Iran
Order. Before the Foreign Secretary responds, I remind Members that we have six hours of protected business on the Finance (No. 2) Bill, so this has to move much faster—we need shorter questions. This statement will finish in about 40 minutes.
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Iran
Order. I do not think that Members quite understood what I said earlier. Questions must be short.
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Iran
Mr Thomas, you used the word “you” twice. I am not here to respond to your questions.
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Points of Order
I am grateful to the right hon. Gentleman for giving notice that he intended to draw attention to this matter. As he knows, that is not a point of order. He is an experienced Member who serves on the Panel of Chairs, and he does not need any guidance from the Chair on how to take this matter further—no doubt he will pursue it. Those on the Treasury Bench will have heard his request for a statement or response from the appropriate Minister.
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Points of Order
I am grateful to the right hon. Member for giving notice of his point of order. I take it that he has informed the hon. Member for Wakefield and Rothwell (Simon Lightwood) that he intended to raise the matter in the House.
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Points of Order
The right hon. Member is nodding accordingly. As he knows, the Chair is not responsible for the accuracy of ministerial answers—if only we were—but I am sure the Table Office will be able to advise him on how he might pursue the matter further. Once again, I have no doubt that those on the Treasury Bench will have made a note and will pass on that information directly to the Minister involved.
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Finance (No. 2) Bill
With this it will be convenient to consider the following: New clause 8—Review of impact of section 86 on the hospitality sector— “(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before the House of Commons a report assessing the impact of the measures contained in section 86 on the hospitality sector. (2) A report under subsection (1) must include an assessment of the impact of section 86 on— (a) levels of employment across the United Kingdom within the hospitality sector, (b) the number of hospitality businesses ceasing to trade, and (c) the number of new hospitality businesses established. (3) In this section, ‘the hospitality sector’ means persons or businesses operating in the provision of food, drink, accommodation, or related services.” This new clause would require the Chancellor of the Exchequer to review and report on the impact of the alcohol duty measures in Clause 86 on the hospitality sector, including effects on employment and business viability. New clause 9—Review of cumulative impact on the hospitality sector— “(1) The Chancellor of the Exchequer must, within six months of the passing of this Act, lay before the House of Commons a report assessing the cumulative impact on the hospitality sector of— (a) the measures contained in section 86 of this Act, and (b) changes to taxation and business costs affecting that sector introduced outside this Act since 2020. (2) For the purposes of subsection (1)(b), changes to taxation and business costs include, but are not limited to— (a) changes to employer National Insurance contribution rates or thresholds, (b) changes to business rates, including reliefs and revaluations, and (c) any other fiscal measures which materially affect operating costs for hospitality businesses. (3) A report under subsection (1) must include an assessment of the impact of the matters listed in that subsection on— (a) levels of employment across the United Kingdom within the hospitality sector, (b) the number of hospitality businesses ceasing to trade, (c) the number of new hospitality businesses established, and (d) the financial sustainability of hospitality businesses. (4) In this section, ‘the hospitality sector’ means persons or businesses operating in the provision of food, drink, accommodation, or related services.” This new clause would require the Chancellor of the Exchequer to assess and report on the cumulative impact on the hospitality sector of alcohol duty measures in the Act alongside wider fiscal changes, including employer National Insurance contributions and business rates. New clause 26—Statements on increasing alcohol duty— “(1) The Chancellor of the Exchequer must, within six months of this Act being passed, make a statement to the House of Commons on the effects of the increase to alcohol duty made under section 86 of this Act. (2) The statement made under subsection (1) must include details of the impact on— (a) the hospitality sector, (b) pubs, (c) UK wine, spirit and beer producers, (d) the employment rate, and (e) the public finances.” This new clause would require the Chancellor to make a statement about the effects of the increase in alcohol duty.
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Points of Order
Always, Madam Deputy Speaker. The Cabinet Office guide to parliamentary work is clear: “There should be no inconsistencies between the provision of information in answers to written questions and information given under the FOI Act”. It also states that material disclosable under the Freedom of Information Act should also be disclosed to Parliament. On 2 December and 4 December in written parliamentary questions, I asked the Secretary of State for Transport what information the Driver and Vehicle Licensing Agency holds about third-party intermediary organisations acting on behalf of Oxford city council and Oxfordshire county council in accessing vehicle keeper data. In both cases, the Minister for Local Transport, the hon. Member for Wakefield and Rothwell (Simon Lightwood), told me that this information was not “appropriate to disclose” because of commercial sensitivities. However, shortly afterwards, the DVLA released under FOI the code of contract with Oxfordshire county council, confirming contractual arrangements involving intermediaries and third-party access, with only personal data redacted. I would be grateful for your guidance, Madam Deputy Speaker, on this apparent inconsistency. Might you raise it with the Leader of the House or the Departments concerned?
