James Murray MP: speeches

Speeches

• 14 Jan 2025 · Agricultural and Business Property Relief · Hansard source

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  I am just about to come on to the details of the reforms that we have made to agricultural property relief and business property relief. If the hon. Gentleman waits a moment, he will see some of the reasoning behind the decisions that we took. The Government recognise the role that the reliefs play, particularly in supporting farms and small businesses, and under our reforms that will continue. The case for reform is underlined by the fact that the full unlimited exemption, which was introduced in 1992, had become unsustainable. Under the current system, the benefit of the 100% relief on business and agricultural assets has become heavily skewed towards the wealthiest estates. According to the latest data from HMRC, 40% of agricultural property relief benefits the top 7% of estates making claims. That is 117 estates claiming £219 million of relief. It is a similar picture for business property relief. More than 50% of business property relief is claimed by just 4% of estates making claims. That equates to 158 estates claiming £558 million in tax relief.

• 14 Jan 2025 · Agricultural and Business Property Relief · Hansard source

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  It is a pleasure to speak in this debate with you as Chair, Dr Allin-Khan. I congratulate the right hon. Member for Beverley and Holderness (Graham Stuart) on securing this debate. Likewise, he is always thoughtful in his contributions, so I am always glad to hear from him and indeed the interventions that he allowed during his speech. I know hon. Members have raised questions about the reforms that we are making, and I will try to address as many of them as I can. However, let me start by briefly reminding hon. Members of the economic context in which the decisions were taken. At the autumn Budget, we took difficult but necessary decisions on tax, welfare and spending to restore economic stability, fix the public finances and support public services, as a result of the situation that we inherited from the previous Administration. We took those tough decisions in a way that will make the tax system fairer and more sustainable. The decision to reform agricultural property relief and business property relief was not taken lightly. The reforms mean that, despite the tough fiscal context, the Government will maintain significant levels of relief from inheritance tax, beyond what is available to others.

• 14 Jan 2025 · Agricultural and Business Property Relief · Hansard source

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  I will give way maybe once or twice, but I do not have much time.

• 9 Jan 2025 · Debt Advice Services · Hansard source

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  I thank my hon. Friend for raising that constituency case and highlighting the important work that that organisation does for his constituents. I cannot comment from the Dispatch Box on individual funding decisions, but he underlines the importance of tailoring to local need. Although there may be a national priority to ensure that people are provided with debt advice, individual local debt advice agencies will need to tailor their services to the needs of their communities. He is an excellent advocate for his constituents in that regard. Alongside the debt advice services that the debate has focused on, it is important, as I was saying, that individuals can access the financial services that they need. That is why the Government announced in December our intention to develop a financial inclusion strategy that will aim to further tackle barriers to individual and household ability to access affordable and appropriate financial products and services. The strategy will be supported by a committee that the Economic Secretary to the Treasury convened for the first time in December, which will consider the problem of debt. I will turn my attention briefly to the work that the Government are doing to support vulnerable individuals and businesses repaying debt to the public sector. The Government debt management function functional centre, based in the Treasury, convenes the debt fairness group—a collaboration with the debt advice sector that identifies opportunities to continuously improve public sector debt recovery processes. The functional centre’s work includes debt management toolkits to support public sector bodies dealing with those facing physical and mental health challenges, and to help them identify and support the 8.7 million adults in the UK who have experienced economic abuse. I thank my hon. Friend the Member for Walthamstow once again for raising this important matter. I have no doubt that she will continue to be a champion on the issues that we have discussed. The Government remain committed to providing accessible debt advice and promoting financial inclusion. We are committed to ensuring that everyone has the support they need to manage their finances effectively and build a more secure future for themselves and their family. Question put and agreed to.

• 9 Jan 2025 · Debt Advice Services · Hansard source

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  I congratulate my hon. Friend the Member for Walthamstow (Ms Creasy) on securing the debate. I very much recognise and have seen the work she has done over the years to raise the profile of responsible consumer credit practices and effective debt advice. I thank my hon. Friend the Member for Congleton (Mrs Russell) for her contribution and specifically for raising the experience of her constituents. Credit, when offered responsibly, can be an essential tool for people who have to manage unexpected costs or who need to smooth their cash flow. As a Government, we want to support consumers in having access to credit when they need it. But, at the same time, we are determined to ensure that access to credit comes with robust protections to ensure that lending is affordable and consumers are protected when things go wrong. That is why in October last year we published a consultation on a proposed regulatory regime for “buy now, pay later” products. The regime will introduce better protections for millions of consumers and will bring “buy now, pay later” firms into the regulatory perimeter of the FCA. That in turn will mean that firms offering “buy now, pay later” products will be required to pay specific annual FCA fees and levies. Among those is the financial guidance levy, the proceeds of which fund free debt advice services. As I turn to the importance of debt advice, I pay tribute to the thousands of debt advisers across the country for the critical work they do to provide support for those in need.

