Closed-Ended Investment Companies: Cost Disclosure

Baroness Bennett of Manor Castle Excerpts

Monday 24th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness, again, for her question. I am not sure that we are going to agree on this specific point. I have already set out the Government’s position very clearly. I recognise that there are frustrations among some noble Lords and in the sector. It is the Government’s view that operationalising this legislation is a matter for industry and the regulator. The Government look forward to seeing the outcomes of the FCA’s consultation in due course.

[Baroness Bennett of Manor Castle (GP)]

My Lords, in an earlier answer, the Minister said that the Government want to encourage savings and think that saving is a good thing. How does the Minister square that with the fact that the Government are planning to increase the supply of credit to households, regarding that as a way to encourage growth? Despite the obvious risks that increasing household credit brings—and the fact that, as the Economics Observatory noted, consumer confidence remains weak, as it has been since the Brexit vote in 2016, and has declined since mid-2024—how do we square up encouraging savings and encouraging credit?

[Lord Livermore (Lab)]

The Government have a very clear objective of increasing living standards in all parts of the country. We want all households to have more money available to spend and to save.

Capital Investment and Share Ownership

Baroness Bennett of Manor Castle Excerpts

Thursday 13th March 2025 Lords Chamber

[Lord Livermore (Lab)]

The noble Lord is right. He is far more expert in these matters than I am, but I absolutely agree with him. Clearly, the public sector needs to be an intelligent client when it is negotiating with the private sector. That skill set is vital both within the Civil Service and in the skills we can draw on. As I mentioned, the Chancellor has established the British Infrastructure Taskforce to try to help with skills and advice. It is made up of some of the UK’s biggest financial companies, and it will support the Government’s infrastructure goals and ensure that the strategy is credible and deliverable.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the Minister referred to the disastrous Blair PFI NHS hospitals scheme. I do not think there is much awareness that about half the money is still to be paid off. The noble Lord, Lord Fox, referred to the cost to local government. The Minister is probably aware of the National Institute of Economic and Social Research figure: local government is paying £13.5 billion. The institute also found that £1 billion had been made in pre-tax profit by a handful of companies, often registered in Guernsey and Jersey. Is PFI not simply a benefit to the financial sector?

[Lord Livermore (Lab)]

I think it was probably a benefit to the people who were able to be treated in the 100 hospitals that were built as a result of it. As I say, the private finance initiative was a specific public/private partnership model that was developed 20 years ago. The Government are actively managing the legacy PFI portfolio, and we are learning lessons from that.

London Stock Exchange: Decline in UK Funds

Baroness Bennett of Manor Castle Excerpts

Thursday 13th February 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question, and once again, I pay tribute to her for her campaigning on this issue. The Government absolutely recognise the key role the investment company sector plays in the UK economy; it represents over 30% of the FTSE 250 and invests in assets that support the Government’s growth agenda. We have listened carefully to the noble Baroness’s concerns, not least through her campaigning in the previous Parliament and her Private Member’s Bill in this Parliament. Last year we legislated, I think as a direct result of her campaigning, to reform retail disclosure, with the FCA launching a consultation on an entire replacement regime in December.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am sure the Minister is aware that the tax-dodging fast-fashion firm Shein, having been rejected in New York, is now apparently seeking to list on the London Stock Exchange. Does the Minister agree with Liam Byrne, the chair of the Business and Trade Committee, who wrote to LSE asking if it agreed that it was important that firms seeking to list on the exchange have safeguards against forced labour in their products?

[Lord Livermore (Lab)]

The decision on whether a firm can list in the UK is a matter for the independent regulator, the FCA, subject to a firm meeting its listing rules and relevant disclosure requirements.

Mortgage Prisoners Inquiry Bill [HL]

Baroness Bennett of Manor Castle Excerpts

2nd reading
Friday 7th February 2025 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a pleasure to follow the right reverend Prelate the Bishop of Chelmsford, who really cut to the nub of this issue and the reason for this Bill. This is a case of extreme, long-term injustice in which people suffer through absolutely no fault of their own. The fault lies with the failure of the financial sector, the regulators and the Government to take action.

The speech from the noble Earl, Earl Lytton, was particularly powerful in illustrating the way in which failures in the financial sector interact with gross failures of regulation in the building sector. Some people are almost literally being crunched in the middle between those two situations.

I commend the noble Lord, Lord Sharkey, on bringing this Bill before us and being a dedicated, long-term campaigner on behalf of mortgage prisoners; he gave us a clear explanation of the issue, which I will not repeat. I acknowledge that I have acted as a modest supporter of the noble Lord since the passages of the Financial Services Act 2021 and the Financial Services and Markets Act 2023. In that modest supporting role, I went with him to the Treasury with some of the victims affected—the mortgage prisoners themselves. I have to note that, as we heard from the noble Lord, at that meeting, we heard the testimony of just how much this has destroyed some people’s lives; indeed, we have seen some tragic cases of suicide.

