PARLIAMENTARY DEBATE
Finance (No. 2) Bill - 16 December 2025 (Commons/Commons Chamber)

The reasoned amendment in the name of the Leader of the Opposition has been selected.

I beg to move, That the Bill be now read a Second time.

On 26 November, my right hon. Friend the Chancellor delivered her second Budget at this Dispatch Box. This was a Budget to build strong foundations and a secure future for our country, with no cuts to capital spending—which I am sure would have been implemented by the Conservatives, if they were in this financial situation—and no return to austerity, including for public services. This is a Budget about Labour choices.

The Minister says that there will be no cut to capital budgets, but of course he is talking only about the public sector. Has he seen the CBI Economics research that suggests that there will be severe capital budget reductions in the private sector—the very sector that creates the wealth on which everything else depends?

I am sure that the right hon. Gentleman will have read the Office for Budget Responsibility’s report—we had a bit of extra time to read it this year. He will know that according to that report, investment—both overall, whole-economy investment and private sector investment—has outpaced the OBR’s forecast from March this year. I look forward to returning to those points later.

The Budget delivers choices that were fair and necessary—choices that deliver on the public’s priorities, and that bring about the change that this Government promised. This Government have chosen to cut the cost of living, delivering £150 off energy bills and freezing train fares and prescription charges. This Government have chosen to cut NHS waiting lists, delivering 5.2 million more appointments and announcing in the Budget 250 new neighbourhood health centres. This Government have chosen to lift 550,000 children out of relative poverty in this Parliament, by removing the two-child limit, and by expanding free breakfast clubs and free school meal eligibility.

The Government have chosen to absolutely decimate family farms across the whole United Kingdom. The Prime Minister was questioned yesterday by members of the Liaison Committee, and he was told that farmers have said that they might be better off dying before this tax change comes in. I feel that we need to let the reality of that sink in. His response was that Governments have to bring about sensible reform, but sensible reform is not someone lying in an early grave to avoid the break-up of their family farm. He also claimed that this policy was not targeted, and was merely a change to the tax regime, but when this Finance Bill decimates family farms, it certainly—

Order. The hon. Lady’s intervention is far too long.

Thank you, Madam Deputy Speaker. I look forward to contributions from Members on both sides of the House on the various measures in the Finance Bill. On the point that the hon. Member raises, this Government considered really carefully the reforms that were announced at the Budget last year, and have put forward changes to agricultural property relief and business property relief. There is an additional £1 million allowance—an allowance that was made transferable between spouses in this Budget—and also a 50% discount on the inheritance tax rate, so tax on that higher allowance will be at 20%, rather than 40%.

As well as making changes to lift children out of poverty, this Government have chosen to increase the national living wage from 1 April 2026 by 4.1% to £12.71 an hour, and to increase the national minimum wage for 18 to 20-year-olds to £10.85.

Will the Minister give way?

I happily give way—I look forward to it.

The Minister will know that for the vast majority of employees in Scotland, the increase in the national living wage is redundant, because it is less than the Scottish living wage. He talks about the things that the Government increased in the Budget; was it their intention to increase unemployment by 25% as a result of their jobs tax?

This Budget will lift thousands of children in Scotland out of poverty, because of decisions that we have made. This Government have made £10 billion more spending available to the Scottish Government, yet we still see public services failing up and down Scotland; the NHS is not working as well as it should north of the border.

The Minister is making an excellent series of points, and I commend him on behalf of 4,000 vulnerable children in Reading for the fantastic support he is offering them and their families. It is much deserved and appreciated by our community. I point out other significant benefits, such as the freezing of rail fares, continued bus fare subsidies, and economic measures that will drive growth across this country.

I thank my hon. Friend for his intervention—the first from a Labour Member. I look forward to many more from Labour hon. Friends, as well as Opposition Members. This Government have also chosen to cut Government borrowing every year, so that interest rates, already cut five times since the election, keep falling.

Will the Minister give way?

I give way to my constituency neighbour.

I thank my neighbour. The Minister did not answer this point made by the hon. Member for Angus and Perthshire Glens (Dave Doogan) about the effect of the jobs tax on unemployment. In my constituency, I have met countless businesses that have laid off staff, or have shifted staff to being self-employed. Does he accept, particularly given the unemployment figures today, that there is a direct link between the jobs tax and higher unemployment?

The OBR was aware of the tax changes announced in the previous Budget when it made its forecast just a few weeks ago. It expects that employment will rise in every year of this forecast; that every year, the figure will be higher than it was in March; and that there will be over 35 million people in work by the end of the decade.

As I was saying, this year, borrowing as a share of GDP will be at its lowest level in six years, and the Chancellor made the decision to more than double our headroom against the fiscal rules in this Budget to provide continued economic stability. This Finance Bill, alongside other Budget decisions, delivers choices that give people new opportunities and renew our public services. These choices will help lift thousands of children out of poverty, get more people into work and maintain the highest level of public sector investment in 40 years. I was struck by the response from the North East chamber of commerce, which welcomed the ending of the two-child limit, saying,

“The Chancellor is right to scrap the two-child benefit cap. Our members have long argued that this is one of the most powerful levers available to tackle the unacceptable rates of child poverty across our region and to support more parents into sustained and meaningful employment.”

Statements like that are further confirmation that lifting 500,000 children out of poverty is not just the right thing to do, in order to give our children the best start in life, but is an investment in the future and our economy. All of us will be better for it.

This Government have promised to deliver economic growth as our No. 1 priority.

I am not quite sure whether the Minister believes what he is reading, because UKHospitality has already done the sums on the impact that this Budget is having on many hard-working hospitality businesses across Keighley and Ilkley. Indeed, it has calculated that over the next three years, hospitality businesses in my constituency will have to pay on average an additional £13,690 per annum. Can the Minister say what the Budget will mean for the growth of hard-working hospitality businesses in my constituency?

The hon. Member said that he is not sure whether I believe what I am reading. I did write this myself, and I do very much believe it. We will have plenty of time to debate the business rates measures when we consider the relevant pieces of legislation and in Committee, I am sure. They are not specifically in the Finance (No. 2) Bill, but I am mentioning things that are not in the Bill, so of course, he is welcome to raise things that are in the Budget, too. At Treasury questions last week we discussed at length, with the shadow Front-Bench team and others, the relief and support that is now in the system to help businesses with the increases in valuations they have seen since the pandemic—there is over £4 billion of support over the next few years, with £2 billion coming this year alone. However, I thank the hon. Member for his intervention. Madam Deputy Speaker, I thought I might speak for 15 minutes, but we are 11 minutes in and I am only on page 2, so I will try to make some progress.

We are sticking to our commitments in the corporate tax road map, maintaining the headline rate of corporation tax—the lowest in the G7—and making reforms to capital allowances to support fiscal sustainability while retaining incentives to invest. We are going further to support companies to scale up and attract investment and talent by significantly expanding the enterprise management incentives company eligibility limits, to maintain the world-leading nature of this scheme. We are doubling the maximum amount that a company can raise through the enterprise investment scheme and venture capital trusts scheme, to make the schemes more generous and supportive for entrepreneurs, helping to support more investment in companies and improve access to finance for those we want to see make the transition from start-up to scale-up.

We are delivering a new service to support major investment projects with advance tax certainty, as committed to in the corporate tax road map. We are also introducing a 40% first-year allowance, allowing businesses to immediately write off a significant amount of their investment to reduce their corporation tax or income tax bill in the year that they make that investment. Overall, these growth measures and the many others we are delivering across the Government will result in the doubling of limits for our enterprise tax incentives and will support many scale-ups and businesses to attract capital as they grow.

This Finance Bill builds on many other measures announced at the Budget and delivered over this Parliament. We are expanding and continuing the work of the National Wealth Fund. We have committed £14 billion for Sizewell C, to help power more than 6 million homes. We are making rapid progress on enabling the delivery of a third runway at Heathrow, and we have provided £120 billion in additional capital investment for roads, rail and energy, including £15.6 billion for major city regions.

I welcome the £50 million or £60 million that the Government have provided to Lancashire county council to provide good roads for my constituents. On the Minister’s point about business investment, I welcome the three-year holiday from the stamp duty reserve for new listings, which we are not talking about enough. That will be a huge benefit to newly listed companies in the UK and manages our competitiveness very well.

I, too, welcome that change in the Budget, and I commend my colleague the Economic Secretary to the Treasury for the work she has been doing on that—I am sure we will hear more about it in her closing remarks.

Will the Exchequer Secretary give way?

I will give way, and then I will try to make some progress, so that other Members can get in.

I am grateful to the Exchequer Secretary for giving way. On the point of growth, he should be aware that, since the Budget last year, 49% of farm businesses have paused or cancelled planned investment, 10% have already downsized operations, and 21% intend to do so before next April. What are the Government going to do to restore confidence in farming to invest? Without that, there is no growth in the rural community.

I thank the right hon. Member for his point. We do want to see farming businesses in rural communities and businesses up and down the country investing and growing for the future. On the changes to agricultural property relief and business property relief, it is worth noting that the statistics suggest that up to 375 estates a year will be affected—a small proportion of the overall number—and that number has come down from 520, as was forecast at the previous Budget.

If I may, I will try to make some progress so that other hon. Members are able to contribute.

This Government are delivering growth and are focused on driving investment in our economy. As I said earlier, whole-economy investment has risen by 4.2% in real terms since the start of the year, outperforming the OBR’s March forecast of a decline of 0.1%. As the shadow Chancellor will know, Britain has outperformed its growth forecast this year, with growth in 2025 upgraded to 1.5% from 1% in March.

Beyond growth, this Bill delivers a set of responsible choices that safeguard our economy and prepare us for the future. We have been clear that in order to achieve that we have had to take the decision to ask everyone to contribute more at the end of the decade to protect our public services. After a freeze that was initiated by the previous Government, this Bill maintains income tax thresholds for employees and the self-employed at current levels for a further three years, from April 2028 to April 2031. That is a fair choice. In 2029-30, three-quarters of the revenue from maintaining income tax and employee, self-employed and national insurance contribution thresholds is expected to come from the top half of households.

The Bill also takes action to ensure that income from assets is taxed more fairly, raising £2.2 billion in 2029-30 by increasing taxes on property dividend and savings interest income. The Government are narrowing the gap between taxes paid on work and taxes paid on income from assets. At the moment, for example, a tenant will pay national insurance on their income, and a landlord will not. With the extra 2p, we will be closing the gap between tax rates on landlords and on tenants. In 2029-30 around two-thirds of revenue from increases to dividend property and savings interest tax rates is expected to come from the top 20% of households. Importantly, there are choices we have not taken—choices that previous Governments have taken to borrow more in a fiscally irresponsible way, or to return to austerity, which would undermine our economy and society. We have also chosen not to increase the rate of corporation tax, and we have stuck to our corporation tax road map.

It is important that those with the broadest shoulders contribute more to protect our vital public services, and the Bill delivers previously announced reforms to tax wealth fairly, including a revised tax regime for carried interest. That sits wholly within the income tax framework to ensure that reward is taxed in line with its economic characteristics, removing the opportunity for individuals to use pensions as a vehicle for inheritance tax by bringing unspent pots into the scope of inheritance tax, and by reforming agricultural property relief and business property relief, while ensuring that any of the £1 million allowance for the 100% rate that is unused will be transferable between spouses and civil partners. Those decisions build on our action in the previous Finance Bill, including abolishing the non-dom tax status, ending tax breaks for private school fees, and raising the rates of capital gains tax. That currently raises £14 billion a year, with revenue expected to more than double to around £30 billion by 2030-31.

Fair choices also mean delivering justice for those affected by the infected blood scandal. The Government will extend the existing inheritance tax relief for infected blood compensation payments, so that if an infected or affected person has already died when compensation is paid, inheritance tax relief will instead apply on the death of the first living recipient of the compensation payment.

Fair choices in a Finance Bill also mean tackling serious reforms that have been ducked for too long. That means reforming tax reliefs that, while intentioned, have exploded in cost in recent years. This Government are reforming capital gains tax relief, which has allowed wealthy business owners to sell their shares without paying any capital gains tax. We are reducing the relief available for business owners who are selling their businesses to employee ownership trusts from 100% to 50%—a relief that the previous Government expected to cost less than £100 million a year in 2018-19, although published figures now show that the cost of the capital gains tax relief reached £600 million in 2021. Without any action, forecasts suggest that that could rise to more than 20 times the original costing, to £2 billion by 2028-29.

I give way to the hon. Member for Keighley and Ilkley (Robbie Moore), who was the first to catch my eye on that occasion.

Business property relief impacts many family businesses across the country. What does the Minister say to Fibreline in my constituency, which has worked out that its BPR liability is about £850,000? The company employs 250 people in Keighley whose jobs are potentially at risk as a result of the business not being able to mitigate an inheritance tax liability that this Government are imposing on it.

Our proposals on APR and BPR mean that those with business or agricultural assets will have both the additional £1 million allowance and a tax rate that is half the rate that others within the system pay. My understanding is that the system will be more generous than the one in place before 1992, throughout the whole time that Margaret Thatcher was Prime Minister.

We are reforming the Motability scheme to end the VAT relief on top-up payments, which was a one-off payment required to lease more expensive vehicles on the scheme. We are also ending the application of insurance premium tax on leases to ensure that the scheme delivers value for money for the taxpayer, while choosing to continue to support disabled people.

We are introducing reforms to ensure that private hire vehicle operators will no longer be able to illegitimately exploit an administrative scheme intended for tour operators to pay a much lower rate of VAT than others.

On that point, will the Minister give way?

I will give way—persistence pays.

The Minister is always both gracious and generous. Further to the point made by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) about the impact of BPR, imagine a company that is worth £11 million. It will have a £2 million BPR tax payment to make. The person who inherits the shares will not have that £2 million, so they will have to extract that money from the business. Am I right in thinking that that would require £3.3 million to be deducted and taken out of the company in order to pay that £2 million in tax? Is that in the right order?

I am happy to discuss those numbers with the right hon. Member in more detail, either afterwards or I can come in and discuss those points with him, although I did not quite follow all of the maths—[Interruption.] I thank Members on the Conservative Front Bench for their intervention about that.

Increasing taxes on online gaming and betting is another change that we are making in the Budget, with the rate for remote gaming increasing from 21% to 40% from April 2026, and the rate of remote betting increasing from 15% to 25% from April 2027, while choosing to protect in-person betting and horseracing, which plays such an important role in our sporting culture and many local economies.

The Minister will be aware that those rate changes will have a consequential impact on jobs, particularly in places such as Stoke-on-Trent, where thousands of people are employed by gambling companies. The rights and wrongs of gambling aside, there will be an impact on jobs. Is he willing to look at that issue with the industry going forward, so that we can mitigate the damage done to the sector and keep people in Stoke-on-Trent gainfully employed?

My hon. Friend is a strong advocate for his constituents and the businesses based in his part of the world. Those businesses contribute significant revenue to the Exchequer, and this Government are asking them to contribute a bit more in order for us to be able to continue to fund our public services in a sustainable way. I will continue to have conversations with him and others about the impact of the changes that the Government are announcing to this sector and others in the Budget and this Bill.

