Tulip Siddiq MP: speeches

Speeches

• 10 Dec 2024 · Finance Bill · Hansard source

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  If the shadow Minister looks carefully at the documents we have published, he will find all his answers written out very clearly there. New clause 5 would require the Government to publish an impact assessment of the changes to business asset disposal relief, and to compare the impact of those changes with the number of claims that would have been expected if the rate had not been changed. Every year, the Government publish capital gains tax statistics, which include the number of business asset disposal relief claims for the most recent tax year with available data. The number of claims in 2024-25 compared with upcoming tax years will therefore become public information in time. Meanwhile, the fiscal impact of the changes are is out in the tax information and impacts note for this measure, which has been published online.

• 10 Dec 2024 · Finance Bill · Hansard source

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  I thank hon. Members for their contributions to today’s debate. I will take a few moments to respond to some of the points, and will then give the Government’s views on the proposed amendments. If there are questions that I do not answer, I will write to hon. Members. I thank my hon. Friend the Member for Dartford (Jim Dickson) for his important speech and agree with his points about much-needed reform to our tax system. I also thank my hon. Friend the Member for Earley and Woodley (Yuan Yang) for her powerful speech and wholeheartedly agree with her constituent, who seems very principled and knowledgeable. To respond to the points made by the Conservative spokesperson, the hon. Member for Grantham and Bourne (Gareth Davies), about the revenue impacts of the carried interest measure, the OBR-certified costings demonstrate that this measure raises revenue over the scorecard period. The Budget does deliver on the Government’s manifesto commitments on tax: estimated revenues for these policies have been adjusted for final policy decisions and to account for underlying changes in the OBR’s forecast, but overall, the hon. Gentleman may be interested to know that the tax measures raise over £1 billion more than was in the manifesto. To answer the hon. Gentleman’s question about why the changes are being made in-year, the in-year rate changes were made to protect Exchequer revenues from the impacts of forestalling. It is common practice for tax changes to take effect from the date of the Budget. As for anti-forestalling, we would not expect the anti-forestalling provisions to apply to an ordinary commercial sale of an asset where the contract was entered into prior to 30 October. Those provisions target those who enter into artificial arrangements to lock in the pre-Budget tax treatments. The Lib Dem spokesperson, the hon. Member for St Albans (Daisy Cooper), talked about inflation indexation of CGT. Indexation previously existed when CGT rates were charged at income tax levels with a top rate of 40%. A rate schedule of 18% and 24% is significantly below those levels, so for the important reason of simplicity, indexation is not a part of the system. New clause 1 would require the Government to present to Parliament a review of the capital gains tax package’s impacts on long-term investment, disposable income across the distribution, and tax revenue. In deciding on these changes to capital gains tax, the Government have already considered all three factors. On long-term investment, the OBR assessed the CGT package to have no measure-specific macroeconomic impact. On impacts across incomes, distributional analysis for all Budget measures combined is set out in the “Impact on households” publication. The Government do not normally publish the impacts of individual measures. Finally, the Government’s projection of the revenue raised by these CGT changes has been certified by the OBR and published in the Budget document. Every year, the Government publish the amount of CGT paid in the most recent tax year with available data, where table 3 breaks down gains by income. For those reasons, the proposed report is unnecessary, and I implore Members to reject the new clause. New clause 4 would require the Government to publish a review within three months of the passing of this legislation covering various issues in connection with our reforms to the tax treatment of carried interest. As set out earlier, the CGT rates applicable to carried interest will increase to 32% from April 2025. This is a first step in advance of moving to a revised regime fully within the income tax framework from April 2026. The Government believe that their reforms will deliver increased fairness and place the tax rules on a more sustainable footing, while preserving our country’s position as a global fund management hub. We will also be undertaking extensive technical consultation ahead of legislating for the revised regime in a future finance Bill, which the House will of course have the opportunity to scrutinise. We therefore do not consider that new clause 4 is a necessary addition to the Bill that is before us today.

