Finance (No. 2) Bill (Fourth sitting) 2026-01-29

Supports amendment to exempt rural areas from VAT increase on taxis. Argues that it will be unfair for local authorities and vulnerable constituents, particularly those with special education needs.

Questions the effectiveness of clause 79 in securing tax revenue from Uber by rewriting contracts to act as an agent rather than a supplier.

Expresses concern about the financial impact of the new tax on special educational needs (SEND) transport in Devon, which could lead to a £10 million increase if not addressed. Calls for clarity and assurance from the Government regarding additional costs.

Explains that the exclusion applies to several large private hire vehicle operators but ensures they are subject to the same tax rules as everyone else. Confident that this change is carefully targeted and will raise £700 million in tax revenue annually, which is vital for public finances. Reiterates that the clause does not seek to apply additional VAT to those who are already using TOMS and highlights mechanisms local authorities have for handling their VAT liabilities.

Continues to discuss day-trippers, emphasising that proposed new subsection (3A) in section 53 of the 1994 Act does not provide for day-trip excursions. Suggests the Government should consider amending the wording to ensure protection for genuine day-trip packages within TOMS. Requests a written response from the Minister regarding SEND concerns and expresses dissatisfaction with the Minister's handling of rural issues.

Moves amendment 43 in clause 80, proposing that the £200 cap for charitable donations be uprated annually in line with the consumer prices index. Acknowledges the positive change but highlights concerns about complexity and administrative hassle, urging the Government to provide practical guidance.

I thank the Opposition spokespeople for their questions. Before the Budget, I attended a roundtable with businesses, charities and those who had been campaigning and advocating for the change we brought in at the Budget. In response to many of the questions asked by the Opposition spokesmen, I can reassure them that we worked through the limits and detail of the clause really closely with the charitable sector and with the businesses that would have a different VAT treatment or that may pass on their goods in this way.

The hon. Member for Maidenhead makes a reasonable point about the £200 limit. The Minister said that there had been a lot of discussion to arrive at that threshold, but I do not think he exposed the entire rationale underpinning it—he talked about washing machines and their prices, which was an interesting diversion. The point remains that if we have a £200 limit and we think that is the right limit now, why do we not just automatically uprate it? Then the Minister will not have to come back with regulations or put other clauses in future Finance Bills.

Balancing VAT refund rights to ensure fairness for CCAs is, of course, welcome, and we support it. We support the idea that VAT refund rights should be balanced across groups and institutions that are similar and have a similar purpose. That is why I hope you will allow me to share some surprise, Mrs Harris, that the Government have not gone further in balancing refund rights. For example, a school with a sixth form attached can claim its VAT back, but a sixth form college cannot.

Critiques the Conservative Party's stance on business rates and the proposed stamp duty relief. Emphasises that the Government should extend the period of relief beyond three years to attract more listings, arguing it does not cost anything because companies would not list without this relief.

Argues against the Minister's point about value for money, stating that extending stamp duty relief beyond three years would encourage more listings and thus generate revenue the Government would not otherwise have. He questions why they cannot extend it.

She argues that raising prices on tobacco risks boosting demand for illicit products. She cites HMRC data suggesting that 10% of cigarettes and 35% of hand-rolling tobacco are from illegal or non-UK duty-paid sources, while industry data suggest up to 30% of cigarettes and over 50% of hand-rolling tobacco being sourced illicitly.

Tomlinson responds by stating that HMRC's estimates are the most reliable, produced annually in 'Measuring tax gaps'. He provides figures showing a 13.8% tobacco duty gap equivalent to £1.4 billion for 2023-24. He also mentions ongoing efforts with Border Force and funding commitments of £100 million towards enforcement.

Wild discusses new clause 17, which would require the Chancellor to make a statement on the impact of vehicle excise duty increases. He supports this clause as it aims to assess impacts on the automotive sector, household incomes and the UK economy.

The Government do consider the impact of each individual tax measure on businesses and consumers in the round with the others, at Budgets and in between them too. As a result, we have concluded that this is the right and proportionate way forward, to protect revenue and make sure that we can increase revenue in line with inflation, rather than beyond it.

The clauses deal with changes to vehicle excise duty for heavy goods vehicles. We have concerns about the timing of the increases, and the absence of meaningful backing for the most affected industries, especially the logistics sector, which keeps Britain moving. The logistics industry pays a huge amount of fuel duty—it is a vital sector, which adds £170 billion in gross value added and employs around 8% of the workforce, so this is a sector that the Government should be supporting.

My hon. Friend makes an important point about the effect of these clauses on putting up costs and potentially adding to inflation, which as we know has almost doubled from the rate that the Government inherited.

The haulage sector has seen significant challenges in recent years: increases in fuel prices, increases in wages and significant changes in the Employment Rights Act 2025, business rates and vehicle excise duty, as we see here. The Government’s EU reset has not touched the sides, as haulage associations have been telling us recently.

Clause 94 will increase the threshold for zero emission cars from £40,000 to £50,000. This measure is projected to benefit over half a million drivers of zero emission vehicles over the next five years and incentivise electric vehicle take-up.

Clause 94 makes changes to the expensive car supplement in vehicle excise duty, specifically for zero emission vehicles. The Government propose to increase the threshold to £50,000 but only for zero emission vehicles. The clause will take effect from April 2026 and is projected to benefit electric vehicle drivers while excluding petrol, diesel, and hybrid cars.

Welcomes the uprating of the expensive car supplement for EVs to £50,000 but expresses concern over supporting electric vehicles post 2027 in other clauses of the Bill. Raises concerns about flooding of electric vehicles from China undercutting European and British competitors.

He discusses the impact of changes to air passenger duty, stating that it will make a fair contribution to public finances. He also mentions new clause 20 and 32 proposed by the Opposition are unnecessary.