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Storm Goretti
I join the Minister in thanking the emergency services, local authority and Environment Agency staff and volunteers, who have worked tirelessly to recover from the storm and to keep the public safe. I also join him in sending our condolences to those families who are grieving and whose lives have been upended by the storm. Given the severity of this and earlier extreme weather events, what further preparations will the Government make for future storms and for adverse weather? Do they plan to carry out further storm preparedness exercises, and to implement lessons learnt from the previous test of the emergency alert system in response to these extreme weather events? What further discussions have they had, internally and with local authorities, utility providers and emergency services, to co-ordinate the continued response to this storm? Does the Minister agree that the latest mass power outages in the south-west show that the Government should reconsider their drive for more electricity pylons and instead back faster undergrounding of cables, particularly in high-wind zones? As we heard from the hon. Member for Truro and Falmouth (Jayne Kirkham), many people reported that when the power failed, mobile signal followed shortly after. What are the Government doing to ensure that telecommunications masts have enough battery or generator back-up to remain operative during 48 or 72-hour storm cycles? What assessment has the Minister made of the implementation and operation of the severe weather emergency protocol to support the most vulnerable, particularly those sleeping rough, in rural areas such as Cornwall and the Isles of Scilly? Storm Goretti has led to significant rainfall in many parts of the country. What assessment have the Government made of localised flooding, and will support be made available to those affected by the storm through the flood recovery network? I understand that the floods resilience taskforce met on 8 September. I should be grateful if the Minister could outline what actions were taken following that meeting to prepare for eventualities such as this.
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Finance (No. 2) Bill
The Minister rightly refers to draught beer and cider relief, and she said earlier that her concern about freezing alcohol duties was that most of the benefit would be going to supermarkets and other places that sell beer cheaply. Surely she recognises that what the Chancellor should have done is reduce the draught rate, as happened last year, so that the full benefit would have gone to licensed premises, as they are the only venues that can sell the draught drinks covered by that rate.
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Finance (No. 2) Bill
It is a genuine pleasure to follow the hon. Member for Burton and Uttoxeter (Jacob Collier), who made some excellent points. Before I begin, I will disclose that although I do not have any relevant interests to the debate in the Register of Members’ Financial Interests, I have received hospitality below the threshold from UKHospitality, the British Beer and Pub Association, CAMRA and the British Institute of Innkeeping; there may be others. People up and down the country may be justified in asking what the Government have against pubs. Many things are causing so many pubs to struggle and to question whether they can survive beyond the very short term—the enormous increases in business rates, the increases in employer national insurance that particularly hit those who employ part-time workers, and the ever-growing burden of regulation, not least in the Employment Rights Act 2025, that affects many pubs and hospitality venues—but I think that this clause in the Bill really sums it up, The Government did have a choice. The Chancellor could have built on a success of the previous Conservative Government—in fairness to her, she actually did so last year—by reducing that draught duty rate so that duty on beer and cider sold on draught in pubs was paid at a lower rate, perhaps at the same time as extending the differential with supermarkets and off-sales that might be sold at or below cost price. But she chose not to do that; she chose to increase duty on top of all the extra burdens that are threatening the survival of our community pubs, bars and other hospitality venues. By increasing duty by RPI rather than the lower rate of CPI, the Chancellor is threatening to return us to the bad old days of the previous Labour Government’s hated beer duty escalator, under which the duty rate increased year after year. I think the hon. Member for Birmingham Northfield (Laurence Turner) suggested that this measure is somehow in keeping with the policy of successive Governments, but nothing could be further from the truth. In just 19 months, the Government will have increased beer duty by more than it went up in the 12 years running up to the last general election. This is a massive increase in duty in a short period. Indeed, the duty paid on a pint in a pub was actually lower in July 2024 than it had been 12 years earlier because of policy decisions made by Conservative chancellors.
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Finance (No. 2) Bill
My hon. Friend is right, although that is not really a choice that many pubs are able to make, because it is taken for them. We saw the same thing when the previous Labour Government’s beer duty escalator was in force. We know that increases in alcohol duties have a minimal impact on overall alcohol consumption, but they do have an impact on how people drink and what they drink. Higher alcohol duties lead to a shift from people consuming alcohol in well regulated, licensed premises like a community pub—where they will typically drink medium-strength beer and cider—to people drinking more stronger alcohol at home without the protective framework of a licensed pub. That makes no sense on either a social and health or an economic and community basis. It is the wrong thing to do yet again. It is yet another burden that our overstretched pubs and hospitality venues simply cannot afford. It is the wrong thing to do and that is why, as well as supporting our own new clause and opposing the clause, I will certainly support the new clauses tabled by the Liberal Democrats. There is a better alternative.
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Nigeria: Freedom of Religion or Belief
The tragic case of Deborah Samuel Yakubu is a reminder of the culture of impunity that has been allowed to develop in too many parts of Nigeria. Can the Minister assure the House that the UK Government do everything and take every opportunity to stress the need for improved security in particularly vulnerable parts of Nigeria to ensure that people are safe to exercise their religious beliefs?
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Storm Goretti
Will the Minister join me in putting on record my thanks to West Mercia police, Shropshire Fire and Rescue Service, West Midlands ambulance service and all the local government officers at Telford and Wrekin council and Shropshire council who helped? At its peak, 10,000 homes were without power. Currently, there are 200 homes throughout the county of Shropshire, some in my constituency, still without power. Will he urge his officials to press National Grid to do far more, and to ensure that it is part of the generator scheme? He will know that many trees have fallen in many storms over many years, but this time there was a particular issue with trees falling throughout Shropshire. In high winds and heavy snow, they blocked the M54 for a large part of the storm and they blocked the main railway line into Birmingham. This might seem a minor point, but could we have a review of the number of chainsaws and the number of people available to operate them at Network Rail, Highways England and National Grid?
