Finance (No. 2) Bill

Daisy Cooper Excerpts

Committee of the whole House
Tuesday 13th January 2026 Commons Chamber

[The Second Deputy Chairman]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

This is a retrospective tax without transitional protection. It upends plans for those who have already made sacrifices to build up their pensions, undermines confidence in pensions planning, reduces long-term investment and causes people to rush to withdraw money from their pensions.

As has been mentioned, the chartered institute and the ATT have raised concerns about this group of clauses, which shoehorn pensions legislation into tax legislation. There are major worries about creating personal liability without control for personal representatives, whether executives or administrators. Personal representatives are legally obligated to gather all the assets, settle any liabilities, including inheritance tax, and distribute the remainder of the estate to the beneficiaries. They are personally liable if they do not set aside enough money to settle all financial liabilities, including IHT. Experts have warned that someone being personally liable for IHT on a pension fund that never comes into their hands leaves the door open to costly and protracted litigation and will understandably make personal representatives, such as professionals or friends of the deceased, much more cautious before they distribute all of the estate.

Even more concerning is the fact that if representatives discover a new pension fund after settling the initial IHT liability, this would have a knock-on effect on not only the estate but all other pension funds. It means that IHT will have to be recalculated for every part of the estate and every pension fund. It is far from uncommon for people to have had different jobs with separate pension plans, so the risk of miscalculation is obvious. If someone passes away before they have had the chance to consolidate their pension funds, tracking down the unused pots within six months of their death will be very difficult for executors and will mean that the initial IHT calculations could be wrong. The Government must recognise that and amend this measure. If they do not, and Ministers simply ask future executors to sign some sort of disclaimer form, they will soon find that nobody will want to take on that role.

Our new clauses 18 to 20 raise the clear need for significant reforms and are a means of pressing the Government to protect individuals from being liable for private pensions that they did not know about and could not reasonably know about either. Finally, there is widespread worry that family members might have to wait up to 15 months before they are able to access their inheritance, during what is bound to be a hugely straining period of loss and grief. The Liberal Democrats’ new clause 20 urges the Government to recognise that reality and take steps to address it.

[Lucy Rigby]

I thank hon. Members for their contributions to the debate on this group of clauses. Before I respond to the specific points that have been raised, I will reflect briefly on the core purpose of the Bill.

The Bill contains fair and necessary reforms to the tax system, which unfortunately have been ducked for far too long. They will help to strengthen our economy for the long term, ensuring that we can cut the cost of living and inflation, and restore our public services and the public finances to health. The Tories and Reform—who are increasingly indistinguishable, it might be said—have already set out their choice: a return to the chaos and instability of the past. That approach failed before, and we are not going back.

The clauses in this group restore pensions to their core and intended purpose, which is funding retirement. We are not allowing them to function as a tax-free vehicle for the transfer of wealth. Generous tax relief for retirement saving is preserved. The clauses ensure that pension wealth is treated fairly and consistently for inheritance tax purposes. They protect ordinary families, with more than 90% of estates still paying no inheritance tax at all each year after the changes.

Let me turn to the non-Government amendments in this group. New clause 18 would require the Treasury to review the effects of the changes to pension tax policy, including their impacts on individuals, administrators and behaviour. A report would need to be laid in Parliament no later than six months from when the Act comes into force. This new clause is not necessary. The Government have published a tax information and impact note on the changes in the normal way. It sets out the impact on individuals, and accounts for the impact on personal representatives.

As hon. Members know, the Government keep all tax policies under review through the monitoring of returns and communication with representative bodies and taxpayer groups. A review within six months of the policy taking effect on 6 April 2027 is not practical, not least because the data relating to inheritance tax in 2027-28 will not be fully available until the summer of 2030. That is the normal timescale, and it operates because tax liabilities data is available only with a long lag, partly because the filing of the relevant inheritance tax accounts is due 12 months after a death. For those reasons, new clause 18 should be rejected.

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[The Second Deputy Chairman of Ways and Means (Caroline Nokes)]

I call the Liberal Democrat spokesperson.