However, I am afraid that what also came through from that meeting was the sense that the Treasury really did not grasp the issue. That makes a powerful case for the Bill before us today and for a public inquiry in order to get the full understanding. We have the excellent LSE/Martin Lewis report but relying on academics or on someone who is, after all, just an ordinary member of the public to explain things is really not the right place to be in this great systems failure case.

The timing of this debate is interesting. We are talking about an extreme case of abuse of consumers in the all-too-often predatory financial sector. We are seeing scandals strike again and again, and innocent consumers are the victims. It is concerning that, just yesterday, we saw the unexpected resignation of the head of the UK Financial Ombudsman Service amid what has been described as a

“major review of the consumer redress system in the financial services sector”.

The Financial Times reports that she was

“under pressure to take a less consumer-friendly approach”.

We are told that industry executives complained that she was too much on the side of consumers. The head of the consumer group Fairer Finance is quoted in the Financial Times as saying:

“It may well be that she is quitting in protest at the direction of travel … perhaps the strongest signal yet that the Treasury is serious about watering down consumer protections”.


The context of the Bill provides a real opportunity for the Minister and the Government to signal that that is indeed not the case. Accepting the Bill would be one way of sending that signal. We are, of course, in

“the fraud capital of the world”.

as the head of UK Finance said. Surely, the Government should be more concerned about the fate of consumers, given what we have heard today.

I have one final thought. An article in the Express newspaper on 22 January cited the FCA’s figure of 47,000 mortgage prisoners. The story reported that:

“The Economic Secretary to the Treasury has promised to look into these latest proposals”,


those proposals being those of the LSE and Martin Lewis. The signal here to mortgage prisoners from at least one media source is that are going to see progress; they will see genuine reaction from the Government. I can only offer my hope that we will hear something positive today for all the people who read that story and had, after so many years of suffering, a little dash of hope.

--- Later in debate ---

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, it is a pleasure to speak in this debate. I begin by congratulating the noble Lord, Lord Sharkey, on his Bill and on his opening speech today. I thank him for bringing this issue to the attention of your Lordships’ House, not only through this Bill but through his campaigning over recent years.

The Government recognise the seriousness of the issue raised by this Bill—the challenge facing borrowers who have been unable to switch to a new mortgage deal despite keeping up to date with their repayments. While they constitute a small proportion of mortgage borrowers, for those affected the impact has been all too real, and I commend the noble Lord, Lord Sharkey, for his work to highlight their situation.

The Bill has one central provision; to establish a public inquiry into the events surrounding the creation of the group of borrowers commonly referred to as “mortgage prisoners”. The Bill also contains terms of reference for that inquiry. I will seek to address three key points. First, the origins of this issue, and why the Government’s assessment is that the right processes were followed in relation to this group following the financial crisis. Secondly, the case for a public inquiry and why the Government do not believe that it represents the right approach. Thirdly, support to those affected and the action the Government are now taking.

The vast majority of the borrowers we are discussing today took out mortgages under less stringent lending conditions prior to the financial crisis. Many of these mortgages were held with either Northern Rock or Bradford & Bingley, which were subsequently nationalised by the Government to protect financial stability. In 2010, they were transferred to a public body known as UK Asset Resolution, which was unable to offer new deals to borrowers because of state aid rules. Between 2014 and 2021, UK Asset Resolution sold these mortgages back to the private sector. Many were sold to so-called inactive lenders that did not offer new mortgage deals, leaving some borrowers paying costlier standard variable rate tariffs. Those borrowers were, and in some cases still are, unable to switch to another lender because they do not meet modern lending criteria. The terms of reference for the inquiry proposed by the Bill seek to investigate the process by which these mortgages were sold back to the private sector.

The Government recognise the challenges faced by these borrowers and the very real impact this process has had on them. However, our assessment is that the correct protections were put in place at the time and that all relevant Financial Conduct Authority rules were followed.

Specifically, bidders were prevented from changing a customer’s existing terms and conditions. Rules ensured that all mortgages were either administered by a Financial Conduct Authority regulated entity or made in accordance with Financial Conduct Authority regulations. Further protections were included with each subsequent sale, some of which followed recommendations from Parliament.

All types of lenders, including “active” lenders who offered new loans, were invited to take part in this process, but interest from active lenders was very limited and no viable bids were put forward in any of the sales. This likely reflects the fact that most of the loans involved were outside of most active lenders’ risk appetite following the financial crisis. The Government have studied this issue carefully but we remain of the view that no further action should have been taken at the time to encourage only active lenders to take part, particularly given the importance of delivering value for money to the taxpayer.