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Iran
Can the Foreign Secretary reassure the House that freedom and justice—rather than the pursuit of oil and gas, however important that might be—will remain at the heart of British foreign policy? I stand with her in standing up for those who are courageously and bravely standing up for freedom in Iran. Of course, freedom is not a western construct; it is a universal right. It does not emanate out of London or Washington; it emanates out of the hearts of men and women across this planet. I ask the Foreign Secretary to draw on the lessons of history going back to the 1950s and Operation Ajax—the Shah and his family have been referenced here today. It is important that, were we have seen regime change and changes of leadership in the middle east, whether in Libya, Iraq or Syria, we learn the lessons of mistakes we have made as a country, even though we stand by those in Iran today.
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Points of Order
On a point of order, Madam Deputy Speaker. I seek your guidance. Since Christmas, hundreds of my constituents have not received a single letter via the Royal Mail. That is causing huge anxiety for those waiting for medical results, important documentation, job offers and so on. The local post office team of postmen and postwomen have said that it is a result of management decisions at the most senior level. What advice can you give me to pass on to my constituents about the possibility of the Minister responsible for the Royal Mail and postal services coming to the House to make an urgent statement to ensure that this issue is thoroughly and fully investigated and that letters begin to land on doormats once again in Shropshire?
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Universities: Statutory Duty of Care
My constituent Hilary’s daughter Phoebe took her own life at the University of Newcastle, aged just 20. Does the hon. Member agree that the level of pastoral care that universities do and do not provide is an important factor, not just for students but for their parents, in the choice where to go to university? Universities should be transparent and honest about the level of support that they do and do not provide.
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Finance (No. 2) Bill
It is a privilege to speak in this debate. I want to speak about the pub and hospitality sector in my constituency in the Scottish Borders, but also more broadly about the impact of these changes on an important industry that is the lifeblood of the Scottish economy. We are debating the hike in alcohol duty, which the Treasury has described merely as “uprating”, but for Scotland this technical change will have a real impact on our iconic industry. It will be a hammer blow to the Scottish whisky industry as well as to the pub and hospitality sector. The Treasury is hiking these taxes to fill the black hole in its balance sheet, but the Scottish whisky industry is a global brand that not only supports the Scottish economy but is very important to the UK economy, and it is really important that the Treasury and the Government understand the impact that these changes will have on this global brand. It is important to remember the numbers associated with the Scottish whisky industry. It contributes £7.1 billion to the UK economy. It also supports 41,000 jobs in Scotland, some of them in our most fragile and vulnerable communities in the highlands, in Moray, in the Borders and all over Scotland. The whisky industry has a footprint and an impact. Whether it is the distilleries or the farmers who are growing the crops that go to be distilled, the whisky industry is a key part of the Scottish economy as well as the key part of many local economies, in that it provides local jobs in remote communities and supports local events and, often, local services such as the local school, the village shop and many other key parts of the community. The Minister and the Chancellor claim that the rise in alcohol duty will boost revenue, but history says something very different. Indeed, the Treasury’s own data says something very different, because when duty was hiked by 10.1% in 2023, spirits revenue did not go up; it actually plummeted. Before colleagues seek to intervene, I appreciate that it was a Conservative Chancellor who made that change, but Scottish Conservative MPs argued strongly for it not to happen. We accepted the representations that the Scottish whisky industry, the Scotch Whisky Association and many of our constituents were making against the tax rise. The evidence has backed up what the industry was saying. When we put up taxes, the revenue generated actually falls. According to the Scotch Whisky Association, that tax hike actually cost the Treasury £150 million as consumers pull back and stop spending as much as they did. By doubling down, the Labour Government will compound the situation. The Chancellor and this Government are trapped in a doom loop where higher taxes lead to lower sales, which lead to lower tax receipts, which lead to—you guessed it—even higher taxes from elsewhere as they scramble around to try to fill the gap. It is not possible to tax a sector into prosperity. I want to touch briefly on the impact on our high streets and pubs, because it is not just the distilleries that will suffer as a consequence of this tax hike. From the highlands to the Borders, our hospitality is screaming out for “breathing room” because all it is getting from this Government is a tightening of the noose. The Scottish Government are compounding matters in Scotland with their anti-job policies. Taken with the UK Government’s policies, that is making things even worse.
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Finance (No. 2) Bill
I am grateful to the hon. Member for making that point, but by any measure the Scottish economy is not doing well. Scotland is, by any definition, the most highly taxed part of the United Kingdom. While paying all this extra tax, none of my constituents—I am sure his constituents would agree—feel that they are getting any extra benefit from it. Our NHS and our education system are not performing well; there are potholes on all our roads; and our local authorities are underfunded. Taxes are going up in Scotland, but public services are going down. But of course we have an opportunity in a few weeks in Scotland to replace a failing nationalist Government with a pro-UK Scottish Conservative Government. The hospitality and pub sector in Scotland is having to deal not just with these higher rates of alcohol duty, but with national insurance hikes, the jobs tax and the national living wage hike, as well as all the other red tape being imposed on it. Pubs are finding it more and more difficult to do business, which is why numbers are falling as a direct consequence of decisions that this Government have taken. In fact, in 2025 we saw a record number of licensed premises handing back their keys because they could no longer make their balance sheets work. As colleagues have mentioned, pubs are more than just where people go to have a drink and more than just the value of a drink; they provide social value to the local community. I represent 90 to 100 different communities in my constituency. Not all of them have a pub, but for those that still do, the pub is a focal point. It is where people go not just to have a drink, but to meet friends and chat to neighbours. It might be the only conversation and contact someone has that day, over a social pint or a can of cola. I want to mention a couple of the excellent pubs in my constituency: the Black Bull in Duns, the Cobbles in Kelso, the Ship Inn in Melrose, the Plough Hotel in Yetholm and the Office Bar in Hawick. One pub I must mention that has bucked the trend—I said earlier that lots of pubs are closing—is the Blackadder in Greenlaw, which has just reopened and is going from strength to strength. But the pub highlights the huge challenges that the Government are imposing on it. Despite the fact that it has made this effort to open and get people back in the pub, the challenges being imposed on it—largely, I have to say, by the UK Government—are clear, and it is finding it so difficult to continue the service it is providing and keep the business running. We are fast approaching the point when people in Scotland and across the UK will no longer be able to go down to their local to enjoy a drink, and when the only people who can afford Scotland’s national drink—a glass of whisky—will be those living outside Scotland, as opposed to those living in Scotland. I just wish that the Chancellor, the Minister and the Government would reflect on all the voices highlighting these issues and crying out for help, and that they would recognise the service that these important local businesses are providing to their communities. They should listen to all the publicans who have decided to ban Labour MPs from their premises because they do not agree with the policies that they are proposing. They feel so strongly about this issue that they have decided to make a stand. I encourage the Government to think again. If they cannot think again tonight, they should at least recognise that a cumulative assessment of all these changes would allow them to come back to the Chamber better informed and justify the choices that they are making in this Budget.
