clarificatory and ensure that the legislation works as originally intended. In the context of part 8C, restitution interest is compensation for not having had access to money awarded by the courts on repayments of tax in long-running litigation, between His Majesty’s Revenue and Customs and companies, about whether UK tax law was compatible with EU law when the UK was a member state. Many such cases remain in litigation, so more restitution interest may be awarded in the future. Part 8C was enacted to apply a higher 45% tax rate in the unusual event that the court were to award such restitution interest to companies on a compound basis—that is, including interest on the interest. It was not intended to apply to a more normal award of simple interest—that is, interest only on the principal sum. The first of the amendments to part 8C clarifies that intent by expressly removing the ambiguous meaning that it could apply in cases of simple interest, which I think we would all agree is very important. The second amendment removes an unintended lacuna in the timing of assessment, which might otherwise mean that events overrun the ability of HMRC to raise a charge in certain cases where the courts’ decisions crystallising a charge under part 8C are outside the normal time limit. Again, we would not want that to happen. The clarification that part 8C does not apply to simple interest is generally favourable to the companies involved, and the change to assessment time limits corrects a defect in the legislation and protects the Government’s interests in long-running disputes. In summary, the regulations ensure that the legislation applies as originally intended, and I commend them to the Committee.

• 6 Jan 2026 · The Corporation Tax Act 2010 (Part 8C) (Amendment) Regulations 2025 · Hansard source

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  I thank the right hon. Member for North West Hampshire for his contribution, and for sharing his knowledge and expertise on this matter and many other matters relating to tax and economic policy. There are two separate changes. The first, as he points out, is more a clarification to ensure that this provision applies only on compound interest and not on simple interest.

• 6 Jan 2026 · The Corporation Tax Act 2010 (Part 8C) (Amendment) Regulations 2025 · Hansard source

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  A very small number of companies are affected, but yes, my understanding is that this change will mean that the decision point where the interest is applied will shift from the beginning to the end. As the right hon. Gentleman says, that will change the financial considerations for the small number of businesses that are in litigation at the moment. Question put and agreed to.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  We have come forward with a change to this policy after listening to farmers and farming communities and to the representations that have been made. We think that this is the right change. We will have the chance to debate it again when we consider the Finance (No. 2) Bill in Committee of the whole House next week, when the amendment that has been tabled will be voted on. In the end, Opposition Members who wish for the Government not to go ahead with this change at all should come forward with ideas for how they would raise £300 million from those who have the very largest estates in this country. We think it is right to raise revenue from those with the very broadest shoulders, and that is what this change will allow us to do.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  This Government have our farming road map. We have also published the Batters review, and we will be taking forward many of the proposals and the recommendations in it, so that we can continue to support profitability and sustainability for farmers and our farming communities.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  I thank my hon. Friend for his reminder that the previous Government and previous Conservative Prime Ministers were roundly rejected by the country at the last general election. People in rural communities and communities up and down the country voted for change for the better with this Labour Government and for a Government who will continue to represent and support farming communities up and down the country. Let me praise my hon. Friend on his recent appointment to the Environment, Food and Rural Affairs Committee, to which I know he will provide an invaluable contribution in his continued representation of rural communities.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  The figures that the Government have published on this change and at previous Budgets are drawn from actual claims and from engagement with His Majesty’s Revenue and Customs on both APR and BPR. That analysis shows that before this change, up to 275 estates a year would have been affected, and that that number is now forecast to halve to around 185. That means that around 85% of all estates claiming APR, some with BPR, will now not pay any additional tax. I stand by those figures. We published them when we made the decision and they are included in the letter that I and the Secretary of State have sent to all Members. On the right hon. Member’s point about £2.5 million or £5 million, I think he was referring to the fact that a couple can pass on up to £5 million and for a single person it is £2.5 million. That is a long-standing position. It means that the inheritance tax nil rate band and the residence nil rate band are transferable only between spouses and civil partners. Making any unused allowance transferable in the same way is consistent with that long-standing approach.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  Government decisions are made collectively. Yes, the Government have listened to farming communities and farming businesses, and to representatives of family businesses that would also have been affected by the £1 million BPR threshold, which was the same as the APR threshold.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  The Batters review focused closely on this, and we will be looking at its proposals and recommendations, and ensuring that we can do all that we can as a Government, within the constraints that we have, to continue to focus on improving farming profitability.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  The Finance (No. 2) Bill will be making its way through the House in the coming weeks, and once the Bill is law that change will come forward. If the hon. Gentleman meets his farmers on 7 April this year, the change will already be in place.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  We think it is right to have the same level across the country. It is the same in other parts of our tax system, and it would not be right to have different tax thresholds for different small parts of the country.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  I have been asked that question already by an Opposition Member, but I am happy to give the right hon. Lady a similar answer. I can say to those families that we listened carefully to the representations that were made about the level of the threshold as it was originally set at the Budget in 2024, and we have now come forward with a change to increase the threshold from £1 million to £2.5 million, which, coupled with the changes announced at the Budget in 2025, will now be transferable between spouses, allowing those families to pass on up to £5 million tax free.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  I had the pleasure of meeting Mr Bradshaw last year. The NFU published statements—both at the time of the announcement and around the turn of the year—welcoming the changes that the Government have proposed. The hon. Gentleman asks about manifesto commitments. We were very clear in our manifesto that we would return economic stability to this country, putting behind us the chaos of Liz Truss and the chaos that the Conservatives left us with. Part of that is about ensuring that we do not continue to borrow at excessive levels, as they did, but bring borrowing down— [ Interruption. ] Borrowing is coming down in every single year of the next five years. We are ensuring that we can raise, in a fair and sustainable way, the revenue to fund our public services.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  We heard what farmers were saying and that is why we have come forward with the changes we announced last month.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  No, I do not accept that. That is not the answer.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  The Government have been listening to rural communities, farming representatives and the representatives of family businesses. That is why, after listening, we have come forward with these changes, which we think strike the right balance between the necessary impulse to ensure a fair and sustainable tax system and continuing to protect smaller businesses and farms. I am sure that we will have many more chances in this place to continue to discuss business rates.

• 5 Jan 2026 · Agricultural Property Relief and Business Property Relief · Hansard source

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  We have listened. We have made sure, after the engagement we have had with farmers across the country, their representatives and the representatives of family businesses, that we have come forward with a policy proposal that we, on the Government Benches, now think is balanced. It raises £300 million from the very largest estates and does so in a fair way that means we can continue to fund our public services sustainably.