Alongside the choices I have mentioned, we are also taking action on the loan charge review. That will include accepting all but one of the recommendations of the independent review, and in some places going further than the review suggested. We are creating a new settlement opportunity to support those with outstanding liabilities to resolve their affairs with HMRC. This marks the start of a final opportunity to draw a line under this long-running issue. I sincerely and dearly hope for everyone involved that we will be able to move forward and that this issue can start to be part of people’s pasts, rather than a seemingly never-ending part of their future.

In tandem, we are delivering a package of measures to close in on promoters of marketed tax avoidance and help taxpayers to steer clear of the schemes that they promote. Those measures include a new prohibition on promoting avoidance arrangements that have no realistic prospect of success and new promoter action notices to require businesses to stop providing goods or services to promoters of tax avoidance where they are used in the promotion of avoidance.

The Minister is making an excellent point. May I commend him on his work on the loan charge? Many IT consultants in my constituency and across the Thames valley are grateful to the Treasury for looking into this matter. Many of them felt they were sold schemes that they did not always fully understand, and they are also grateful for the action to tackle inappropriate schemes being marketed at professional people. I thank him for his work on this matter.

That is very kind of my hon. Friend. I know that he and others on all sides of the House have made representations over many years on behalf of their constituents affected by the loan charge. I have met some of those affected and members of the all-party parliamentary group. In the months that I have been in this role, having been appointed only on 1 September, I have worked hard to ensure that we come forward with proposals that I hope will help to draw a line under this issue. I hope that those affected can see we have a reasonable and fair set of proposals that will help those who were subject to the loan charge to be able to come forward and to settle; I really encourage those individuals to come forward.

Alongside those changes, we are making steps to continue to close the tax gap by closing loopholes and removing barriers to ensure that people pay the tax that they owe, including raising an additional £2.4 billion in ’29-30 by introducing further reforms to pursue those who bend or break the rules to collect more unpaid taxes. We are also going to modernise the tax system to make it easier for taxpayers to get their tax right the first time. With the choices delivered in this Finance Bill, that will bring the total additional revenue raised by closing the tax gap in this Parliament to £10 billion by 2029-30.

My right hon. Friend the Chancellor has spoken about this Budget being

“a package, not a pick-and-mix”,

and that is so important for our public finances and our public services. Through this Bill, we are choosing to deliver long-overdue reforms to update our tax system so that it can work for a modern, dynamic and thriving economy, and funding vital policies such as the removal of the two-child limit, which will lift half a million children out of poverty.

This Bill is about delivering on choices: choices to protect working people; choices to cut energy bills, and to freeze train fares and prescription charges; choices to boost wages and reduce poverty; and choices to cut inflation to bring down mortgage costs. It delivers the Government’s commitment to this country to build a stronger and fairer economy in which living standards rise, to see child poverty fall, and to ensure that public services are improved up and down the country. With every measure in this Finance Bill being geared towards that goal, I commend this Bill to the House.

I call the shadow Chancellor.

I beg to move an amendment, to leave out from “That” to the end of the Question and add

“this House declines to give a Second Reading to the Finance (No. 2) Bill because the Bill includes provisions breaking the Chancellor of the Exchequer’s promise, given after the Autumn Budget 2024, not to raise taxes, and breaking the Chancellor’s promise at the last Budget that there would be no extension of the freeze in Income Tax and National Insurance thresholds and that, from 2028–29, personal tax thresholds would be uprated in line with inflation once again; because the Bill implements changes to Agricultural Property Relief and Business Property Relief for Inheritance Tax which will devastate family farms, businesses and food security; because the Bill is the result of a Budget that will lead to higher spending and borrowing, while damaging growth and living standards with £26 billion of tax rises; and because this House is opposed to raising taxes on working people to pay for increased welfare spending.”

In the middle of Leicester Square, in the heart of our great city, there is a statue of perhaps one of the greatest Englishmen who ever lived: William Shakespeare. In his hand there is a scroll, which reads, in his own words:

“there is no darkness but ignorance”.

This Government have brought plenty of darkness to our country—indeed, during the run-up to the Budget, we had so many kites flown as to what taxes were going to be put up or not that the sun was blotted out of the sky, and a huge, dark shadow was cast across consumers, who stopped spending, and businesses, which stopped investing and employing people. Don’t take my word for it, Madam Deputy Speaker: the Bank of England itself says precisely that it damaged the economy. Indeed, we have seen this in the latest figures on growth, which the Minister was most eager to tell us about in his speech. For the three months to the end of October, growth in the economy was negative—it was minus 0.1%—which is further evidence of the darkness that this Government have cast upon the animal spirits in our economy.

To return to Shakespeare, were he here today, he would be appalled by the ignorance that this Government have shown of the basic rules of economics. It is a basic fact that if you focus on redistribution, as socialists always do—of course, there is always an argument for redistribution—at the expense of getting the incentives right in the economy, you will damage growth. That is exactly what is at the heart of this Budget. The key choice that has been taken is to increase taxes on hard-working people and spend at least a substantial proportion of the money raised on increasing the benefits bill.

The second rule that this Government seem incapable of grasping is that if you tax something, you get less of it. That is a simple fact. That brings me to the topic of work. This Finance Bill further freezes the income tax threshold, meaning that 800,000 people or thereabouts will be dragged into the basic rate of income tax, and 1 million or thereabouts will be dragged through fiscal drag into the higher rate of income tax. By 2030, it is estimated that around one in four taxpayers will be in either the higher rate of income tax or the additional rate—an £8 billion tax grab in the target year, rising to £12.7 billion in 2030. That is on top of various other issues that are coming down the track, such as the freezing of the threshold for repayment of student loans, which is effectively a stealth tax on younger people. It is also on top of the freeze in the employer national insurance threshold, which will raise around £1 billion by 2030. Once again, that comes straight out of employers’ pockets—it is a further instalment of the extra jobs tax.

All of this will reduce the incentive to work, as we have seen. In an intervention a moment ago, my hon. Friend the Member for Keighley and Ilkley (Robbie Moore) raised this very point in the context of hospitality. We have seen 90,000 jobs destroyed on this Government’s watch—and whose jobs are they? They are predominantly young people’s jobs, because increasing national insurance and reducing the threshold at which that tax kicks in disproportionately impacts those on lower incomes, which includes younger people. Of course, we also have the Employment Rights Bill coming down the track, which will make employing people, particularly younger people, even more risky and expensive.

We see in this Finance Bill an outright attack on savers —those who are doing the right thing, putting money by for their retirement—and a 2% increase in taxes on savings income, which the OBR suggests will ironically lead to more people putting cash into individual savings accounts. That is quite the reverse of the effect that the Chancellor is attempting to achieve. According to the OBR, three quarters of the impact of that tax will be borne by working people by way of reduced pension contributions and lower wages. Indeed, the Association of British Insurers says that this measure is

“a short-sighted tax grab which will lower pension saving and undermine people’s retirement security.”

Then we get to inheritance tax. When we shuffle off this mortal coil—to get back to our friend Shakespeare—there will be a tax charge for those who have the temerity to have left something by way of a pension. It is a £1.5 billion tax grab by the Chancellor on those unused pensions.

There has been much mention of Shakespeare. I wonder whether the gravediggers in “Hamlet” might give us some clues as to what the last Conservative Government did to the British economy.

Sadly, I think the gravediggers are still alive and well under this Government. We are seeing that in the destruction of jobs, businesses, farms and livelihoods up and down this country.

The Minister gave his estimate of the number of farms that would be affected by the new tax, which I am quite sure is an underestimate. Notwithstanding that, though, the chilling effect on agricultural investment has been felt across the entire sector as people seek to avoid their farm reaching the threshold for the new tax.

My right hon. Friend is absolutely right. What businesses, including farms, need to succeed is lower taxes and not to be spending most of their time worrying about how they will cover the impact of future taxation. They need to be planning for the future of their businesses and investing in them.

The hon. Member will be very familiar with my constituency, as he is my constituency neighbour. Does he agree that the Minister might have got his figures wrong? I surveyed all the farms in South Devon—there are nearly 500 small farms—and 44% of respondents said that they would be hit with an inheritance tax bill of over £300,000 when these measures come in. Does he agree that the Government simply do not understand the value of a farm, particularly in a part of the country like ours?

I would not naturally defer to the results of a Lib Dem survey over the work of His Majesty’s Treasury. However, I get the gist of what the hon. Lady is saying—perhaps a bar chart with a slightly dodgy scale would be a good way of putting the point.

The Chancellor says that those who are in receipt solely of the state pension should not worry about being dragged slightly into taxation, because that will be dealt with, but we do not know what that actually means. We do not know what the plan is, nor the cost. Perhaps in the wind-ups the Minister can tell us exactly what is envisaged for the very large number of pensioners who, under the Bill, will be dragged into paying tax on their state pension for the first time. What a mess! The Government are working against the instincts of those who are doing the right thing to save for their future.

The same is the case in respect of investment. The 2% increase in tax on dividends—a £1.2 billion tax grab—will simply have the effect of disincentivising investments in equities. That will mean less capital being invested in businesses, which is what drives up productivity. Part of the story of low productivity in our country is the fact that private investment has been too low for too long. This tax increase will weigh in the opposite direction. The Minister spoke about the importance of increasing investment in plant and machinery; the reality is that the Bill cuts the writing-down allowances, unless they relate to new plant and machinery, which will weigh against that very objective.

This is an unfair Bill. My right hon. Friend the Member for New Forest West (Sir Desmond Swayne) raised the issue of the farm tax, and he was absolutely right to do so. Farms up and down this country are now worried about the future. Farms in my constituency, which have sometimes been in the family for decades or generations—in some cases even for centuries—are now having to stare down the barrel of a very uncertain future. What an irony and what a tragedy that, during the run-up to the general election, the then shadow Secretary of State for Environment, Food and Rural Affairs, the right hon. Member for Streatham and Croydon North (Steve Reed), looked the president of the National Farmers Union in the eye, and said that, when it came to inheritance tax, farmers had nothing to fear from a future Labour Government. How wrong they were. As Tom Bradshaw said, this whole tax increase is

“morally wrong and economically flawed”,

and he is right.

The hon. Gentleman is also a near neighbour of mine in Devon. Does he agree that the changes to agricultural property relief feels like a double taxation that burdens farming families in their old age? One can reasonably reach only one conclusion: this Government neither understand nor value this country’s farming communities —talk about biting the hand that literally feeds us. It is for this reason, amid a host of others adumbrated by colleagues across the Opposition Benches, that I will vote against the Bill this evening.

I welcome the hon. Lady’s intervention. She is absolutely right on the matter of APR, but the issue is not just APR.

We are in a world that is extremely uncertain, and our farmers are part of our national security, but we are farming them to death. What does that do for sustainability and our thriving farm agribusinesses?

The hon. Lady is absolutely right. The value of farming goes above and beyond successful businesses simply contributing to the economy in the traditional way. Farming also underpins our food security as a nation.

There are hundreds, if not thousands, of farmers in Parliament Square this afternoon, blasting their horns about the family farm tax. The shadow Chancellor and many other colleagues from the Opposition Benches have been out to meet the farmers to understand their concerns. Has he heard, like I have, their frustration at the Government’s failure to listen and understand the impact that the family farm tax will have on farm viability?

My hon. Friend is right. I was out there this morning speaking to farmers, including a group up from Newbury, who have taken the trouble to come here to make exactly that case powerfully to us on the day of this debate.

Will my right hon. Friend give way before he moves on?

How could I resist my right hon. and gallant Friend?

This attack on investment extends well beyond agriculture and family farms; it is an attack on every family undertaking and every family business in the land. It is bonkers.

I notice that my right hon. Friend is being restrained in his use of language, given the severity of the matters we are discussing. He is absolutely right. Business property relief is being changed in broadly the same way as agricultural property relief in this Bill. That will have a devastating and similar consequence for family businesses across the UK, and I have been up and down the country to meet many of them. One of the foremost in campaigning has been Steve Rigby of the Rigby Group. He is the head of Family Business UK, and he put it perfectly when he said that family businesses are spending too much time protecting their legacy and succession, not on promoting growth. That is the whole point. If this Government want growth, they will have to do things that get businesses to think about growth, rather than having to worry about being broken up because of onerous tax measures.

Does my right hon. Friend worry, like me, about the background of those on the Government Front Bench? I do not want to disrespect either of the individuals sitting there now, because they are both fine people, but neither has ever, so far as I am aware, been involved in running a private business. They do not understand how private business works, and they equate the inheritance of money—for example, from a father to a daughter—with a family business. A family business needs to continue, because of all the employment that arises from it. Equating the two and saying that it is half the normal inheritance tax is to show a complete failure of understanding of the economy of this country and the economy of a family business.

My right hon. Friend is absolutely right. It shows a complete lack of understanding of business, and it reflects the lack of true business experience on the Government Front Bench. It also goes right to the core of the difference in principles and beliefs between the two principal parties in this Chamber. We on the Opposition Benches believe that if someone works hard, saves hard and has something left at the end of their life, they should be allowed—because they love those who they wish to look after in their absence—to pass on that inheritance without the taxman taking a huge, disproportionate amount of what they have accumulated. All the Labour party believes in is mounding up ever more debt in a statist world in which that debt is to be passed on to future generations to be paid back.

We believe in supporting the little platoon, as Burke put it—the families that together form a mighty army. We believe in personal responsibility and for that to be rewarded.

I will give way to the hon. Gentleman and then I will come to the hon. Lady.

Does the shadow Chancellor bristle like I do and like my constituents in Angus and Perthshire Glens who are engaged in farm businesses and agribusiness more generally when they hear Ministers make a false equivalence in talking about the generous rates of agricultural property relief compared with the wider economy and how long people will get to pay? They are making a false equivalence between someone inheriting their mother’s house after her death and transferring the family farm from one generation to the next. They are completely different propositions, are they not?

As I have to say so often following his interventions, the hon. Gentleman is absolutely right. There is a huge difference between the position of a dynamic, growing organism of a company and the other situation that he has described. Loading up these taxes on the death of the principal owner or one of the significant owners of a business means loading it up with uncertainty, and quite conceivably the business must be broken up as a consequence.

As someone who used to be part of a small family business in Glasgow, I wonder whether the right hon. Gentleman agrees that stability in relation to inflation and corporation tax and reducing interest rates are equally important to a small family business.

It is interesting that the hon. Lady should raise the issue of inflation. Inflation is currently at about twice the target of 2%, and it was bang on target on the day of the general election, at 2%, because of the action that we took, alongside the Bank of England. The International Monetary Fund is forecasting that inflation in our country will be the highest in the G7 this year, and the highest in the G7 next year. If we ask why that has happened, the answer is relatively simple. If national insurance increases are imposed on employers, they pass on some of those additional costs by way of higher prices, and that is inflationary. If vast amounts of money are borrowed, and, notwithstanding what the Minister had to say earlier, vast amounts of money are spent, too—about half a trillion pounds more than was the case under the plans that Labour inherited—that also stokes inflation. Those on the Government Front Bench may trumpet the fact that interest rates have come down five times, but if they had not mismanaged the economy, rates would have come down an awful lot faster. Interest rates are higher, and for longer, because we have sticky inflation, which is due to the choices made by this Government.

My right hon. Friend makes a good case for Conservative economics. Does he agree that the Government have made some wrong-footed changes to non-dom status in their two years in office so far, and that they will damage investment and growth? Not only is that a development that Conservative Members do not want to see, but the Government’s forecasts rely on £34 billion of revenue from these people. Does my hon. Friend agree that they should think again about the wisdom of these changes?