• 9 Jan 2025 · Debt Advice Services · Hansard source

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  I am sure that Treasury officials and the Economic Secretary to the Treasury, my hon. Friend the Member for Hampstead and Highgate (Tulip Siddiq), will be in close contact with the sector about any proposals they have. It is important to emphasise that because of the regulations we are consulting on for the new regime, that will mean that “buy now, pay later” firms will be required to pay those specific fees and levies, which will help fund free debt advice services. We know that funding those services is important because intervention through debt advice services not only prevents financial difficulties from escalating, but protects people’s overall mental health and wellbeing. More widely, there are positive effects for families, communities and the economy at large. As a new Government, we are committed to supporting national and community-based services through the Money and Pensions Service, or MAPS as it is commonly known. Those services provide advice to hundreds of thousands of individuals and families in need in England. In December, MAPS published its first debt advice impacts report, which showed that across 2023-24 people accessing debt advice through MAPS-funded services gained an estimated £48 million of extra income. That underlines the fact that for many people, advice not only allows them to deal with their debt problems, but helps them to find a way forward with more money in their pockets. Eighty-seven per cent of people who received MAPS-funded debt advice said they would recommend the service to someone in a similar situation. Outside of England, the UK Government provide funding through the financial services levy to the devolved Governments in Scotland, Wales and Northern Ireland. As debt advice is a devolved matter, the devolved Governments have responsibility for delivering those services within their nations and for tailoring provision to the needs of their local communities. My hon. Friends spoke about the gap between those who need debt advice and those who are currently accessing it. The Government recognise that gap and the need to tackle it. Funding levels, which my hon. Friends mentioned, are regularly reviewed to reflect demand, inflation and evolving needs. The MAPS debt advice budget for the upcoming financial year will be communicated in the usual way in the spring, and I will ensure that my hon. Friends are informed. My hon. Friend the Member for Walthamstow mentioned the MAPS consultation last year on the future of its debt advice commissioning strategy. MAPS published its response to that consultation in October, setting out its commitment to increasing debt adviser wellbeing, further building advisers’ skills and delivering digital transformation across the debt advice sector. As part of its efforts to address unmet demand for debt advice, MAPS has also launched its debt advice modernisation fund, a grant initiative designed to support projects aimed at enhancing and modernising debt advice services in the not-for-profit sector. Projects are currently under way and will be completed by the end of March. My hon. Friends touched on the wider issue of financial inclusion. I assure them that the Government are taking further steps to ensure that individuals can access the financial services they need.

