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Finance Bill (Energy Security Investment Mechanism) - New Clause 3 and associated clauses
08 May 2024
Lead MP
Eleanor Laing
Debate Type
Bill Debate
Tags
TaxationEnergy
Other Contributors: 20
At a Glance
Eleanor Laing raised concerns about finance bill (energy security investment mechanism) - new clause 3 and associated clauses in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The new clause requires the Chancellor of the Exchequer to publish a review within three months of the Act being passed, detailing the impact of section 2 on individual taxpayers facing marginal tax rates of 20% and 40%. The review must also compare figures for the current tax year with those for the previous three years and project them into the future. Additionally, it requires an analysis of how many pensioners will be liable to pay income tax under section 1 and what their average tax liability per person would be in each of the next four years.
Eleanor Laing
Welsh Conservative and Unionist
Proposes new clauses for reviews on the impact of section 2, pensioners' tax liability under section 1, and an analysis of the measures in sections 1 to 4, 12 and 13 on Wales, Scotland and Northern Ireland. The amendments aim to provide transparency and comparative data to ensure that all demographics are aware of their financial implications.
Carmarthen East and Dinefwr
Mr. Edwards questions the Government's approach by highlighting concerns raised by constituents regarding unfrozen personal tax thresholds, suggesting that the measures taken to reduce taxes may not address underlying issues effectively.
James Murray
Lab Co-op
Ealing North
Mr Murray argues that higher taxes will burden families by £870 per year by 2028-29, with pensioners facing an even greater increase of £960. He criticises the Conservative government for failing to admit the impact of their tax policies and calls for transparency through new clauses 1 and 4.
Carmarthen East and Dinefwr
Mr Edwards intervenes to ask if the Labour position on fiscal policy is ideological or a general election tactic, challenging the Labour MP's stance on transparency.
John Redwood
Con
Wokingham
Supports tax-cutting proposals, including national insurance reductions. Argues that reducing taxes can boost economic growth and increase tax revenue through productivity improvements. Cites a £20 billion loss in productivity since 2020 due to public sector issues during the pandemic. Raises concerns about the decline in self-employed individuals post-IR35 changes and lockdowns, advocating for easier registration thresholds for VAT to support small business growth.
Drew Hendry
SNP
Inverness Nairn Highland Caithness
Critiques the Finance (No. 2) Bill for failing to address the cost of living crisis in Scotland and across the UK, emphasising issues like soaring mortgage bills, food prices up by a quarter over two years, and energy costs still nearly 60% higher than in winter 2021-22 according to Library research. Argues that clauses 1 and 2 should have invested more in the economy but instead are leading to cuts in Scottish capital funding. Suggests Labour's plan involves austerity measures and maintains a 'conspiracy of silence' on necessary spending reductions.
Ben Lake
PC
Ceredigion Preseli
Proposes new clause 5 to require a review of the impact of UK tax measures announced in the spring Budget on Wales, Scotland and Northern Ireland. Emphasises differences in economic conditions across regions, advocating for tailored fiscal policies that reflect local needs rather than uniform central taxation. Highlights issues like lower wages and productivity in Wales compared to the UK average, calling for a better understanding of how UK tax policy impacts different parts of the country.
Nigel Huddleston
Con
Droitwich and Evesham
Acknowledges the Conservative Party's commitment to low taxes and highlights the state pension increase. Defends against claims of scaremongering regarding national insurance and pensions, arguing that the government’s measures are fair and necessary. Rebutted criticism from Scottish National party and Labour representatives.
Drew Hendry
INTERVENTION
Clarifies his statement about the Conservative Party being hollowed out by right-wing extremists, correcting Nigel Huddleston's interpretation of his earlier comments.
Nigel Evans
Con
Wrexham
Mr. Nigel Evans proposed three new clauses to review the impact of corporation tax changes on businesses, energy security mechanisms, and small and medium enterprises' costs.
Gareth Davies
Con
Grantham and Bourne
Mr. Gareth Davies argued that the Government has already struck a balance between remaining competitive and raising revenue, maintaining corporation tax rates at 25% for large companies and 19% for small businesses, which provides certainty to businesses and supports investment.
James Murray
Lab Co-op
Ealing North
Murray supports new clauses 2 and 3, advocating for stability in business taxation to attract investment. He emphasises the need for a clear roadmap on corporation tax and proposes an end date for the energy profits levy to ensure long-term planning certainty.
Christchurch
Mr Chope opposes clause 12 and new clause 2, arguing that high corporation tax rates discourage business investment decisions. He calls for a reduction to 19% or lower and criticises the government's lack of commitment to reducing corporate taxes in the long term.
James Murray
Lab Co-op
Ealing North
[INTERVENTION] Mr Murray clarifies that Labour aims to cap corporation tax at 25% for the next Parliament. He responds to Mr Chope's arguments about the need for a review.
[INTERVENTION] Drew Hendry agrees with James Murray on capping corporation tax at 25% and argues that progressive taxation in Scotland has led to higher-rate taxpayers moving there, protecting public services.
Drew Hendry
SNP
Inverness Nairn Highland
Mr Drew Hendry criticises clauses 12 and 13 for maintaining the status quo on corporate taxation, neglecting Scotland’s hospitality sector which has seen over 500 closures in a year. He mentions that these clauses ignore calls for VAT relief, reflecting a lack of support for Scottish economic challenges.
Gareth Davies
Con
Grantham and Bourne
Davies argued against the proposed new clauses, stating that they are not necessary as information is already publicly available. He highlighted government measures to support small businesses through tax relief and other schemes.
Sarah Olney
Lib Dem
Richmond Park
Olney intervened, questioning the adequacy of maintaining the small profits rate at 19%, arguing that it is insufficient to address spiralling costs in energy and staffing. She supported new clause 7, which would require a review on how the rate affects SME cost management.
Christchurch
Chope intervened to ask for assurance that a future Conservative Government will lower the headline rate of corporation tax, indicating support for reducing current rates.
James Murray
Lab Co-op
Ealing North
Murray questioned the government's commitment to its policy of abolishing national insurance contributions, pointing out a funding gap and challenging the Minister on consistency in policy statements.
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