[Daisy Cooper]

We Liberal Democrats have long campaigned for the doubling of remote gaming duty, and we are grateful to the Government, who have finally listened and taken that on board. This measure will raise vital revenue in a fair way, while addressing the eye-watering profits of the big online gambling companies and standing up for the thousands affected by problem gambling. According to the latest figures from the Gambling Commission, the online gambling giants saw revenues reach an eye-watering £7.8 billion in 2024-25. Meanwhile, Public Health England has estimated that gambling costs the UK economy about £1.4 billion a year through a combination of financial harms and the impact on physical and mental health, employment, education and crime. About 300,000 adults in Britain experience problem gambling, as well as roughly 40,000 children. Those figures are stark. This measure finally takes action that should have been taken a long time ago, and it will raise about £1.8 billion a year by 2029-30 to fund our public services fairly.

Buried in the fine print, however, is a detail that makes it seem as if the Government are giving the big online gambling firms a get-out, and I should be grateful to the Minister for some clarification. According to the “Budget 2025 Policy Costings” document,

“The tax base for this measure is the Gross Gambling Yield”,

which is the revenue retained by gambling operators after they have paid out winnings to customers. The tax base for remote gaming duty as defined in the Finance Act 2014 is a larger tax base. It is known as the gross gambling revenue, and includes the notional stake value of free bets and free plays. Can the Minister explain why today’s tax measure will apply to a narrower tax base than the one currently targeted by remote gaming duty? How much tax revenue has been forgone by this narrowing of the tax base? Was it unintended, or was it a result of influence from the sector? Did any of the big online gaming companies meet any Ministers and discuss these measures while they were being considered?

New clause 21, tabled in my name, seeks to clarify this situation by requiring the Chancellor, within six months of the passing of the Act, to undertake an assessment of the impact of the implementation of sections 83 and 84 in respect of the treatment of free bets and free plays for calculating general betting duty on remote bets, so we can clearly see the impact of this difference.

[Alex Ballinger]

I want to speak in support of clauses 83 and 84 on gambling taxation. I of course strongly welcome these steps on remote gaming duty, which cover online slots, online casino games and other high-risk remote gambling products.

Ahead of the Budget last year, I was one of more than 100 Labour MPs, alongside Gordon Brown, who wrote to the Chancellor calling for a different approach to gambling taxation and one that recognises the reality of the modern gaming industry. We highlighted how taxing the social ills caused by online gambling could pay for the abolition of the two-child benefit cap, and I strongly welcome the action the Chancellor has taken to lift hundreds of thousands of children out of poverty on the back of these changes. For us, fairness was not just about asking those with the broadest shoulders to contribute more, but about ensuring those whose business models generate the most harm make a proper contribution to the cost of that harm. That is why clause 83 is so important, as it targets the most addictive and dangerous forms of gambling: online slots and casinos.

As a country, we are experiencing record levels of harm caused by gambling. The Gambling Commission’s figures tell us that 2.5% of adults, which is more than 1 million people, are suffering from serious gambling harm. There are many types of gambling harm—debt, family break-up, crime and, at the most severe end, suicide—so it is extremely worrying that the Royal College of Psychiatrists has seen a threefold increase in the number of those referred for gambling treatment since gambling moved online during the pandemic.

In my own area, the Dudley-based Gordon Moody charity, which provides gambling treatment centres all over the west midlands, has seen a large increase in referrals, most worryingly among younger people involved in online gambling. This is not a coincidence, because online slots and casinos are designed to be high speed, continuous, psychologically manipulative and, for many, overwhelmingly addictive. So the Chancellor’s decision to increase remote gaming duty targeted at these most harmful forms of gambling is absolutely the right thing to do. It sends a clear message that the tax system must reflect the level of harm caused.

There is another reason why this change—as well as clause 84, which increases general betting duty—is the right thing to do: many online gambling operators, particularly large global operators, have spent years offshoring their profits, booking revenues overseas, minimising their UK tax liabilities and contributing very little in meaningful employment or investment in our communities. In one example, at the end of last year the online operator Sky Bet moved its headquarters to Malta specifically to avoid UK corporation tax, cutting its contribution to the Treasury by tens of millions of pounds. In another example, an unnamed online bookmaker was investigated by the Gambling Commission for illegally directing customers to offshore-based platforms —indeed, to the black market itself—to avoid paying UK tax and to avoid UK regulations. Increasing these online duties means that it will be harder for unscrupulous operators to avoid tax by moving operations offshore. Online gambling in the UK will be taxed fairly in the UK.