• 7 Jan 2025 · Crown Estate Bill [Lords] · Hansard source

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  It is a pleasure to close this debate on the Crown Estate. May I wish you, Madam Deputy Speaker, a happy new year? I am grateful to the shadow Minister for his comments today, as well as for the contributions of all my hon. Friends. I am particularly grateful for the Opposition’s support for the Bill in general, which they display by their absence this afternoon. I welcome the questions set out by the shadow Minister and I will go through some of those in my remarks. As the Chief Secretary to the Treasury noted in his opening speech, the purpose of the Bill is to bring the legislation governing the Crown Estate into the 21st century by making a targeted and measured enhancement to its powers and governance. Without the Bill, the Crown Estate would continue to be restricted in its ability to compete and invest and would therefore be limited in its ability to deliver returns to the public purse. The Bill therefore broadens the scope of the activities that the Crown Estate can engage in, enabling it to further invest in the energy transition that we know is so crucial. It empowers the Crown Estate to invest in capital-intensive projects more effectively and, critically, the measures will unlock more long-term investment, increasing the contribution that the Crown Estate can make to creating high-quality jobs and driving growth across the UK. I turn to some of the points raised in the debate. I appreciate the shadow Minister’s broad support for the Bill’s aim. On his specific question about the Crown Estate’s borrowing powers, the Bill is clear that any borrowing undertaken by the Crown Estate can only be from the Treasury or otherwise with Treasury consent. The Treasury will, of course, ensure that any borrowing is consistent with our fiscal rules. There will, as has been noted, be a memorandum of understanding in place between the Treasury and the Crown Estate, and that will govern how borrowing powers will be exercised. As with any public sector borrowing, the Treasury will ensure that that is consistent with managing public money principles to ensure value for money for the taxpayer. The shadow Minister also asked specific questions about commissioners’ pre-appointment scrutiny. I want to set out for him how the appointment of other commissioners is likely to work. The Crown Estate commissioners who manage the Crown Estate are appointed by His Majesty on the recommendation of Ministers. The appointment process is governed by the code for public appointments. The reforms in the Bill will not alter the fundamental statutory basis of the Crown Estate, which is as a commercial business that is independent of government, operates for profit, competes in the marketplace and needs to recruit the highest quality talent to its board of commissioners. Within that context, it would not be appropriate for either the Government or Parliament to place further requirements on the recruitment process. The shadow Minister also asked about chief executive pay. The details of a chief executive’s remuneration are a matter for the Crown Estate board, which is operationally independent of government, as I set out. As the Crown Estate is statutorily an independent, commercial organisation, which returns hundreds of millions of pounds in profit to the Exchequer every year, continuing the success is crucial and it requires the organisation to have the freedom to compete for the top talent in the commercial world. We know that cheap executive remuneration in this context is set at the lower end of the private sector peer group, which is agreed with the Treasury. The majority of the package is in fact conditional on performance, which ensures that the chief executive rewards are heavily dependent on delivering long-term value to the Exchequer. The shadow Minister also asked about governance when it comes to the Crown Estate and Great British Energy. I can set out to him the operational matters in regard to the partnership, but they will be determined in their final detail by the passing of the great British Energy Bill, which is currently going through Parliament. Once it completes all its legislative stages, the partnership will be subject to an agreement between the Crown Estate and Great British Energy. Although the partnership agreement itself will not be published, given that it will be commercially sensitive, the Crown Estate has committed to publish information relating to the partnership as part of its existing annual report. This will include a report on the activities of the commissioners under that partnership and any effects or benefits resulting from the activities of the commissioners that entails. The shadow Minister asked a specific question about the amendment on the seabed, which was debated in the other place by Lord Livermore. As hon. Members may know, on Report of the Crown Estate Bill in the Lords, the Financial Secretary to the Treasury committed to bring forward an amendment, if it were needed, to restrict the ability of the Crown Estate to sell the seabed. That was in response to concerns from peers that the seabed, which is owned by the Crown Estate, is a unique asset and therefore special protections may be warranted. As the Financial Secretary noted at the time, the law on the ownership of the seabed is complex, so officials are working with the Crown Estate to establish the extent to which the Crown Estate can currently sell the seabed. If it is established that further legislation is required to restrict the ability of the Crown Estate to sell the seabed, we will look to bring forward an amendment at Committee stage. Finally, the shadow Minister mentioned the measures on salmon that were inserted in the Bill in the other place. There is a fundamental question about whether the Bill is an appropriate vehicle for a debate about the rights of salmon and protecting animal rights in that context. In England, Wales and Northern England, to which the Bill applies, there is on Crown Estate-owned land only one relevant area—one relevant salmon farm. The issue really relates more widely to Scotland, which is governed by Crown Estate Scotland and not by the provisions in this Bill. We know that fisheries policy is the responsibility of devolved Government in Scotland. All fish farming in England is regulated with the intention to ensure that it is carried out in a responsible manner. Given that virtually all salmon aquaculture in the UK takes place in Scotland, the matter is really one for a different debate. As well as the comments from the shadow Minister, we also heard from the Liberal Democrat spokesperson, the hon. Member for South Cambridgeshire (Pippa Heylings). Many points that she raised have been covered in what I have said so far, although she raised an additional point that aligned with comments by the right hon. Member for Orkney and Shetland (Mr Carmichael) about how the Crown Estate will balance the expansion of offshore renewables with the needs of the fishing industry, marine wildlife and so on. I wish to set out briefly the Government’s position on that matter. We know that the Crown Estate is committed to sustainable management of the seabed and, where appropriate, it collaborates with industry stakeholders, marine licence bodies and environmental non-governmental organisations to ensure that activities on the seabed are conducted responsibly. As with any developer, the proposals of the Crown Estate go through a standard planning application process, which includes the relevant environmental assessments. Under the Crown Estate strategy, it has an objective to take a leading role in stewarding the natural environment and biodiversity. Key to delivering that aim is managing the seabed in a way that reduces pressure on, and accelerates the recovery of, our marine environment. The Bill will not directly impact on how much commercial fishing takes place in areas managed by the Crown Estate. My hon. Friend the Member for Reading Central (Matt Rodda) raised an important point around grid connections and grid connectivity, which are vital to ensuring that our plans to move towards clean energy are effective. His points were important