• 10 Dec 2024 · Finance Bill · Hansard source

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  Since 2010, the UK has experienced low productivity, rising debt levels and declining public services. Public sector net debt is at its highest since the early 1960s, at 98.5% of GDP. Per capita, GDP remains lower that before the covid-19 pandemic. In July this year, the Government uncovered a challenging fiscal and spending inheritance, with a £22 billion in-year pressure in the public finances. The Office for Budget Responsibility’s review into March’s spending forecasts concluded that had the information that has since been shared by the Treasury been made available to it at the time of the March Budget, there would have been a materially higher departmental expenditure limits forecast for 2024 to 2025. This was the result of the previous Government not factoring in the impact of a series of new, challenging pressures on the public finances, not taking the difficult decisions needed to address these pressures, and instead making a series of commitments that they could not fund. This Government are committed to fixing the foundations and delivering a decade of national renewal. To do so, we must turn the page and take a different approach. In the autumn Budget, the House will have heard the Chancellor set out the Government’s first steps to repair the public finances, by taking the tough decisions needed to address the £22 billion in-year pressures to avoid further damage to our public services, including securing £5.5 billion of savings. We are also putting in place significant reforms to strengthen our fiscal and spending framework that will improve certainty, transparency and accountability, and ensure that the situation can never happen again. This Government are taking the tough decisions on tax, spending and welfare that are necessary to repair the public finances and restore economic and fiscal stability. Those choices are not easy, but they are transparent, they are responsible and, with such a difficult position, they will ensure that the Government can deliver on our commitments not to increase taxes on working people. The changes to the main rates of capital gains tax in clauses 7 to 11 will help to address the gap in public finances while retaining the UK’s internationally competitive investment climate. The new rates are revenue-maximising in the current design of the tax system, generating an additional £8.9 billion over the forecast period. The UK’s headline CGT rates will remain lower than those of France, Germany and Italy, and the highest rate is still lower than it was between 2010 and 2016. The new rates will mostly affect people who earn income from selling financial assets. The Government are taking the difficult but responsible decision to ask that group to pay a little bit more tax in order to restore economic stability. Clause 12 represents the first step in a package of reforms to the taxation of carried interest by increasing the applicable rates of capital gains tax to 32% for carried interest arising on or after 6 April 2025. The reforms will put the tax treatment of carried interest on a fairer and more stable footing for the long term, while preserving the UK’s competitive position as a global asset management hub. I will begin with clauses 7 to 9, concerning the capital gains tax package. CGT is charged on individuals’ annual capital gains, net of losses and allowable costs. Less than 1% of adults pay CGT per year. There are lower rates available for reliefs, including business asset disposal relief and investors’ relief. CGT has an annual exempt amount of £3,000 for individuals, which keeps people with lower levels of capital gains out of the system. To repair the public finances and help raise the revenue required to increase funding for public services, the Government are increasing the main rates of CGT. The clauses will increase the lower main rate of CGT from 10% to 18% and increase the higher rate from 20% to 24%. Those changes affect disposables made on or after 30 October 2024. The clauses also increase the CGT rate at which business asset disposal relief and investors’ relief are charged in a phased way from 10% to 14%, effective from 6 April 2025, and from 14% to 18%, effective from 6 April 2026. Phasing in the rate increases for those CGT reliefs demonstrates the Government’s commitment to a predictable tax system. The Government accept that for some entrepreneurs, a lower CGT rate will be factored into their plans for exiting the business, which can be a once-in-a-lifetime event. Although it is right to increase CGT rates to raise revenue, it is also fair to give business owners some time to adjust. The changes will raise £2.5 billion per year by the end of the forecast period, while ensuring the UK’s headline CGT rates remain below those of France, Germany and Italy. Turning to clause 10, investors’ relief offers access to the lower rates of CGT on the disposal of qualifying unlisted shares. Its objective is to provide the financial incentive for individuals to invest in unlisted trading companies over the long term and help companies in accessing other forms of investment. The lifetime limit for investors’ relief was previously £10 million, compared with business asset disposable relief’s lifetime limit of £1 million. We feel that that disparity in lifetime limits is unfair towards entrepreneurs and could encourage harmful tax planning strategies. The changes made by clause 10 will reduce the lifetime limit for investors’ relief to match that of business asset disposal relief at £1 million of qualifying gains per person. Investors’ relief has received little take-up since its introduction in 2016, and so the Government expect that the measure will affect a very small number of individuals. Turning to clause 11 and schedule 2, which introduce transitional arrangements and anti-forestalling rules, the transitional arrangements are consistent with similar rules put in place when CGT rates were charged in-year in 2010. The anti-forestalling rules draw on the approach taken when changes were made to business asset disposal relief in 2020. Transitional arrangements are needed for a small group of taxpayers in some specific circumstances. Those taxpayers will have capital gains that are ascribed to the 2024-25 tax year in general and not to any particular point in the year, and because clause 7 makes in-year changes, the Government have a legal responsibility to clarify the capital gains tax liabilities of those taxpayers. To avoid taxing those individuals retrospectively, the legislation puts in place transitional arrangements. The relevant capital gains are treated as arising in the earlier part of the year and are therefore subject to the previous rate schedule. From April 2025, there will be no need for those arrangements to remain. I now turn to anti-forestalling rules. Some taxpayers will have tried to lock in the old rate by entering into various artificial arrangements and specific anti-forestalling rules are needed to prevent abuse. The anti-forestalling rules target disposals entered into before 30 October 2024 but completed after that date for the main rate change and the investors’ relief lifetime limit reduction. They also target disposals entered into on or after 30 October 2024 for the phased rate changes applying to business asset disposal relief and investors’ relief. The provisions ensure that such people can still access the previous rates and the previous investors’ relief lifetime limit, but only where the disposal has not been artificially structured for the purpose of securing a tax advantage. I now turn to clause 12, which concerns CGT on carried interest gains. Carried interest is a form of performance-related reward that is received by a small number of individuals who work as fund managers and, unlike other such rewards, carried interest can, where certain conditions are met, be subject to capital gains tax. Hon. Members will have heard the Chancellor announce at the Budget that the Government will reform the way carried interest is taxed, ensuring that that is fairer and in line with the economic characteristics of the reward. From 6 April 2026, a revised regime will tax all carried interest within the income tax framework with a 72.5% multiplier applied to the amount of qualifying carried interest that is brought into charge. The Government are also consulting on potential new conditions of access to the regime. Legislation to implement that revised regime will be included in a future finance Bill. In advance of the implementation of the revised regime, the Government are acting now to increase the rates of capital gains tax that apply to carried interest. Clause 12 therefore increases the rates of capital gains tax for carried interest arising on or after 6 April 2025 from 18% and 28% to 32%, and from that date, the single CGT rate will apply to all relevant carried interest, subject to the same conditions as currently. To conclude, the increases to the main rates of CGT to 18% and 24% represent a balanced and responsible approach to revenue raising, which will help the Government to improve the UK’s public finances and services while remaining competitive for investment. The clauses phase in the rate increase for business asset disposal relief over 18 months to mitigate impacts where the previous level of relief was factored into anyone’s plans to exit their business in the short term. That underlines the Government’s commitment to supporting entrepreneurs and recognising the vital role that small businesses play in our economy. In addition, the move to a single higher rate of CGT on carried interest at 32% demonstrates the Government’s commitment to decisive action now, while we rightly take the time to undertake technical consultation on the revised regime.