My hon. Friend is right to suggest that we have become an economy that has closed the door on international investment. In fact, the door has been blown wide open by those fleeing to go to the United Arab Emirates, Milan and other places around the world to escape the high-tax jurisdiction that we have become, and it comes with great cost. Given the 16,000 high net worth individuals who have fled under this Government, about a third of a million to half a million people on average earnings would probably be needed to cover the tax that has just walked out of the door. I can also tell the hon. Member for Angus and Perthshire Glens (Dave Doogan) and others that we will reverse the APR and BPR changes if we form the next Government.

I will now make swift progress. Let me just say that the wrong choices have been made. Tax should not be going up and spending should not be going up in this way, and I do not even believe that the Chancellor’s heart is in the benefit changes that have occurred, including the two-child benefit cap change. If it were, why was the Whip removed from several Labour Members? The reality is that the Prime Minister and the Chancellor are lashed to the same mast. This is all about their survival. They lost control of their own Back Benchers. Let me go back to Shakespeare, and “The Tempest”. The storm has no respect for rank, so they pitch and roll solely at the command of those behind them. The great man also wrote:

“All the world’s a stage…And one man in his time plays many parts”.

However, this Chancellor has played but one part, that of recklessness. At heart, she has taxed that which is good, and in this Bill she has incentivised that which is not. By so doing, with this Bill she will diminish us all.

Order. As it is the Second Reading of a finance Bill, I cannot impose a time limit, but I can suggest that colleagues keep their remarks to around six minutes.

I am pleased to contribute to this debate, and I congratulate my hon. Friend the Exchequer Secretary on bringing forward his first finance Bill. I hope it is the first of many.

Given the limited time that I have, I will focus my remarks on the Government’s central mission: economic growth. The Government have rightly placed investment and reform at the heart of their strategy, and they are removing the barriers to economic growth that for too long have held back this country and the towns, villages and city that make up the Buckingham and Bletchley constituency—be it through major planning reforms, cutting regulatory costs, investing in skills and apprenticeships, or undertaking fundamental pensions reform to free up more risk capital. This pro-investment and pro-reform approach lays the foundation not only for our long-term economic growth across the UK, but for our long-term global competitiveness.

This country is a great place to start a business, despite what Opposition Members have said, but scaling a business has been too difficult for too long for too many entrepreneurs, and too many firms are acquired early by private capital—often from abroad—and therefore fail to scale globally. There are a number of fantastic, innovative and high-growth companies in the Buckingham and Bletchley constituency—be it Pulsar, Envisics or Carnot Engines—and I want all of them to realise their full potential in my constituency, not overseas. I believe that this Bill goes some way towards enabling that, and it is not just those companies that it will help. I have read many commendations from the Startup Coalition and the ScaleUp Institute, which have backed many of the measures that I will cover in my remarks.

Clauses 13 to 16 and clause 82 back ambition, encourage investment and reward those who want to take risks. Expanding the enterprise management incentives—by raising the employee limit to 500, the gross assets limit to £120 million and the holding period to 15 years—ensures that more high-growth, innovative companies can attract and retain the world-class domestic and global talent that they need. For many, joining a fast-growing company is a leap of faith, and when that risk pays off, the people who create the success should share in the reward.

I also welcome clauses 14 and 15, which follow the logic that I just set out with regard to the enterprise investment scheme and venture capital trusts. I particularly welcome the raising of the company investment limits and the lifetime caps, which will ensure that more early-stage companies can scale here in the UK, not overseas. Similarly, raising the respective gross assets limits before and after share deals sensibly reflects modern growth realities. I believe that these reforms will support life sciences, green technology and advanced manufacturing, all of which are sectors identified in the Government’s industrial strategy, which they published earlier this year. The reforms will enable earlier capital raising and faster, more efficient scaling, and make it far more likely that more companies will become national champions and companies of global consequence that are anchored here in the UK.

The final clause that I particularly welcome is clause 82, on the new UK listing relief, which removes the 0.5% stamp duty reserve tax on transfers for newly listed companies. This measure has been called for by UK financial services, and also by a wide range of sectors that are included in the industrial strategy, for a significant period of time. I believe that the clause will boost liquidity, incentivise more investors of all types—be they institutional or retail—to buy British, and entice more domestic companies to follow in the footsteps of Magnum, Shawbrook and the Beauty Tech Group by listing in London. I am pleased that this Bill strengthens the UK’s ability to compete globally, to support its entrepreneurs and to make sure that the UK is the best possible place to scale a company.

I will close my remarks by mentioning what I hope will be given consideration in a finance Bill in future parliamentary Sessions: the Government may wish to dedicate themselves to pro-growth and pro-enterprise tax reform. The previous Government, and indeed many Governments of different political orientations, have increased the length of the tax code, increased the number of cliff edges, complicated the tax base and, frankly, fundamentally failed to close or tackle various loopholes. As we rededicate ourselves to growth in this parliamentary Session and in future parliamentary Sessions, we would do well to ensure that simplification and fairness anchor our growth agenda.

I call the Liberal Democrat spokesperson.

If this Finance Bill represents anything, I am sorry to say that it represents the fact that the Government know the cost of everything and the value of nothing. We Liberal Democrats have tabled a reasoned amendment against this Bill, setting out all the reasons why we are against it.

Ultimately, this Bill is a series of short-term Treasury tax grabs, with no care for the consequences and no vision for the future. People are crying out for change—the change that they were promised—but the double whammy of stealth taxes on households and high streets makes the Labour Government look like nothing more than continuity Conservatives. Once again extending the unfair freeze on income tax thresholds will drag millions of low-paid workers into tax. The failure to reform the business rates system again makes the Government look like continuity Conservatives.

In a turbulent world, we need to boost our sovereign capabilities, and food security is critical to that, yet despite all the evidence, all the campaigning and all the honking of tractor horns on Whitehall, the Government have failed to get it right.

I thank my hon. Friend for that intervention, and I wholeheartedly agree that the Prime Minister should change direction. It is deeply disappointing that, having been grilled at the Liaison Committee yesterday, he clearly has no intention of doing so. The changes to the agricultural property relief and the business property relief will punish family farmers who put food on our tables and guarantee the food security of our nation, and they will not tackle the loophole of private equity companies and celebrity farmers buying land to reduce their tax liability.

Labour Members have made much of the fact that, upon a family farm being inherited, the inheritance tax will be payable over 10 years. They completely ignore the fact that 30% of family farms made no profit at all last year. Invariably, those who inherit will have to sell land to pay the bill. That will feed exactly the kind of market that the investors that my hon. Friend mentions are looking for.

I am grateful to my hon. Friend for making that point. This will have unintended consequences, and we can see what those will be. We have spent a year warning the Government; they can no longer say that they have not been warned. I hope so much that, at this late stage, they make changes to the Bill.

My hon. Friend may be a little over-generous in saying that there are unintended consequences. The anti-forestalling clause, which is intended to deny those over 65, or anyone who dies within seven years of making a transfer, the ability to manage their tax affairs in a sensible way, puts a massive burden on those who are over 75.

I could not agree more. My right hon. Friend chairs the Environment, Food and Rural Affairs Committee—a Labour-majority Select Committee—and he has navigated that issue so well over the last year. I say on the parliamentary record: all credit to him for his sterling efforts to draw attention to the issue.

If there had been any justification at all for the APR and BPR changes, it would have been that the Government were trying to crack down on loopholes, but as my hon. Friends have said, that has not happened as a result of these changes. The Prime Minister in effect admitted in front of the Liaison Committee yesterday that the Government were not even trying to do that. We all know that the measures will cause damage. Farming communities know it; Liberal Democrats know it; and Labour-majority Select Committees know it. This is just another short-term Treasury tax grab. Family businesses will be hit, too—the very businesses that support their employees through thick and thin; the very employers who provide employment in every corner of the country; the very family businesses that help the economy bounce back strongly after a crisis, giving our economy resilience. Why would a Government want to target our family businesses?

Does my hon. Friend agree that this is not a tax on passive wealth, but that it punitively, cynically targets productive enterprise? The Government expect to raise roughly £1.4 billion from the inheritance tax changes, but analysis by Family Business UK suggests that behavioural responses could produce a net fiscal loss of £1.9 billion by the end of the decade. Are these measures not anti-growth, and directly at odds with the supposed messaging of this Government?

I wholeheartedly agree. It is so frustrating; in last year’s Budget and in this year’s Budget, the Government continue to say that they are pro-growth, and that growth remains their No. 1 mission, but measure after measure in those two Budgets is anti-growth.

Many of us have heard from family businesses in our constituencies and around the country. Many of them have told us that they have sat around the family dinner table and had deeply difficult and traumatic conversations, planning what to do with their business if they “die in the wrong order”, a phrase that some family businesses have used with me. Again, if they have to break up the business, they will probably end up selling it off to private equity companies. These are businesses that are household names and family favourites. It is another short-term Treasury tax grab, with no care for the consequences.

On the income tax hike for dividend, property and savings income, the Federation of Small Businesses sums it up:

“Hikes to dividend tax mean the Government continues to make investing in your own business one of the least tax-friendly things you can do with your money.”

At a time when we desperately need more business investment, that seems to be another short-sighted Treasury tax grab.

We desperately need growth. We Liberal Democrats have repeatedly banged the drum for growth with Europe. Brexit, we know, has been a disaster. Many of the Government’s own Ministers admit it, yet where is the strength of conviction needed to try to fix that? We now know that the previous Government’s failed Brexit deal costs the taxpayer around £90 billion a year in lost tax revenue. Just think about what the Government could deliver if they started to fix that. Just imagine what it would mean for people’s pockets and energy bills, and the money that they could have in their bank account at the end of the month. Imagine the change that the Government could deliver for households and high streets if they just started to plug that gap of £90 billion a year in lost tax revenue.

Our high streets are critical to our sense of community up and down the land, yet high-street hospitality businesses are getting hit once again. Last year it was the jobs tax; this year it is the higher business rates bills.

Just yesterday, I was talking to a pub landlord who wants to expand his business and has acquired a new building. He has found that even though the new building is derelict, his business rates on it have increased by 89%. He is eager for his pubs to continue to be the heart of the community, but he is finding it difficult to recruit workers since Brexit, when all the casual workers went back to Europe. Does my hon. Friend agree that these policies profoundly undermine not just growth but the heart of our communities?

I am incredibly grateful to my hon. Friend for making that point, because our pubs in particular, but hospitality more widely, are at the heart of our community. They provide so much more than just somewhere to have a pint and a pie. They provide community and social cohesion. They are the antidote to the epidemic of isolation. They have history and culture attached. They are somewhere we can go to argue well over a pint, yet our pubs and hospitality businesses are really struggling. That is why, as a point of protest, we Liberal Democrats voted against the increase in alcohol duty in the Budget resolutions last week, and we remain opposed to the measures in the Bill that relate to that increase.

On business rates, I am sorry to say that the Government are behaving as though they are somehow doing hospitality a favour, but I cannot tell you, Madam Deputy Speaker, how angry hospitality owners and leaders are. Furious, angry, betrayed, gaslit—these are just some of the politer words I have heard them use. The Labour manifesto was clear:

“The current business rates system disincentivises investment, creates uncertainty and places an undue burden on our high streets. In England, Labour will replace the business rates system, so we can raise the same revenue but in a fairer way. This new system will level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship.”

However, Labour has not replaced business rates, and it has not levelled the playing field.

As a result of the Bill, in places like Stratford-on-Avon, pubs on high streets and in villages face bill increases many times higher than those faced by the larger distribution warehouses linked to online retail. Does my hon. Friend agree that this raises serious questions about whether the tax system is really supporting communities and local economies?

My hon. Friend is spot on with that comment. We have all seen the statistics; while offices and warehouses face marginal percentage increases in tax, the increases faced by our pubs and hospitality businesses are massive. Analysis that I know has been shared with Ministers this morning suggests that the bill for Harrods, for example, will actually fall by £1.1 million, while the bills for many of our small independent pubs, hotels and hospitality businesses will be going up by tens of thousands.

The Government cannot hide behind semantics. For a year, they kept using the word “lower”, and that is what businesses heard; however, now the business rates bills have arrived, businesses can see that the rates are higher. The Government gave themselves the power to reduce the retail, hospitality and leisure multiplier by not just 5p, but 20p, but they now refuse to use that power. The system of transitional relief that the Government have put in place is simply an admission that they have got this badly wrong.

There is a stark warning coming from the hospitality industry that the looming increase in business rates, due to come in during 2029, will kill the pipeline of owners coming into the hospitality industry. This comes just as the Government are about to publish their visitor economy strategy. There is so much incongruence here. The Government say that they want to do one thing, and then do something else to undermine it.

The bottom line is that hospitality and high-street businesses have just two choices: they can shut up shop, or they can put up prices. There are few things that speak to the economic health of the nation and the high street more than the price of a pint. I issue a warning to the Government now: if they do not act, customers will see the £10 pint before the next general election, on Labour’s watch. I call on Ministers again to use the powers that the Government gave themselves to reduce the multiplier by the full 20p, and to make an emergency VAT cut for our hospitality businesses to boost growth, stimulate consumer confidence and help save our high streets. For all these reasons, we Liberal Democrats will vote against the Government’s Finance Bill.

I struggle to be brief, so excuse me if I compensate with bluntness, Madam Deputy Speaker. I am a lifelong Labour supporter, a Labour activist of 20 years, a former councillor and chief whip on a Labour group, and although I currently have the Labour Whip suspended, people should be under no illusion about where my loyalties lie.

I knew before the election in July ’24 that this Government would not have an easy job. I believe that there is too much to do: many broken services and not enough money to fix them. I also know that the choice at the ballot box was between a party that subjected this country to politically motivated austerity or a Labour Government who would invest in the future. I believe that still means tough decisions on spending and tax—tough decisions that our Treasury team have not ducked. I do not find it credible that the Conservatives, who were last in government, failed to tackle backlogs in the NHS, cut back on early intervention and family support, and failed to fix the housing crisis, yet they complain about the benefits bill, like those things are not all linked.

Today I will support the Bill to progress to the next stage—the Government need to set a Budget, and there are many measures in the Bill that will benefit Cumbria—but let me be clear: Whip or no Whip, as the Bill progresses I will not be supporting the agricultural inheritance tax proposals. I want a full U-turn. I have previously set out why I cannot and will not be moved to a position where I break my word to farmers in my community.

My advice to Ministers is to take note of my more reasonable colleagues on the Government Benches. They have been increasingly vocal on this issue, and it does not look like they are going to stop soon. Ministers must look at the anti-foreclosure clause in the Bill, recognise the deep discomfort it is causing across rural Britain, and change course. It really is not too late.

It is a pleasure to take part in this debate and follow the hon. Member for Penrith and Solway (Markus Campbell-Savours), who is rare, as a Member on the Labour Benches, in feeling such commitment to maintaining and fulfilling the promises he made, not least to his farmers.

I will begin by focusing on the farming issue. Too often we look at it in an overall, structural way and make comparisons with other types of inheritance, rather than looking at the specifics of the farming industry. A third of farmers do not make any profit at all, and those who do make profit make very little. Although we do not have exact data, it would appear that well over half of farmers make a 1% return on capital employed or less.