The Bill before your Lordships’ House proposes a statutory public inquiry to explore these issues in greater depth. The noble Lord, Lord Sharkey, has spoken powerfully about the situation faced by affected borrowers and his desire to fully understand the process which resulted in their inability to obtain a new mortgage deal. The Government understand and respect this argument. However, we believe the scrutiny provided to date has produced the necessary information in relation to these events. This includes the two reports published by the National Audit Office covering various aspects of the sales process and, separately, a Public Accounts Committee report into one of the biggest asset sales. The previous Government also provided relevant disclosures to Parliament on the completion of each sale.

The Government agree with all those who wish to see these issues fully and transparently investigated. We will continue to work with regulators and industry to ensure that the issues and specific proposals raised by the report mentioned by the noble Lord, Lord Sharkey, are properly considered. However, given the volume of information already in the public domain, we do not believe a further inquiry would provide any significantly new information or additional support to those affected.

Finally, on the support currently available to borrowers, there are protections in place for vulnerable mortgage borrowers. Financial Conduct Authority rules require firms to engage individually with their customers to provide tailored support. Lenders have been allowed to waive certain regulatory requirements when assessing whether a new mortgage deal is affordable for borrowers who are up to date with their repayments. This applies to the cohort of borrowers we have been focusing on. Mortgage lenders, including inactive firms, are also now subject to the consumer duty, which ensures that firms prioritise fair treatment and good outcomes for their customers.

I fully understand that some noble Lords wish us to go further. I assure them that we will continue to consider this issue closely by listening to those borrowers affected and engaging with regulators, the industry and other key stakeholders, including the noble Lord, Lord Sharkey, about the processes currently in place.

The Government recognise the impact felt by this group of mortgage borrowers. Their concerns have been ably highlighted by the noble Lord in this debate, as well as by other noble Lords from across the House. The Government will continue to listen carefully to their concerns and consult with others who have an interest in this issue, not least those households directly affected.

However, we are unable to support the Bill before your Lordships’ House today. Our assessment is that the correct process was followed when these mortgages were sold back to the private sector in the years after the financial crisis. We believe that the necessary information has now been put in the public domain, both as evidence submitted to Parliament by the previous Government and through other external analyses, including from the National Audit Office. Most importantly for the households affected, we are confident that significant protections are in place to protect vulnerable mortgage borrowers.

Although I appreciate this will not satisfy the noble Lord’s demands, I hope he will continue to work with the Government, as he has done throughout his campaign on this issue.

[Baroness Bennett of Manor Castle (GP)]

The noble Lord did not refer to my questions about the UK Financial Ombudsman Service. I understand that this is a new situation. Perhaps he could write to me about that.

[Lord Livermore (Lab)]

I will happily do so.

Crown Estate (Wales) Bill [HL]

Baroness Bennett of Manor Castle Excerpts

2nd reading
Friday 7th February 2025 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, I am delighted to follow the noble Baroness, Lady Smith of Llanfaes, and congratulate the noble Lord, Lord Wigley, on bringing before us this important and timely Bill. We have a sense of unfinished business here. It is not too late, as we have heard, for the Government to pick this up with their own Crown Estate Bill, and we saw the possibility of that happening demonstrated earlier today in your Lordships’ House.

It is worth noting the point made by the noble and learned Lord, Lord Thomas of Cwmgiedd, that we are talking here about land resources that are the result of conquest. It is interesting that in the current global position, it is a Green principle to believe in self-determination and democracy. I know that the Wales Green Party has been campaigning very strongly in favour of the step that the Bill delivers, and I am sure I will be talking about it with its members when I visit Cardiff next weekend.

I hope that everyone will agree that if we want to discuss British values, self-determination and the right for people to democratically decide their own governance and to have control over their own resources are indeed British values. The Bill is timely because currently these are issues of great concern to the people of Greenland and Panama, as they are to the people of Wales. If we believe in the increasingly battered principle of an international rules-based order and if we are to stand up against powerful forces opposed to that, working at speed to smash them both in their home countries and abroad, this Bill takes us in the right direction.

It is also worth looking at the context of much that is discussed in your Lordships’ House, such as the recent Channel 4 report on Generation Z, identified as those aged 13 to 27. The headline said that a majority of young people want the country to be a dictatorship. When you actually look into the detail of the questions that were asked, it is a little more complex than that. They were asked whether they favoured a strong leader

“who does not have to bother with Parliament and elections”.

I note that these young people are perhaps reflecting what we are hearing from the Government and the governing classes, given that we have just seen the abolition of a large number of elections being delivered by the Government and a great deal of talk about elected mayors being strong leaders. So we might want to look at where these ideas are coming from.