• 9 Dec 2024 · Draft Building Societies Act 1986 (Modifications) Order 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Building Societies Act 1986 (Modifications) Order 2024. It is a pleasure to serve under your chairmanship, Mr Dowd. The Government have made clear their support for building societies—mutually-owned financial institutions that specialise in savings and mortgage products—as part of our commitment to modernise the Building Societies Act 1986. The draft order forms part of that commitment. It makes small but much-needed updates to the Building Societies Act 1986 to remove some unnecessary corporate governance burdens for the sector, aligning requirements with those provided to companies operating under the Companies Act 2006. Overall, the instrument supports the Government’s ambition to unlock the full potential of the mutuals sector to help drive innovation and inclusive growth across our country. The order modernises the 1986 Act by making provisions in two places. First, it amends sections 60 and 61 of the 1986 Act to remove all references to the normal or compulsory retirement age of 70 for directors. This updates the 1986 Act, bringing it in line with the Companies Act 2006, providing building societies with greater flexibility in appointing directors and ending an outdated age-based restriction. After the amendment provided by this statutory instrument, section 60(11) and section 60(13) of the 1986 Act will specify that all directors must step down after three years, regardless of age, although they may be re-elected; members will therefore still be able to scrutinise the performance of all directors, even after the removal of the age requirement. Secondly, the order amends section 80 of the 1986 Act, changing the current requirement for the balance sheet of a building society to be signed by two directors and the chief executive officer to allow one director to sign the balance sheet on behalf of the board. This further aligns the 1986 Act with the requirement for companies under the Companies Act 2006, removing an unnecessary burden for building societies. The amendment will not impact on the reliability and accountability of the process, as the full board of a building society is still required to approve the annual reports and accounts, and the signing director’s responsibility is not enhanced by the change. Together, these amendments will modernise the Building Societies Act 1986 and ensure that building societies have the same modern flexibilities as retail banks operating under the Companies Act 2006. The changes have been supported by the building society sector. For instance, the proposal to amend the Act to allow one director to sign the balance sheet on behalf of the board was welcomed by the sector in a consultation published under the previous Government in December 2021. Although the removal of the retirement age for building society directors was not part of that consultation, it was proposed by the Building Societies Association and another large building society as part of their responses, as seen in the consultation responses published in December 2022. It is therefore evident that the amendments have the support of the sector. As I mentioned earlier, the order forms part of the Government’s commitment to modernise the Building Societies Act 1986. Some of us may remember that the Building Societies Act 1986 (Amendment) Act 2024 achieved Royal Assent earlier this year. It allows for real-time virtual participation at building society general meetings and provides the Government with powers to introduce subsequent legislation to further modernise the 1986 Act. The Government will look to introduce the changes enabled by that Act in due course. To conclude—I say to the shadow Minister, the hon. Member for Wyre Forest, once again, as we meet for the second time today—the order will make small but important updates to the Building Societies Act 1986, modernising the Act to align certain corporate governance requirements with the same flexibilities afforded to companies under the Companies Act 2006. It will help to deliver on the Government’s commitment to unlock the full potential of the mutuals sector through ensuring that the legislation supports building societies to grow. I hope that colleagues will help me in supporting the amendments; I commend the order to the Committee.

