Taxes

Phil Brickell Excerpts

Tuesday 15th July 2025 Commons Chamber

[Phil Brickell (Bolton West) (Lab)]

It is a pleasure to speak in the debate, and I do so on behalf of my constituents, who dutifully pay their taxes in the expectation that they will receive a fair deal in return. Today’s motion from the official Opposition implies that the efforts that this Government have undertaken to deliver that fair deal are not in the interests of those constituents. I reject that premise entirely. Instead, Labour in government has constantly and rightly stuck to ensuring that those with the broadest shoulders carry the greatest burden. That approach has secured over £20 billion a year of revenue to pay for schools, the NHS and our national security. The Chancellor has restored responsibility and credibility—

[Alison Griffiths (Bognor Regis and Littlehampton) (Con)]

Will the hon. Member give way?

[Phil Brickell]

I will make some progress given the time limits that will be put in place on other Members.

That finally put us on a strong footing to move on from the irresponsible and reckless chaos of Liz Truss’s mini-Budget and the litany of unfunded spending commitments left behind by the previous Administration, who had no intention of implementing them.

I must remind the House of what Labour inherited from the last Government when the Chancellor walked through the doors of No. 11 just over a year ago: a national debt at nearly 100% of GDP—the highest since the 1960s; living standards falling for the first time since the 1950s; anaemic growth that left us second to last in the G7; and the UK as the only G7 country where the employment rate had still not recovered to pre-covid levels by the first quarter of 2024. That was the Conservative legacy—a legacy of economic mismanagement and a tax system weighed down by loopholes, complexity and underenforcement, so I will take no lectures on fiscal responsibility from the architects of that wreckage.

We on the Labour Benches will not indulge the fantasy that the path to prosperity lies in slashing public services, making unfunded promises and claiming that we can borrow endlessly without consequences. Our constituents deserve better. This Government, led by the Prime Minister and the Chancellor, are getting on with what Labour always provides: a Government of service.

First, let me address the abolition of the outdated non-dom regime. For too long, our tax code allowed the very wealthiest to live in this country and enjoy our services, infrastructure and rule of law but contribute only a token amount to the national purse. That ended, quite rightly, with this Government. The new residency-based regime is a matter of principle: “If you live here, you pay here.”

Secondly, we have increased the rate of capital gains tax on share sales—not to punish wealth but to deliver fairness. Many of my constituents contact me to say that they see no reason why wealth—assets, and stocks and shares—should be taxed less than work. There is more to be done on that, but I welcome the measures that the Government have taken so far.

[Joy Morrissey]

What the Labour party is saying very clearly—it is useful to have it clarified—is that those who scrimp and save, who decide to give money or homes to their children, who save their farm for their children, do not matter. They will be the ones who are punished under Labour—not those who scrounge on benefits, but those who have saved their money and made choices. Labour is saying that those are the people it will punish. I thank the hon. Gentleman for clarifying that.

[Phil Brickell]

The hon. Member would do well to listen to what I have to say, and I will come to wealth taxation shortly, but I would appreciate it if she did not take that very condescending tone with me—I spent more than a decade working in the financial services industry myself.

These measures have been taken because it is simply the right thing to do. When a nurse in Bolton hospital is paying a higher effective tax rate than someone making millions on property or shares, the system is not just broken; it is unfair.

Thirdly, the Government have cracked down on tax-dodging, with more funding for HMRC to go after tax evaders and bring down the stubbornly high tax gap. That gap—the difference between what the Government are owed and what they actually collect—currently stands at almost £50 billion. That figure—50,000 times £1 million—is almost the size of the entire defence budget in 2023-24. Unlike the dearth of policy proposals from the Conservative party, I constructively implore the Government to continue tackling the enablers of dodgy tax schemes. Firms that promote aggressive tax avoidance schemes will now be held to account with fines of up to £1 million. I welcome that measure in particular.