Before we give up on democracy, we should think about trying it. This Bill delivers democracy for the people of Wales. Democracy is not just about voting; it is about deliberating, being in control, being able to collectively make decisions and the people most affected being able to make them, and benefiting from their own resources. As has been commented on by multiple noble Lords, I believe it is the policy of the Labour Party in Wales to support the Bill.

It is worth noting the very relevant context. Report stage of the Great British Energy Bill will be with your Lordships’ House next week and I understand that the Government have finally made a concession on supporting community energy, something that your Lordships’ House has fought for and backed again and again. I reserve the right for final judgment until I have seen the detail; none the less, this is a positive sign. The Bill of the noble Lord, Lord Wigley, would enable much more community control and community energy to be delivered in Wales rather than by giant multinational companies operating with far distant commissioners.

Finally, if this Bill was delivered, it would really highlight the remaining lack of democracy around the whole Crown Estate structure for England.

The noble Lord, Lord Moynihan, said that the Bill might delay. I suggest that it would greatly enhance and speed up the possibility of delivering that community and democratic energy. There is the strongest possible Green support for this and I very much hope that the noble Lord, Lord Wigley, is able to hear from the Minister that this is all going to power ahead.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Bennett of Manor Castle Excerpts

Committee stage
Thursday 6th February 2025 Grand Committee

Moved by

[Baroness Bennett of Manor Castle]

68: After Clause 3, insert the following new Clause—
“Review of effect on people with protected characteristicsThe Chancellor of the Exchequer must, within six months of the day on which this Act is passed, lay before Parliament a review of the impact of the measures contained in this Act on people with protected characteristics under the Equality Act 2010.”Member's explanatory statement
This amendment would require a review of the impact of the measures in this Act on people with protected characteristics.

[Baroness Bennett of Manor Castle (GP)]

My Lords, in moving Amendment 68 I will also speak to Amendment 69, which is also in my name. Amendment 68, like a number of other amendments that we have discussed today, calls for a review of the impact of the increase in employers’ national insurance, particularly the effect on people with protected characteristics.

--- Later in debate ---

[Lord Livermore (Lab)]

My Lords, I will first address the amendment seeking to require the Government to review the impact of the measures in the Bill on people with protected characteristics. The Government carefully consider the impact of all decisions on those sharing protected characteristics, in line with our legal obligations and our commitment to greater fairness and opportunity. The Government are committed to meeting their obligation to the public sector equality duty, and Ministers are confident that the Government have met the obligation for the changes in this Bill.

Turning to the amendment requiring a review of the impact of the Bill on the environment and green jobs, as I have said previously, an assessment of the policy has been published by HMRC in their tax information and impact note. Further, the OBR’s Economic and Fiscal Outlook sets out the expected macroeconomic impact of the changes to employer national insurance contributions. The Government and the OBR have therefore already set out the impacts of the policy change. This approach is in line with the previous changes to national insurance and previous changes to taxation, and the Government do not intend to provide further impact assessments. In light of these points, I respectfully ask the noble Baroness to withdraw her amendments.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I have some sympathy with the comments made earlier about the quality of debate and response that we have received from the Government in this Committee. I must express agreement with those statements. I thank the noble Baroness, Lady Neville-Rolfe, for responding here. I point out that these amendments very much reflect her Amendment 64, which concerns the impact on economic growth, so I am not sure that the arguments about increased bureaucracy and resource cost will apply equally to her amendments.

None the less, let me pick up the points made by the Minister. He said, in referring to the effect on people with protected characteristics, that the Government are considering this carefully. I invite this Committee to consider some of the reports that have come out this week on the lack of trust—among young people in particular—in our Government and our so-called democracy. If we are to win back trust and have people feel that the Government are acting for the common good, not for a few special interests, the Government will need to show their workings. If the Government do indeed care, they need to demonstrate that they care, which is the kind of thing that this review would do.

On Amendment 69, I say again in response to the noble Baroness, Lady Neville-Rolfe, that the economy is a complete subset of the environment. There are no jobs on a dead planet. There is not much point in assessing economic growth if there is nothing living for it to grow in. We are in Committee so I beg leave to withdraw my amendment, but I will be back.

Amendment 68 withdrawn.

Growing the UK Economy

Baroness Bennett of Manor Castle Excerpts

Monday 3rd February 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for that question. I will leave it to my right honourable friend the Secretary of State for DESNZ to bring forward the Government’s response in that area.

[Baroness Bennett of Manor Castle (GP)]

My Lords, Martin Wolf, the chief economics commentator for the Financial Times, this morning noted how trend growth across a wide range of global North countries continues to be at historic lows, reflecting real-world conditions such as increasing dependency ratios, and geopolitical and climate shocks. Mr Wolf said that

“the government could focus on redistribution instead”

of growth. Does the Minister agree with Mr Wolf that something such as a wealth tax could be a way to immediately address child poverty, ill health among working-age people, the housing crisis and the low spending power among the lowest 50% of the population by income that the noble Lord, Lord Sikka, alluded to?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question, but I do not understand the contention at the heart of it. She talks about redistribution, but what is the growth she wants to redistribute if she does not believe in growth? She talks about a wealth tax, but what wealth is it that she wants to tax? She does not believe wealth should be created.