Even if Treasury Ministers do not have any business experience—sadly, Labour Treasury Ministers typically do not—they should at least practice numeracy. If they are numerate, they can work out that if someone makes just 1% return annually on the capital value of their business, it would take 20 years of earnings to pay a 20% tax—and a third of farmers do not make anything at all. How is someone who makes 1% profit going to pay a 20% tax? This is not some freak thing that has just happened; it is consistent.

The Government, to be fair to them, seem to have woken up in one sense. They said, “We must have a new initiative”—I forget what it is called—“to increase the profitability of farmers”. Well, yippidy-doo, well done for that. But should they not increase the profitability of farmers before imposing a tax that, mathematically, arithmetically—whatever other word you want to use—they cannot pay? The truth is that farmers cannot pay it.

More than half of farmers literally do not have the profits to allow them to pay that tax. That simple truth sits at the heart of this. These businesses are prepared to do it because of their lifestyle, personal commitment and love of farming. They do it in order to put food on our plates that is among the highest quality in the world and at costs that are among the lowest in Europe.

The Government could think about this from a public policy point of view too. There are businesses that are prepared to do that—unlike any other business sector I can think of or have ever experienced, or would certainly ever have entertained being part of myself. There are businesses that would take such low returns, work all the hours God gives and bring brilliant food to the tables of people up and down this country at low cost. Why on earth would the Government want to drive the people running those businesses out so that the people they say they want to attack—namely, huge billionaires and vast trust-based businesses—can gobble up those very farms, which are currently run by decent people in our communities who do all that good and ask for very little in return?

The right hon. Member is making an impassioned speech that certainly represents the feeling of farmers in my rural constituency. Does he agree that farmers are also up in arms at these billionaire companies that are ripping small farms out of the system and building their empires? Any time the small family farms do make a profit, they reinvest it straight back into the farm so that they can farm the following year.

Yes, indeed—and they did. We have seen it. All the evidence is there, and it is happening now, regardless of the argument from Ministers as to what percentage of farms will be affected. We can see it in all the stats. Those stats are available—particularly, I would have hoped, to Treasury Ministers to find out what the real-world impact of this policy is. The real-world impact is that we have seen a drop in investment in the farming industry. That is a disaster.

It may be that the hon. Member for Penrith and Solway is standing alone, but let us look at the enthusiasm on the Labour Benches for the Second Reading of this major Finance Bill that is supposed to be doing such good for the country. There are more than 400 Labour Members, but they are not exactly here to cheer it on. I think they—and, I hope, the Minister—are realising just how counterproductive this is. The one thought I will try to implant above all is those numbers, which mean that it is absurd.

Madam Deputy Speaker, imagine generally being a business owner today, and not necessarily in farming. You hike your way up the mountain to get to success, wading through an eternal shower of tax rises and hacking your way through a jungle of red tape. Then, on your death bed, you are met not first by the grim reaper but by the Chancellor, armed with one final sting: a double tax bill for your children. This is the reality facing family businesses: if the Government cut business property relief next year, that will lead to a double tax bill.

I asked the Exchequer Secretary to the Treasury, who opened the debate, to comment on how that double taxation works. He was unable to respond off the top of his head to my specific numbers, which is entirely understandable, but I hope that the Economic Secretary to the Treasury, armed and perhaps refreshed by the brilliant people in the Box behind her, will be able in summing up to address the specifics of the tax reality for a business faced by the double tax bill that thousands of sons and daughters will receive when their entrepreneurial mum or dad passes away.

From April, the 100% inheritance tax relief that family businesses rely on will be capped at just £1 million; anything above that will be taxed at 20%. Take a small company worth £11 million: the inheritance tax bill alone will be £2 million. But as far as I am aware, the sons and daughters of most entrepreneurs in Beverley and Holderness do not have £2 million tucked away down the back of the sofa. To pay that bill, which is a tax not on the business but on the people who inherit the business, as they are outside the business—I am not sure whether people have focused on this enough—they will be forced to extract that money from the business itself, usually in the form of dividends, and those dividends are taxed at rates approaching 40%. So a £2 million inheritance tax bill becomes a £3.3 million hit on the business, with £2 million to pay the Chancellor and another £1.3 million to pay—oh yes—the Chancellor, simply because the money was invested in jobs, equipment or the business overall rather than left idle.

Is the right hon. Gentleman as concerned as I am that this is a spreadsheet Budget concerned with little more than the number in the bottom right-hand corner? That is why everything is unravelling so catastrophically. On his BPR point, I have nothing against PLCs, but does he agree further that businesses that are owned by families and rooted in communities spend their investments locally, support local organisations and charities, employ locally and have their profits going back in locally, and that this is devastating jeopardy for those businesses?

As so often, the hon. Gentleman is absolutely right. Again, the talk is of hitting the fat cats and big businesses, but it is the huge corporates that will benefit. They will snap up the farmland and the small business. This is not fair taxation; it is irrational double taxation.

The consequences of this policy are real. If the hon. Member for Angus and Perthshire Glens (Dave Doogan)—I will call him my hon. Friend, if I may—is right about the Treasury being obsessed with the bottom right-hand corner, I hope that if no other argument weighs with the Minister, this might. A report by the CBI suggests that far from raising the welcome £1.4 billion forecast by the Treasury, the changes are likely to reduce tax revenues from family-owned businesses by £1.8 billion by 2030. That is yet another example of this innumerate Government having the exact opposite outcome from the one they wished, as investment falls, businesses restructure and growth is choked off. Instead of supporting the Government’s claim to be pro-business and pro-worker, this change could cost more than 200,000 jobs, on top of the 200,000 that the Chancellor has already cost the country. That is money sucked out of the economy and into Labour’s bottomless black hole. The impact will be felt directly in Beverley and Holderness, where it is expected to put 237 local jobs at risk, according to the CBI. Those are apprentices—

Will the right hon. Gentleman give way?

I had better not.

That means apprentices not taken on, machinery not upgraded and businesses downsizing. The changes will leave us all poorer, so I ask the Minister and the Chancellor a simple and constructive question: if the Chancellor will not reverse these changes to business property relief, will she at least consider a targeted mechanism so that when these dividends are necessarily extracted, solely to pay the inheritance tax bill, those dividends are not taxed again?

I cannot set a time limit, but I will ask colleagues to monitor their own timekeeping and I suggest that six minutes would be a good time.

It is a pleasure to contribute to this important debate. Members on both sides of the House have eloquently set out their views on the provisions of this Budget. From my own experience of running a small business, I empathise with entrepreneurs working hard to build something, to employ people and to be willing to take on the risk of building a business. In my constituency, as in many others, small businesses are an important part of the local community. Obviously, they provide a source of local employment. They make our high streets into destinations. Many of them lend their expertise to local charitable and social organisations in the community, including local sports teams and volunteer organisations.

Paisley and Renfrewshire North benefits from the generosity of local businesses in lending expertise, making donations or providing sponsorship. This Budget provides a sure foundation for the services that our entrepreneurs need to establish their business. We need a firm foundation of laws, police to enforce them and courts to oversee the process. We need transport infrastructure and public transport by which workers and customers can get to work places or shops and deliveries can be made.

One of the concerns that probably all of us in this Chamber have, including the hon. Lady, is the squeeze of the middle class and the working class. Many of my constituents have told me—I wonder whether her constituents have also told her—of their concern that that squeeze is going to be felt even more. The people who are paying the most are the working class and the middle class, who cannot afford it.

I thank the hon. Gentleman for his point. We need a balance about fairness, and there are a lot of things in this Budget that will balance things out in the round, including all the investment in infrastructure. In Scotland, and in my constituency, that is really important for driving economic growth.

We need a workforce with the education to produce our goods and services and to drive our business ecosystem forward. This Budget sets a fair balance between taxes and services, a fair balance between benefits and responsibilities, and a fair balance between meeting immediate needs and investing in the future. I know that people are still suffering the hangover from the last Government, and I hope that they will start to really feel the benefits of recovery from this Budget.

Last week I was at the Paisley Christmas market. I expect it is quite like markets up and down the country: a mix of established local businesses and young and family entrepreneurs testing out a business idea, or making Christmas gifts or treats for a little extra income. In 2026 some of those stallholders will grow their businesses locally. Some will be taking steps in wider markets and new products, and my constituency of Paisley and Renfrewshire North is a suitable place to do that. Recently named Scotland’s town of the year, Paisley has a supportive infrastructure for new and growing businesses. New net zero commercial property developments across my constituency are making it one of the most welcoming places in the country to locate or grow a business. This Budget gives them a firm foundation on which to build.

The Budget’s demonstration of the Government’s commitment to fiscal responsibility is keeping borrowing costs down and bringing much-needed stability to the economy. In education, we are focusing on skills and increasing the availability of apprenticeships. We are negotiating exciting trade deals across the world, attracting important new orders for ships to be built on the Clyde and so much more.

I am in no doubt that much more still needs to be done, and I look forward to what my right hon. Friend the Chancellor of the Exchequer and colleagues across Government can achieve in 2026.

I remind the House of my entry in the Register of Members’ Financial Interests.

I want to start with a comment that some may see as controversial—uncharacteristically so, I hope. I want this Government to succeed. I think it is in the national interest; everyone should want our Government to succeed. I worry that continued economic stagnation poses an increasing threat to social cohesion, and that is why I agree so strongly with their growth mission and why I think it is so important. If that growth is to be meaningful, though, it has to be available, felt and understood in every part of the United Kingdom. It should not just be growth in the cities and towns; it has to be felt and understood in rural communities, coastal communities and, of course, our island communities. It is for that reason that I feel so strongly about the dangers of what the Government are doing on the removal of agricultural property relief.

We have already seen the effect that the prospect of that has had on agricultural businesses, and of course agricultural businesses underpin so much of what happens in rural communities. Forty-nine per cent of farm businesses have already paused or cancelled planned investment, 10% have downsized the scale of their operations and a further 21% intend to do so before next April. The truth of the matter is that these changes to APR have absolutely killed the sense of growth in the rural community.

I welcome what the Minister said today about changes to the spousal transfer. I was inspired by the shadow Chancellor’s references to Shakespeare. I offer my own from A. A. Milne—maybe not quite so high-falutin’. As you well know, Madam Deputy Speaker, I am a bear of very little brain, but I am pretty sure that what we heard from the Dispatch Box is more or less what the Government were telling us last year was going to be the case any way. If that is a concession, it does not seem to be much of a concession to me.

It may have escaped the attention of the Treasury Front Bench that not every farmer is married and, indeed, a lot of farmers—like everybody else these days —get married and some then get divorced. Is the message from the Government to the farming community really, “If you want to hold on to the farm for the next generation, then get on to Tinder now, because that is your best chance of holding on”?

Will my right hon. Friend give way?

In a second—this is my punchline: “You’d better understand that if you want to develop your relationship in the back of a double cab pick-up, then that is going to cost you as well.”

I suppose some in the farming community will not be taking up my right hon. Friend’s dating tips, but is he aware that 46% of farms are owned by single farmers and that a single farmer with 200 acres of land would have to pay 136% of their yearly profits to cover this tax bill?

I am indeed aware of the general point. The specific illustration is a new one on me, but I am pretty sure, knowing my hon. Friend, that it will be well founded.

The reason this is so dangerous is rooted in the exceptionally poor return on capital investment that we get from agriculture. I have sat down with many farmers in my constituency. The average family farm in Orkney will be something in the region of 250 to 300 acres, running perhaps 100 suckler beef cattle and some sheep. The value of that property will be something in the region of £3 million, including stock, buildings and machinery, but it will return a net profit most years of something in the region of £25,000 to £30,000. Do the maths here—that is an inheritance tax liability of £400,000, which, even over the 10 years that is allowed, farmers simply will not be able to pay. As a consequence, farms are going to be sold off in whole or in part, and they will not be bought by those who want to produce food. That comes to the nub of it. The Prime Minister tells us that food security is national security, but the changes to APR will in fact diminish our ability to look after our own food needs.

The Exchequer Secretary to the Treasury said that this would only affect 375 estates per year. That figure may or may not be correct—I have heard nobody outside Treasury say it is a credible figure—but it honestly misses the point. Whether it is one estate or 1,000 estates, an injustice is an injustice, and that is why I was so disappointed by the Minister’s attitude today. Let us consider who will be paying this tax and whose estates will be affected. The Treasury’s own figures tell us that 75% of those estates will belong to those who are 75 or over. That is why the anti-forestalling clause in this Bill is so pernicious and so obnoxious. The effect of the anti-forestalling clause is to trap especially those who have farmed into their 70s and 80s into the new rules unless they die before next April. I dislike the use of hyperbole, especially when we are talking about people and their lives, but the anti-forestalling clause in this Bill is downright cruel.

Those who have farmed into their 70s and 80s did it principally for two reasons. First, they were given good, sound professional advice that this was the best way to hold on to the farm and hand it on, and that was true until last October. We also have to understand—and again, this is rooted in the poor level of farm incomes—that many of them did it because they could not afford not to. In my own family, there are those who continued to farm into their 80s because if they did not, they would be left simply on the state pension and nothing else. That is why this Bill and these measures are wrong, they are dangerous, and they are a threat to our growth, our national security and our food security, and I, along with my colleagues, will be voting against them this evening.

I fully support the Chancellor’s decision to rebuild the headroom, tackle Government borrowing and stick to her fiscal rules. It is consistent with Labour values. There is nothing progressive about 10% of Government spending being on interest. There is nothing progressive about leaving unsustainable debt to future generations.

I worry that there is a lot of criticism of the Chancellor’s proposals but very little by way of fully worked-up alternative proposals. Tackling debt is very important because the nature of Government debt buyers is changing with the closure of defined-benefit schemes, and as the OBR has outlined in a report, where we borrow money from in the future will be very different from what we face now. Furthermore, there is rising debt across many Governments in the western world. Tackling this Government debt in the longer term is very important, and the Chancellor is quite right to focus on her fiscal rules and face the tough decisions that need to be taken. All of us must play our part in assisting with something that is incredibly important for our country.

This comes down to choices. The tax revenue that will be raised from the changes to APR and BPR is about £500 million. On the other hand, the Government are saying, “We are going to spend £1.8 billion on a roll-out of mandatory digital ID, and £47 billion on the Chagos deal.” This is about choices and how the Government not only raise revenue, but spend it.

It is about choices—choices to invest in the health service so that people can return to work and contribute to the economy. There is nothing more heartbreaking than being a constituency MP and listening to people who have been waiting for over two years for a hip operation and cannot work. It is about choices to invest in infrastructure and in new nuclear power stations. These are the choices that the Government are making, and I am proud of them.

The hon. Gentleman is right to say that this is about choices, but will he accept one of the choices that the Chancellor has made? Even though hospitality employs less than 7% of people in the UK, since she has come into office, the number of jobs lost in that sector is almost 100,000—50% of total job losses? The Chancellor has made a choice in the Budget, and that choice is to lose swathes of jobs throughout hospitality, including making many young people—whose first jobs are often in the hospitality industry—unemployable.

I have worked in hospitality. I am not sure I was particularly successful at it, but there is a macro point here—an important point not to lose sight of. We hear from Opposition Members objection after objection to the Chancellor’s decisions, but no credible alternatives.

Will the hon. Gentleman give way on that point?

I am going to make some progress if I may. Given the public finance situation that we face, I am afraid it is incumbent on Opposition Members to come up with some credible alternatives. But of course we know what their credible alternatives are; they are the sort of decisions made by the gravediggers Liz Truss and Kwasi Kwarteng—back to Shakespeare.