• 9 Dec 2024 · Draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2024. It is a pleasure to serve under your chairmanship, Ms Vaz. The draft regulations will add four pieces of legislation to the list set out in section 17(3) of the Financial Services and Markets Act 2023 so that legislation can be temporarily modified as part of financial market infrastructure sandboxes. The Treasury was granted the power to make provision for FMI sandboxes by section 13 of FSMA 2023, and the list of legislation that the Treasury can temporarily modify in an FMI sandbox is set out in section 17(3). An FMI sandbox is designed to provide a controlled regulatory environment in which existing legislation and regulation is temporarily removed or modified. FMI sandbox participants can test new and developing technologies and practices that would otherwise be inhibited by existing legislation outside of the sandbox. If activity in an FMI sandbox is successful, and only after laying a report before Parliament, the Treasury can make permanent changes to legislation by introducing a further affirmative statutory instrument. The testing of new technology and practices is inherently uncertain and will evolve over time, meaning that it is likely that the list of legislation in scope will need to be added to. For that reason, the Treasury has the power to add further legislation to the list in section 17(3) of FSMA 2023, as set out in section 17(6). Through the testing of new technologies and practices in an FMI sandbox, we are likely to identify additional legislative modifications, and the ability to add further legislation to the list is a way of ensuring that the FMI sandbox regime can be kept up to date. The draft regulations exercise the power set out in section 17(6) of FSMA 2023, so that the four items of legislation can be added to support two FMI sandboxes, namely the existing digital securities sandbox, which I will refer to as DSS, and the future private intermittent securities and capital exchange system sandbox, also known as the PISCES sandbox—we love acronyms in the Treasury. The DSS will enable firms to test new and innovative technology across financial market infrastructure activities, and the PISCES sandbox will allow private companies to have their shares traded on an intermittent basis on a new type of stock market. The draft regulations will bring the following legislation into scope of the power to make temporary modifications in FMI sandboxes: the Stock Transfer (Gilt-edged Securities) (CGO Service) Regulations 1985, which I will refer to as “STRs”; the Government Stock Regulations 2004, which I will refer to as “GSRs”; the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, which I will refer to as “MLRs”; and regulation (EU) 2017/1129 of the European Parliament and of the Council, also known as the prospectus regulation, which we inherited from the EU. Temporarily modifying the STRs and GSRs will enable us to support the issuance of a digital gilt instrument through the DSS. I and the Financial Secretary to the Treasury set out further details of that pilot in written ministerial statements to both Houses on 18 November, which hon. Members may have seen. The MLRs will be modified to facilitate an exemption from the cryptoasset regime in the MLRs for DSS participants, on the basis that activity in the DSS will involve securities, such as bonds and equities, that are already regulated, so conventional anti-money laundering legislation will be applied in the normal way. The prospectus regulation will be modified as part of the PISCES sandbox so that prospectus requirements can be disapplied in favour of bespoke disclosure requirements in that sandbox. I should note at this point that the draft regulations do not make any temporary changes to the four specific items of legislation. Under the procedure stipulated by FSMA 2023, that will be done as part of further negative SIs to be laid before Parliament, which will provide all the relevant explanatory information for the changes being made to each enactment. The Government published a draft of the instrument that will set up the PISCES sandbox in November for public comment ahead of its being laid before Parliament in May. The DSS was established by a statutory instrument laid last December, although changes to the MLRs will require a further statutory instrument, which is to be laid before Parliament in January. I recognise that this is a very technical measure, but the draft regulations will make changes consistent with the powers established by FSMA 2023—the Conservative party led the introduction of that Act, and we supported it when we were in opposition—and support the continued development of the DSS and of future FMI sandboxes, such as the PISCES sandbox. The Government believe that this will help to support innovation through each of these FMI sandboxes. I hope that the Committee will feel able to support the draft regulations and their objectives, and I commend them to the Committee.