Raising remote gambling duty to 40% and general betting duty to 25% for remote bets also puts us on a footing much closer to that of other European jurisdictions and many states in the United States. Until the Budget, the UK was behind the curve in taxing these highly harmful online products. For us, the Chancellor’s move is a matter not just of revenue, but of fairness, responsibility and aligning our tax system with the reality of modern online gambling.

However, taxation is only one element of harm reduction. Raising duty alone will not of course prevent gambling addiction, stop children being exposed to online gambling advertising and ensure that families receive the support they need when a loved one falls into crisis. If we are to tackle these harms, we need a public health approach. That means proper funding for treatment, and I welcome the steps already taken under the statutory levy. However, it also means serious investment in prevention, community education and early intervention, and a modern regulatory framework that puts people, not profits, first and is fully independent of the gambling industry.

I want to highlight another pressing issue for the Minister, which is the continued prevalence of the B3 gaming machines on physical premises. These high-intensity machines, so often located in areas with higher deprivation, continue to cause significant harm, yet they remain under-regulated and undertaxed relative to the risks they pose. If we are to take harm seriously, B3 machines should be included in the next phase of gambling tax reform.

Finally, the most recent gambling Act was introduced more than 20 years ago, in a completely different era: before the smartphone, before the explosion of data-driven behavioural targeting, and before 24/7 online casinos in your pocket. A new Act is clearly needed. Our laws have not kept pace with technology, they have not kept pace with the scale or sophistication of online gambling operators, and they have not kept pace with the reality of the harm we now see every day in communities across the country. I welcome the measures in the Bill, but I urge the Government to move quickly to update advertising rules, strengthen affordability checks, protect children and vulnerable people, and ensure that tax policy, regulation and public health strategy on gambling are all aligned.

The measures on remote gaming duty and general betting duty are excellent steps in the right direction. They acknowledge the reality of harm, strengthen fairness in our tax system and take us closer to a modern framework that puts the wellbeing of the public first.

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[Lucy Rigby]

The hon. Member raises an important point. Before I commit to her that I will take that forward, I would like to check what discussions have already taken place. I hope she will accept that that is necessary from my point of view.

Both the proposed new clauses focus on the impacts of the changes to the gambling duty and ask for a commitment to update Parliament within six months of the Bill being passed. First, this Government did not announce, and are not proposing to make, any changes to the treatment of free plays or free bets through this Bill. Furthermore, the Bill does not make any changes to the duty charged on bets placed on horseracing in high street betting shops.

Secondly, on the illegal market, which has been raised a number of times, the Gambling Commission is already tackling that risk and is protecting consumers, but we recognise that modern technology makes it easier for illegal websites to target consumers. To strengthen enforcement and protect consumers from dangerous illegal sites, we are providing an additional £26 million to the Gambling Commission over the next three years. I hope I can assure my hon. Friend the Member for Stoke-on-Trent Central that the £100 million a year in the form of the statutory levy is ringfenced for prevention, treatment and research in this area.

The Government published a tax information and impact note for this measure at the Budget. As is set out in that note, consideration will be given to monitoring and evaluating the expected Exchequer impacts of the policy after at least two years of monitoring data has been collected and analysed. More broadly, the Government continually monitor the operation of all taxes and keep them under review to ensure that they deliver on their intended outcomes and, indeed, are fit for purpose. For those reasons, the proposed statement and the impact assessment are not necessary.

The measures in clauses 83 to 85 deliver fair reforms to our system of gambling taxation. They reflect how gambling has changed in our country, the harms that now exist and the need for the tax system to keep pace as those changes continue. The shadow Exchequer Secretary, the hon. Member for North West Norfolk (James Wild), raised levels of employment. He will know that right across the piece, the OBR expects that employment levels will rise in every year of the forecast. Costings were also raised, including by my hon. Friend the Member for Stoke-on-Trent Central. The OBR has taken account of behavioural impacts within its costing. Of course, those costings have been certified and scrutinised in the usual way.

The Liberal Democrat spokesperson, the hon. Member for St Albans (Daisy Cooper), asked about engagement with industry. I can confirm that the Government, as I hope she would expect, engaged with a number of stakeholders, including from the gambling industry, as part of the consultation process. My hon. Friend the Member for Stoke-on-Trent Central also raised Gibraltar. Of course we recognise that Gibraltar has a gambling industry that very much faces the UK. I can assure him that there has been engagement, not by me, but by some of my colleagues in the Treasury, with Gibraltar to that end.