Control of public finances is one part of the equation. The other is growth, and the Government are promoting growth in the economy through things like the Planning and Infrastructure Bill, which was shamefully delayed in the other place.

I suppose we should talk about Reform’s proposals for growth. Private sector investment—like many Labour Members, I have worked in business—is supported by contract law, the rule of law, confidence in the independence of our courts, and the reliability of the Government. The European convention on human rights also has an important part to play, particularly article 1 of protocol 1: the right to peaceful enjoyment of possessions. Those Members who argue for the complete unilateral withdrawal from the ECHR may wish to consider the catastrophic effect on the economy of such a step. In the summer, Reform threatened investors with the cancellation of contracts for difference. That shows that a Reform Government would be happy to rip up contracts and to shred Britain’s reputation as a place of stability. I fail to see how that would promote economic growth. It would mean higher bills for consumers, and would make the country poorer.

I welcome the Chancellor’s reforms to gambling taxes. There is a clear distinction between going to the bingo and gambling on the horses—I will disclose that in the past I have enjoyed quite a few trips to the races—and online gambling and gaming, which, as we heard in the Treasury Committee, cause serious harm. It is essential that we start to tackle this issue. I realise that it is not a matter for the Treasury, but the marketing of online gambling and gaming needs to be reviewed, and I encourage the Treasury to act robustly against any evasion and black market activity.

I have heard some mention of choices today. This Budget and the Bill put in place steps to remove the two-child limit. My constituency of Glasgow East has some of the highest levels of child poverty in the United Kingdom. This is a disgrace and a scar on our society.

Will the hon. Gentleman give way?

I will make some progress—I am mindful of Madam Deputy Speaker’s time limit.

Child poverty blights the lives of children in Glasgow East, and the levels of child poverty are a moral outrage. The Conservatives’ approach is to refer to my constituents as being on “Benefits Street”, which reveals the contempt that they have for my constituents, and Reform UK Members have been speaking about children in my seat with real racist malice. I say that it is a privilege to be a Member of Parliament for those children and I am proud that this Bill will help to lift hundreds of thousands of children out of poverty. I am proud of our Labour Government’s actions on child poverty and I fully support the Bill, which raises the funds to reduce child poverty.

I can only guess that Reform UK is polling quite high in Glasgow East. On his substantive point about child poverty, is the hon. Member relieved that his constituents in Glasgow East are benefiting from the fact that under the SNP, Scotland is the only part of the United Kingdom where child poverty rates are falling?

Perhaps Reform UK is polling high in Perthshire as well. Leaving that to one side, let me tell the hon. Member what my constituents in Glasgow East are not relieved about: record NHS waiting lists, an SNP Government who block nuclear developments that would bring in hundreds of thousands of pounds a year through the creation of good employment, excellent jobs and growth in the economy, and an SNP Government who are anti-business and anti-growth, and who have just spent 18 years running Scotland into the ground. That is what concerns my constituents and that is why next year Anas Sarwar will be the next First Minister and create optimism for Scotland.

I am pleased to speak in this debate on the Finance (No. 2) Bill. I have now spoken in most of the Finance Bill debates since I was first elected to represent the people of Ceredigion in 2017, and subsequently, since last year, I now also represent the good people of Preseli, in north Pembrokeshire. In advance of all Finance Bill debates I make the effort to consult widely with my communities, in particular with the small businesses that form such an important part of the economy in my constituency. In all the years that I have served as a Member of Parliament, never has the sense of fear, the lack of confidence and the uncertainty been so palpable when I have met businesses in my constituency.

If I reflect briefly on the structure of the economy of the constituency, it is perhaps no surprise that they should be so worried about the measures in this Budget. As of March this year, there were some 5,500 businesses registered in Ceredigion Preseli—that number may well be slightly lower by next March—and 81% of them are classified as small businesses, with fewer than 50 employees, which makes Ceredigion Preseli the small business capital of Wales. It is a rural and coastal constituency, so the industries of agriculture and hospitality are key pillars of our economy. Indeed, 35% of all businesses are classified as being in the agricultural, forestry or fishing sector.

Much has already been said in the debate about the changes to the agricultural property relief and the business property relief, and the concerns that these changes have caused for small businesses and small family farms across the United Kingdom. We have heard other Members, particularly the right hon. Member for Orkney and Shetland (Mr Carmichael), eloquently speak on this matter. As he mentioned, we have already seen how these proposals have changed the way in which our small businesses, particularly farm businesses, operate. Some 55% of small businesses and 49% of farm businesses have already cancelled proposed investment projects in anticipation of the changes. Family Business UK estimates that in my constituency these changes alone will lead to the loss of some 250 jobs and deliver a £13 million hit to my constituency’s gross value added.

There is a real danger with these changes that the Government will deliver incredibly long-lasting harm to small businesses across the country, especially in rural areas. It is particularly disappointing that the Government have refused to pause, at least, these changes so that they can properly understand the impact that they will have on rural areas. Many figures and statistics have been bandied about in the many debates that we have had in the past months about the prevailing facts of these changes, but the Government have not undertaken a full impact assessment, as follows most policy decisions that they take.

I am intervening on the hon. Gentleman because we both represent rural constituencies—he in Wales and me in Lincolnshire. Our constituencies are very different in their rural aspect, but both are affected equally badly by the family farm tax. Many of my farms may be larger than his, but their income is still quite marginal. So many of us representing rural areas cannot understand why the Government have not been prepared to compromise, listen to the NFU and, if necessary, take more resources from the big estates but preserve our family farms.

I very much agree with the right hon. Member. That is a point of real bemusement and confusion for many of my constituents.

The Government have not looked for or sought compromise or engaged with the alternative proposals presented by the NFU and the Farmers Union of Wales. Some consensus is to be found, if only the Government would budge and were willing to compromise ever so slightly, so that they can achieve the objectives they so eloquently pointed out are the intention of the policy without sacrificing hundreds if not thousands of family farms and businesses across rural Britain, particularly in my constituency.

That probably underlines a growing sense that I have had. Although my constituency is only 170-odd miles from Westminster and Whitehall, where many of these decisions are dreamt up and subsequently implemented on us, we may as well live on the moon, such is the disconnect between the policies that are sometimes made here and the impact that they have on the ground. There is a lack of effort to try to understand why so many businesses and people in my communities are so fearful about the impact that these proposals will have on their lives.

Let me add that some 15% of all jobs in my constituency are in hospitality. There was a missed opportunity in this Budget for the Government to look again at the VAT for hospitality. That would have done a world of good and given much-needed confidence to an industry and sector that are suffering dreadfully at the moment with the cumulative impact of different price increases as well as new taxes. A VAT cut on hospitality would have been very much welcome.

It is not only the VAT; the proposed hike in alcohol duty is yet another blow to pubs and breweries in my constituency. They include the Three Hills in Bartlow, which is reeling from a business rate increase of 123% as a result of the business rate valuation changes. Does the hon. Gentleman agree that the Chancellor is failing to protect our pubs and breweries with these measures?

I very much agree; that takes me neatly to my next point.

The Government have failed in their Budget to acknowledge the many increasing and cumulative pressures on hospitality and pub businesses in particular. The hon. Member for South Cambridgeshire (Pippa Heylings) referred to significant increases in the rateable value of a pub in her constituency, and I have also been contacted in recent days by hospitality businesses, such as a pub that has just been informed of a 131% increase in its rateable value.

The pub is now waiting to understand what exactly that means for its business rates bill, but the fear that it will find itself having to pay a great deal more in the coming years than it previously did is very much well-founded. That is on top of the higher employment costs generated by this Government’s decisions on employer’s national insurance and all the other inflationary costs in terms of energy and goods.

The Valuation Office Agency will come under HMRC from next April, if I have understood things correctly. I very much hope that the Government and HMRC will avail themselves of the opportunity to ensure greater consistency and clarity—and, dare I say, transparency—in the way that the VOA works and these valuations are calculated. It is a very technical, complicated and murky way of addressing and calculating business rates.

There is such a discrepancy in Wales that I must finish my remarks by bringing it to the attention of the House. The town council of Aberystwyth has done a lot of work in recent months on trying to find out why so many retail premises on the high street have been vacated and are empty. Time after time, businesses say that the business rates are just too high, so it did some research and found that on average, a business paying the zone A rates levied on retail properties in Aberystwyth town centre would expect to pay £525 per square metre.

The town council then looked at other towns and cities in Wales and found that a retail business on St Mary Street in Cardiff would be paying £460 per square metre for zone A rates, and a premises on the Kingsway in Swansea would be paying £180 per square metre. One does not need to be an expert on Wales to understand that as wonderful as Aberystwyth is, it is not quite the same sort of hotspot as St Mary Street in Cardiff, or Swansea for that matter. If the Government and HMRC will be taking ownership of, and responsibility for, the VOA from next April, I very much hope that one of the first things they will do is look at some of those inconsistencies. At the moment, as I say, some of these decisions are so disconnected from reality that we might as well be living on the moon.

As an eight-year-old girl sheltering in the little library at my primary school, I was able to escape my bullies by using my imagination. Later, I harnessed my love of reading to build a successful career as a screenwriter, so I am delighted that the Finance Bill extends the Libraries for Primaries scheme to secondary schools. The Government have already committed £10 million to create libraries in the 1,700 primaries across the country that do not have one, and now we are giving £1,400 to every secondary school to purchase new library books. This £5 million investment is targeted at getting more children reading for pleasure, and is part of the Government’s aim to make 2026 the national year of reading.

Feeding a child’s imagination is wonderful, but making sure they do not go hungry is essential. The Chancellor’s choice to lift the two-child benefit cap will lift around 1,850 children in Scarborough and Whitby out of poverty, and next year, up to 4,000 children in my constituency will benefit from the expansion of free school meals. I have visited some of my local primary schools with fully funded breakfast clubs and seen for myself how incredibly popular they are with both children and parents. All these measures are expected to lead to the largest reduction in child poverty over a Parliament since comparable records began. The choices that the Chancellor has made in this Finance Bill and previously will endure for generations. In my constituency, children will be helped to fulfil their potential. These are the barriers to opportunity that we promised in our manifesto to break down, and they are the barriers that this Finance Bill is breaking down—promise made, promise kept.

One of the projects I loved at my primary school was “My Breakfast Table”, where we looked at where our food and drink came from. Tea from Sri Lanka was incredibly exotic; bacon from a local pig farm was decidedly less exotic, as the aromas from said pig farm often wafted as far as the school playground. Growing up surrounded by farms, I learned to value their contribution, not just through the food they produced but through the difference they made to our community. I was reminded of their practical, altruistic attitude this summer during the wildfire that centred on Langdale forest and Fylingdales moor. At its terrifying height, that wildfire covered an area 10 miles square, ripping mercilessly through shallow peat, deep peat, forest, grassland and heather moor. The farming community reacted immediately by cutting fire breaks, back-burning, bringing water in tankers, and generally assisting the firefighters from North Yorkshire fire and rescue. The farming community did not think about anything other than putting the fires out—they were all heroes, and we must value them.

Will the hon. Lady give way on that point?

I will just make some progress, thank you.

I started my speech with children at the start of their lives, and I end it with people coming towards the end of their lives. I owe it to the farming families who I represent to raise my concerns about the anti-forestalling clause in the Bill. That measure means that any elderly or terminally ill farmer who transfers their ownership of their farm to a descendant, but dies within seven years, will be liable to pay inheritance tax under the new system. If they do not live seven years after the gift, that could also trigger capital gains tax.

If a farmer does not make a transfer but dies before April 2026, the agricultural estate will pass inheritance tax free. I have met several families in Scarborough and Whitby who told me that they are having heartbreaking conversations with their parents, who talk about ending their own lives before April next year. I ask my hon. Friends in the Treasury to please look at removing the anti-forestalling clause from the Bill, or at the very least introducing a transition to protect the most elderly, and those with a terminal medical diagnosis. We have shown before that we can listen and amend our policies; please can we listen again? It is my hope that we can show the same compassion for our farmers in the winter of their lives as we have for our children in the spring of theirs.

The SNP will not support a Second Reading. This Bill derives from a Budget that failed to deliver for Scotland and does nothing to move the dial for the households hammered by the cost of living crisis.

Scotland was relying on a step change from this Labour Government—on investment in public services, jobs and industry, and real action on energy bills—but none of that has come to pass. Instead, we have a dog’s dinner Budget that results in an increase in funding for Scotland that does not even cover half of the Scottish Government’s exposure to the national insurance increase across the public sector, and a resource block grant that increases only 0.5% per annum on average across the spending review period.

Thankfully, the clauses on income tax largely do not concern Scottish taxpayers, who benefit from the SNP’s judicious and progressive income tax rates in Scotland. Those in Scotland earning less than around £30,300 are expected to pay slightly less income tax than they would elsewhere in the UK, with the freezes to higher, advanced and top-rate thresholds estimated to affect only the highest 26% of earners. Someone earning more than £35,000 in Scotland will pay just 90p more in income tax per week than someone in the rest of the United Kingdom, while benefiting from Scotland’s unique social contract, whereby, under the SNP, we collectively fund prescription charges, bridge tolls, the Scottish child payment, tuition fees, under-22 bus travel, the baby box, personal care, publicly owned railways and publicly owned Scottish Water, which is the best-performing water company in the United Kingdom. Not bad value for 90p a week.

The Scottish public finances have been aided by a record budget settlement from the UK Government, but there is a £5 billion black hole in them. Might it be the case that after 18 years of the SNP, some responsibility for such matters lies closer to home, perhaps in Edinburgh?

The hon. Gentleman was obviously not listening. The increase to the block grant is spread over the entire spending review period—five years—and it does not cover more than half of the cost faced by the Scottish Government as a result of the increase in employers national insurance imposed by the same Chancellor. I am glad that I got the opportunity to say that twice.

Energy bills have gone up by £340 under this Government, despite the fact that they were supposed to fall by £300. That is what people voted for—that is the prospectus that Labour gave them—and the Government are not taking it seriously. They are coming back with a £150 reduction to energy bills, which is coming out of general taxation. As sleight of hand goes, that is not very slick. The money comes out of people’s standing charge, but goes directly on their general taxation.

In the interests of time, I will not dwell on agricultural property relief; I have said a fair bit during interventions, and I know that my hon. Friend the Member for Aberdeenshire North and Moray East (Seamus Logan) will contribute on that issue.

I am grateful to the hon. Gentleman for giving way while he is on the subject of energy. Of course, what should have been in the Bill was an end to the additional tax levy, because there are no sky-high profits any more, there are no excess taxes that need to be paid, and 1,000 people a month are losing their job in the oil and gas industry.

The right hon. Gentleman anticipates my next paragraph. The energy profits levy should be coming to an end, but it has been extended by this Labour Government until 2030. That has caused 100 job losses from Harbour Energy, and it is causing 1,000 job losses every month, according to Offshore Energies UK. We are in this situation because the Prime Minister lacks the mettle to get rid of the Secretary of State for Energy Security and Net Zero. That is one job getting protected in Whitehall, but it is costing 1,000 jobs a month in Scotland. That is the Labour way, and it always will be.