• 9 Dec 2024 · Draft Financial Services and Markets Act 2023 (Addition of Relevant Enactments) Regulations 2024 · Hansard source

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  I thank the shadow Minister for his comments about our constructive relationship. I am sure there will be many fights in these rooms, but they are not happening yet. He will be delighted to know that we will be back here at 6 o’clock to consider a similarly simple statutory instrument. We intend to lay the statutory instrument providing the legal framework for the PISCES sandbox before Parliament by May next year. As the shadow Minister will probably know, the testing of new technology and practices is uncertain, so there may be further FMI sandboxes with a different focus that require changes to legislation that have not been considered previously. Therefore, it is not really possible to set out a timeline, but the statutory instrument for PISCES will be laid by May 2025. As I am sure the shadow Minister will recognise, the draft regulations are an important step forward in the development of the digital securities sandbox and future financial market infrastructure sandboxes such as PISCES, which is world leading and very impressive for our Government, and will be a good thing for the financial services sector. The draft regulations will ensure that FMI sandboxes are able to facilitate innovation while ensuring that all the risks are proportionately managed, as well as ensuring that firms are incentivised to participate. The changes will be laid out in detail in a negative statutory instrument that we intend to lay before Parliament. We will be modifying the money laundering regulations to ensure that activity in the digital securities sandbox is not caught under the definition of cryptoassets in the MLRs. We will also provide the shadow Minister with a timeline on that, if that makes sense. I thank Members for participating in the debate. I hope they found it informative, I hope they will learn all the acronyms, like I have, and I hope they will join me in supporting the draft regulations. Question put and agreed to .

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

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  You’re the shadow Minister.

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

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  I am reluctant to do so, but I will.

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

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  The best decision that we have ever made in government is putting money back into the pockets of working people. Questions were raised by the hon. Member for Isle of Wight East (Joe Robertson), the hon. Member for Yeovil (Adam Dance) and the Liberal Democrat spokeswoman, the hon. Member for St Albans (Daisy Cooper). The hon. Lady asked a number of questions about the NHS. The Government will provide support for Departments and other public sector employers for additional ER NICs costs only. That will apply to central Government, public corporations and local government. Primary care providers—GPs, dentists, pharmacies and eyecare provider—are valued independent contractors who provide nearly £20 billion worth of NHS services. Every year we consult each sector both about what services they provide and about the money to which providers are entitled in return under their contracts. As in previous years, this issue will be dealt with as part of that process.