[Daisy Cooper]

I am grateful to the Minister for confirming that she has consulted and that Ministers have had engagement with the industry. I was specifically wondering whether in the course of that consultation with the industry, there was discussion about using a different measure and choosing a different tax base for the calculation of this particular tax, because it seems as though the tax base could have been bigger if they had used the measure already in the Finance Act, rather than this new measure that seems to shrink the tax base. Did the Treasury have a particular reason for using a different measure for calculating this remote gaming duty?

[Lucy Rigby]

It was not me who had those engagements, but as I said, I confirm to the hon. Member that we are not proposing to make any changes to the treatment of free plays and free bets through the Bill, which I hope reassures her in that regard.

I urge the Committee to reject new clauses 21 and 25 and agree that clauses 83 to 85 and schedule 13 should stand part of the Bill.

Question put and agreed to.

Clause 83 accordingly ordered to stand part of the Bill.

Clauses 84 and 85 ordered to stand part of the Bill.

Schedule 13 agreed to.

New Clause 25

Statements on increasing remote gambling duty and introducing a new rate of General Betting 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 in gambling duties made under sections 83 to 84 of this Act.

(2) The statement made under subsection (1) must include details of the impact on—

(a) sports and horseracing,

(b) the number of high street betting shops,

(c) the gambling black market,

(d) the employment rate, and

(e) the public finances.”—(James Wild.)

This new clause would require the Chancellor to make a statement about the effects of the increase in gambling duties.

Brought up, and read the First time.

Question put, That the clause be read a Second time.

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[Daisy Cooper]

Clause 86 increases the rate of alcohol duty in line with RPI inflation. On paper, that measure might look like a normal, simple uprating policy, but it must be seen for what it really is: in the broader context, it is yet another tax on struggling hospitality businesses and financially stretched customers.

Hospitality is being hammered over and over again with sky-high rents and soaring energy bills, the Government’s unfair jobs tax, and now this business rates bombshell buried in the fine print of the Budget. It matters, and hospitality really matters. It is the only element of pre-pandemic spending that has not recovered. The sector employs huge numbers of young people and part-time workers, often giving people their very first job and their way into longer-term employment.

This is one of the sectors that make life worth living. We all remember the place where we fell in love, or had our first date. I remember the music venue where I found my favourite band. I remember the pub where I sat with my girlfriends and one told me that she was not going to survive her stage 4 cancer—and I remember the spa day that we had when she did. Hospitality is part of who we are as human beings. It is unique in what it contributes to our economy, and we must do everything to support it.

[Mr Lee Dillon (Newbury) (LD)]

If this debate had taken place before Christmas, I would have had to declare an interest, but my father has now sold his majority share in our local pub in our home town, which I think goes to the core of today’s debate: publicans are leaving the sector. My hon. Friend has been talking about the importance of hospitality. My father’s pub used to host bingo nights on Thursdays and bingo on Sunday afternoons, and on those occasions we would see people there who would never go at other times of the week. Does my hon. Friend agree that the sense of community that pubs build is crucial, and is under threat from this Labour Government?

[Daisy Cooper]

My hon. Friend is absolutely right. Pubs are irreplaceable, and when a pub goes a community falls apart. Pubs are vital as part of the social fabric: they are the glue that holds our communities together, and we must protect them. We tabled new clause 9 because we want the Government to look at and

“report on the cumulative impact on the hospitality sector of alcohol duty measures”

alongside all the other “wider fiscal changes”, including the higher national insurance contributions and the business rates changes. This really matters.

[Dr Al Pinkerton (Surrey Heath) (LD)]

Back in November, the Chancellor promised to support the great British pub by introducing permanently lower tax rates in more than 750,000 retail and hospitality properties. In my constituency, the Half Moon will experience an 157% rise in business rates, the Inn at West End an 87% increase and the Frog in Deepcut an increase of 128%. Does my hon. Friend agree that this feels less like support and more like last orders?

[Daisy Cooper]

I agree 100% with my hon. Friend. One of the points that I have made repeatedly to other Ministers is that businesses heard the promise that there would be permanently lower business rates, and made decisions based on the fact that they had heard the word “lower”. The Government gave themselves powers to introduce a lower multiplier for retail, hospitality and leisure—20p less—and it was understood by the hospitality industry that if they used those powers, that would effectively cancel out the loss of the RHL relief. Businesses made investment decisions. They made hiring decisions. They made all sorts of decisions based on what they thought was going to happen. But the Government have not used those powers that they gave themselves, using a multiplier of minus 5p rather than the maximum of minus 20p.