On electric vehicles, this thruppence a mile probably does not sound that much to those who live in Chelsea or Kensington, but it will cost an awful lot more to those who live in Angus and Perthshire Glens. I get the politics of it: half of the entire Labour membership lives within Greater London, and the other half lives in other English cities, and in Glasgow and Cardiff. They probably think it is a tremendous wheeze to make people in my constituency subsidise the tax on the Labour membership’s electric vehicles, but people are smarter than that. People who live in the countryside can add up, and they know that this Government’s attack on their electric vehicle taxes does not add up. They are being swindled by a Labour Government.

The hon. Gentleman’s characterisation is slightly unfair to those 80 or 90 Labour MPs who represent rural areas, and it is worth paying tribute to the speeches by the hon. Members for Scarborough and Whitby (Alison Hume), and for Penrith and Solway (Markus Campbell-Savours). They have spoken out against this mean, callous agricultural property relief measure, and they have done a brave thing by doing so. Does the hon. Gentleman not agree?

I absolutely do agree. I am in full accord with those Members’ bravery on the APR, but I am not sure how that links directly to 3p a mile for electric vehicles. The point is made, though.

The preamble to the Budget was hugely challenging and had a direct consequence on the markets. It caused people to freeze employment and investment in their businesses, and it caused pensioners to cash in their pensions. I am pleased that the SNP was the first to call on the Financial Conduct Authority to investigate the Chancellor’s behaviour, and I hope that the FCA’s position changes. Despite all that, Scotland’s economy remains one of the best performing parts of the United Kingdom. Since 2007, per-person growth under the SNP has been 10.2%. That compares to 6.8% in the UK. We lead the whole of the UK, with the exception of London, for foreign direct investment, and a NatWest report recently confirmed that Scotland had one of the highest start-up rates in the UK in the first two quarters of this year.

Employment across the UK is 75%, but as I mentioned in my intervention on the Minister, unemployment in the UK has risen from 4.1% to 5.1% since this Labour Government grasped power last year. Thankfully for the people of Scotland, unemployment is 25% lower in Scotland, at 3.8%. I am sure that fact will not be lost on the good people of Glasgow East. Next month, the Scottish Government will deliver their Budget and continue to build on our success, but the SNP will not be voting for this Bill’s Second Reading. We will not be party to the injudicious and unjust damage that will be inflicted on businesses and households by the grabbing hand of Labour through this Bill. The people will have their verdict on this risible Chancellor and her bilging outflow of fiscal calamity in May 2026, specifically in Scotland and Wales, and in English councils. I, for one, look forward to the Government getting their just desserts.

I was elected to this House to be a voice for working people, and the thousands of families in Erewash who, in 2022, saw their mortgages skyrocket because the Conservatives sent markets spiralling with billions in unfunded tax cuts. The people who I represent did not vote for Liz Truss—most of them did not know who she was. It was hard-working families up and down the country and in Erewash who paid the price for her failures all the same. That should never happen again.

What my right hon. Friend the Chancellor did last month in the Budget—made actionable by this Bill—was take the necessary decisions to ensure that there will never be another Liz Truss moment. The Bill will, by the end of the decade, deliver the fiscal headroom that we require to withstand shocks and help pay down the national debt. It does so while we deliver record levels of public investment, and without a return to the brutal, crippling austerity that gave this country 14 wasted years under the previous Government.

Change is already under way. The economy is now forecast to grow faster this year than previously expected, and as record investments and trade deals made and secured by this Government pay off, and reforms to stifling planning rules finally come through and deepen, it can grow further. In the first year of this Government, average wages grew more than they did in the entire lost decade of the 2010s, and what happens when workers have more money? They do not sequester it in Dubai or the Cayman Islands; they spend it—on housing, on food, on our high streets, in the pub, and on their children, the greatest investment of all. Rewarded properly for their labour, they fuel our economy.

I wonder when the people of this country will catch up with the hon. Gentleman and start to express the appropriate gratitude for all that has been bestowed on them by this Government.

I thank the right hon. Gentleman for his amusing intervention. I am sure that time will tell.

We must all contribute to Britain’s renewal, and there are things that only Government can do to secure that renewal. If we want to get the NHS back on its feet, fix our crumbling schools, cut waiting lists and truly invest in Britain’s future, we must pay for it. We know that the alternatives proposed by the Opposition parties lead only to calamity. Liz Truss showed us that when Governments cut taxes for the wealthy, it is working people who end up paying. Nor should we want infinite borrowing, however; I do not want to spend £1 in every £10 serving debt interest. It should go to our schools, our hospitals, and our country.



So yes, in the Budget and in the Bill, the tax burden has increased, but it is those with the broadest shoulders who will bear the greatest weight—those with property to let, those with shares to sell, those paid not through wages but through dividends, those with such vast savings that they pay tax on the interest alone.

In the interests of time, I will not give way again.

These are income streams that are overwhelmingly enjoyed by the highest earners, and it is, by and large, the already well-off who will pay more under the Bill. Its provisions include changes to national insurance relief on pension contributions through salary sacrifice schemes—again, a mechanism primarily used by the highest earners. They include reforming council tax, so that someone living in a £10 million mansion in central London does not pay less council tax than a terraced house owner in Ilkeston and Long Eaton. They include a new surcharge on homes worth more than £2 million, which will be paid by fewer than 1% of homeowners. This Budget was for working families, for the everyman and the everywoman, for children and for young people. It was not a Budget for millionaires, billionaires, slum landlords, investment bankers, or the bosses of big corporations.

Will the hon. Gentleman give way?

As I have said, in the interests of time, I will take no more interventions.

Instead, we are taking action to cut the cost of living and strengthen our public services. There will be £150 off average energy bills next year, rising to £300 for the poorest households—again, money back in working people’s pockets. As inflation continues to fall, it becomes easier for the Bank of England to cut interest rates, as it has repeatedly under this Government. Prescription charges, train fares and bus fares have all been frozen. There are 5.2 million more appointments in our NHS, with 250 new neighbourhood health centres, cutting waiting lists and bringing care back closer to where people actually live.

The Opposition parties will decry these measures, exposing our fundamental differences. Reform—whose Members are not here today, I note—would sell off our NHS to the highest bidder, and force people to pay for the care they need. Meanwhile, the Conservatives are calling for mass redundancies in the public sector, enough to sack every police officer in the country twice over. They are against the minimum wage, they are against protections for workers, and they have no plans for growth or renewal—just policies that would leave working families worse off, while their donors get richer and richer.

To renew Britain costs money. To restore confidence in the public finances takes time. To get the economy growing again is a serious challenge, but we are meeting it. The choice is between the measures in the Budget and the Bill, and a return to austerity, and I know which side I am on. I will never apologise for standing up for working people, and for saying that the highest earners should pay their fair share. Nor should the Chancellor, the Government or the British people.

I am not quite sure whether the hon. Member for Erewash (Adam Thompson) has read the Budget. He said that those with the broadest shoulders must bear the pain, but those on the basic rate of income tax will be paying an additional £220 a year in income tax as a result of this Budget. I am not quite sure that those with the broadest shoulders will be paying that level of tax.

Growth is down, inflation is up, taxes are up, unemployment is up, borrowing is up and interest debt is up. This Budget, coupled with the last one, is £66 billion of tax raising. As we speak, there are farmers outside this Chamber once again, and I know that they are in the Public Gallery as well. Why? Because of the changes that this Government continue to press ahead with through the family farm tax and the family business tax.

Does my hon. Friend agree that farmers across South Shropshire have been devastated by the family farm tax? It is going to impact them far beyond what the Government are even considering, and it will impact national food security.

I absolutely agree. This Budget has an impact not only on our farming community, but on the wider agricultural supply chain and the many businesses that support our farming community. Why? Because bringing in a threshold of £1 million will impact nearly every family farming business.

Let us look at the figures. The average size of a farming business in England is about 200 acres. When valuing farmland, there may be a farmhouse, a cottage or two, livestock, agricultural machinery, growing crops and crops in store, which will put it well above the £1 million threshold, thereby exposing the farming business to an IHT liability that kicks in at 20% of the value over and above £1 million. The Government will say that they have permitted some allowances, but that does not take into account the value of those businesses. This is going to have a hugely detrimental impact not only on those family businesses, but on the wider agricultural supply chain.

The hon. Member is passionate about this issue, and I commend him for the stand that he has taken. I know that he is an expert on valuation. Does he agree that Northern Ireland will be harder hit because of the land valuations and the price of land in Northern Ireland?

I absolutely agree, because the value of farmland in Northern Ireland is far greater than the average rate per acre in England or, dare I say, anywhere else in Great Britain. That is why Northern Ireland farmers are going to be absolutely decimated as a result of the changes that this Labour Government are bringing in.

My hon. Friend is making an excellent speech. Is he aware of some research done by the National Farmers’ Union of Scotland, which shows that, under the current inheritance tax rules, farmers in Scotland typically pay a £20,000 inheritance tax bill, whereas under Labour’s current proposals the figure goes up to a staggering £775,000, which will kill off most farming businesses?

My hon. Friend is absolutely right. Indeed, I was in Dumfries and Galloway just last week to speak to farming businesses that will be impacted by the changes that this Labour Government are bringing in. He hits on a very important point, because the NFU, the Country Land and Business Association, the Tenant Farmers Association and the Central Association of Agricultural Valuers have over the past year continually tried to put forward progressive options for this Government to listen to and engage with, but they have not listened. That just shows the naivety associated with this Government. Indeed, at the Liaison Committee yesterday, the Prime Minister himself acknowledged that he was aware of farmers who have worked all their lives within the farming community and who are considering taking their own lives. Despite that knowledge, he wanted to crack on with this policy regardless. It is callous and heartless, and it just shows what this Government are about.

I am reminded again of Shakespeare, who I believe said:

“Th’ abuse of greatness is when it disjoins remorse from power.”

Absolutely. All I advocate, as I am sure my right hon. Friend does, is that this Government simply engage with and listen to our farming community. It is not just our farming community that is hit by the IHT changes; it is family businesses more widely.

I want to point out the case of a North Cornwall farmer called Will Harris, who gave up an engineering job at £60,000 a year to provide food security and put food on our tables. His income is about £30,000 a year, but the tax his children may have to pay would be £500,000—or £50,000 a year, which is almost double the farm income. He is terrified and can hardly sleep at night for thinking, if something happens to him, what will happen to his teenage children and their farm.

The hon. Member makes an excellent point, and not only Cornish farmers, but those right across the country are being impacted by this Government’s decisions. He also makes the excellent point that many of our farming businesses are incredibly highly geared, given the level of debt associated with their businesses, and are not returning a level of income to even contribute towards paying an IHT liability at 20% over and above the £1 million threshold. They will therefore be subject to a death tax that they will simply be unable to pay.

My hon. Friend was brought up in a notable local farming family in my constituency, and the reason why the House is listening to him is that he has been bred into farming and knows about farming. Would he like to say what, from his own family’s experience, this means for farmers in Lincolnshire? Some people say that Lincolnshire is full of large estates and all the rest of it. No, it is full of working farms, and he can speak with authority on this subject.

The point to make quite clearly is that every single farming business will, in one way or another, be impacted by the £1 million threshold kicking in. Why? Because for an arable farm in Lincolnshire, Cambridgeshire or wherever it is, the price of feed wheat is still at about the same price it was 20 years ago, but the costs of all the inputs have been rising. Not only are such businesses subject to cash-flow challenges as a result of this Government removing the delinked payments —dramatically dropping them to £600—as well as removing the sustainable farming incentive and bringing in the fertiliser tax or the double cab pick-up tax, but they will be impacted by the changes to inheritance tax. That impact will be felt by hill farmers in Keighley and Ilkley; arable farmers in Lincolnshire or, dare I say it, down in Cornwall; and farmers wherever there are, even those subject to high land values in Northern Ireland. This Government must listen to our farming community right now, because whether farmers come down today or tomorrow to make noise with their tractors outside, I hope they continue coming to make sure that this Government listen.

It is not just our farming community that is impacted by the IHT changes. This has an impact on our family businesses, our hospitality businesses, our breweries and our manufacturing and engineering businesses. That is why I simply cannot understand why we have not heard from Back-Bench Labour MPs representing urban constituencies, who may be representing a manufacturing or engineering business, a hospitality business or a hotelier. Why on earth have those with such family businesses in their constituencies not been loud and proud in making noises to the Chancellor about the negative impacts these IHT changes will have on our many family businesses?

I have recently joined the Public Accounts Committee, and in my short time on the Committee I have come across qualified accounts and local authorities not having audited accounts; only 4% of them have audited accounts. I have watched the Government wasting almost endless amounts of money, and then I witness this madness of them basically breaking the backbone of British farms and British small businesses, and in effect ensuring that there will be none of the long-term investment that drives our economy. Does the hon. Member agree with me that, before we start breaking up these enterprises, we should get the Government’s house in order and cut state waste?

I do agree with the hon. Member that the Government must get their own house in order before implementing strategies that are impacting many of our hard-working businesses.

The changes to BPR are detrimental. Why? I would use the example of a business in my constituency that has already worked out that its liability after the changes to BPR is about £800,000. The business is owned by the fourth generation, who are in their late 80s. They have been told that the only way to pay a BPR liability, should a death occur after April 2026, is to sell plant or machinery, or to sell shares in their business, either way losing control of their business or not being able to keep their business productive. That demonstrates how uninformed the Government are about the changes they will be making.

I think I have made my point. [Interruption.] The Minister sits on the Front Bench laughing away, but had she had the time to go outside and engage with our farming community, or at least get around the table with Back-Bench Labour MPs and Opposition Members who have been consistently raising this issue over the last year, she might not be sitting there smiling away; she might be able to come to the Dispatch Box in her winding-up speech to give some sort of positive conclusion and hope to those many businesses who will be impacted by this disastrous Labour Government.

For my constituents, the Finance Bill is more than just a legislative process; it is a statement of who we are as a country and what we believe our future to be. I can say with confidence that this is a Finance Bill for places such as Wolverhampton and Willenhall.

I came into politics after years in the classroom. I know the harm that poverty does to our children. I have seen too many young people believe that a successful career is for someone else and not for them, and not addressing poverty ends up costing society far more in the long run. We inherited a country where we have a rise in food banks—more food banks than branches of McDonald’s. There is no single silver bullet to end poverty, and some of the Bill’s measures might not ever make the headlines, but they show the different choices that a Labour Government will make for our communities.

I support the Finance Bill to enable us to lift the two-child benefit cap. Independent analysis estimates that it will lift around 450,000 children out of poverty by the end of this Parliament. The inaccurate attacks from some quarters, painting families in poverty with a broad brush, are disappointing but not surprising. In Wolverhampton North East, I inherited more than a third of children in poverty after housing costs—higher than the UK average. Lifting the two-child cap will benefit more than 4,200 children in Wolverhampton North East. That is the equivalent of 20 primary schools packed full of children. How could I not support that measure? And for those who are still clinging to lazy stereotypes, did you know that 60% of families in poverty are working families? The rest may be families who have lost a parent or where a parent has lost a job, fallen ill or become disabled. So this, along with the expansion of free breakfast clubs for all families and free school meals for children from families on universal credit, ensures that no child is too hungry to learn. Labour values and choices are clear: children need to come first.

I welcome the Chancellor’s response to calls from MPs like me and others to reintroduce libraries in our secondary schools, with an additional £5 million in funding on top of the £10 million for primary schools. I want all children to benefit from social mobility-boosting libraries and reducing inequalities that saw libraries removed disproportionately from poorer areas. This is a Finance Bill that shows that our children matter.