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

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  If you will forgive me, Madam Deputy Speaker, I feel that a lettuce would have better judgment. I turn to the devolved Governments. The Government will provide Departments and other public sector employers with support for additional ER NICs costs only. The funding will be allocated to Departments, with the Barnett formula applying in the usual way. The overall outcome of the Barnett formula is that all the devolved Governments will receive at least 20% more funding per person than the equivalent UK Government spending in the rest of the UK. The Scottish Government will receive £47.7 billion in 2025-26, including an additional £3.4 billion through the operation of the Barnett formula. The Welsh Government will receive £21 billion in 2025-26, including an additional £1.7 billion through the operation of the Barnett formula.

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

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  As far as I am concerned, the current numbers are the correct ones.

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

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  The Department of Health and Social Care will confirm funding for general practice for 2025-26 as part of the usual GP contract process later in the year, through consultation with the sector. I understand the concerns about the impact on the healthcare sector, but I can assure the hon. Lady that the Department of Health will continue to engage with GPs, dentists and pharmacists as part of the usual contract process, and that changes in NICs will be taken into account in those discussions. Let me now turn to the rant, I would say, rather than speech, from the hon. Member for South Shropshire (Stuart Anderson). I was not quite sure what question he was getting to, but he did ask very clearly whether the Chancellor understood the impact of the economic policies that she was making, and whether she would remain in her place. Considering those questions, I wondered what he thought about economics as a whole, so I decided to look into him. Not long ago, he said: “I have worked with Liz Truss on many occasions…I believe that her economic position…and her parliamentary experience make her the best option to lead our country.”

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

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  It is an honour to close the debate on behalf of the Government. When the hon. Member for Grantham and Bourne (Gareth Davies) loses his seat, he can work as my speechwriter, because he is right that I am going to say all the things he said, but I will come on to that soon. Let me start by thanking hon. Members for their contributions to the debate. There were some powerful speeches, including from my hon. Friends the Members for Chipping Barnet (Dan Tomlinson), for Bournemouth East (Tom Hayes), for Leeds South West and Morley (Mr Sewards), for Gateshead Central and Whickham (Mark Ferguson), for Dartford (Jim Dickson), for Welwyn Hatfield (Andrew Lewin), for East Thanet (Ms Billington), for Rochdale (Paul Waugh), for Loughborough (Dr Sandher), for Basingstoke (Luke Murphy) and for Reading West and Mid Berkshire (Olivia Bailey). . Before I come to the specific points raised in this debate, I want to reiterate the purpose of the Bill. Our priority in the Bill is to restore stability to our economy, repair the public finances to fix our economy, and support long-term economic growth. The Chancellor recognised that to do that, the Government needed to make difficult decisions. That is why under the measures in the Bill, employers are being asked to contribute more. First, the Bill provides for a rise in the rate of employer secondary class 1 national insurance contributions from 13.8% to 15%. Secondly, it provides for a decrease in the secondary threshold for employers from £9,000 per employee to £5,000. Thirdly, it provides for changes to the employment allowance, to increase it from £5,000 to £10,500, and removes the £100,000 eligibility cap, so that the vast majority of employers benefit. The hon. Member for North Bedfordshire (Richard Fuller) asked at the start of the debate where the extra money raised will go. Let me remind him that the Government uncovered a challenging fiscal and spending inheritance with £22 million of in-year pressure on public finances. We have taken difficult but necessary decisions to fix the foundations of our economy and to fix public services. The Budget provided additional day-to-day funding to stabilise and support public services. Day-to-day funding will now grow at an average of 3.3% in real terms over this year and next, compared to 0.2% under the last Government’s plans.

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

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  That is under review, and we will come back to the hon. Gentleman soon. I turn to the questions from the hon. Member for Eastleigh (Liz Jarvis) about childcare providers. She may be aware that I served on the shadow Education team for a long time. I realise the value of early years providers, and I know that they drive economic growth and break down barriers to opportunity. We have committed to making childcare more affordable and more accessible, which is why we promised 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. However, I say to the hon. Member that the Government inherited the worst economic circumstances since the second world war, and our first step must be to fix the foundations of our economy. In spite of the challenges, the Chancellor announced in her Budget significant increases to the funding that early years providers are paid to deliver Government-funded childcare places, meaning that the total funding will rise to over £8 billion in 2025-26. I am grateful to have had this opportunity to respond to the questions that have been raised today. I also want to thank my officials for their work on bringing the Bill to the House. Before I finish, however, I want to answer a question that the right hon. Member for East Hampshire (Damian Hinds) asked in his speech: what is the mission of this Government? Well, let me tell him. This Government’s mission is economic stability, restoring our public services, a thriving workplace, making sure that we have a strong education system and strong public services, putting more money in working people’s pockets, and fixing the foundations of our economy. The mission is to rebuild Britain. The Conservatives left a mess, and we will do a better job than them. I commend the Bill to the House. Question put, That the amendment be made.