EU Law

Baroness Bennett of Manor Castle Excerpts

Tuesday 28th January 2025 Lords Chamber

[Baroness Gustafsson (Lab)]

I cannot comment on the specifics of the exact regulation that may or may not be coming. With regard to the trading relationship and making sure we have trade agreements in place, the Government are constantly and doggedly pursuing that to make sure we have a clear trade relationship that is free from barriers that get in the way and impede trade.

[Baroness Bennett of Manor Castle (GP)]

My Lords, before the previous general election, the Royal Society of Chemistry was calling for a national chemicals agency to overhaul our

“broken chemicals regulation and management system”.

Since Brexit, the EU has stepped ahead in addressing many chemicals that are a threat to public health and environmental health. We are now getting further and further behind almost every day. Are the Government going to follow the recommendation of the Royal Society of Chemistry?

[Baroness Gustafsson (Lab)]

On the possibility of a chemicals agreement, as we have said, we will work to improve the UK’s trade and investment relationship with the EU across a wide range of areas, including this one. But it is too early to discuss scope or specific areas in greater detail.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Bennett of Manor Castle Excerpts

Committee stage
Tuesday 21st January 2025 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble and learned Lord, Lord Hope of Craighead. The example that he just gave us illustrates, down at the level of fine detail, the broader point I want to make about charitable organisations and non-governmental, not-for-profit organisations.

In thinking about making a contribution to this debate, I looked up contributions around the phrase, “I wouldn’t start from here”, to see some quotations. I found lots of rather repetitive jokes—noble Lords can look them up for themselves—so I shall aim not to be repetitive. As I said at Second Reading, the Green Party believes we should start with a wealth tax so that the people with the broadest shoulders make contributions to society in order that we can do what we need to do: invest far more in our austerity-stricken services and infrastructure and tackle the climate emergency and nature crisis. However, we can combine two things here and focus on charities and non-governmental organisations. We are talking about hospices, for goodness’ sake, which these amendments of which I am broadly in favour, deal with.

I want to cross-reference two Early Day Motions in the other place: EDMs 374 and 380, tabled by my honourable friend Ellie Chowns. They look at what a mess the social care sector is in now, with the chronic underfunding and the workforce shortages problems. They also note how much the voluntary sector is already under strain from escalating operating costs and cuts to contract funding.

The elements of these amendments that are worth focusing on are voluntary sector charities and not-for-profit organisations. I have a proposal to put to the Minister; it comes from the charities and NGOs that I have spoken to. They are saying, “Yes, we can imagine a scenario where we could cope with this national insurance rise, but not on 6 April, which is so close, with our budgets all set out and our staffing set in the position it is now”. Would the Government consider, specifically in the case of charities, non-governmental organisations and not-for-profits—particularly those in social care; the Government can draw the lines wherever they like—postponing for a year? This would surely not involve that much money in terms of the Budget, but postponing for a year would give these organisations the chance to reorganise their budgets so that they have a chance to prepare for this situation. That is neither where I would like to end up nor where I would like to start, but it is a constructive suggestion to help these organisations, many of which are in desperate straits.

[Lord Forsyth of Drumlean (Con)]

My Lords, as we have heard, it is rather unusual for a Bill that will have such a devastating impact on our country, businesses, charities and so on to have its Committee stage in Grand Committee. Normally, we would have it on the Floor of the House. It is certainly true that past national insurance Bills have been taken in Grand Committee, but it is distressing that the Government have chosen to push this Grand Committee to consider a very controversial Bill that will affect many groups of people. It should be taken on the Floor of the House.

I hope that this is neither a precedent nor a move that drives us in the direction of the House of Commons, which moved towards the timetabling of Bills, and proper scrutiny of important Bills, on the Floor of the House. We are familiar with the consequences of that: us having endless amendments to legislation that has not been properly scrutinised. If this was about saving time, I do not think it is going to work, because the fact that we cannot have votes in this Committee will mean us spending, perhaps unnecessarily, rather a long time on Report. Of course, the whole point of Committee stage is that it enables a bit of to and fro and discussion under the rules that apply in that respect.

I find myself in an unusual position in the Grand Committee, speaking on a highly controversial Bill, devastating in its consequences. The Minister is keen on telling us about black holes and this creates an enormous black hole in the delivery of public services and for businesses up and down the land. The unusual position in which I find myself is being in complete agreement with the noble Lord, Lord Scriven. I started to make notes to find something that I thought he had got wrong, but I could not say anything until I looked at the amendment, because the flaw in his erudite and proper analysis of the damage that will be done to GPs, social care, pharmacies, hospices and others is the distinction that he makes between the public and private sectors.