The Bill goes further. It strengthens the dignity of work. The national living wage will rise to £12.71 per hour from April 2026, putting more money directly into people’s pockets. That money is more likely to be spent in our local shops, precincts and high streets. Targeted cost of living measures continue to make a difference: prescription charges frozen, energy bills likely to fall by around £150, train fares frozen for the first time in 30 years, and continued support to ease everyday financial pressures. Alongside no cuts in capital projects, sustained investment in public services, infrastructure and skills, the Bill is set for stronger long-term growth: a long-term plan with undeniable benefits for Wolverhampton and Willenhall and across the UK.

Order. I encourage the remaining speakers to focus on the fact this is a Finance Bill, and therefore the debate is about taxation measures, not spending.

Wales is the poorest of our four nations. It has the highest levels of unemployment and the lowest wages. The family farm tax is yet another example of how this Government are going to hurt the Welsh economy with full knowledge of the consequences. They have decided to hit Wales, in whose economy agriculture is a major sector, with an extra tax. It is, quite frankly, an unacceptable and horrific way for this Government to start off.

Family farms are the backbone of our rural economy, the heart of our food system and central to the survival of many communities in Wales. People in Wales are shocked that this Labour Government have decided to come for one of our major industries. People in Wales are accustomed to the Conservatives unpicking our major industries and taking them out—they expect that—but they expect better from the Labour party.

When family farms are hit, the damage spreads far beyond the farm gate; it hurts vets, suppliers, hauliers, markets, local shops and rural high streets. That is why it was so deeply disappointing that 23 of Wales’s 27 Labour MPs chose to vote this policy through despite clear warnings from rural Wales. The scale of what is being put at risk is enormous.

My hon. Friend’s communities are not dissimilar to mine; they are very rural and very mountainous, and upland farming is critical to his communities, as it is to mine. Does he think the Labour Government have failed to understand that wealth is not concentrated in the hands of famers in the way that they think? It is entirely possible to be an upland farmer in my hon. Friend’s patch or in mine and to be earning the minimum wage or, indeed, less—the University of Cumbria shows that the average upland farmer earns less on average than the minimum wage—and yet to be in a position, after inheritance tax is due, to be paying £20,000 a year or more while earning only £16,000. That is not right, is it?

My hon. Friend is quite right to point to the struggles of upland farmers, who deserve to earn a living from their work—they are working people too, but they are not being recognised as such.

Agriculture and the wider food and drink sector supports more than 228,000 jobs in Wales and generates more than £24 billion in turnover each year. This is not a marginal industry; it is a pillar of the Welsh economy. Industry bodies have warned that these tax changes will force family farms to sell land or assets simply to meet higher liabilities, accelerating consolidation and driving our young people out of rural Wales, which damages our food security and local supply chains, hollows out communities and obviously undermines our tax base, too.

This is not just an economic but a cultural issue. Some 43% of people working in agriculture in Wales speak Welsh, compared with 20% of the population overall. To undermine family farming is to undermine Welsh culture and the Welsh language itself.

What makes this policy even harder to defend is the Government’s selective approach. Ministers have refused to act on supermarket profiteering—with Tesco alone seeing its profits rise by more than 100%—yet are content to squeeze family farms that are already grappling with rising costs and post-Brexit uncertainty. The Welsh Affairs Committee has called for this policy to be paused so that a Wales-specific impact assessment could be carried out. It is a grave mistake that that request has been ignored. This is becoming a familiar pattern for those of us from Wales. There has been rail underfunding, a refusal to devolve powers, including over taxation, and now a tax that threatens one of Wales’s most important sectors.

Time and again, Labour has advanced policies in this Parliament that would hit Wales the hardest, and waved them through regardless. The Welsh Liberal Democrats oppose this tax because we believe that family farms should form the spine of a prosperous rural economy. Rural Wales—in fact, the rural economy across the whole UK—deserves a plan for growth, not punishment driven by ideology.

The Welsh Government deserve a Government who understand the value, strength and work that our agricultural sector provides to rural Wales. I think of the tens of young farmers’ clubs in my constituency; they are run by incredible young people who form community groups and build the confidence of the young people in their communities, as well as running their family businesses. We need those young people to stay in Wales, run their businesses well, and create the jobs and employment that will enable rural Wales to prosper. Instead, they are being told by this Government, “No, we’re going to hit you with an extra tax”. This will fall on the shoulders of Welsh young farmers. The Welsh economy deserves a Government who understand Wales, and that is not what we are getting so far.

I want to begin by endorsing and agreeing with the very articulate and passionate contributions from Members right across the House. It is encouraging that there have been speeches from those on the Labour Benches attacking the cruel death tax on family farms—that is the only way to describe it. It is cruel, no matter what way you look at it.

The right hon. Member for Orkney and Shetland (Mr Carmichael) laid it out very clearly, as indeed he did yesterday in the Liaison Committee when he put the Prime Minister on the spot and the Prime Minister had no answer. A Prime Minister with no answer needs to change course. The Government have lost the argument on this issue. It is no answer to simply say, “We have the numbers to drive it through”. This needs to be done on the basis of equity and what is right. Having lost that argument—and so patently lost it—they need to face up to that. Just as the Prime Minister lost the argument yesterday in the Liaison Committee, so the Government need to face up to that point on this issue as well.

I want to make some comments about the Bill that are particularly pertinent to Northern Ireland. In any fiscal landscape, critical to being a part of a United Kingdom is the reasonable expectation that there will be the same fiscal ground rules across that United Kingdom—that if business is given advantage in one part, it will equally have that advantage in another. Yet when I come to this Finance Bill, particularly clauses 13 to 15, I discover to my dismay that businesses in Northern Ireland are not to have the same advantages when it comes to the capacity to scale up, as is provided for in clauses 13 to 15 regarding enterprise investment schemes, venture capital projects and enterprise management incentives. That is because the hideous tentacles of the Windsor framework have reached right into this Bill.

Because of the Windsor framework’s imposition on Northern Ireland business of EU state rules, we find in clauses 13 to 15 the exemption of Northern Ireland companies from the advantages to be given to others under those clauses. That removes the fiscal level playing field that should operate in any UK internal market. That undermines the UK internal market, because under those clauses companies in Great Britain will rightly be able to maximise state aid so that they can maximise their trading power, but an alike company in Northern Ireland has the benefit it can obtain from those scaling-up opportunities capped by EU state aid rules. That means they are not on a level playing field when it comes to competitiveness in respect of the capabilities in the Finance Bill.

That causes me to challenge the declaration that the Bill has no effect on GB-Northern Ireland trade. It most patently does if some companies in GB can scale up using these enhanced benefits from investment and venture capital unfettered by any state aid rules, while the same type of company in my constituency has the benefit it can draw fettered by the imposition of EU state aid rules. That is neither fair nor right, and it is but the latest manifestation of the Windsor framework and our continuing subjection to foreign laws.

These are not laws that we make here. EU state aid rules are not set here; they are set in a foreign Parliament that no one in this United Kingdom elects by a combination of Ministers from 27 other countries who have no accountability to anyone in my constituency or any constituency in this Parliament—and yet those rules are traducing and impeding business in Northern Ireland.

The hon. and learned Member is making a passionate contribution, and he is absolutely right. In truth, clauses 13 to 15 all increase support for businesses across the UK, apart from those in Northern Ireland. It is not that we have been overlooked; the clauses expressly, explicitly and deliberately exclude us. That amounts to discrimination. It has to end.

It has to end. It is discrimination at the behest of a foreign power. It is Brussels saying, “You must impose state aid rules on Northern Ireland.” The product of that in these clauses is a foreign Parliament dictating to this Parliament what we can and cannot give to our own businesses in this United Kingdom. That is so fundamentally offensive to our constitutional integrity that it goes to the very heart of what it means, or what it should mean, to be part of a United Kingdom.

I rise to focus briefly on a small number of issues in the Bill and one associated with it—I will explain. I want to focus on how these issues will impact Scotland generally and my constituents in particular. Although the Exchequer Secretary to the Treasury is no longer in his place, I note his comment that persistence pays off, which I think he made in reference to the intervention of the right hon. Member for Beverley and Holderness (Graham Stuart). I therefore hope that the Minister is listening to me in relation to this matter.

It is just over 100 days until April, when farmers across Scotland will face changes to agricultural property relief described by NFU Scotland as

“one of the most significant threats to Scottish family farms in a generation”.

They did not know that the changes were coming—no one did—because they were not in Labour’s manifesto. What was in the manifesto, on page 59, was a pledge to recognise that

“food security is national security. That is why we will champion British farming whilst protecting the environment.”

The sudden application of the new rules on inheritance was deeply unfair. No farmer expected it.

In Scotland, 98% of the total land area across the country is classified as rural, covering about 17% of the Scottish population. Land use in my constituency is classed as 76% agricultural, 18% forest or semi-natural and 3% built-up areas. There are 51,200 farm holdings in Scotland, and I accept that not all of them will be impacted by this policy, but studies by experts such as the Centre for the Analysis of Taxation have offered an alternative approach—one that is less harsh and that would generate similar levels of revenue, but it has been ignored by the Government. As I say, although not all farms will be affected by the change to APR, all farms could be, and maybe have been, impacted by having to take new and costly legal advice in the light of these unexpected changes.

The spousal transfer allowance change is welcome, but its addition points to a recognition at the Treasury. It is a shallow attempt to placate farmers in the light of the ensuing backlash and an admission that the 2024 Budget provisions were too harsh. The anti-forestalling clause mentioned by the right hon. Member for Orkney and Shetland (Mr Carmichael)—clause 62 of the Bill—and the associated schedule 12 are deeply cynical, as they penalise anyone who transfers their farm but dies within seven years, creating a potentially massive bill. Good for the Treasury; potentially disastrous for national food security. As the hon. Member for Scarborough and Whitby (Alison Hume) pointed out, if no transfer is made and the farmer dies before April 2026, the estate passes tax-free. That is the problem with the anti-forestalling clause.

I appreciate that Labour MPs are probably preoccupied with a different aspect of succession planning at the moment, but perhaps they could focus their minds on this issue. As has been said, Labour is paradoxically biting the hand that feeds it, but every family across these isles is feeling this effect.

My hon. Friend is making a powerful speech. Does he agree with me—and, I think I am right in saying, with the hon. Member for Brecon, Radnor and Cwm Tawe (David Chadwick)—that agriculture in Wales and Scotland forms a very much larger part of our economies than it does in England, and it is therefore particularly objectionable that the Government did not consult the devolved Governments on this legislation? Does my hon. Friend further agree that farmers do not own wealth; they own value?

I agree with my hon. Friend completely. I implore the Treasury to reconsider and hear what the hon. Member for Penrith and Solway (Markus Campbell-Savours) said, but if it does not, my party will bring forward a suitable amendment on Report.

Labour MPs have talked a big talk about how much money is going to Scotland, but I would like to ask them how much they are taking away from Scotland, whether it is through the APR, the energy profits levy, the excise duty on Scotch whisky or the national insurance hike. Once again, it feels like Scotland’s wealth and success are being used against it by an uncaring Westminster Government.

I want to turn to one other issue: NHS drug costs. They are not in the Finance Bill, but my point is that they should have been. I appreciate that you are giving me a bit of leeway, Madam Deputy Speaker. The new UK-US trade deal in medicines raises huge questions about where the money is coming from to pay for these increases in drugs costs. If the additional costs are to come from within existing NHS budgets—that is, through efficiency savings—I must ask the Government whether they have read the University of York’s impact assessment concerning excess deaths and negative impacts on cancer patients, gastroenterology and respiratory care in particular. If the additional costs are to come from the Treasury, where is this mentioned in the Budget, in this Finance Bill or in the accompanying Red Book? It is certainly not in the Bill, but it should have been. The OBR will be listening and watching, and will get to this in due course.

What does all this mean for Scotland in Barnett consequentials? Why has there been so little opportunity for parliamentary scrutiny of this smoke-and-mirrors deal? Transparency is needed on costs. The Health Secretary says £1 billion to £1.5 billion. The OBR says £3 billion, and £6 billion has been suggested by other commentators. Which is it? The Government hail it as a great deal for the UK, but the truth is that no matter where this money comes from—the Treasury or existing NHS funds—patients will ultimately pay the price for filling this pharma black hole. It looks like the UK Government are over a barrel on this, with drug companies threatening to pull out of investment in the UK, bullying from an increasingly erratic White House and creeping privatisation of the NHS. The Government need to provide some answers. I simply say to all Labour Members who have bragged this evening about what a wonderful Bill this is and what a wonderful Budget this has been: why are the polls showing that this Government are the least popular in history?

I thank the hon. Gentleman for giving way at such an opportune point. I respect the fact that he is here and that his political ambition is Scottish independence. The Government negotiated that trade deal with the United States, and it is one of the best deals any country in the world has. I find myself wondering what kind of deal an independent Scottish Government—perhaps led by the hon. Member for Angus and Perthshire Glens (Dave Doogan) sitting next to him or by John Swinney—could negotiate with Donald Trump. Would it be a better deal or a worse deal?

I am glad to hear that the hon. Member respects our desire for Scottish independence. I simply say to him: when will this Government respect the democratic will of the Scottish people?

I could go on to talk about energy and the coastal growth fund—two measures that, again, have particularly hurt my constituents—but I will leave it there.

We come to the final Back-Bench contribution. I just note that the Front Benchers wish to be on their feet by around 6.40 pm.

In contrast to the Budget and its effects, so much about business in Taunton and Wellington is on the up thanks to the enterprise, community spirit and business nous of people there. In Wellington, the new community hub in the Kings Arms—with a café set to open in the new year—where I held my surgery last Friday, is a huge success thanks to volunteers such as Cliff and many others. New units are going up in Westpark, and new retail and food outlets are popping up all over the town. In Taunton, footfall has jumped by 2.1%—four times the national average increase of 0.5%. Lots of independent shops, such as Dosha Wellness and The Little Cheese Shop, have recently opened. We have great pubs and restaurants, too. In just the past few months, we have seen The Winchester open in Castle Green, Tap One in the independent quarter and The Chapel Tap in the town centre. I thank all those business people who are committing to Taunton and Wellington and opening businesses in our area.

However, these hospitality and drinks businesses are not sharing the joy this Christmas from the Budget, and neither are our farmers. The Lib Dems would not have levied the family farm tax—I voted against resolution 50. Instead of abolishing the penal anti-forestalling clause as many have called for, the confirmation of the transfer by the Government of the £1 million allowance between spouses and partners, though welcome, does not go anywhere near what was needed.

Hospitality and drinks businesses are worried about increasing duty and business rates. Cider is worth £150 million to the south-west economy, but cider makers are struggling. One in my constituency has pointed out that orchards take 10 years to become mature, demanding contracts of 25 to 30 years. Cider plays a huge role in supporting our agriculture and maintaining the countryside, so it delivers a public good. However, the fact that it represents only 6% of the sector means that it is much more vulnerable to duty changes and price changes. What cider needed from this Budget was a 5% duty cut to put back the original differential with beer duty.

Hospitality believed that its rates would go down—it believed the famous “permanently lower business rates” promise—but they have actually gone up. Philippe, a partner of The Little Wine Shop, which is a fantastic brasserie in my constituency, tells me that the Budget means

“less hours for my staff, therefore less revenue for the treasury”

as he is closing one day per week. He says:

“we will stop employing young people (16 years old)”

and

“I have 3 members of staff leaving by mid-March, I will replace only one if I am still open by then! I AM FUMING!”

