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Finance (No. 2) Bill - Second Reading of the Finance (No. 2) Bill
29 March 2023
Lead MP
Victoria Atkins
Debate Type
Bill Debate
Tags
EconomyTaxationCulture, Media & SportBusiness & Trade
Other Contributors: 41
At a Glance
Victoria Atkins raised concerns about finance (no. 2) bill - second reading of the finance (no. 2) bill 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 Minister supports the Finance (No. 2) Bill, which aims to support enterprise and economic growth by lowering business taxes and encouraging investment through full expensing for qualifying plant or machinery. She highlights measures such as the super deduction policy introduced previously, a corporation tax cut worth £9 billion, and an increase in funding limits for seed enterprise investment scheme companies from £150,000 to £250,000. The Bill also includes reforms to R&D tax reliefs system, extending rates of tax relief for theatres, orchestras, and museums, and increasing the pensions annual allowance to £60,000 to incentivise highly skilled individuals from retiring early.
Rachel Hopkins
Lab
Luton South and South Bedfordshire
The speaker raises concerns about the number of doctors who will stay in the NHS specifically because of the measure which will cost more than £1 billion a year.
Harriett Baldwin
Con
West Worcestershire
While welcoming many measures, raises concerns about clause 346 that abolishes the Office for Tax Simplification and questions how accountability will be maintained.
Sammy Wilson
DUP
East Antrim
Questions whether the corporation tax increases will result in more money being taken out of firms than the allowance provided, highlighting potential negative impacts on businesses.
Alistair Carmichael
Lib Dem
Orkney and Shetland
Raises concerns about the decision not to reverse the double-digit duty hike previously announced for Scotch whisky while introducing a freeze on duty for 'warm ale', questioning consistency with Government’s policy.
Sammy Wilson
DUP
East Antrim
Questions whether immediate effect of zero VAT rates on renewables such as boilers and solar panels in Northern Ireland has been realised, pointing out that this is not clear from the Bill.
Alistair Carmichael
Lib Dem
Orkney and Shetland
Asks for a date on when we can expect reforms to spirit duty, emphasising the need for transparency regarding such changes.
Inquires about the number of countries supporting the OECD's global minimum tax reform, highlighting concerns over compliance and implementation timelines.
Richard Fuller
Con
North Bedfordshire
Expresses reservations regarding the immediate impact of the measures on major multinationals not covered by countries mentioned, suggesting a conditional amendment in Committee to delay UK action until all OECD nations comply.
Sammy Wilson
DUP
East Antrim
Questions the wisdom of entering into arrangements that limit sovereign control, particularly noting Ireland's stance on corporation tax and its competitive impact on Northern Ireland.
Expressed concern about the use of tax havens, particularly those with corporate income tax rates below 15%. Asked if the Government had discussed reforms with territories to ensure they do not rely on other jurisdictions for taxation.
Matt Rodda
Lab
Reading Central
Did not provide a position or key arguments in the given text, only intervened briefly.
James Murray
Lab Co-op
Ealing North
Highlights that the bill fails to address pension issues affecting NHS doctors and does not introduce a targeted scheme for economic growth. He criticises the government's tax changes as benefiting only those with large pensions and costing £1 billion annually without addressing fairness or providing value for money during an economic crisis.
Intervened to point out that according to the International Monetary Fund, the UK's economic growth has been faster than other developed nations and suggests that this is a success worth acknowledging.
Matt Rodda
Lab
Reading Central
Agrees with James Murray’s point about small businesses facing extreme pressures on costs, suppliers, and energy costs due to government policies. Emphasises that these pressures have been overlooked by the Government.
Raises concerns about the differential geographic impact of the proposed policy, suggesting it could hinder efforts to 'level up' economic disparity between regions like Wales and London/South-East England.
Questioned whether Labour would rule out harmonising capital gains tax with income tax, suggesting some scepticism about Labour's economic policies.
Richard Fuller
Con
North Bedfordshire
Asked James Murray to clarify whether a future Labour Government would push for an increase in the global minimum tax rate from 15% to 21%, indicating uncertainty about Labour's economic intentions.