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Finance (No. 2) Bill
As the hon. Member will know, the Scottish Government announced their Budget today. I am sure he is aware of the comments from UKHospitality Scotland’s executive director, who said that the Scottish Government Budget had “not sufficiently addressed the challenges that hospitality businesses in Scotland face”, and that the majority “will still be paying higher business rates bills in April”. How does he reflect on those comments in the light of what he was just saying?
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NHS 10-year Workforce Plan
A study by the Health Foundation has found that the cost to the NHS of staff sickness and staff turnover is of the order of £12 billion a year. Will the Government’s new workforce plan cover the issue of excessive cost through the entirely avoidable turnover of staff?
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Business of the House
I thank the Leader of the House for his statement and for advance notice of it, but I think it should be noted by the House that this—I am sure he would agree—is a bit of a mess. The Public Office (Accountability) Bill was in Committee in December, and amendments should have been filed by the Government on Wednesday of last week, but in fact they came on Friday, too late for colleagues to be able to address them. Now we have had a sudden emergency rejig of business tomorrow, and we know not what is going to happen to the ping-pong that was planned for next Monday. Instead will be debating this Bill. Can the Leader of the House explain why this has happened and what has gone wrong here? Can he also explain what will happen to the legislation and motions that were originally to be debated on Monday 19 January? Finally, can he assure the House that when these matters are brought in front of the House next Monday, the Minister will give a full explanation as to both the ministerial snafu and the substantive issues that have caused this in the first place?
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Airport Drop-off Charges
I rarely intervene on another spokesperson’s speech, but this raises a question: if the Liberal Democrats want these expensive policies and say that consumers should not pay, who should pay?
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Airport Drop-off Charges
It is lovely to see you in the Chair, Ms Vaz. I join all other contributors today in congratulating the hon. Member for Bolton South and Walkden (Yasmin Qureshi) on securing this debate. We often say, “This is an important debate,” and most of the time in this Chamber we do not mean it, but on this occasion I think we do. Through some very articulate speeches, building one upon the other, the debate has exposed two significant problems with the current state of affairs in drop-off charges at our airports: first, whether we should be charging in the first place; and secondly, if we accept the proposition of the hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) that it is okay to charge for drop-offs, whether the process of charging is itself fair. Frankly, I was taken by surprise on this point, which was raised repeatedly. At multiple airports, the charging mechanism is itself unfair, as it does not give the opportunity of point-of-service charging—a barrier at which the customer pays—but instead requires customers to pay after the event by what are, at times, very complex mechanisms. I was a barrister a very long time ago. There is a health warning on my legal advice, but this matter was first settled in 1877 by Mellish LJ—I do not have this at the back of my memory; I looked it up—in Parker v. South Eastern Railway Company. When parking somewhere, the terms and conditions are typically on a board. A provider seeking to rely on those contractual terms has to take reasonably sufficient steps to draw them to the consumer’s attention for the contract to be established, and it must be at or before the point at which the contract becomes established. The reason why that triggered my memory is because, in my day, I learned about a very famous judge—Lord Denning, the Master of the Rolls—who developed the argument in Spurling v. Bradshaw in 1956. He said that the principle covers typical, expected terms and conditions, but if there are particularly onerous conditions as part of the standard terms, the level of notice has to increase to a commensurate degree. I am interested to hear the Minister’s considered thoughts on this issue. I wonder whether a requirement not to pay now, but to pay later and by a circuitous route, would constitute an onerous term when dealing with a consumer, as these contracts almost always are. If that is the case, has a contract been established at all with any of the people dropping off at these airports? I cannot give legal advice, and I am very out of date anyway, but consumer rights groups should explore this issue with a test case—a group action would run to many millions of pounds if it were proved successful. That is the point about whether charging is fair.