Apparently, if one is doing this in the private sector, it is okay to slap on a great tax that means one has to consider dismissing staff and so on. But if it is in the public sector, that is completely unacceptable. This is particularly egregious, although I think, and the noble Lord will correct me if I am wrong, he makes an exception for the provision of care home services in the private sector. I am not sure if that is right. I shall happily give way to him if he thinks I have got it wrong. In other respects, however, it is all about giving—

--- Later in debate ---

[Baroness Neville-Rolfe (Con)]

My Lords, on growth, and indeed on the hospitality industry, it is particularly good to have the practical experience of the noble Lord, Lord Londesborough. I agree with him that it would be helpful to understand today’s employment decline a little better in the Committee.

According to the ONS, there are 8.4 million people working part-time in the UK, which is approximately one-quarter of the workforce. They work in large and small firms and include many young people, students and carers, as well as disproportionate numbers in hospitality, tourism and retail. I know from my days at Tesco how important part-time workers are to big employers as well as small employers, and, in particular, to 24/7 businesses—retail is a 24/7 business. That includes a lot of employment of elderly people. Also, as was said, part-time workers are not only the lowly paid—I had several part-time directors working for me—and good employers offer proper training to their part-time teams. It is an extremely important part of the economy.

While the rise in the national insurance rate to 15% will no doubt hit part-time workers, it is the huge reduction of the threshold to £5,000 from £9,100 that will have the most detrimental consequences for those who work part-time. It is yet another blow to the sector, alongside the increase in the minimum wage that comes into force in April.

As a result, a company that employs a part-time worker over the age of 21 who works just eight hours a week on the minimum wage—I think the noble Baroness, Lady Kramer, said it was down from 14 hours a week —will be hit with this jobs tax for the first time, and the hospitality sector will be disproportionately affected. I think Kate Nicholls used the word “eye-watering”. The industry has warned that the measures announced in the Bill will cost it £1 billion overall. My noble friend Lord Ahmad quoted that figure as well. He is right about the adverse consequences of this and the need for consultation on such changes. How can you adjust your business model and be ready if you do not know what is coming?

It is really difficult for these companies. For the first time, they will have to pay tax on the wages of thousands of part-time hospitality workers. UKHospitality has estimated that a company employing a part-time worker doing 15 hours a week will see a 73% increase in its national insurance bill. It goes without saying that business will have to make tough decisions, as employing part-time workers is soon to become much more expensive. The trouble is that part-time work provides a flexible form of employment for so many—I have mentioned students and carers, but parents are also affected. It can be very useful in juggling what families do. These are people who rely on the flexibility of part-time contracts and might not otherwise be able to work at all.

Can the Minister tell the Committee what assessment the Government have made of the effect of the changes enabled by the Bill on part-time workers? Perhaps he could also comment on the levels of employment within the hospitality sector and how he sees that panning out. How do the Government intend to support industries that will be most impacted by these changes to national insurance contributions? How can he give them hope and how can we be sure that they continue to play their part in growth? It is difficult and we need to try to find some comfort.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I apologise for speaking after the Tory Front Bench, but I thought the noble Lord, Lord Londesborough, was continuing after the voting break.

I will speak briefly in favour of Amendments 58 and 59. In doing that, perhaps I should declare an interest. I was on the board of the Fawcett Society in 2010 when it brought a judicial review against the emergency Budget of that year for its failure to honour its legal duty under the Equality Act to do with gender impact assessment. In that case, although Fawcett lost the overall case on legal grounds, it was said that the gender impact assessment requirements applied to the Budget and should have been carried out on a couple of aspects of that Budget.

With that in mind, I draw attention to the final page of the policy paper of 13 November, which I think we are regarding as an impact assessment. Under the heading “Equalities Impacts”, in this five-page document that my sub-editor’s eye tells me is in 16-point, it states:

“Secondary Class 1 NICs are levied on employers rather than individuals. There are therefore no direct equalities impacts”.


I would like to question the Minister on how it can be claimed that there are no equalities impacts. Some figures have already been raised, but I point out that 74% of part-time workers are female, 57% of involuntary part-time workers are female, 6 million women are working part time and 10 million women are working full time. According to the Resolution Foundation’s analysis of ONS data, 63% of UK workers under the £9,100 threshold are female. We are seeing national insurance charges increasing the cost of employment by nearly £700 a year for someone working 15 hours a week on the minimum wage. An additional 600,000 women workers are being brought within scope of national insurance. As others have said, on the minimum wage you need to work fewer than eight hours a week to stay below the new threshold.