[John Milne (Horsham) (LD)]

I recently met Richard, a publican in my constituency, and he told me the trade had never been so tough. He said:

“The truth of the matter is, for the first time I’m thinking I shouldn't have bothered taking the risk of going into business. I should have stayed with the big brewer, taken my salary and relied on my pension.”

He is right, isn’t he?

[Daisy Cooper]

I hope so very much that he is not, but I understand why he said that, and I hear the same from many hospitality owners and pub landlords on my own patch.

It is because we Liberal Democrats care so deeply for hospitality, and recognise the vital role that it plays in every community in the land, that we were campaigning ahead of the Budget for an emergency VAT cut for hospitality accommodation and attractions until April 2027 —a measure that would have brought growth into every corner of our country, saved jobs and our high streets, and given a real boost to consumer confidence. That is why, since the Budget, we have been fighting tirelessly against the Government’s devastating business rates hikes, and pressing Ministers to implement the full 20p discount for which they legislated last year.

[Dr Luke Evans]

The hon. Member rightly points to the cumulative effect, but I am interested to see that her new clause 9 does not mention the Employment Rights Bill or the impact of the national living wage increase. Is it by design that the Liberal Democrats have not put those in, because they do not agree that they will have an impact on hospitality, or was it an oversight, and they are other cumulative effects that need to be considered when holding the Government to account?

[Daisy Cooper]

I am grateful for that question, but if the hon. Member reads the explanatory statement closely, he will see that it says “alongside wider fiscal changes”. The Government could of course widen that to other legislative changes, if they chose to do so. However, on that basis, I hope the hon. Member and his colleague will be supporting the new clause when we push it to a vote later.

[Dr Arthur]

As an important point of clarity on the living wage, which of our constituents on low pay does the hon. Member think do not deserve that uplift in living wage? Is she saying they do not deserve it?

[Daisy Cooper]

Absolutely not. During the passage of the Employment Rights Bill, we Liberal Democrats said repeatedly on the record in both Houses that we supported a higher minimum wage. The problem we are hearing from businesses, particularly small businesses, is that they are getting lots of changes from the Government all at once. It is business rates changes, higher contributions, wages, the new regulation and now alcohol duty as well. It is the cumulative impact of all of the employment changes and the fiscal changes that means business owners and pub landlords just cannot cope.

This is about the cumulative impact. We have made very clear which measures we support and which ones we do not, but the cumulative impact is felt by small businesses. That is why, during the passage of the Employment Rights Bill, we tabled a number of amendments asking the Government to report on the impact on small businesses in particular. I hope that has clarified the matter for the hon. Member.

[Dr Arthur]

A wide range of concerns has been developed, and I get the point that these are costing the hospitality sector money—I absolutely get that—but all that the Lib Dems are promising is a review. What I do not hear is what they would do to resolve this and how much it would cost, apart from the broad assertion that they would cut VAT in some undefined way. What is this going to cost, and where is the money coming from?

[Daisy Cooper]

I have explained all those measures in this Chamber before, but I am happy to spell them out again, including the remarks I made a few minutes ago.

The very first thing we called for was for the Government to use the powers they gave themselves in the Budget last year. I would love to know the costings for that measure, and I have tabled written parliamentary questions to ask the Government to give me those numbers. If the Government will not answer written questions, how on earth are opposition parties supposed to come up with modern proposals? We have tabled written questions time and again, but we have not received any answers.

On the VAT point, we have costed it. We said it would cost £7 billion over 17 months, and we would fund it with a windfall tax on the big banks, which is a proposal backed by the Institute for Public Policy Research and independent economists. So we have answered all of these points and explained where the money would come from. The suggestions are fully costed and fully funded. We have made those points in this Chamber on several occasions, as I am sure the hon. Gentleman will see if he has a look at Hansard. My point is that, if we are going to put questions to the Government asking them for data so we can make informed policy suggestions, I very much hope that they start to answer them.