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Airport Drop-off Charges
The hon. Gentleman is absolutely right. That is exactly the kind of evidence that a judge would assess to establish whether sufficient notice had been given and how onerous a term is. The second part is about whether the travelling public accept that this is a reasonable charge and has become the norm, as the hon. Member for Oldham West, Chadderton and Royton asserts. An awful lot of people do not feel that it is fair in principle to charge for this service, because no real service is being supplied. People are occupying a bit of tarmac for one or two minutes. It used to be free, so the feeling of value is limited at best. The hon. Member for West Dorset (Edward Morello) talked about a hidden charge, and he was absolutely right. As passengers, we are incredibly price-conscious when it comes to buying our flights. We will wear only one pair of socks for the entire holiday in order not to pay for baggage. We then get lumped with paying a tenner for being dropped off, and it is a hidden cost—it is not in the headline price of the flight. I totally understand the reaction of many that this is unfair, and that the market is not working. The communal reaction is that we must regulate. Perhaps we should, but before we do so we need to understand why airports are raising these charges. I am sorry to say that in many cases it is because this Labour Government are forcing them to do exactly that. If Government policy increases costs for airports, the airports, as rational commercial organisations, will seek to recover those costs from their consumers, because there is no one else—ultimately, the consumer always pays. This Government have increased employer national insurance contributions, levying more than £900 in additional tax for every single employee on the books. They have raised business rates enormously and have increased environmental targets, which also have significant cash consequences. All of it comes for the consumer. I will not deal with national insurance contributions because we all know how impactful that change has been, not just to pubs but right across the private sector.
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Airport Drop-off Charges
The logic is not exact, but if you increase costs, you cannot be surprised if prices go up. Essentially, that is the point I am making. On business rates, Gatwick has had the worst increase. According to the Financial Times, its business rates have increased from £40 million a year to £90 million a year, so the Government have increased Gatwick’s costs by £50 million every single year. Where do they think that money will come from? It will come from the consumer via drop-off charges, other additional charges or increases in the landing rates applied to airlines—such increases would go on to the consumer through increased air fares. It is therefore financially illiterate for the Government to very substantially raise the cost of doing business—particularly for airports, with their increased business rates—and then complain when these companies raise their charges. There are additional costs on airports, which I will briefly talk about, because of environmental and net zero targets and requirements. Many airports have directly cited those costs to explain why they are raising charges. Many of them, including Bristol, Heathrow and Gatwick, have said that they are trying to raise drop-off charges to force passengers to use alternative modes of mass transport. That would be fine and well if additional public transport were available for those people being disincentivised from using their car. However, I do not agree that we should penalise passengers by using the stick of increased charges to force them to use a less convenient mode of transport to get to the airport. Instead, we should lure passengers to airports by providing a method of public transport that is even more convenient than using the car. That is where the Government have gone wrong, because they have incentivised airports to use the stick of payments or costs to beat their own customers without providing an attractive alternative to car use. I fear that I am running short of time—I see that I have one minute left—so I will not do the peroration where I say, “Aren’t the Conservatives wonderful? We are re-evaluating our environmental policies to get rid of the target of net zero by 2050, which is driving the transition at such a pace that it is increasing costs unrealistically, and we should be focusing on the consumer rather than on interest groups.” However, I hope that in the time available to him the Minister will show that he takes seriously what is genuinely an important issue that affects many millions of people around the country. It is an unfairness in plain sight. This is his opportunity to assure all our constituents that they have been listened to and that the Government are taking this issue seriously.
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Airport Drop-off Charges
The hon. Member for Oldham West, Chadderton and Royton (Jim McMahon) made the very good point that the notice of the charge was situated beyond the point at which someone could reverse out. Will the Minister undertake to remind Manchester airport that any notice of a charge has to be at a place where people can decide not to accept the charge?
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Topical Questions
The Health Secretary has said he is “shocked” at the inability to acknowledge and then remedy state failures. It is now two years since the Hughes report was published, but no timeframe has been set for compensation for the valproate scandal. When will my constituents Colleen and Andy get the redress they need, so that they can make long-term provision for their son?
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Finance (No. 2) Bill
On behalf of His Majesty’s Opposition, I wish to speak to new clauses 22 to 24, tabled in my name and those of my hon. Friends. As the Minister set out, clauses 63 to 68 introduce measures to apply inheritance tax to unspent pension assets and other death benefits for deaths occurring after 6 April 2027. This Labour Government have taken taxes to record levels, with £26 billion in additional taxes in this Budget and £66 billion since the election. These tax increases were not mentioned in Labour’s manifesto. Labour is increasing taxes on family businesses, farms, jobs, dividends, savings, motorists and now death. Removing the inheritance tax exemption for pensions could undermine efforts to encourage people to save at a time when people are not saving enough. And what do the Government do? They limit the salary sacrifice pension contributions scheme and introduce a new raid on people’s pensions pots. The Minister did not refer to the impact assessment, but it is worth pointing out that it estimates that 10,500 estates will now become liable for inheritance tax, raising £1.5 billion by 2029, and 38,500 estates will pay more inheritance tax than was previously the case. That is why we oppose this extension of inheritance tax and the underlying principle, to which the Minister seemed to allude, that people’s money belongs not to them but to the state. New clause 22 is straightforward. It would require the Chancellor to set out the impact of these measures on pension saving, household saving decisions and personal representatives. There is real concern—I am surprised the Minister did not address this—about the administrative burden being placed on personal representatives and the effect on the industry. Personal representatives will be required to identify every pension asset, calculate