Analysis of this has suggested that women workers are particularly affected by this change. Some of them may want to raise their hours, so this might turn out positive. Some of them may have caring responsibilities that mean that they cannot lift their hours and may then have to leave employment because they are being offered more or nothing. It is also worth pointing out that the Women’s Budget Group has highlighted how the overall impacts of the national insurance changes are likely significantly to increase childcare costs. That is of immediate relevance to working women with direct childcare responsibilities, but, as the Women’s Budget Group pointed out, there are also issues around grandparents, very likely grandmothers, who may find themselves being pushed, and feeling obligated, to leave employment so that they can take up childcare responsibilities. I do not think that that equalities impact can be justified and would appreciate the Minister’s comments.

[Lord Livermore (Lab)]

My Lords, I am grateful to all noble Lords for their contributions to this debate. I will address the amendments and the new clause proposed by the noble Baroness, Lady Kramer, and the noble Lords, Lord Bruce of Bennachie and Lord Londesborough. These seek to set a reduced rate of employer national insurance for part-time workers at 7.5%. As I have said before, the difficult decisions in the Bill were necessary to repair the public finances, protect working people and invest in Britain’s future. This amendment would reduce the revenue raised from the Bill and therefore prevent the Government achieving those objectives. In policy terms, reducing the rate of employer national insurance for part-time workers would create additional complexity in the tax system and distortions in the labour market.

The Government have taken action to support those on lower pay by increasing the national minimum wage, which I was interested to hear the noble Baroness, Lady Neville-Rolfe, describe as a blow. I think that will be interesting to those on lower pay. We have also introduced important protections for workers as part of the plan to make work pay.

Employers will also continue to benefit from employer national insurance reliefs, including for hiring under-21 and under-25 apprentices, where eligible.

The noble Baroness, Lady Kramer, also spoke about umbrella companies and mini umbrella companies. I will just note that the Government are committed to closing the tax gap and have announced, as part of the closing the tax gap package in the Budget, that we will bring forward measures to tackle non-compliance in the umbrella company market, including mini umbrella company fraud.

The noble Baroness, Lady Bennett, spoke specifically about equalities impacts. I can say that they were fully considered and we are confident that they are set out in the tax information impact note that she referred to.

--- Later in debate ---

[Baroness Kramer (LD)]

My Lords, I am standing in what would usually be a winding position, but I think Amendments 4 and 5 have been so thoroughly discussed and I am very much in support of most of the comments.

I say to the noble Viscount, Lord Chandos, that I think it is very dangerous to always worship at the altar of simplification. As the noble Lord, Lord Forsyth, said, if it was the precise phrase, you end up with so many hard cases as a consequence of that. The noble Earl, Lord Kinnoull, talked about a specific charity that is delivering warm spaces—and on a day like today, when we have had to bring additional heaters into this Room, boy, something like that comes home. It is now facing additional costs that it could not possibly have planned for, without the time to put any kind of scheme in place that would give it the breathing space to be able to deal with that kind of challenge. I just find it extraordinary.

However, I wanted primarily to speak to Amendment 8, which has been less discussed today. I thank the National Association of Local Councils for a briefing. Like many others, I was very shocked when the Government confirmed that the upper tier of local authorities would qualify for financial support to offset the increased cost of employer NICs, but parish and town councils were to be excluded because they do not receive funding through the local government finance scheme. Parish and town councils raise their funding via precept. Therefore, these councils will undoubtedly have to increase local taxes in order to cover the additional costs. They have nowhere else to go.

I am sure that that was not in Labour’s manifesto and that this is something Labour did not intend, but there really is no other route they can go down other than to increase council tax. Its calculation is that the NICs increase will cost English parish and town councils approximately £10 million each year, requiring an increase of something between 1.5% and 3% to cover the additional cost—that is £10 million each year, and £50 million over the life of a Parliament. It really is a rounding error. I just cannot understand why town and parish councils were excluded from the provision for upper tier councils.

Part of the argument is around fairness, but there is also an argument around democracy. Many people can relate to their town and parish councils, as others have said, in a way that they do not relate to higher tiers. It is at the parish and town level that money goes to projects that are specifically designed around the needs of a local community. They really are very different in the services that they provide. I am concerned, on a broader scale, about the centralisation of local government that we have been seeing: in essence, we are looking at unitary authorities with something like half a million people in them as the decision-making, strategic and implementation element of local government.

I very much fear that the difficulties that parish and town councils will face will turn them much more into agencies of that upper tier, rather than something at the level of local government with the capacity to respond to local needs and to underpin the character and nature of each individual community. The amount of money is so trifling that, in putting these councils on an equal basis with upper tier ones, there must be some other agenda at work here. I do not know what it is; perhaps the Minister could enlighten us.

This amendment is in my name, as are Amendments 4 and 5. I very much hope that the Government are listening because these are issues of significance.