Craig Mackinlay
Con
South West Hertfordshire
Mr. Mackinlay criticises the proposed changes to income tax rates, particularly the peculiar rate of 60% for earnings between £100,001 and £125,140. He also strongly opposes the increase in corporation tax from 19% to 25%, arguing that it will deter foreign investment. Mr. Mackinlay points out that many countries are not implementing similar measures and suggests waiting for others to see if these changes prove effective before committing to them. Additionally, he raises concerns about the inclusion of OECD pillar two proposals within a Finance Bill.
Richard Drax
Con
South Dorset
Mr. Drax agrees with Mr. Mackinlay's point regarding the 31% increase from 19% to 25% in corporation tax, emphasising that such a high marginal rate discourages economic activity and investment.
Kit Malthouse
Con
North West Hampshire
Mr. Malthouse draws attention to the importance of consistency in corporation tax rates for long-term business planning, comparing it favourably with the American approach where high but stable rates enable better economic forecasting and investment.
Roger Gale
Con
Herne Bay and Sandwich
Paid tribute to Baroness Boothroyd and mentioned Jack Weatherill as great Speakers. Made a brief interjection about Stewart Hosie's speech.
Stewart Hosie
SNP
Dundee East
Critiqued the Financial Secretary’s remarks on debt servicing, employment and living standards. Cited OBR forecasts suggesting productivity growth below norm. Highlighted inflation issues, energy price cap reduction, pension allowance changes, and whisky duty increase. Criticised nuclear investments vs renewable technologies, emphasising financial risks to taxpayer and loss of investment confidence in renewables sector.
Nigel Mills
Con
South Cambridgeshire
Welcomes clause 25 on net pay arrangement for pensions, expresses scepticism about differentiated tax regimes for different sectors, and highlights the need to simplify pension tax policy. Condemns the increasing complexity in corporate taxation measures.
Anthony Browne
Lab
Carshalton and Wallington
Agrees with Nigel Mills on the issue of proliferating lifetime allowances for public sector workers, stating it would be unfair and economically irrational to have a separate pension regime for them.
Kit Malthouse
Con
North West Hampshire
Questions the logic of raising corporation tax to 25% without considering higher rates, suggesting that there must be a point where it negatively impacts investment and business behaviour.
Stephen Timms
Lab
East Ham
The decision to give a big tax cut to the wealthiest pension savers and abolish the Office of Tax Simplification at a time when ordinary families are facing an increasing tax burden is unjustifiable. The Bill will cost £1.8 billion in uncollected tax over three years, furthering unfairness towards lower-paid workers who lack access to auto-enrolment schemes for pension saving.
Richard Drax
Con
South Dorset
Expresses concerns about the increase in corporation tax from 19% to 25%, arguing it is a significant rise. Criticises the move towards an international minimum level of tax, suggesting it undermines control over domestic taxes and aligns with EU policies which were opposed during Brexit negotiations. Points out that other countries such as Singapore are delaying implementation until 2025, questioning the UK's rush to implement it now. Argues that lower taxes attract businesses and wealth creation, contrary to the current policy direction.
Alyn and Deiswrn
Calls for targeted support measures such as extending energy bills support, increasing local housing allowance rates to 30th percentile of market rents to alleviate poverty, and securing Wales' fair share of Barnett consequentials from HS2 funding. Highlights the detrimental effect of current fiscal policies on Welsh public services and infrastructure.
Richard Fuller
Con
North Bedfordshire
Mr. Fuller supports the Finance Bill and its measures, highlighting the Chancellor's successful Budget crafting despite pressures from Back Benchers and Opposition parties. He criticises Labour for lacking substantive opposition points and questions their stance on taxation policies, such as harmonising capital gains tax with income tax and pushing for a higher global minimum corporation tax rate. Mr. Fuller also advocates for lowering taxes to encourage economic growth and investment, particularly concerning the 60% marginal rate of income tax. He expresses concern over the impact of increased corporation tax rates on attracting international capital and talent. Additionally, he suggests introducing carbon taxes combined with reductions in general corporation tax to achieve net zero goals.