What does the Minister say to Philippe in my constituency?

We have discovered since the Budget that hospitality rateable values have increased, helping to cancel out the new multiplier. For another business owner, Mr Miles, although his valuation has actually gone down by 10%, his business rates bill has gone up by 12%. What does the Minister have to say to those at Mr Miles tea room as they work to keep the lights on in the high street? As the owner of the other great Winchester pub in my constituency, the Winchester Arms, has pointed out, pubs have to pay business rates according to their turnover. What other business is subjected to the disincentive that when they increase turnover, their property rates increase? The answer is none. What Taunton and Wellington residents and high streets needed from this Budget was a boost.

Like me, the hon. Gentleman represents a constituency in the south-west where hospitality businesses of all sorts will be very heavily hit by this Budget. They have seen rate increases. They have seen increases in alcohol duty, increases in the minimum wage and national insurance increases. Some of them are literally going to be taxed out of existence. This Government say they support small businesses. That could not be further from the truth.

I agree with the hon. Gentleman. Small businesses are the backbone of the economy, and the promise to reform business rates made by the last Government needs to be delivered upon by this Government.

As I was saying, as a result of quantitative easing funds, the big four banks alone will make £50 billion of profit this year. The boost that people and the high street need is both the cut to electricity bills and the 5% VAT cut that the Lib Dems propose, funded by a windfall tax on those bank profits. It is time the Government backed small businesses like those in Taunton and Wellington—part of the biggest and most important sector of the British economy—after the economic chaos under the Conservatives. It would be a boost to going out in the evening, a boost to our pubs and restaurants, and a positive boost to the economy. That is the kind of Budget we needed, and that is the kind of Budget the Liberal Democrats would have delivered.

I call the shadow Minister.

It is a pleasure, as always, to respond on behalf of His Majesty’s official Opposition. I thank Members across the House for their contributions to the debate, in particular those on the Conservative Benches, and notably my hon. Friend the Member for Keighley and Ilkley (Robbie Moore), who has been a ferocious champion of farmers not just in Yorkshire but across the country. He also spoke well about the family business tax and his business, Fibreline, which has been adversely impacted. My right hon. Friend the Member for Beverley and Holderness (Graham Stuart) sought to give those on the Labour Front Bench a maths lesson, although I am afraid it is a little late for that and entirely futile.

I enjoyed very much the speech by the right hon. Member for Orkney and Shetland (Mr Carmichael). I enjoyed his A. A. Milne reference almost as much as I enjoyed the unexpected mention of Tinder. Of course, when it comes to politics, I encourage everybody to swipe right. [Laughter.] I thought I would give it a go.

Let me highlight how prominent the family farm tax has been in this debate and acknowledge the contributions from the hon. Members for Penrith and Solway (Markus Campbell-Savours) and for Scarborough and Whitby (Alison Hume), who spoke well, speaking out against their own party’s policy when it comes to farmers. That is not an easy thing to do, but it is the right thing to do, and we appreciate it.

For my part, I am struck by a sense of déjà vu. Here we are again, with another Finance Bill that targets working people’s pockets while failing on the Government’s No. 1 mission of economic growth. This Finance Bill is actually double the length of Labour’s first Finance Bill, and I fear it will bring double the pain to the British public. Last year we had the now infamous Halloween Budget, which scared the living daylights out of business, and this year we have the nightmare-before-Christmas Budget, which is essentially finishing off the rest of the country. This Bill feels less like a carefully wrapped present and more like something hastily stuffed into a stocking at five minutes to midnight, with the receipt missing and the instructions written in a different language. We were promised a gift to working people, but what we have instead are higher burdens and lower incentives.

My hon. Friend is making a fantastic speech, with some very colourful analogies, but if I may be prosaic, is it not the case that the Office for Budget Responsibility has not scored a single impact on growth in the overall Budget?

As always, my hon. Friend points out something that is important for the whole House to consider. I will come on later to the broader assessment of the OBR, which does not make for pleasant reading for Labour Members.

Tonight, Labour Members must decide whether they are content to vote for a Bill that makes their working constituents poorer, punishes family farmers and family businesses, and breaks promise after promise that they made to secure their seats. For all the bravado that we may hear later from the Minister, there is now a growing gap between what Ministers are saying, and what families and businesses are living. That gap has now become so visible that it has followed Labour Members out of the Chamber and into the real world. At this time of year, pubs should be putting up mistletoe; instead they are hanging up signs saying, “No Labour MPs welcome.” This is a Christmas tradition that this Government have invented all on their own. When a Government cannot get a warm welcome or a pint in the local pub that so badly needs the trade, it might be a good idea to reflect on why.

There is another growing gap between what Labour Members told the public before the election, what they repeated after it, and what is in the Bill. First, the Bill is anti-working people. Only last year, Ministers stood up and promised the House that this Government would not freeze income tax thresholds. They could have stopped there, but they did not. They went further and said that to do so would amount to a tax rise on working people’s payslips. Yet here we are today, with this Bill that freezes income tax thresholds to 2030-31. The message to working families could not be clearer: if someone gets up early, goes to work, does the right thing and provides for their family, Labour will not back them; it will tax them. What will the Labour Government do with all the money they are raising? They will not pay down the national debt—debt is going up. They will not employ more teachers; there are fewer of them now. They will not employ more police officers, either; there are fewer of those, too. In fact, they will fail to deliver on almost everything they promised while in opposition. Instead, they will turn hard-working taxpayers’ money into handouts to appease their left-wing Back Benchers.

This Bill is anti-aspirational and anti-business. If someone decides to start their own business, or wants to take over a business or a farm from their family, what does this Labour Government think of them? As we have heard extensively today, this Budget takes further what they introduced at the last Budget: the family farm tax, as spoken about by so many colleagues, and a family business tax that will destroy aspiration and entrepreneurialism. Time after time, the Chancellor has been warned of the impact of these changes to inheritance tax. She has repeatedly dodged questions in the House, as she is doing this very moment. She has ignored concerns from the business community, and run scared of meeting the National Farmers’ Union. That is not leadership; that is not owning one’s decisions.

Finally, we were promised economic stability and management, yet the OBR’s own assessment of the Bill tells a very different story. Growth will be slower over the forecast; inflation will be higher. Debt will rise every single year of the forecast, and taxes will rise to their highest level on record. Just this morning, we learned that unemployment continues to spiral to levels that we have not seen in years. This was not a Budget for the wellbeing of the country; this was a Budget to try to preserve the careers of the embattled Prime Minister and the embattled Chancellor.

As we approach Christmas, it is traditional to reflect on who has been naughty and who has been nice. We are told that Father Christmas checks his list twice, but the British public need only glance once at this Finance Bill to know that they have been seriously let down. They know exactly which list the Chancellor belongs on. It does not matter if they work hard, run a family business or farm, and have saved responsibly for their retirement; even in death, through the Bill, the taxman still comes a-calling. Under the Bill, there is simply no way that hard-working British families do not end up poorer. Nobody voted for that, and we will certainly not be voting for it tonight, either.

The shadow Financial Secretary, the hon. Member for Grantham and Bourne (Gareth Davies), took the time to mention Father Christmas and Tinder. I thought he might also have taken a moment to welcome the fourth major trade deal secured by this Government and signed today with South Korea, which is set to boost our economy by £400 million, but that was obviously too much to ask.

It is an honour to close this Second Reading debate on the Finance (No. 2) Bill. I thank the Exchequer Secretary to the Treasury for opening the debate, and all right hon. and hon. Members who made contributions. I look forward to hearing further contributions during the rest of the Bill’s passage.

Before I turn to the points made during today’s debate, let me be clear about the purpose of the Bill. I will frame it in the context of choices, because so many hon. Members who have contributed to the debate have done the same. Put simply, the Bill delivers the fair, responsible and necessary choices required to strengthen our economy and cut borrowing, to return our public services to health, to back British entrepreneurs and to make people better off. Those are the choices that this Government are making.

On that point, will the Minister give way?

Not yet.

We have heard absolutely nothing from the Opposition that acknowledges that they made the wrong choices. Indeed, what we heard just now from the shadow Financial Secretary and earlier from the shadow Chancellor was a masterclass in selective amnesia. People would be forgiven for thinking that Members on the shadow Treasury Bench were not living in this country during their period of Government, let alone running it. They have conveniently forgotten that their choices gave us appallingly low productivity, threadbare public services, ballooning welfare spending and real wage stagnation. Those were their choices, and it is little wonder that they do not to want to remember them, let alone be judged on them.

I will make a bit of progress. Our choices are different: they seek to rebuild and repair our country and our economy. They are choices to renew our public services and reform our welfare system; we are rebuilding our NHS, helping to lift hundreds of thousands of children out of poverty, and investing in getting more people into work. They are choices to strengthen our economy; we are maintaining the highest level of public investment for 40 years, backing British aspiration and, importantly, cutting borrowing and doubling the headroom against our fiscal rules.

If we look at employment over time, we see that employment was growing every month until a certain thing happened in July last year: Labour came to power. As of this morning, unemployment has officially gone up 5.1%. As it stands today, there is a 25% increase in the number of people who are not in employment. How can that possibly correspond with a mission for growth?

I am afraid to tell the right hon. Gentleman that employment is rising in every single year of the forecast.

My hon. Friend the Member for Glasgow East (John Grady) raised the importance of getting debt and borrowing down. I could not agree more. There is nothing progressive whatsoever about spending over £100 billion a year on servicing our debt. That is more than five times our annual policing budget. It is money that could be spent on schools, hospitals and the urgent public service renewal that this country so desperately needs. That is exactly why, under this autumn Budget, borrowing falls in every year of the forecast, and we are bringing the national debt under control. The Chancellor is putting in place the fastest rate of fiscal consolidation in the G7, and she is doubling the headroom to £21.7 billion.

I am grateful to the Minister for giving way. Will she concede that approximately three quarters of the last three hours of debate on this Bill has been devoted to the egregious family farm tax, including two noble and articulate contributions from Labour Beck Benchers, which took some bravery? Will she take that message back to the Chancellor, and get her to finally scrap the family farm tax?

It is not a concession to acknowledge that that was the topic of much of the debate. We are more than aware of the strength of feeling on inheritance tax and the cost pressures that farmers are under, and I appreciate the compassion with which hon. Members have made their arguments. I remind them that that is why the Government came forward with the changes announced at the Budget just a few weeks ago. Following those changes to both APR and BPR, surviving spouses can pass on double the tax-free allowance, making the system more fair and simple for farmers.

A core part of strengthening our economy is about backing British businesses to reach their full potential. That means backing British innovation and aspiration and giving entrepreneurs what they need to start up, scale up, list and grow here in the UK. That is why this Bill significantly expands the enterprise management incentive scheme limits to maintain the world-leading nature of this relief.

Does the Minister agree that it is due to the careful management of the public finances that we have record investment in defence and other areas of the Scottish economy, creating lots of well-paid jobs in Glasgow?

The Scottish Government have been given a record settlement—a £820 million boost in this Budget—that takes the total additional funding for the Scottish Government from this Labour Government to more than £10 billion.

I was talking about the entrepreneurship package in the Budget. As my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson) said, we are doubling the maximum amount that a company can raise through the generous enterprise investment and venture capital trust schemes. We are making them more generous, and are supporting more investment in companies that are making the transition from start-up to scale-up, and we are not stopping there.

When some of our most innovative, high-growth companies succeed, bringing jobs and growth to our economy, we want them to list here, too. That is why this Bill ensures that companies that list here in the UK will benefit from a stamp duty holiday on their shares for the first three years on the market—a point well made by my hon. Friend the Member for Burnley (Oliver Ryan). We are backing British entrepreneurs and ensuring that the UK remains one of the most attractive places in the world to found, scale and list a business.

Let me address the point referred to by the hon. and learned Member for North Antrim (Jim Allister) about the application of the measures that I have just spoken about to Northern Ireland. I can assure him that Northern Irish service companies will benefit from the expansion of the scheme, and goods and wholesale electricity companies in Northern Ireland will continue to benefit from the previous scheme limits.

The key is in the point that the Minister finally made there; that is under the previous scheme. Northern Ireland is not to get the uplift that the rest of the United Kingdom does under clauses 13 to 15. Why? Because we are subject to EU state aid rules. We are being held back by the old rules, whereas everywhere else in the United Kingdom gets the new uplift.

I assure the hon. and learned Member, who makes a valid point, that there are hardly any—very few, if any—of these types of goods and wholesale electricity companies in Northern Ireland that come close to the existing limits of the scheme, let alone the extended limits.

We are very clear about the role of business and economic growth in improving household incomes, but we are also clear that after the Opposition gave this country the worst Parliament on record for living standards, far too many people are still struggling with the cost of living. This Government are already making progress to tackle that. Wages have gone up more in the first year of this Government than in the entire first decade of the last Government. Real household disposable income was £800 higher in the first year of this Parliament than in the last year under the Tories, but we know that there is more to do.It is because of the fair and necessary choices in this Bill that we are able to help ease the cost of living for millions of families across this country. Those choices are how we are cutting energy bills for millions of households by an average of £150 per year and extending the warm homes plan. They are how we are lifting the two-child cap and, with it, lifting half a million children in this country out of poverty. They are how we are freezing prescription charges and rail fares, and increasing the national living wage while protecting the triple lock on pensions. This is a Government who are committed to helping people with the cost of living, to putting more money in people’s pockets, and the choices we are making in this Bill do just that.

My hon. Friends the Members for Scarborough and Whitby (Alison Hume) and for Wolverhampton North East (Mrs Brackenridge) are absolutely right that the choices this Government are making in this Finance Bill will help restore our public services. Those choices are why the Chancellor is able to put libraries in primary schools, as my hon. Friend the Member for Scarborough and Whitby referred to, and they are why she is able to protect NHS budgets as well. They are why she is able to invest an extra £300 million in NHS technology, roll out 250 new neighbourhood health centres right across this country, and continue to get waiting lists—which stood at a record high when this Government came to power—back under control. That means millions more people able to access the healthcare they need, free at the point of use; millions more people getting the operations, preventive care and scans they need. It is how we will be able to repair our NHS and ensure it will continue to exist for the next generation and for many generations to come.

This Finance Bill is about delivering on our commitments. It is about building a stronger economy in which prosperity and living standards rise, child poverty falls, businesses succeed and public services are renewed. Every measure in this Bill is geared towards that goal. We promised change and fairness, and we are delivering both. For those reasons, I commend this Bill to the House.

Question put, That the amendment be made.

On a point of order, Madam Deputy Speaker. I would be grateful if you could confirm whether any points of order raised by Members of this House since this parliamentary Session began have actually been deemed to be points of order. If this is not the case, could you provide guidance to hon. and right hon. Members about what does constitute a point of order, so that the time of Members is not wasted in this House?

I am grateful to the hon. Member for giving notice of his point of order on points of order. I can say that his point of order was most definitely not a point of order. For clarity, and for the benefit of the hon. Member, a point of order should in principle draw the Chair’s attention to a possible breach of the House’s rules of order, which his point of order failed to do. I would not like to speculate on how many points of order actually have served this purpose—I am sure many now will—but the hon. Member raises an interesting question. Hansard can point out how many points of orders have been raised that, like his, were obviously not points of order.