the inheritance tax due and ensure payment within six months, and they will be personally liable if they fail to settle all the liabilities due. In many cases, that deadline would be impossible to meet and must be extended. Furthermore, if a pension fund has to quickly sell illiquid assets, such as commercial property, it may not get the full market value, but the Bill does not introduce a relief where the underlying assets must be sold and the proceeds are less than the value of the assets at the time of death. Late payments will attract interest at 8%. By contrast, someone in self-assessment has 10 months to pay tax on the income they already understand. Both the Association of Taxation Technicians and the Chartered Institute of Taxation have offered some practical solutions, the first of which is to extend the withholding periods. Personal representatives can ask pension administrators to withhold 50% of funds for up to 15 months, but that is simply not long enough for the complex cases I have referred to, particularly where business property valuations have to be agreed with HMRC. Will the Minister consider allowing HMRC to extend withholding in such complex cases? Secondly, the Government should allow instalment payments for illiquid pension assets. Billions of pounds of pensions wealth are in illiquid assets. The Government allow inheritance tax to be paid over 10 years for illiquid estate assets. Why deny the same practical relief for pensions? When this policy was announced, the Office for Budget Responsibility gave it a “very high” uncertainty rating and estimated that behavioural effects will cut the static yield by about 43%; the Government’s own forecasters accept that the changes may well significantly alter saving behaviour. The new clause would simply require the Chancellor to assess that impact and come to the House to make it clear. New clause 23 would require the Chancellor to consult on the impact of clauses 63 to 67, and whether they deliver better outcomes for savers and pensioners. The truth is that the Government rushed the consultation out after the 2024 Budget and followed it with a very narrow technical consultation, which did not consider the principled question of whether this approach to pensions being brought within the inheritance tax framework was appropriate. As the Investing and Saving Alliance told the House of Lords Economic Affairs Committee in its inquiry to which the Exchequer Secretary also gave evidence: “If we were consulted and listened to, we probably would not be having this discussion today, because I do not think pensions would be going into IHT.” Both the chartered institute and the ATT have criticised the Government for consulting on pensions in isolation, rather than in the context of individuals’ wider inheritance tax position. Our new clause is explicit. Consultation must take place to assess whether these changes “deliver better outcomes for savers and pensioners” —wording that reflects the commitment the Labour party made in its manifesto. New clause 24 is essential. It would require HMRC to publish comprehensive guidance on the new rules for pensions and to set up a dedicated helpline. Why does that matter? Because this measure will be incredibly complex in practice. The chartered institute has said that professional executors are already questioning whether they can continue to operate in the market at all. Some firms, we are told, are already leaving the market. If professionals step back, the burden falls on lay personal representatives: often grieving family members or friends, with more errors, delay and potentially a wider tax gap ensuing. Professional indemnity insurers also need clarity, yet when is HMRC due to deliver detailed guidance? Not until spring 2027, just weeks before the changes take effect. That is completely outrageous and far too late. That is why the new clause requires guidance to be published within six months of the Bill being passed. I want to touch on a broader concern that has been raised with me on the potential serious unintended consequences for unmarried couples. Today, couples can anticipate making financial provision for each other via pensions, but if this measure comes into force they will have to look at other options. If one member of an unmarried couple in their 50s or 60s dies with a pension at peak value, the survivor could lose up to 40% of that fund. Are Ministers talking to pension scheme administrators to mitigate the risks for such couples and to provide clear guidance? These clauses increase taxes, add complexity, penalise saving and add stress for grieving families. Despite clause 67, we are also advised that there is still a risk of double taxation of inheritance tax and income tax, which could see beneficiaries paying an effective tax rate of 67%. Our amendments seek to mitigate their worst impacts. The Chancellor should assess the real impact on saving behaviour and personal representatives. She should consult properly on these provisions and she must provide clear guidance, backed by dedicated support. We should be incentivising saving and encouraging people to do the right thing. Extending inheritance tax does the opposite, and we will oppose the Government’s measures.
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Finance (No. 2) Bill
These changes were presented as some sort of simplification and modernisation, but clauses 83 and 84 nearly double remote gaming duty from 21% to 40% and increase general betting duty to 25%. We will have some of the highest rates of tax on gambling in the world. As we have heard from some Members, the industry has warned that that could have severe consequences for an internationally competitive sector that supports tens of thousands of jobs, underpins horseracing and other sports and already contributes significantly to the Treasury. It is questionable whether these measures will lead to stable, long-term revenue gains for the Exchequer, and there is a very real risk that they will result in job losses and greater use of unregulated operators in the black market. New clause 25 would require the Chancellor to come back to the House and explain what the consequences have been for revenue, sports and horseracing, high street betting shops, the black market, jobs and the public finances. Of course, the origin of these changes owes much to Gordon Brown, who encouraged the Chancellor to hike taxes in order to increase welfare spending. Proponents of higher taxes often suggest that they will not have any consequences, but it is the role of us in this House to scrutinise potential changes and assess the impact after the event. Independent modelling from EY shared by the Betting and Gaming Council suggests that the impact of doubling remote gaming duty could be the loss of 15,000 jobs, and a further 1,700 jobs could be lost as a result of the increase in general betting duty. In total, 17,000 positions located in Stoke-on-Trent, Leeds, Sunderland, Manchester, Nottingham, Newcastle-under-Lyme, Norwich and other areas could be affected. Of course, those are simply projections—they could prove to be pessimistic, and we certainly hope that will be the case—but when unemployment has risen consistently under this Government due to the jobs tax and other costs, such warnings should not just be dismissed. That is why the Chancellor must account for the impact of her choices, as new clause 25 requires. There has been some mention of horseracing. I was pleased to join colleagues across the House in support of the “Axe the Racing Tax” campaign. That is another tax that the Chancellor wanted to introduce, but she was forced into one of her all-too-regular U-turns.