as part of the connection between the Crown Estate and Great British Energy, which we have been talking about during the debate. One benefit of the Crown Estate working with Great British Energy is that they can work together to speed up the process of developing clean energy projects, including co-ordinating planning requirements and grid connections, as well as leasing land to de-risk and speed up projects so that private developers can get on and build them. That will be crucial to unlocking the private investment and speeding up the deployment of clean energy infrastructure. As well as de-risking private sector investments, GB Energy and the Crown Estate will directly co-invest in clean energy infrastructure. That will include floating offshore wind and carbon capture projects. Several of my hon. Friends made important points around local community benefits and supply chains. I thank in particular my hon. Friends the Members for Mid and South Pembrokeshire (Henry Tufnell), for Truro and Falmouth (Jayne Kirkham) and for Camborne and Redruth (Perran Moon) and the hon. Member for Inverness, Skye and West Ross-shire (Mr MacDonald). They all focused on the importance of community benefits, local supply chains and investment in jobs and skills. My hon. Friend the Member for Great Grimsby and Cleethorpes (Melanie Onn) made a helpful set of points around the importance of long-term community benefit—that is, people who are not just building infrastructure, making a one-off payment and then leaving, but actually making a long-term investment in the area and the people who live there. She referred to Projekt Renewable in her constituency, and it would be interesting to discuss that with her after the debate. Looking more broadly at what the Crown Estate has been doing and intends to do on investing in local community benefit, it is committed to working with local communities and partners to enable employment and skills opportunities. For example, it has allocated £50 million through the supply chain accelerator to stimulate green jobs. It is also developing a green skills pipeline from a GCSE in engineering skills for offshore wind, seed-funded by the Crown Estate and developed with Cornwall college, to a post-16 destination renewables course with Pembrokeshire college. The Crown Estate is partnering with the employment charity Workwhile to create green construction apprenticeships. On offshore wind specifically, the Crown Estate has worked on upskilling frontline Department for Work and Pensions work coaches to be well equipped to support job seekers in the offshore wind industry through the offshore wind learning programme and specifically in relation to offshore leasing round 5, which hon. Members have mentioned. The Crown Estate has designed the leasing process in such a way that developers have to make commitments to deliver social and environmental value as part of the development of new wind farms, including a requirement to provide an apprenticeships plan and a skills development plan. The Crown Estate is also committed to working with communities to ensure that future generations can make the most of the opportunities that marine energy will bring. It is working closely with local educational institutions, such as Falmouth marine school, where it helped develop a pre-16 engineering programme to build skilled local workforces, alongside other initiatives, including the marine internship programme and a recent partnership with the Sea Ranger Service, which is based in Port Talbot. We heard from the hon. Member for Ynys Môn (Llinos Medi), who asked questions about the devolution of the Crown Estate and its functions to Wales. Some of the points she raised were addressed by my hon. Friends, but it is important to recognise that the proposed powers in the Bill will be of huge benefit to Wales. Combined with its existing scale, expertise and track record, the Crown Estate is uniquely placed to help drive the activities required, such as de-risking and developing offshore renewable energy and other emerging offshore technologies to realise the potential of the Celtic sea. I would be concerned that further devolution of the Crown Estate in the manner suggested could fragment the renewable energy market and undermine the strong international investor confidence in the UK to the detriment of both Wales and the wider UK. It would risk creating further complexity and delay our drive for energy security and net zero at a time when simplicity and accelerated deployment are essential. That is why the Government believe that the existing provisions are the best way to ensure that the assets of the Crown Estate are managed most effectively to benefit people across Wales, England and Northern Ireland. The hon. and learned Member for North Antrim (Jim Allister) spoke of his concern about environmental impacts. Offshore wind is essential to meeting our net zero and energy security objectives, which I hope he supports, but to get the wider balance right, the habitat regulations assessment process ensures that we can deliver our offshore wind requirements while maintaining environmental protections. The Government are also consulting on revisions to the national planning policy framework to increase support for renewable energy schemes in order to tackle climate change while safeguarding environmental resources. I thank my hon. Friends the Member for Lichfield (Dave Robertson) and for York Outer (Mr Charters) for their particularly impassioned support for the principles behind the Bill and what it sets out to achieve. As my hon. Friend the Member for Lichfield said, it is crucial for investment, growth and modernising the Crown Estate for the 21st century. My hon. Friend the Member for York Outer focused on the power of the Bill’s measured reforms to modernise the Crown Estate and support growth in a fiscally responsible way while generating revenue that will benefit our constituents across the country. I hope that I have managed to address hon. Members’ points. As my right hon. Friend the Chief Secretary to the Treasury and I have set out, the Bill delivers a targeted and measured enhancement to the Crown Estate’s powers and governance, thereby modernising it for the 21st century. It broadens the scope of activities that the Crown Estate can engage in, enables it to further invest in the energy transition, and empowers it to invest more effectively in capital-intensive projects. Critically, the measures in it will unlock more long-term investment and increase the contribution of the Crown Estate to generating high-quality jobs and driving growth across the UK. Growth is at the heart of our Government’s mission. I commend the Bill to the House. Question put and agreed to. Bill accordingly read a Second time. CROWN ESTATE BILL [ LORDS ] (PROGRAMME) Motion made, and Question put forthwith (Standing Order No. 8 3 A(7)), That the following provisions shall apply to the Crown Estate Bill [ Lords ]: Committal (1) The Bill shall be committed to a Public Bill Committee. Proceedings in Public Bill Committee (2) Proceedings in the Public Bill Committee shall (so far as not previously concluded) be brought to a conclusion on Tuesday 11 February. (3) The Public Bill Committee shall have leave to sit twice on the first day on which it meets. Proceedings on Consideration and Third Reading (4) Proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which proceedings on Consideration are commenced. (5) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day. (6) Standing Order No. 83B (Programming committees) shall not apply to proceedings on Consideration and Third Reading. Other proceedings (7) Any other proceedings on the Bill may be programmed.—( Christian Wakeford.) Question agreed to. CROWN ESTATE BILL [ LORDS ] (MONEY) King ’ s recommendation signified. Resolved, That, for the purposes of any Act resulting from the Crown Estate Bill [ Lords ], it is expedient to authorise (1) the payment out of money provided by Parliament of any expenditure incurred by the Treasury under any other Act that is attributable to the Act; (2) the payment out of the National Loans Fund of any sums payable out of the fund under any other Act that is attributable to the Act.— (Christian Wakeford.)