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

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  With pleasure.

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

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  I do have the faintest idea how it works, which is why I am on this side of the House and the hon. Gentleman is on that side. That is why I am a Treasury Minister and he is not, and probably never will be. The hon. Member for Huntingdon (Ben Obese-Jecty) spoke about hospitality. Without any Government intervention, retail, hospitality and leisure relief would have ended entirely in April 2025, creating a cliff edge for business. [ Interruption. ] I know the truth hurts, which is why the hon. Member for Thirsk and Malton (Kevin Hollinrake) is chuntering from the Opposition Front Bench. Our Government have decided to offer a 40% discount to RHL properties by introducing a cash cap of £110,000 per business in 2025-26, and we have frozen the small business multiplier. This package is worth over £1.6 billion in 2025-26 and is aimed at supporting the most vulnerable businesses, ensuring that over 250,000 RHL properties receive the full 40% support.

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

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  If the hon. Gentleman is patient and listens carefully to my speech, I will come on to the Scottish Government, so he does not need to worry. The increase in employment NICs raises revenues for the NHS and increases funding for contributory benefits such as the state pension, easing wider pressures on public finances. It is part of the Government’s announcement of an additional £22.6 billion of day-to-day spending over two years for the Department of Health and Social Care, including the NHS.

• 3 Dec 2024 · Topical Questions · Hansard source

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  The FCA is held to account by the Government and Parliament, but Treasury Ministers cannot comment on individual cases, and the Treasury has no stake in the operational issues of the FCA. I am very happy to meet with the right hon. Lady and the FCA to discuss that matter, but let me be clear: the FCA is an independent regulator.

• 3 Dec 2024 · Topical Questions · Hansard source

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  My hon. Friend will know that there is a long-standing debate about the relationship between financial and real economy growth, on which there is no consensus. The Government are clear that we see the financial services sector as a key part of our future economic success. The growth of the UK economy and our wider missions will not be achieved if we do not champion one of our biggest assets—the growth of the UK’s financial services sector—and mobilise it towards achieving those goals.

• 3 Dec 2024 · Financial Conduct Authority · Hansard source

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  I understand that lots of people have suffered, as the report explains, which I said I have read. However, I do have confidence in the FCA; I have sent it remit letters outlining what we expect it to do to deliver on its objectives. The FCA is looking at certain things such as its rulebook, which we think is too extensive, to look at rules that no longer need to be applied but, overall, we are working with the FCA closely and we believe that it is trying its best. It is not possible to have a system where nothing ever goes wrong, but we are trying to minimise that and ensure that there is consumer protection. The FCA knows that we are working together to deliver on its objectives.

• 3 Dec 2024 · Financial Conduct Authority · Hansard source

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  I read that report with great interest and have a lot of sympathy for those who suffered. However, a lot of the incidents described happened a very long time ago. The FCA has made substantial changes in response to those experiences. That does not mean the end of our engagement with the FCA, but we are continuing to hold it to account and it has made changes since the report came to light.

• 2 Dec 2024 · Draft Scottish Rates of Income Tax (Consequential Amendments) Order 2024 · Hansard source

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  I thank the hon. Gentleman for his co-operation and for commenting on the lateness of some of the people behind me—I am sure that the Whip will have taken notice of that, but not me, because that is not my job. Only Scottish taxpayers who are entitled to deficiency relief and who pay tax at the Scottish advanced rate of income tax will be affected. The measure only affects Scottish taxpayers who claim deficiency relief and whose income is taxable at the Scottish advanced rate of income tax. I cannot give the hon. Gentleman an absolute number, but the criteria apply to people whose income is taxable at the Scottish advanced rate of income tax, as he referenced. The hon. Gentleman will be pleased to know that guidance is available. The “Insurance Policyholder Taxation Manual” from His Majesty’s Revenue and Customs contains guidance on deficiency relief. It will be updated to reflect these changes, so people can refer to that, and it is available on gov.uk. I will answer a question about the order applying retrospectively, because I think the hon. Gentleman alluded to that. The Scottish advanced rate of income tax applies from 6 April 2024, but applying these provisions from this date ensures that no taxpayers are adversely affected. I hope that those answers are satisfactory— [Interruption.] I am being handed another piece of paper, which I will read. Oh, the number affected is fewer than 10, and the Exchequer impact is less than £5 million per annum. I hope that satisfies him. This order ensures that the calculation of deficiency relief takes account of the new Scottish advanced rate of income tax. I am glad that the Opposition will not oppose it and are in agreement. I commend the changes to the Committee. Question put and agreed to.