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Finance (No. 2) Bill
We are debating the measures in this Bill, which was introduced by this Government. I was not involved in the changes that the hon. Gentleman refers to, and I certainly would not have supported hitting the horseracing sector in the way that was proposed. I do not remember that being in a previous Finance Bill introduced by a previous Government; it is this Government who sought to bring forward those measures, but they were roundly rejected, because horseracing supports around 85,000 jobs and contributes £300 million in tax revenue every year. Despite the Government’s climbdown in exempting horseracing from the higher rates, the industry could still feel the consequences of this Government’s approach to gambling duties. When the online betting sector is squeezed, sponsorship is likely to be reduced, and because racing’s funding depends heavily on those partnerships and that sponsorship, we could see an impact on racing. In my area of Norfolk, we are very fortunate to have Fakenham races—I went there to support the British Horseracing Authority’s campaign against the Government’s plans. That venue is synonymous with the area and its identity, and is a source of local employment, not just at the track itself but for the farriers, the pubs, the hotels and the whole ecosystem that supports racing. That is why these clauses in the Bill continue to pose a risk to the sector and other sports, and that risk needs to be accounted for. I now turn to the black market, an issue that was raised by the hon. Member for Stoke-on-Trent Central (Gareth Snell) and my right hon. Friend the Member for Stone, Great Wyrley and Penkridge (Sir Gavin Williamson). The Government have acknowledged the risks associated with taking this approach, which is why they quietly set aside £26 million for the Gambling Commission to combat expansion of the black market, but the same EY analysis suggests that over £6 billion in stakes could migrate to the black market, doubling its current size and undermining the progress that has been made through the existing regulatory framework. The Office for Budget Responsibility has identified potential leakage of around £500 million in lost revenue as activity shifts away from properly regulated markets. Those projections—which again could be wrong, but could also be right—raise legitimate questions about the overall effectiveness of the Government’s approach. When taxes rise too far, behaviour can change and the yield can go down, which is what we will see with a number of the tax rises that the Government have included in their Finance Bill. Rather than reducing demand, activity will move to unregulated markets where consumer protections are weaker, fraud risks are higher, and tax revenue is not collected. I am not sure we have heard a convincing response from the Minister about how that will be addressed and whether those risks have been taken properly into account. Let us look at what happened in the Netherlands, where the Dutch Government raised their remote slots tax rate to 34% last January. Within months, gross gaming revenue fell by a quarter and gambling tax receipts dropped to just 83% of the previous year’s figure, leaving a €200 million shortfall from the projections. Somewhat predictably, the Dutch regulator then reported a huge growth in the number of people accessing unlicensed domains, rising from 200,000 to a million. That should serve as an example of why we should be cautious about the Chancellor’s plans. Experience suggests that changes have unintended consequences, and those risks must be carefully assessed. In winding up, will the Minister provide a bit more clarity about how that will be monitored and what steps the Government will take if there are unintended consequences and those projections prove to be accurate? There is some debate and confusion in the sector and some of the professional bodies about the treatment of free bets and free plays. The sector and those bodies have raised concerns about that. The Budget costings document calculates gambling duty using the gross gambling yield, which is the revenue retained by operators after paying out winnings to customers. However, current law uses a wider measure, which also counts the value of free bets and free plays. That means there is a potential mismatch. Will the Minister clarify that? I am sure she has had representations on it directly. We need to strike a balance with the levels of taxation. The industry is warning that these increases will impact on sports and lead to job losses and more black market activity. New clause 25 seeks transparency and an answer to those concerns. It asks the Chancellor to assess the impact of these rises on horseracing, the black market, jobs and the public finances. That is the minimum that Parliament should expect, and I hope Members will support our new clause.
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Finance (No. 2) Bill
It feels like we are getting warmed up for scrutinising the 536 pages of the Bill upstairs in the Public Bill Committee shortly. It is good to see that the popularity of the topics we are debating has increased as we move on to alcohol duty, which clause 86 increases in line with the retail prices index from 1 February. I am proud to confirm that His Majesty’s Opposition are big supporters of beer, wine, spirits and hospitality businesses. As such, we oppose these tax rises. This £26 billion tax-raising Budget piles pressure on households and businesses that are already struggling because of the decisions of the Chancellor. Prices are high, growth is sluggish and now the Chancellor has chosen to impose another duty hike. Our new clause 26 would therefore require the Chancellor to publish a statement on the impact of increasing alcohol duty on the hospitality sector, on pubs, on UK wine, spirit and beer producers, on jobs and on the public finances. These sectors are already being hammered by this Government’s economic choices. A Government who say that the cost of living is their priority are raising alcohol duty, putting more cost on to people and businesses that keep our rural communities and high streets alive.
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Finance (No. 2) Bill
Indeed. When we brought in the new duty system, we focused on the strength of alcohol in terms of the tax. We want to encourage more people into the hospitality sector, but the Government seem to have a policy of driving people away from going into pubs—and not just Labour MPs. In government, we recognised the importance of those sectors to jobs, to our communities and to growth, and the simplified duty system, including the two new reliefs—draught relief and small producer relief—were warmly welcomed. My hon. Friend the Member for Kingswinford and South Staffordshire (Mike Wood) made the point that the Government are choosing not to implement similar measures on draught relief. At the 2023 autumn statement we froze alcohol duty rates, and we extended that freeze in the spring Budget of 2024. I am proud to support that record: we had a Government working with the sector, not against it. It gives me no pleasure to say that this Government have chosen a very different path.