• 17 Dec 2024 · National Insurance Contributions (Secondary Class 1 Contributions) Bill · Hansard source

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  I cannot give way. I have given way to the hon. Gentleman many times in recent weeks, but I have about four minutes in which to address everyone’s comments. As hon. Members have set out, we recognise that the changes we are making today will have an impact on employers. Making these changes was a tough decision that we did not take lightly, but we are also clear that the revenue raised from the measures in this Bill and others in the Budget will play a critical role in both restoring economic stability and getting the NHS back on its feet. As a result of the measures in this Bill and the wider Budget measures, the NHS will receive an extra £22.6 billion over two years to deliver 40,000 extra elective appointments a week. The Government will provide support for Departments and other public sector employers on additional employer national insurance costs, including central Government, public corporations and local government. Independent contractors, including primary care providers, social care providers, charities such as hospices and nurseries will not be supported with the costs. That is the same as was the case with the changes to employer national insurance rates under the previous Government’s plans for the health and social care levy. Primary care providers—general practice, dentistry, pharmacy and eye care—are important independent contractors that provide nearly £20 billion-worth of NHS services. Every year, the Government consults each sector about what services they provide, and about the money to which they are entitled in return under their contract. As in previous years, the issue we are debating today will be dealt with as part of that process in the round. The Department of Health and Social Care will confirm funding for general practice, dentistry and pharmacy for 2025-26 as part of the usual contract process later in the financial year, including through consultation with sectors. I turn to adult social care. The Government have provided a real-terms increase in core local government spending power of around 3.2% for 2025-26, including at least £680 million of new grant funding for social care. The funding can be used to address the range of pressures facing the adult social care sector; again, they will be considered in the round. Some hon. Members have tabled amendments to exclude charities from the new national insurance rate and threshold. However, it is important to recognise that charities can benefit from employment allowance, which this Bill has more than doubled from £5,000 to £10,500. That will benefit charities of all sizes, particularly the smallest. The Government also provide wider support for charities, including hospices, via a tax regime. This tax regime is among the most generous in the world, with tax reliefs for charities and their donors that are worth just over £6 billion for the year to April 2024. I recognise that some hon. Members have shown an interest in the impact of this Bill on childcare settings, as highlighted in the amendments tabled by the hon. Members for St Albans, for Grantham and Bourne, and for Lagan Valley, and in the new clause tabled by my hon. Friend the Member for Walthamstow (Ms Creasy). Early years providers have a crucial role to play in driving economic growth and breaking down barriers to opportunity. We are committed to making childcare more affordable and accessible, which is why the Government committed in our manifesto to deliver the expansion of Government-funded childcare for working parents, and to open 3,000 new or expanded nurseries, by upgrading space in primary schools to support the expansion of the sector. Despite the very challenging circumstances that the Government inherited, the Chancellor announced in her Budget in October significant increases to the funding that early years providers are paid to deliver Government-funded childcare places. This means that the total funding will rise to over £8 billion in 2025-26. New clause 4, tabled by my hon. Friend the Member for Walthamstow, specifically refers to the eligibility criteria for employment allowance. I can assure her that they have not changed, except for the removal of the £100,000 threshold, which will mean that more organisations are able to access employment allowance. The eligibility of a particular organisation will depend on the make-up of an individual business’s work, which can be determined following detailed guidance from His Majesty’s Revenue and Customs. While every organisation will need to check its eligibility for the employment allowance, it is likely that many childcare providers will be able to access it. Finally, I will turn to the amendments to exclude universities from the new rate and thresholds for employer national insurance. We greatly value UK higher education in creating opportunity, being an engine for growth in our economy and supporting local communities. The Budget provided £6.1 billion of support for core research and confirmed the Government’s commitment to the lifelong learning entitlement. The Secretary of State for Education has confirmed that the maximum fees in the academic year 2025-26 will rise, for the first time since 2017, from £9,250 to £9,535. This was a difficult decision, which demonstrates that the Government are serious about the need to put our world-leading higher education sector on a secure footing. I would like to continue, Madam Chair, but I should stop now—

• 17 Dec 2024 · National Insurance Contributions (Secondary Class 1 Contributions) Bill · Hansard source