[Rachel Blake (Cities of London and Westminster) (Lab/Co-op)]

On that point, does my hon. Friend agree that it is important for HMRC to work with local authorities to take action on tax evasion by high street stores that do not act fairly, like the awful Harry Potter stores in my constituency? I am worried about the impact that they have on the high street and on our tax revenues.

[Phil Brickell]

My hon. Friend, who has been a fantastic champion on tackling that issue, makes a valid point.

The Opposition would have us believe that taxes writ large are a drag on growth, but the truth is more nuanced. What stifles growth is instability. What repels investment is unpredictability. What corrodes trust is a tax system that rewards avoidance while underfunding our schools, hospitals and police. Labour is putting more money in people’s pockets by boosting the minimum wage for 3 million workers. Wages are growing more in our first 10 months than in an entire 10 years under the Tories.

I would urge the Chief Secretary to the Treasury not to rest on his laurels, however, because there is more to do. I propose three policy priorities that I hope the Treasury will give serious consideration. First, we should review and reform current tax reliefs. Some £204 billion—a quarter of all tax revenue—was spent on tax reliefs in 2022-23, yet many of those reliefs are uncosted, unscrutinised and susceptible to abuse. The Treasury Committee was right to call for a rationalisation of those reliefs. We must audit them for efficacy, eliminate those that serve no public interest and crack down on those that have become vehicles for avoidance.

Secondly, I draw the Minister’s attention to the issue of tax-dodging in our own backyard. At the end of last month, a number of British overseas territories, including the tax haven of the British Virgin Islands, missed yet another deadline to introduce public registers of beneficial ownership. The Minister will know that this is a long-running issue. The BVI in particular has missed deadlines in 2020, 2023 and 2025, as the right hon. Member for Sutton Coldfield (Sir Andrew Mitchell) knows well, he having campaigned strongly on this issue over many years.

In January this year, the Bureau of Investigative Journalism, working alongside the BBC and The Guardian, revealed that Roman Abramovich, the former owner of Chelsea football club, may owe the Treasury up to £1 billion in unpaid corporation tax, penalties and interest. That is from corporate structures with a value of $6 billion, set up through an offshore web of hedge fund vehicles primarily registered in the British Virgin Islands and Cyprus, in what looks like an ultimately botched attempt to reduce tax liabilities.

When a Russian oligarch allegedly manipulates British secrecy jurisdictions in order to obscure profits made from UK-based centres of control, it undermines the credibility and fairness of our tax system. We need every British overseas territory to adopt full public beneficial ownership registers, so that sham structures such as Abramovich’s can be traced, challenged and taxed. Dirty money—the kind that flows beneath the waves of secrecy—corrodes the entire tax system, so I call on the Minister never to shy away from the globe-spanning challenge of tax abuse hidden in the nooks and crannies of our own backyard.

Let me turn to my third and final recommendation for the Government, which relates to the often overlooked distortion in our system of pension tax relief. This long-standing relief disproportionately benefits higher earners, and it has been my settled view for a number of years that we must look again at how it operates. Currently, higher rate taxpayers enjoy 40% relief on pension contributions, while the highest earners enjoy 45% relief. Basic rate taxpayers nevertheless enjoy a rate of just 20%. Total pension tax reliefs cost circa £40 billion per year to the Treasury, according to HMRC. Of that total, two thirds is relief for those on incomes in the 40% and 45% income tax bracket, which represented 12% of the adult population in 2023-24, according to the IFS.

That highlights the inequity here: a system of relief that is tilted to those who need it least, not to incentivise moderate earners putting into pensions but to support those on the highest incomes. I urge the Minister to consider moving to a flat rate model of, say, 30%, independent of income bracket, so that every saver gets equal recognition for securing their own retirement.