Newcastle upon Tyne North
Critiques the Government's childcare proposal for failing to address economic growth and societal inequalities. Argues that it will not help low-income families due to delayed implementation, insufficient funding, increased complexity in navigating benefits, potential quality degradation through lower staff ratios, and inadequate wraparound care provisions post-childhood.
Bob Stewart
Con
Beckenham
Highlights practical issues faced by individuals trying to access childcare vouchers from the Government; many are missing deadlines due to bureaucratic delays.
Ruth Cadbury
Lab
Brentford and Isleworth
Questions the policy's favouritism towards nurseries over childminders despite previous commitments from government officials to support both equally, highlighting contradictions in approach.
Priti Patel
Con
Witham
She supports simplifying childcare but criticises increasing corporation tax, arguing it can lead to complexities and high costs for businesses. She emphasises the importance of free enterprise and economic freedoms, advocating for lower taxes and reduced regulatory burdens. Patel highlights concerns over the implementation's consistency across jurisdictions and its potential impact on international trade deals.
Ashley Dalton
Lab
West Lancashire
Dalton argues against the clause, emphasising that it primarily benefits the wealthiest individuals. He highlights that less than 1% of people exceed the lifetime allowance limit, while the policy will cost taxpayers an estimated £100,000 for every job retained. He criticises the government's economic strategy as regressive and detrimental to public services.
Mitcham and Morden
McDonagh critiques the clause, focusing on its impact on working mothers and childcare providers. She notes that only 20% of the poorest third of families will benefit from the proposed changes to childcare costs. McDonagh highlights significant concerns about the sustainability of nurseries and the quality of staff in the childcare sector, emphasising the need for government intervention.
Sarah Olney
Lib Dem
Richmond Park
Emphasised that households are under financial pressure due to increased mortgage bills, cost of living, taxes, and energy prices. Criticised the Bill for not addressing inflation effectively by slashing energy support for businesses. Cited a 10.4% rate hike driven by food and alcohol costs in hospitality venues. Highlighted the impact on constituents with 15,000 mortgage holders vulnerable due to rising rates. Proposed cutting energy bills, doubling warm home discount, and setting up emergency insulation programmes. Urged reinstatement of R&D tax credits for SMEs.
Ruth Cadbury
Lab
Brentford and Isleworth
Critiqued the Finance Bill as lacking stability, certainty, and a broader plan. Highlighted outdated business rates harming small businesses and increasing loan costs due to economic challenges. Described impact on public services in constituencies with closed youth centres and reduced health, education, and care services. Noted tax changes benefiting high earners while living standards fell for families across the constituency.
Mick Whitley
Lab
Dorset West
Mick Whitley spoke in support of the reasoned amendment, criticising the Government's priorities and their failure to address the cost-of-living crisis. He highlighted the need for progressive tax reform, action on food and rent prices, and closing loopholes in windfall taxes. He also emphasised the importance of public finance policy for green growth.
Grahame Morris
Lab
Easington
Grahame Morris criticised the Government's levelling-up fund and the impact of their policies on his constituency. He proposed a proportional property tax to replace council tax, arguing it would be a tax cut for many households and benefit regional economies. He also discussed the negative effects of the bedroom tax in Horden, one of the poorest communities in the country.
Erith and Thamesmead
She criticises the tax cuts for the wealthiest individuals and highlights the lack of targeted support for NHS doctors. She also mentions the economic failures under 13 years of Conservative leadership, including low growth rates compared to OECD peers, weak productivity gains in the G7, and lower wages in real terms since 2010.
James Cartlidge
Con
South Suffolk
Defended the government's investment allowance for North Sea oil and gas, arguing that it is necessary to maximise domestic energy production. Rebutted Labour criticisms by pointing out their previous support for more UK-based oil and gas despite their current policy stance. Emphasised the need to balance windfall tax revenues with continued investment in energy security.
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