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  I am conscious that I have only a few moments to speak. I will not go through the four clauses of the Bill, as I take it that everyone will have read it already. I will instead go directly to the amendments that have been tabled, ahead of potential votes in a few moments. I will address the amendments tabled by the hon. Members for St Albans (Daisy Cooper), for Angus and Perthshire Glens (Dave Doogan), for Leicester South (Shockat Adam), for Grantham and Bourne (Gareth Davies), and for Lagan Valley (Sorcha Eastwood). These amendments seek to exclude certain sectors, including healthcare providers, educational settings and charities, from the new rate and threshold for employer national insurance. As hon. Members know, the changes in the Bill before us represent one of the difficult but necessary decisions that the Government have had to take to fix the foundations of our economy and our public finances.

• 17 Dec 2024 · National Insurance Contributions (Secondary Class 1 Contributions) Bill · Hansard source

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  I beg to move, That the Bill be now read the Third time. The Bill seeks to put into law one of the toughest decisions we made at the Budget in October. As I set out in earlier stages of the Bill, we recognise that there will be impacts on employers as a result of the changes, with employers facing difficult decisions. It will implement a difficult but necessary decision that, along with others, is critical to raising the revenue needed to fix the public finances, get public services back on their feet and restore economic stability. The Bill before us has three measures: first, an increase to the main rate of employer secondary class 1 national insurance contributions from 13.8% to 15%; secondly, a decrease in the secondary threshold for employers from £9,100 to £5,000 per year from 6 April 2025; and thirdly, changes to the employment allowance to support small businesses. The measure will protect small businesses and charities by more than doubling the employment allowance from £5,000 to £10,500 pounds a year from April 2025. In addition, the £100,000 eligibility threshold will be removed. Through the measures in the Bill and others in the Budget, the Government are taking the difficult but necessary decisions to fix the foundations of our economy. If hon. Members in other parties choose to vote against the Bill, the British people will see that they are voting to ignore the fiscal mess that we inherited. They are voting to cut investment in the NHS and to increase borrowing for day-to-day spending. Finally, I reiterate my thanks to hon. Members who have participated in the debate, and I extend my thanks to all the officials for their support. I commend the Bill to the House.

• 11 Dec 2024 · Finance Bill · Hansard source

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  My hon. Friend is right to point out that decisions on VAT reliefs are political choices. Indeed, the Opposition are showing which side of that choice they land on when it comes to education; through their new leadership, they are choosing to prioritise a tax break for private school fees over investment in state education. That is a political choice. I am very happy to stand behind where we are on that side of the debate. I will turn to some of the clauses in detail. The changes made by clause 47 will remove the VAT exemption from which private schools currently benefit on the education, vocational training and boarding they provide. Let me be clear: this policy does not mean that schools must increase fees by 20%, and the Government expect schools to take steps to minimise the increases for parents. Schools can reclaim VAT paid on inputs and make efficiency savings to minimise the extent to which they need to increase fees. Many schools have already committed publicly to capping fee increases at 5% or absorbing the full VAT costs themselves.

• 11 Dec 2024 · Finance Bill · Hansard source

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  Let me begin by thanking all hon. Members for their contributions. I will take a few moments to respond to some of the points raised and then to set out the Government’s view on the proposed new clauses. The shadow Minister, the hon. Member for North West Norfolk (James Wild), addressed new clause 8, which was tabled by the right hon. Member for Central Devon (Mel Stride). I will come to the new clause in a moment, but for the avoidance of doubt let me reassure the shadow Minister that higher education and teaching English as a foreign language are both exempt from and not affected by this policy. I also reassure him that HMRC stands ready to support schools. It has already published bespoke guidance for schools, run webinars, updated registration systems and put additional resources in place to process applications.

• 11 Dec 2024 · Finance Bill · Hansard source

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  I am going to make some progress. I thank my hon. Friends the Members for Falkirk (Euan Stainbank) and for Loughborough (Dr Sandher) for their comments. I feel that I am duty bound to add my congratulations to my hon. Friend for Loughborough on his engagement. The hon. Member for Hinckley and Bosworth (Dr Evans) is not in his place—sorry, he is at the Bar. Perhaps he could come and take a seat on the Benches. He asked an important question to try to get some clarity about the VAT treatment of combined fees that cover school meals, transport and other services. I hope that my earlier answer gave him some reassurance on that. I reiterate that I cannot provide advice for individual schools, but it is worth emphasising that the general principle is that if a school supplies a package of education for a single fee, that will normally be a single supply for VAT. That package could include a number of other elements such as transport or meals, alongside the main element of education. If it is a single supply, it is a single VAT liability. However, where a school supplies education and also supplies other elements for a separate fee, that will normally be treated as a separate supply. For example, if a school offers school meals alongside the education for a separate charge, those will normally be two different supplies, and they may have different VAT liabilities. Although the education would be subject to the standard rate of VAT, the school meals may be exempt, if they meet the conditions.