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Finance (No. 2) Bill
They absolutely are. I would be happy to come to my right hon. Friend’s constituency to discuss this over a pint in one of those small rural pubs, which are the hub of our villages and hamlets. Once they are gone, it is very difficult to replace them. The Government clearly have the hospitality sector in their crosshairs, and clause 86 is just the latest salvo. This is no small corner of the economy. Some 3.5 million people are employed directly in the sector, which invests £7 billion a year, yet the industry is being punished by the Chancellor’s decisions and this clause. UKHospitality’s “#TaxedOut” campaign has highlighted the nearly 90,000 jobs lost in this sector. With unemployment now above 5%, young people in particular are paying the price. That is a consequence of the Chancellor’s damaging tax rises, which were supported by Labour Members. Higher alcohol duties, the jobs tax, energy bills and soaring business rates are layering cost on cost. It is little wonder that UKHospitality has called the Government’s approach a “hammer blow”.
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Finance (No. 2) Bill
That is very clearly the risk. The British Beer and Pub Association has said that the proposed increases will be damaging to the sector, and we may well see more closures as a result. New clause 26 would shine a light on the real impact that these decisions will have on rural pubs, jobs and businesses. I hope the Minister will consider the new clause and not simply dismiss it by referring to the tax and information impact note, as she did with an earlier group of amendments. That is a prediction of what will happen; it is not a review of what the actuality is.
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Finance (No. 2) Bill
I think that makes sense, and I certainly agree with my hon. Friend. The Government are having to try to put in place solutions to deal with problems that they have created. If Labour MPs were welcome in pubs across the country, they would hear quite how difficult—
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Finance (No. 2) Bill
I am sure that the hon. Member is welcome, but let us be clear that some are not. If I go into a pub, I do not think I will find many publicans who think that this Government are pro-pub. We have a Chancellor who said that she did not understand the impact that her Budget, the revaluation and the removal of the discount on business rates would have. That is staggering. Frankly, it shows once again that she does not understand business and was not listening when the sector and many others warned that that was precisely the impact that her policy would have. The Chancellor is reportedly about to do a U-turn on her business rates raid. She has not come to the House yet to inform us or the sector, but what is being briefed is likely to be wholly inadequate. On the radio this morning we heard Ministers saying that the impact will be limited to pubs, but the hospitality sector, leisure businesses and retail all face huge increases in business rates.
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Finance (No. 2) Bill
The hon. Gentleman tempts me on to my next paragraph. Instead of tinkering, the Chancellor should adopt Conservative party policies and abolish business rates for pubs, hospitality businesses, retail and leisure businesses, as well as slashing the average pub’s energy bill by £1,000. That is real help—the Minister can have those ideas for free. The duty increases will also have an impact on the UK’s world-class wine and spirits producers, which together generate £76 billion in economic activity. Across our wine sector, there are more than 1,000 vineyards, including some excellent ones in North West Norfolk, which I recommend. Despite that success, we see the Government putting yet more costs on to the sector; some 60% of the price of a bottle of wine already goes to tax. Instead of listening to calls from the sector to freeze duty, the Chancellor has decided to increase it, and she has failed to fix the small producer relief so that it works for wine makers and distillers. The picture is no rosier in the spirits sector. The Scotch Whisky Association has said that the increase piles additional pressure on to a sector already suffering from job losses, stalled investment and business closures. It estimates that the lost revenue to the Treasury as a result of the previous rise in spirits duty amounted to about £150 million. The UK Spirits Alliance has called the Budget “a sad day for the nation’s distillers, pubs and the wider hospitality sector.” WineGB joins its ranks in pointing out that higher prices will likely lead to lower sales and reduce the Treasury revenue, so the sector could not be clearer. The only people still pretending this is good economics are those on the Government Benches. When the Government should be backing businesses, they are instead choosing to add to their costs. Increased taxes have consequences—they depress demand and revenue. In October, YouGov found that one in four regular drinkers was likely to reduce their alcohol spend this year due to price increases, and the Wine and Spirit Trade Association has called for the OBR’s forecasting assumptions to be reviewed. The Government are putting themselves and the UK on the wrong side of the Laffer curve, which the hon. Member for Stoke-on-Trent Central (Gareth Snell) should read more about—he will be persuaded. Ministers should take fresh advice on the impact of these changes. The UK’s brewers, producers and hospitality businesses are resilient. Frankly, in the face of this Government’s onslaught, they need to be. They are at the heart of our communities, creating jobs, driving local growth and giving many young people their first opportunity in work. Now is the time to support the sector, not tax it more, which is why we will be voting against these measures this evening.
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Puberty Suppressants
Part of the trial is to ask the child participants the Avon longitudinal study of parents and carers romantic relationships questionnaire. Is the Minister as concerned as I am that children under the age of 13 will be asked sexually explicit questions?
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Finance (No. 2) Bill
To come to the rescue of the Chancellor, it turns out that she simply did not understand the impact, according to the Business Secretary. Perhaps the Minister, in her winding-up speech, will be able to confirm that the Chancellor literally did not know what the impact of her own policies would be on hospitality businesses. The Minister may be able to tell us whether the Business Secretary was right to identify that failing of understanding by the Chancellor.