James Wild

We are grateful to the Minister for running through the plethora of Government amendments that are being added to this already stonkingly large Finance Bill. The sheer number of amendments is an admission that Ministers did not get this right the first time—or even the second time, in Committee, which we enjoyed. Let me turn to amendments 1, 2 and 8 and 67 to 94, as well as new clause 10 in my name and the names of my hon. Friends. This Bill embodies Labour’s approach of ever-higher taxes, spending and borrowing, for which hard-working families and businesses are paying the price. The measures in the Budget and in this Bill add a further £26 billion-worth of tax rises, bringing the cumulative total from the Chancellor’s first two Budgets to £66 billion. As my hon. Friend the Member for Bridgwater (Sir Ashley Fox) pointed out, that did not feature anywhere in the Government’s manifesto. Those further tax rises are despite the Chancellor promising not to come back for more. Debt interest is forecast to hit £140 billion by 2030. Unemployment is set to increase to 1.9 million, and youth unemployment has risen to 16.1%. Meanwhile, welfare spending is set to hit £406 billion, and living standards are expected to slow towards the end of this Parliament. Last week, the Office for Budget Responsibility downgraded its growth forecast once again and warned that the Chancellor’s plan, far from working, could “constrain economic activity”. Instead of backing the risk takers and the wealth creators, this Bill delivers slower growth, higher borrowing and higher taxes. Let me turn to the freeze in income tax thresholds set out in clause 10. The Chancellor said at the Dispatch Box that there would be no extension of the freeze on income tax thresholds, because it would “hurt working people” and “take more money out of their payslips.”—[Official Report, 30 October 2024; Vol. 755, c. 821.] That promise has been broken by the measures in the Bill that do exactly the opposite, putting in place a £23 billion-a-year tax rise and bringing nearly 1 million more people into paying higher-rate tax. It is not just working people who will pay the price. During this period, the state pension is forecast to be higher than the personal allowance. In the spring forecast, the OBR warned that an additional 1 million pensioners will find themselves liable for income tax by 2030-31 because of the Chancellor’s freeze. In anyone’s book, that is a retirement tax. The Government have promised to protect people who rely solely on the state pension, but where is the detail? There is nothing in this legislation to do that. The public out there will rightly be sceptical, given that the Chancellor has already broken the promise not to freeze this threshold. Amendment 5 offers the House a very simple choice to stand by working people and pensioners and end the freeze. Let me turn to the Government’s damaging family farm and family business tax. I know that Labour Members are going around their constituencies saying that they got a great win from the Chancellor just before Christmas, but let us be honest: that win was purely a fig leaf. The Government could have actually corrected their mistake, but the partial reversal that the Chancellor was forced into falls short of what is needed. The Country Land and Business Association has said that it only limits the damage—yet another broken promise from a Prime Minister who pledged not to impose an inheritance tax on farms. That measure epitomises Labour’s apparent hostility towards family farms, tenant farmers and our rural communities. I have spoken to farmers, as I am sure other hon. Members have, who are desperate about this situation. That is why we continue to strongly oppose the family farm and family business tax, and amendment 6 would scrap them. Our further amendments seek to mitigate the worst effects of those taxes. Amendments 67 to 87 would remove the transition period for changes to the reliefs, and would delay implementation until after March 2027, lifting the unfair anti-forestalling rules that have tied the hands of farmers and business owners. The Chartered Institute of Taxation—which provided a lot of support in Committee and at earlier stages of the Bill, for which I am grateful—has warned that the measures particularly affect older farmers, robbing them of the ability to plan properly. Amendment 88 would defer the deadline for inheritance tax instalments by a further 12 months. This reflects the conclusion of the House of Lords Economic Affairs Committee that the six-month deadline proposed for the first payment “does not appear to be realistic”. As we know, farming estates and family business are often asset-rich but cash-poor, which makes it difficult to raise the funds quickly. The National Farmers Union has warned that expecting probate to be granted within six months is “completely unrealistic, especially given the complexity of valuing an agricultural business”. Does the Minister recognise the strain that such unrealistic deadlines place on family farms and family businesses, and will he therefore accept our amendment and extend the payment deadline by 12 months? If he will not, will he explain to family farms and family businesses why not? Amendments 89 to 94 would exclude from inheritance tax the value of any jointly held tenancy on the death of a joint tenant. This issue is causing concern across the sector, and has been raised by the Tenant Farmers Association and by my hon. Friend the Member for Keighley and Ilkley (Robbie Moore). Exempting genuine arm’s length tenancies between unconnected parties from inheritance tax is simply the fair thing to do. I would be grateful if the Minister could explain what engagement he has had with the Tenant Farmers Association on that point, what his response is, and how he intends to rectify this injustice. Of course, this is not just about farms; family businesses, which make up 90% of our firms and employ well over half the workforce, are firmly in the Chancellor’s crosshairs as well. These are firms that focus on the long term, yet according to Family Business UK, over half of affected businesses have already paused or cancelled investment as a result of the threatened tax. It would be remiss of me to not mention that the Government’s claims do not seem to add up. Will this tax actually end up raising money? While the OBR forecasts a £500 million gain, analysis by the Confederation of British Industry suggests a net loss of nearly £2 billion, once the wider damage to the economy is considered. The family farm and family business tax does nothing to promote growth or fairness. It targets those who anchor our rural economy and communities—the family businesses committed to long-term growth. It is already having a chilling effect on investment, and now there is a prospect that companies that would otherwise thrive under family stewardship will break up. Again, I urge hon. Members to support amendment 6, which would remove this damaging measure from the Bill. Savers and investors are not safe from the Chancellor, either. Amendments 1 to 4 deal with the introduction of increases in income tax on dividends, savings, and property income in the years ahead. Increases to the dividend tax will hit 4 million people by 2029-30, while the savings tax rate increase will hit a further 3.8 million individuals, and 2.4 million landlords will now face higher bills, making it less attractive to provide the rental properties that our constituents want. These measures are targeted at entrepreneurs, investors, pensioners and hard-working families. Rather than supporting growth, the Government seem determined to stifle it. The Government are also scrapping the long-standing inheritance tax exemption for pensions. Some 10,500 estates will be targeted under this measure, costing savers £1.5 billion by 2029. We oppose this extension of inheritance tax, which seems predicated on the Government’s belief that people’s money belongs to the Government, rather than being their own. We should be rewarding saving and people who do the right thing, but extending inheritance tax in this way does exactly the opposite. As we discussed previously, there is also a concern about the burden being placed on personal representatives, and I have mentioned the unintended consequences for unmarried couples. In some cases, a surviving partner could lose up to 40% of a pension fund built up over a lifetime. Again, this is manifestly unfair, and amendment 7 would remove this damaging new tax from the Bill.