• 11 Dec 2024 · Finance Bill · Hansard source

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  Local authorities and schools already have processes in place to support pupils who move between schools at any point in the academic year. Analysis carried out by the Department for Education under the previous Government suggests that each year, almost 60,000 secondary school moves take place not at normal transition points or over the school holidays. We fully expect the majority of moves to take place at natural transition points or in the school holidays, rather than within the school year. I have been clear that ending these tax breaks for private schools has been a difficult decision, but it is necessary to secure additional funding that will help us to fulfil the commitments we made to improving education for all.

• 11 Dec 2024 · Finance Bill · Hansard source

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  This Government believe that all children should have the opportunity to succeed. That opportunity should not be limited by who they are, where they are from or how much their parents earn. We are determined that a young person’s background should not limit what they can achieve. That is why, despite the dire fiscal situation that we inherited and the numerous tough choices that it has entailed, the Chancellor prioritised investment in education at the Budget in October. At that Budget, the Chancellor announced real-terms growth of 3.4% in education funding, including a £2.3 billion increase to the core schools budget in England for the next financial year. This funding supports the recruitment of 6,500 additional teachers, in line with the Government’s commitment, and includes £1 billion for the special educational needs and disabilities system, to help the 1 million pupils in the state system with special educational needs. This Government will make sure that all children get the high-quality education that they deserve, as well as high-quality school buildings; funding has been announced for the school rebuilding programme, and for school maintenance, so that we can begin to tackle the maintenance backlog. These changes are crucial first steps to improving education for all children and meeting the aspirations of parents across the country. Investment in education has to be paid for, so I turn to the focus of this debate: our decision to end the VAT exemption for private school fees. In July, the Chancellor announced that the Government will end tax breaks on VAT and business rates for private schools. These policies are expected to raise £1.5 billion in their first full year, rising to over £1.8 billion a year by 2029-30.

• 11 Dec 2024 · Finance Bill · Hansard source

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  I will not give way because I am making a clear point. We have to make choices in politics about what to prioritise. We have said that the VAT tax break for private school fees is not something that we want to prioritise. We want to spend that money instead on improving state education for all children.

• 11 Dec 2024 · Finance Bill · Hansard source

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  The right hon. Gentleman is tempting me into hypotheticals and into trying to give advice to a school that does not yet exist—I will hold back from that, because I think the principles of our Bill are very clear on what VAT at the standard rate is applied to and what can be made exempt, in line with the existing rules on VAT. We heard several times from the right hon. Member for East Hampshire (Damian Hinds). I assure him that the Government costing has, of course, been fully scrutinised and certified by the Office for Budget Responsibility. He also spoke about capital funding. Obviously, pupil numbers fluctuate for a number of reasons. The Government have already announced more than £700 million to support local authorities over this academic year and the next to provide places in new schools and expand existing schools. I did note, however, that in response to an intervention by my hon. Friend the Member for Hartlepool (Mr Brash), the right hon. Gentleman seemed implicitly to admit to his Government’s failure to improve high-needs education in the state sector, which is precisely why our measures today are so important.

• 11 Dec 2024 · Finance Bill · Hansard source

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  The way that we treat private school fees and the other charges that private schools may levy has to be consistent with the VAT principles more broadly, which is why I have tried to explain how the supply of education and the supply of other elements would interact with the VAT system more widely. I will hold back from giving specific advice about that individual school, but I would encourage it to contact HMRC to get advice about its specific registration. If the school staff read what I have just said in Hansard , I hope they will see some information that will help them to understand how to approach this issue.

• 11 Dec 2024 · Finance Bill · Hansard source

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  As I said to the right hon. Gentleman, pupil numbers in schools fluctuate regularly for a number of reasons, and the Department for Education, and indeed the devolved Governments, already work with local authorities to identify pressures and take action where necessary. As I said in my earlier remarks to him, the Government already provide capital funding through the basic need grant to support local authorities in England to provide school places, and the Government have already announced £700 million over this academic year and the next, which can be used to provide places in new schools and to expand existing places. Finally, the hon. Member for Bexhill and Battle (Dr Mullan) raised the motivation behind our policy, which other Opposition Members also spoke to. Let me be clear on this: our decision to fix the public finances to fund public services, including education, means that difficult decisions have to be taken. Our choice to end the VAT exemption for private school fees has been a difficult but necessary decision that will secure additional funding, which will help to deliver on our commitments to improve education for all.

• 11 Dec 2024 · Finance Bill · Hansard source

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  In designing the Bill and making sure that it is clear, we decided to focus on those schools that provide full-time education. Following feedback during the consultation on the Bill, we decided to clarify some of the treatments, such as for nurseries, which I mentioned earlier, to ensure that they are treated appropriately. If they are fully stand-alone nurseries, they are not covered. In the original drafting of the legislation, we referred to nurseries that wholly comprise children below the compulsory school age. We changed that to wholly or almost wholly to ensure that having, for example, one pupil over compulsory school age would not trip a nursery into being covered.