On that matter, it has been reported in various newspapers, on the BBC and in other places that the Chancellor and Ministers did not understand—those sources have quoted the Chancellor and Ministers as saying they did not understand—the impact that revaluation would have on business rates bills, especially for pubs. I find that impossible to believe, and I cannot understand how that can be the case. We know for a fact that, at the very least, the Valuation Office Agency gave the aggregate data to the Treasury. We know that because it says it in black and white—or in black and slightly red—on page 81 of the Red Book. It says that the VOA gave that data to the Treasury.

I tabled a number of written questions asking the Government whether they had received that information broken down by sector, and I did not receive any answers. I wrote a letter to the Leader of the House and I made a point of order, but again, that information was not forthcoming. Then we had a bombshell revelation today when the VOA, in giving evidence to the Treasury Committee, confirmed upon questioning that it had given data drops on the sectoral impact starting a year ago. It also confirmed to the Treasury Committee today that 5,100 pubs have seen their rateable values at least double. It therefore seems, if the VOA did provide that information to the Treasury, that the Treasury should have had that information. It is not clear to me why I did not receive data-rich answers to my written questions asking for that breakdown by sector. It is also not clear to me how the Chancellor and Ministers can say that they did not know or did not understand the impact that the revaluation would have on bills if they had had that data over the course of the past year.

I urge Ministers when they come to the House, as they are indicating they will, to provide some kind of a U-turn—we do not know what that looks like—to bring some clarity to all those questions. In the meantime, I hope the Government do support new clause 9, because we need to see the cumulative impact not just of alcohol duty changes, but their impact alongside national insurance and business rates.

[Sir Edward Leigh]

The hon. Lady is giving a very good speech. I hope, as the Liberal Democrat spokesman, she will say just a tiny bit more about rural pubs. I think a lot of urban Members do not understand the context. Where I live here in Westminster, it takes me one minute to walk to my local—one minute. Where I live in the Lincolnshire Wolds, it takes me one hour to walk to the pub—one hour. Everybody who accesses pubs in rural England has to go there by car. We do not ride horses any more, and it is too dangerous to walk on the road or take a bicycle. The Government have to understand that the rural pub is in real danger from the alcohol limits and other measures.

[Daisy Cooper]

I am incredibly grateful to the right hon. Member for making that point. I am the MP for St Albans, which is a small city, but I am a Suffolk girl born and bred. I know how valuable rural pubs are. They provide all sorts of services: they look after older people and single people; they are a fantastic community hub; and they provide employment for young people—one of my first jobs, aside from apple picking, was working in a pub—so I understand the vital importance of pubs in every single village, town, parish and hamlet up and down the United Kingdom. I am grateful to him for making that point.

In closing, I hope that when the Government respond this evening they provide answers to some of these questions. What did Ministers know and when? If the VOA sent that sector information on valuations, when was it sent? When did it send the information on pubs, specifically? If the VOA did tell Ministers that rateable values had at least doubled for more than 5,000 pubs, how is it possible that Ministers did not know? Why have we still not had a statement from the Government on what they are trying to do? Will their announcement extend to the rest of the hospitality industry, or just to pubs? Will the Government now use the full powers that they gave themselves? I cannot cost this, because I have not been given the numbers despite repeated attempts to get them. Will the Government consider a VAT cut?

Finally, the only rumour we have heard about what the Government may be considering are the changes to licensing laws, so let me close with this point: if your pub is empty, you do not want to keep it open for longer, paying more money to keep the lights on, the radiators heated and the staff behind the bar. That is not an answer to this problem.

[Jacob Collier (Burton and Uttoxeter) (Lab)]

As the MP representing the home of British brewing, Burton-upon-Trent, it will come as no surprise that I will speak to clause 86, and focus my contribution on pubs and hospitality. For me, this not just political; it is personal. As a Burtonian, I grew up with the smell of hops permeating the air and Burton’s famous water flowing from the taps. My very first job was in a pub. This industry is who we are.

Pubs are woven into the very fabric of our country. They are the heart of our high streets and villages, and are among our last shared spaces. When we talk about growth, and supporting wellbeing and employment, pubs and hospitality sit at the heart of that conversation. Yet this is an industry that has faced years of challenge. Navigating the pandemic, absorbing high energy costs and managing rising prices have left many venues operating on very low margins, if any at all.