• 2 Dec 2024 · Draft Scottish Rates of Income Tax (Consequential Amendments) Order 2024 · Hansard source

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  I beg to move, That the Committee has considered the draft Scottish Rates of Income Tax (Consequential Amendments) Order 2024. It is a pleasure to serve under you as Chair, Sir Roger. The draft order enables the calculation of deficiency relief to take account of the introduction of the Scottish advanced rate of income tax. Deficiency relief reduces the tax that some individuals are required to pay when certain life insurance policies come to an end. It applies in unusual circumstances in which the policyholder would otherwise be taxed on more than the actual economic gain they made on the policy. That might include when a tax charge arose on an earlier withdrawal. On 22 February this year, the Scottish Parliament introduced the new Scottish advanced rate income tax band. That means that, from 6 April 2024, the former Scottish higher rate income tax band was split into the Scottish higher rate and the Scottish advanced rate income tax bands. The current deficiency relief rules do not take account of the new tax band. This reduces the amount of deficiency relief available to a small number of Scottish taxpayers from 6 April 2024. The order applies from 6 April 2024, and ensures that the new Scottish advanced rate of income tax can be included in the calculation of deficiency relief. At the same time, the Government are taking the opportunity to simplify the wording of the legislation. The order ensures that the calculation of deficiency relief takes account of the new Scottish advanced rate of income tax.

• 27 Nov 2024 · Finance Bill · Hansard source

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  It was a difficult decision, and I understand the point the hon. Lady is making, but the reforms to agricultural property relief mean that farmers can access 100% relief for the first £1 million and 50% relief thereafter, meaning an effective 20% tax rate. It was a difficult decision, but we had to do it to fund public services. My hon. Friend the Member for Bolton West (Phil Brickell) talked about tax avoidance and fraud. To stop people taking unfair advantage of our system, the Government announced in the Budget the most ambitious ever package to close the tax gap, raising £6.5 billion in additional tax revenue per year by 2029-30.

• 27 Nov 2024 · Finance Bill · Hansard source

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  The right hon. Gentleman has spoken enough times in the debate, so I will not be taking yet another intervention from him. The hon. Member for Bognor Regis and Littlehampton (Alison Griffiths) raised questions about SMEs and high streets. The Government have been absolutely clear that we need to take difficult decisions to deliver long-term stability and growth, and that stabilising public finances is the only way to create long-term stability in which businesses can thrive. But we recognise the need to protect small employers, which is why we have more than doubled employment allowance—she may like to know that—meaning that half of businesses with mixed liabilities will either gain or see no change at all next year. The right hon. Member for East Hampshire (Damian Hinds) raised questions about VAT on private schools hitting SEND pupils. To protect pupils with special educational needs and disabilities who can only have their needs met in a private school, the local authorities and devolved Governments that fund those places will be compensated for the VAT they are charged on those pupils’ fees. I hope that reassures him. The right hon. Gentleman also raised a point about faith schools. Of course the Government value parental choice and recognise that some people want their children to be educated in a school with a particular faith ethos. My hon. Friend the Exchequer Secretary met the Partnerships for Jewish Schools and the Association of Muslim Schools during the consultation period on this policy. To ensure fairness and consistency between all schools that charge fees, faith schools will remain in the scope of the policy. It is worth noting for the right hon. Member that some faith schools are likely to be less impacted by the policy if some of their income is derived from voluntary donations from the community, because donations that are freely given and for which there is no obligation are outside the scope of VAT. As such, not all the income that small faith schools receive will necessarily be subject to VAT. I hope that reassures him a bit.