• 11 Dec 2024 · Finance Bill · Hansard source

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  Given the record of the Conservatives over the past 14 years, I do not think it is ridiculous to assume that they might need some education on how public finances work, with the mess that we inherited and the desperate need for us to restore fiscal responsibility to public finances. Restoring that fiscal responsibility requires us to take decisions that are difficult but necessary to raise the finances to fund our priorities. We have taken the decision that we will not support a VAT exemption for private school fees and that we will invest the money that we raise in state education to ensure that the aspirations of every parent across this country can be fulfilled. That is a decision I will defend every time I am in this Chamber.

• 11 Dec 2024 · Finance Bill · Hansard source

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  What is connected is that if we want to fund public services and fix the public finances, we have to take difficult decisions. This is one of those difficult decisions we are taking today: a difficult but necessary decision to restore fiscal responsibility after the mess we inherited from the Conservative party and to fund our public services. It is necessary to take those decisions, so that we can get that funding into education for all. If the hon. Gentleman does not want to take that decision, he is, in effect, denying the choices that we are making about funding public services. I will now make some progress to address the new clauses tabled by Opposition Front Benchers. New clause 8, which was tabled by the right hon. Member for Central Devon, would require the Government to make a statement to Parliament about the impact of removing the VAT exemption for private school fees within six months of the Act being passed. It states that it “must include details of the impact on…pupils with special educational needs and disabilities…small rural schools, and…faith schools.” It would require the Government to “make a statement about the impact of the removal of the exemption on schools that take part in the music and dance scheme” within 18 months of the Act being passed. I want to make it clear that in developing this policy, the Government carefully considered the impact it would have, including the impact it would have on pupils with special educational needs and disabilities, rural and urban schools, faith schools, and schools that take part in the music and dance scheme. As I said before, the Government considered a wide range of representations, including over 17,000 consultation responses, before finalising the policy design. The Government set out the expected impact of the measure in a tax information and impact note published at autumn Budget 2024 in the usual way. I set out earlier today how the Government will ensure that those children with an EHCP, or its equivalent in other nations, will not be subject to VAT on any private school fees. I am not clear whether the right hon. Gentleman’s new clause, when it refers to “pupils with special educational needs and disabilities” refers to only those in the private sector, or whether he intends the new clause to consider also the 1 million or more pupils with SEND in the state system. If it is the latter, I am sure he will welcome the extra £1 billion for high-needs funding next year that we have been able to announce thanks to our decisions on tax policy, including that which we are debating today. In addition, based on the evidence provided, it is not apparent that small faith schools will be more affected by this policy than other schools. The hon. Member for Twickenham, the Front Bench spokesperson for the Liberal Democrats, tabled new clause 9. I think I have addressed most of those points already in my remarks today. To conclude, I hope I have been able to reassure Members that the new clauses are not necessary, for the reasons I have set out. I therefore urge the Committee to reject new clauses 8 and 9. Question put , That the clause stand part of the Bill.

• 11 Dec 2024 · Finance Bill · Hansard source

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  Let me explain to the hon. Gentleman how public finances work. Funding a tax relief or a tax break is equivalent to public spending, because it is money that cannot be spent on something else. The Conservatives have committed, through their new leadership, to repealing this policy if they win the next general election. That implies cutting state education—cutting the investment in education for all that we are prioritising.

• 11 Dec 2024 · Finance Bill · Hansard source

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  I thank the hon. Gentleman for his specific question. Let me just be clear that I am not giving tax advice for that particular school in my response, because I would always assume that any school would get its own tax advice. In general, the VAT treatment of a particular supply is determined by the predominant supply, so there are options available to schools. I am happy to pick the matter up with him outside the Chamber and to make sure he has the details in writing. As I said, I would not want to give specific advice to that school, but it is worth the school getting advice on the VAT treatment of the fees it charges based on the predominant supply. I will return to the impact of the policy we are proposing and the changes in clause 47. Government analysis suggests that the impact of the VAT policy on private and state school sectors is likely to be very small—ultimately leading, as I was saying a few moments ago, to 37,000 fewer pupils in the private sector, which includes both pupils who will never enter the private sector and those who will move.

• 11 Dec 2024 · Finance Bill · Hansard source

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  I thank the right hon. Gentleman for his question on the impact of the policies on children’s education. I will come to the details shortly, but to give him an overview of the forecast impacts, we estimate that ultimately there will be around 37,000 fewer pupils in the private sector. That is a combination of pupils who will never enter the private sector in the first place and those who will leave. They represent around 6% of private school pupils. We expect most of the moves to take place at natural transition points, such as when a child moves from primary to secondary school or at the beginning of exam courses.