He supports transparency in the aviation industry regarding the impact of APD changes on various sectors, proposing a full impact assessment and clear statement of APD charges on boarding passes. He raises concerns about affordability for families and regional airports.

Raises points about the high supplement cost affecting rural areas and north London, questioning affordability of new cars within £40k to £50k bracket.

The changes made by clause 97 will increase CCL rates on gas, electricity and solid fuels in line with the retail prices index. The Government already consider the impact of CCL on energy-intensive industries and competitiveness. Several reliefs are available for such businesses.

Clause 97 raises the climate change levy, leading to an additional burden on businesses. High energy costs hinder growth and productivity in the country. The new clause would require a report on CCL rates and their impact on energy-intensive industries.

The Government is doing all they can to accelerate the roll-out of clean power, including nuclear power. The new clause would require a report on the impact of section 98 which increases landfill tax in line with RPI from April 2026.

Clause 98 increases standard and lower rates of landfill tax, intended to discourage disposal in landfill. However, there are concerns about the impact on business costs, recycling rates and wider environmental outcomes. New clause 22 would require an assessment of impacts.

Welcomed the Government's decision to abandon plans for merging landfill tax rates and imposing a significant increase on inert waste disposal. Emphasised that such proposals were not aligned with government objectives of promoting housing construction. Cited concerns about increased costs for new build homes, potentially hindering the delivery of 1.5 million planned new homes by the Government.

Expressed concern over the impact of the abandoned tax proposals on his local constituency's quarries and waterways, citing potential hazards such as dangerous quarry lakes. Mentioned a tragic incident involving deaths near his constituency due to shallow yet deep quarry lakes.

Supported Mr Reynolds' comments, highlighting the impact on local industry and exports in Newton Abbot. Noted that a factory producing high-value propellers faced closure due to increased disposal costs from sand used in moulds.

Welcomed the Government's decision on removing the dredging exemption but criticised opposition parties for inconsistency regarding consultations. Stressed that the consultation process led to a proportionate policy outcome, dismissing concerns about inadequate engagement.

Rejected Dan Tomlinson's defence of the Government’s decision-making process, emphasising opposition to consultations on impractical ideas. Highlighted the urgency of addressing industry concerns and called for timely legislative amendments.

Confirmed that changes regarding dredging were not intended primarily for revenue generation but rather to balance support for the circular economy with more environmentally friendly practices. Committed to continued engagement and dialogue with affected sectors.

Asked Dan Tomlinson if he would table amendments on Report stage of the Bill to address industry concerns, emphasising the urgency of these matters.

Clarified that legislative changes regarding aggregates levy were not being addressed in this Finance Bill but would be part of next year's legislation. Noted that amendments to address industry concerns could still be tabled.

Sought agreement on clauses 99 and 100 concerning the aggregates levy, including a rate increase and adjustments for Scottish devolution. Explained the necessity of these changes to maintain consistency across UK and Scotland.

Discussed clause 99’s impact on increasing aggregates levy rates from April, noting its importance in infrastructure projects such as High Speed 2. Questioned the financial implications of these increases for large-scale infrastructure projects like HS2.

Responded to concerns regarding HS2 and other major projects, explaining that maintaining the real value of aggregates levy is essential for encouraging sustainable practices. Emphasised administrative simplicity in tax collection regardless of project types.

Supports the plastic packaging tax rate increase in line with CPI, amends the soft drinks industry levy to reflect new rates from April 2026. Emphasises that the amendments and clauses are supportive of the Government's broader environmental goals.

Opposes the backdated tax rise for the soft drinks industry levy, citing concerns about fairness and consistency in the UK tax system. Supports businesses' need for certainty and clarity regarding changes to the tax regime.

The Government's approach to uprating taxes is clear and appropriate, aligning with inflation. The SDIL will be increased by 27% in line with this approach. He emphasises the need for a robust trade defence system to respond to unfair trading practices. Clauses 106-108 strengthen the UK’s trade defence toolkit, ensuring flexibility and alignment with international standards.

Tariffs are harmful but necessary for a robust trade defence system. He provides historical examples like the Smoot-Hawley Tariff Act to illustrate the potential negative impacts of tariffs, urging the Government to ensure these measures are defensive rather than offensive.

Amendments 44 and 45 aim to strengthen parliamentary oversight by requiring impact statements before ministerial directions on trade investigations. He emphasises the need for proportionate, evidence-based decisions that are democratically accountable.

Supports measures that tackle unfair trading practices, including dumping and subsidisation. Argues for the power of Secretaries of State to initiate investigations. Cites example of Tata Steel facing job losses due to cheap imports from China. Emphasises the importance of a deterrent effect against large countries engaging in these practices.

Explains why the Government cannot accept amendments 44 and 45, citing potential risks to investigations if evidence is publicly disclosed before an investigation. Assures that transparency and evidence will be maintained in decision-making processes.

Supports the principle of clause 109 but expresses concerns about potential additional costs to businesses and consumers if ports are required to provide customs infrastructure. Requests that the Government assesses the impact on trade through these ports.

The previous Conservative Government introduced the levy back in 2022 as a proactive measure to combat money laundering and strengthen our economy. However, we have concerns about the scale of the new band C with a £500,000 levy for businesses with revenue between £500 million and £1 billion, representing a substantial burden on already heavily regulated businesses. Businesses moving into this band will see their payments increase by 1,289%. The simultaneous reduction in the threshold for the “very large” band means that more businesses face higher costs, potentially impacting UK competitiveness.

The Government of course do not place any additional burdens on businesses lightly, but reducing economic crime helps the good functioning of the UK economy and our competitiveness. The changes seek to address a significant imbalance in contributions by aligning them more closely with revenue size.