Finally, with my industry expertise in addressing tax evasion before I came to this place, I would like to address the siren calls of a broader wealth tax being made by a number of colleagues on the Government Benches and elsewhere in the House. Increases in capital gains tax to align them closer to income tax are welcome. Wealth and work should be taxed at similar rates—it is as simple as that—but I have a few words of caution for proponents of wealth taxes.

The Wealth Tax Commission itself acknowledges that wealth taxes could incentivise the wealthy to hide assets behind legal vehicles using expensive lawyers and secrecy jurisdictions. HMRC is already chronically short-staffed, under-resourced and hamstrung by complexity. Without dismantling the complex web of ultimate beneficial owners, offshore trusts, nominee directors and secrecy jurisdictions, we are at grave risk of opening up a game of whack-a-mole that we would likely see the Government lose to deep-pocketed and well-lawyered high net worth individuals who can run circles around HMRC and law enforcement and secrete their assets elsewhere.

My firm view is that the Government should instead crack down on tax evasion, simplify the tax code, streamline existing reliefs and bring capital gains tax levels closer to income tax. The Centre for the Analysis of Taxation estimates that closer alignment of capital gains and income taxes alone could raise some £14 billion for the Exchequer.

As a country, we face enormous challenges: an ageing population, creaking infrastructure, rising global instability and the urgency of the net zero transition. We know that public services are under strain. We need to raise funds in a way that is both fair and that promotes the growth we need to get our country back on its feet after 14 years of Tory decline. Let us be clear: taxation is not merely a tool for revenue but the lifeblood of our social contract, which is why we desperately need a responsible and workable tax system, to ensure that education is a right, not a privilege, that healthcare is free at the point of use and that the most vulnerable in our society are protected.

--- Later in debate ---

[Robbie Moore (Keighley and Ilkley) (Con)]

In my constituency there are dozens of hard-working family businesses, which are the backbone of our local economy and key to our local identity. These business owners get up early, go to bed late, work weekends, employ hundreds of local people and contribute hugely to our local high streets, local communities and local economy. But this Government seem desperate to squeeze every single penny out of those family businesses and into the hands of the Chancellor. The rise in employer national insurance puts a huge strain on the wage bill, especially when coupled with the rise in the minimum wage.

That is squeezing every single family business, as well as schools and hospices. Indeed, last weekend I took part in a local fundraising event—the Oxenhope straw race—which raises money for our local hospice, the Sue Ryder Manorlands hospice in the Worth Valley. Every year they do fundraising, but they tell me that instead of the money going to provide end-of-life care, it now goes straight to the Treasury through employer national insurance. The sad fact is that the large sums of money going to charities is not providing the support that is needed because it is going directly to the Treasury.

The business rate relief reduction is impacting many hard-working businesses across Keighley and Ilkley. The inheritance tax challenges are impacting many of our farming businesses and family farming businesses through slashing the 100% relief on agricultural property relief and business property relief to the £1 million threshold.

That is where the naivety kicks in. When we consider the size of the average farm in England—about 200 acres—and value the farmland, the house, the cottage, the growing crops, the machinery and the livestock, we reach well above the £1 million threshold, therefore exposing nearly every farming business to an inheritance tax liability. Those hard-working businesses make a return of less than 1%, if any at all, yet Labour Members say that they must have the weight of responsibility on their shoulders. That is a disgrace.

[Phil Brickell]

rose—

[Robbie Moore]

I will take a quick intervention from the hon. Member, but I hope that he will justify why those hard-working family farms and businesses in Keighley and Ilkley, who get up day in, day out, have to shoulder the burden for the mistakes that this Labour Government are making. Will he answer that point?

[Phil Brickell]

I thank the hon. Member for giving way. He is the third consecutive Conservative Member to stand up and speak, but I have yet to hear what proposals his party wants to bring in to raise revenue or what services it wants to cut. In my contribution, I made a conscious effort to set out three constructive proposals for the Treasury to consider, and I challenged Conservative Members because there was a dearth of—

[Mr Deputy Speaker (Sir Roger Gale)]

Order.