[Baroness Bennett of Manor Castle (GP)]

My Lords, it is a great pleasure to follow the noble Baroness, Lady Kramer. I will be brief; I want specifically to speak in favour of Amendment 8, given that I raised this issue at Second Reading. I should declare my position as vice-president of the National Association of Local Councils.

I agree with everything that the noble Baroness, Lady Kramer, said. I have just one point to add. As the noble Baroness was speaking, I was thinking about a recent visit to Shropshire. A whole lot of town and parish council leaders and councillors were gathered in a room and talking about all the projects that their councils were running. One of the things I thought about were the photos and slides that were being shown, and how much volunteer effort was involved in the projects being displayed. The money is spent by town and parish councils because they are close to, and there in, the community. Often, it is a community effort to install the bug hotel in the allotments or to put up swift boxes around towns—all sorts of things that many people get involved in on a voluntary level. In taking money away from that, the multiplier effect is much greater. As the noble Baroness, Lady Kramer, said, we are talking about a tiny sum of money in central government terms but something that is hugely consequential in communities up and down the land.

I spoke at some length on charities earlier but there are two specific points that I want to make. I mentioned earlier—the Minister did not respond to me on this—the idea of having a one-year delay for charities so that they have time to work out both the budget and ways to deal with the rise in national insurance; this was something that both the noble Earl, Lord Kinnoull, and the noble Lord, Lord Randall, raised. It would be interesting to hear from the Minister about that point regarding a delay specifically for charities.

I wish to pick up the point from the noble Viscount, Lord Chandos, about complexity. An organisation either is or is not a charity. That would be a really simple way to see this, involving low paperwork. Complexity would be easy to introduce; for a small or medium-sized enterprise or something, it might be more complicated. I do not think, I am afraid, that anyone can compete with the Green Party on our views on simplification because we want to roll together income tax, national insurance and capital gains tax. If that were the case, the Green Minister would not be over there: we would be going through this in one day in the House—provided it was still constituted as it is now when we got to that stage.

UK-China Economic and Financial Dialogue

Baroness Bennett of Manor Castle Excerpts

Tuesday 14th January 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to my noble friend for raising those important trade issues. I can assure him that, having just acceded to the CPTPP trading relationship, we are absolutely committed to continuing that relationship and to building trade relationships in that manner. On Taiwan specifically, we consider the Taiwan issue one that should be settled peacefully by people on both sides of the Taiwan Strait through dialogue, not through any unilateral attempts to change the status quo.

[Baroness Bennett of Manor Castle (GP)]

My Lords, in responding to the noble Baroness, Lady Neville-Rolfe, just now, the Minister said that their austerity—referring to the Tory Government’s austerity—has left us worse off. Can the Minister assure me that we will not see further damaging austerity of the kind that has already left us with a terrible level of public health, teetering Civil Service departments that cannot keep up with their responsibilities and local government in crisis? Can he say that we are not going to see more of that from this Government?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I cannot remember what the Green Party’s position is on the national insurance increases that we have put in place. I certainly hope that she is not opposing those increases but supporting the extra investment that we are putting into the National Health Service as a result, because that would not be terribly coherent. We are committed to investing in our public services. The Budget we just had, in October, announced £100 billion more of capital investment. I certainly would not describe that as austerity.

[Baroness Bennett of Manor Castle (GP)]

Since the Minister came directly at me, I very much invite him to look at the Green Party manifesto from the recent election. It remains our position to raise money from a range of sources to put vastly more investment into the NHS and many other government programmes, particularly through a wealth tax. I invite the Minister to look at it.

Since I am on my feet, the question that I was originally going to ask relates to the position of Jimmy Lai, as raised by the noble Baroness, Lady Kramer. Does the Minister agree that the situation of British citizen Jimmy Lai reflects the fact that there is no rule of law in China? In encouraging British businesses to further invest and become involved in China, is there not a significant risk to both their capital and staff where there is no rule of law? I am concerned that the Statement speaks with praise of HSBC and Standard Chartered. I do not know whether the Minister is aware of the situation where those companies have refused to hand over to Hong Kongers—BNO passport-holders who have come to the UK—their own money in pension funds.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her follow-up question. I am sure that the Green Party manifesto is a cracking read and I will endeavour to read it, if I have time. I note that she did not say that she was in favour of the national insurance increase, so I take it that she is supporting the investment without supporting the means to raise that investment.

The noble Baroness asked specifically about British national Jimmy Lai. His case is a priority for the UK Government. The Chancellor raised this Government’s concerns about the case during her visit to China. The UK has called for the national security law to be repealed and for an end to the prosecution of all individuals charged under it, including Jimmy Lai. We continue to call on the Hong Kong authorities to end their politically motivated prosecution and immediately release Jimmy Lai.