That is why the decisions we make in this clause matter so much. We must look carefully at the overall effect of alcohol duty and how it interacts with consumer behaviour. There is a case for strengthening differential rates of duty between supermarkets and pubs, known as draught relief. Drinking in a pub is not the same as drinking at home. Pubs are supervised, regulated spaces. Landlords ensure responsible drinking, with pubs providing social connection and supporting mental health in our communities. Pubs give character to our high streets and town centres, yet the tax system makes it cheaper to buy alcohol in bulk from a supermarket than to go down the local pub. If we are serious about encouraging people back into our town centres, into these shared protected spaces, alcohol duty must work in favour of pubs.

I encourage Treasury Front Benchers to read the letter from those of us on the all-party parliamentary beer group, which calls for the multiplier to be increased from around 13% to 20%. Our proposal is supported by the Campaign for Real Ale, the Society of Independent Brewers and Associates and the British Institute of Innkeeping. This is not about encouraging more drinking; it is about encouraging better drinking in places that strengthen our local communities and our local economies.

I recognise that the Government have put in place the permanently lower multiplier on business rates for retail, hospitality and leisure businesses, but any wins in this space have been wiped out in many cases by the new rateable values published by the VOA. In my constituency, the rateable value of the Devonshire Arms—the Devvie, my favourite pub—is set to increase by over 60%. Down the road at the Roebuck, the rise is more than 70%. At this rate, I am not going to have much of a pub crawl.

We must stay true to the manifesto commitment we made to level the playing field between online retailers and the high street. An average 76% increase for pubs compared with just 14% for online retailers means that we must think again on this policy. It is no good having transitional relief in place when the bill at the end of the three years is simply unaffordable.

Industry voices are clear that further support is needed in the short term while longer-term changes and reforms are worked through. Operators such as Punch Pubs, which is headquartered in my constituency, have called for a higher business rates discount—up to the maximum permitted—to help offset the valuations and the cumulative tax burden that pubs face. UKHospitality has similarly warned that even after reduced multipliers and the transitional relief that the Government have put in place, the average pub faces a significant increase to its business rates bill, alongside other cumulative impacts that hon. Members talked about earlier.

The Government are right to listen to Labour Members who have been raising the voices of pubs, brewers, restaurants and small business owners. I want to thank those publicans, business owners and representative bodies that have engaged positively with me; it is only through working together constructively that we can bring about change.

Businesses that I speak to want to invest and grow, but they need the space and certainty to do so. I really welcome the recent hospitality investment that my constituency has seen—from Lowe’s on Carter Street to Nathan Dawe’s expansion of Isabel’s and Bespoke Inns’ redevelopment of the Hart and taking on of Tutbury Castle. Such businesses need to be supported by Government so that we can meet their ambitions. We must create more well-paid jobs and revive our high streets and town centres.

That means a fair approach to alcohol duty under clause 86, a recognition of the difference between pubs and supermarkets, and targeted support on business rates while deeper changes are delivered. If we get this right, the reward is clear: thriving pubs, stronger high streets, more resilient local economies, and communities that are not just better off but happier and more connected. That is why pubs and hospitality must continue to be listened to, supported and championed in this House and by this Labour Government. I shall continue to do that.

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[Lucy Rigby]

I am going to make a bit more progress.

New clauses 8, 9 and 26 would require the Government to publish reports on the impacts of alcohol duty. The shadow Exchequer Secretary, the hon. Member for North West Norfolk (James Wild), invited me to refer to our tax information and impact note, and I will take him up on that invitation. As is usual practice, our note was published at the Budget. It outlined the anticipated impacts of this measure for alcohol producers and the hospitality sector. Because this uprating maintains the current real-terms value of the duty, the Government do not expect it to have significant macroeconomic impacts, including to the employment rate or hospitality businesses’ costs, where a duty on drinks will have comparable relative bearing as now.

[Daisy Cooper]

Will the Minister give way?

[Lucy Rigby]

I will make some progress.

On the impacts on the public finances, HMRC publishes data on alcohol duty receipts quarterly. That data is reviewed alongside other evidence by the OBR when it produces its forecasts of alcohol duty receipts, as it did most recently alongside the November Budget. The Government’s view, as is evident from OBR-certified policy costings in recent years, remains that freezing or cutting alcohol duty rates reduces duty receipts.

The hon. Member for Angus and Perthshire Glens raised the importance of producers of Scottish whisky, and I agree with him about that. This Government are supporting key Scottish industries, including whisky, such as through our free trade agreement with India, which will boost exports of whisky and add £190 million a year to the Scottish economy.