Finance (No. 2) Bill

Debate between Robbie Moore and Dan Tomlinson

2nd reading
Tuesday 16th December 2025 Commons Chamber

[Dan Tomlinson]

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

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

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

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

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

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

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

[Dan Tomlinson]

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

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

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

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

--- Later in debate ---

[Dan Tomlinson]

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

[Robbie Moore]

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

[Dan Tomlinson]

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

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

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

Family Farming in Northern Ireland

Debate between Robbie Moore and Dan Tomlinson

Tuesday 28th October 2025 Westminster Hall

[Dan Tomlinson]

The hon. and learned Member raises the CenTax report, and it is worth noting some points about the analysis in that report. First, the Government have consistently said that around 520 farms would be paying additional inheritance tax as a result of the reforms announced at the Budget last year.

Members from all parties have been turning to the CenTax report as an independent analysis of the Government’s reforms. That report agrees with us on the number of farms that will be affected. That independent analysis conducted separately from the Government comes out with the same conclusion on the number of farms that will be affected and it says that its proposal—the minimum share proposal, which the hon. and learned Member for North Antrim mentions—would more than double the number of estates that would pay additional inheritance tax. I do not think the right way forward is to have the number of estates that would be affected increase from about 500 to, I think, about 1,200. I have looked at the report, which has been raised by Members from all parties, but I do not think it is the silver bullet that others have concluded it could be.

The context I just set out is why we are changing how we target agricultural property relief and business property relief from April next year. We are doing so in a way that maintains a significant relief for estates, including smaller farms and businesses. Individuals will still get 100% relief for the first £1 million of combined business and agricultural assets. I know that Members know this, but it is worth setting out the position again. On top of that amount, there will be a 50% relief. That means that inheritance tax will be paid at a rate of up to 20% rather than the standard 40%.

[Robbie Moore]

A £1 million threshold is nothing when we take into account the value of farmland, a cottage, a farmhouse, growing crops, stocks in store, livestock and machinery valuations—all of which will be taken into account at the valuation of an estate on death. A £1 million threshold is nothing before a 20% IHT liability is put on that estate. I urge the Minister to look at this again. Farmland values are significantly higher in Northern Ireland, and I reiterate my point that Northern Ireland farmers will see a greater impact from the £1 million threshold.

[Dan Tomlinson]

I do not agree that £1 million is nothing. It is a significant increase and a significantly higher threshold than that for anyone who does not have access to APR or BPR. I understand the point about land values in Northern Ireland, but at the same time, as far as I am aware, farms in Northern Ireland are smaller than those elsewhere. It is also worth bearing in mind that the £1 million relief comes on top of the spousal exemptions and nil-rate bands, so, depending on individual circumstance, up to £3 million can be passed on by two people, free of inheritance tax, and, as has been mentioned, the payment can be spread over 10 years, interest free. That policy design is not seen anywhere else in the inheritance tax system.