Autumn Budget 2025

Baroness Kramer Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, as the first of the winding speakers, let me repeat the welcome to the right reverend Prelate the Bishop of Portsmouth and say how much we enjoyed his excellent maiden speech, which I will refer to later.

To the Government, let me say that I am not quite in the “Apocalypse Now” camp that I hear from the noble Lord, Lord Bridges, and some of his colleagues, but I really thought this was going to be—and needed to be—a Budget for growth. When we were in that period of endless announcements, U-turns, leaks, chaos, et cetera, I thought there would be a real surprise on Budget Day, that we would get that project, programme and vision that would drive forward growth. I was wrong.

As others have said, the OBR makes it clear that trend productivity growth is down, and we have no proper road map for dealing with it—the noble Lord, Lord Willetts, was eloquent on that point. The OECD has predicted that the UK will face headwinds from the Budget and will have the highest inflation rates in the G7. The noble Lord, Lord Rosenfield, spoke extensively on this issue. The Budget contained no compelling argument for investing in UK business. I wish the Government had listened to the noble Viscount, Lord Stansgate, who was calling for a real step change at this point, which is exactly what we need.

I agree that there were marginal but important measures in here that support upscaling—they were described by the noble Baronesses, Lady Moyo and Lady Penn, and, to some degree, by the noble Lord, Lord Ranger—focusing on AI.

These are not easy times for growth. Global headwinds are reducing global trade forecasts, which is not good news for the UK economy. That is exactly why my party is urging the Government to go immediately beyond their lackadaisical reset with the EU and push for a bespoke customs union. Those who do not think that Brexit is a blow that is battering our economy should go and talk extensively to business. It is not just the economists; it is the people on the ground daily who are dealing with the consequences. Of all times, this is not a time when we can indulge in the glow of insularity and exceptionalism.

My party, using work from Frontier Economics and the Commons Library, calculated that joining a customs union with the EU would deliver £25 billion in additional money to the Treasury. Frankly, that dwarfs every tax-raising measure in the Budget and off-sets far more than any spending cut that the Conservatives propose.

We heard concern about Brexit from the noble Lords, Lord Hollick, Lord Tyrie and Lord Brook of Alverthorpe. My noble friend Lord Razzall referred the Government to the Private Member’s Bill being brought forward by the honourable Member for Surrey Heath, which will give an opportunity to capture these issues.

I and my party strongly take the view—as my noble friends Lord Razzall and Lord Mohammed of Tinsley said—that the Government are absolutely right to lift the two-child benefit cap. I say to the noble Baroness, Lady Deech, and the noble Lords, Lord Bailey and Lord Massey, if a safety net is not for children, who is it for? We take the strong position that poverty undermines children, it does not raise them.

Similar views were expressed by the right reverend Prelates, the Bishop of Portsmouth and the Bishop of Manchester. I pick up the question introduced by the right reverend Prelate the Bishop of Portsmouth on where the funding will come from to guarantee SEND provision when it shifts from local authorities to central government. The noble Baroness, Lady Barran, raised that issue, and my noble friend Lord Mohammed of Tinsley stressed its importance. That means that we must have an important and strong answer on this from the Minister.

The decision to remove £150 from energy bills is welcome, but, as my noble friend Lord Razzall says, it is less adequate than the Lib Dem proposal. I say to the noble Baroness, Lady Griffin of Princethorpe, that we would not have been partly funding that by cutting programmes to tackle climate change, as the Government have chosen to do. We would have fully replaced that from central government resources.

When I first heard the Budget, like others—and the noble Lord, Lord Bilimoria, has just said this—I thought that huge relief would be given to the hospitality industry through the business rates system. We in our party have proposed a VAT cut, and some people implied that this was going to be the equivalent. But UKHospitality estimates that an average pub will pay £12,900 more in business rates over three years.

The noble Lord, Lord Freyberg, stressed similar pressures on grass-roots venues. This is a serious problem and I want to hear a proper answer from the Minister. In our case, we would have paid for the cuts in energy bills and VAT by pursuing the proposals of the IPPR for attacks on the windfall that major banks are making, not from their efforts but from the technicalities of QE and the reserves that they are keeping at the central bank. Why the Government have not seized that opportunity is beyond me. However, I give them credit for seizing the proposals pushed over and over by the noble Lord, Lord Foster, for a remote gambling tax, which has not just fundraising but moral outcomes.

Why have the Government not raised the digital tax from 2% to 10%? It applies to the mega seven digital companies. Frankly, I just do not understand. These are serial tax avoiders par excellence. Our own UK digital companies are disadvantaged by their gaming of the tax system. That absolutely matters if we push on digital and AI.

Let me address the main proposals in the Budget, which raised most of the additional £26 billion in taxation and take tax levels in this country to unprecedented highs. Taxes will have gone up by £67 billion since the first freezing of tax thresholds. Labour is responsible for £13 billion of those taxes and, oh my, the Conservatives are responsible for £54 billion of those taxes. When I hear them talking as though they are a low-tax party, I wish that they would go back and look at what they did. Freezing thresholds is one of the worst ways to increase taxes on ordinary people. The noble Baroness, Lady Thornton, raised the question of the impact on women, and I hope that the Government will answer that.

It is true that many people do not realise what is happening until it is too late, a point made by the noble Lord, Lord Burns. However, we now face the extraordinary prospect that a quarter of employees will be in the high-rate tax bracket by 2030-31, not because they have become more prosperous but simply because their wages are rising just to cover inflation. The OBR forecast relies on inflation staying higher for longer, as the noble Baroness, Lady Neville-Rolfe, said. The Government hope, because their additional spending is front-loaded and the tax increases are back-loaded, that people will have not caught on that, by 2030-31, they will be paying some £1,400 more in tax. We will have had nine years of threshold freezing.

The other major tax-raiser comes from changes to the salary sacrifice scheme of some £4.7 billion. I am concerned, and I heard the same concern from the noble Lord, Lord Hollick, that, combined with the changes to pensions in the last Budget, we are going to see a move away from pension saving and long-term investment by the wage-earning middle. The consequences of that are not good for growth. I ask the Government to get a grip on this issue. They are trying to get more auto-enrolled pensions—which is a very small part of the market covered by the Mansion House compact—into UK investing, but the big part of the market is now essentially being discouraged.

I refer to the comments made by my noble friend Lady Bowles on government procurement of innovation. That is a serious issue and I hope the Government take it on board. It is much wider than the narrow issue that it is sometimes treated as.

The so-called mansion tax will raise only £400 million and likely much less, but in London the revaluation of bands F, G and H will hit social housing. The mansion tax does not but the revaluation does. Can the Minister confirm that? The answer is that the whole of council tax needs a complete rethink—I agree with the noble Lord, Lord Campbell-Savours, on that.

The timing of the taxing per mile of EVs seems perverse, when we need to accelerate the switch from petrol to diesel. I assume, along with the noble Lord, Lord Young, that this is the beginning of an evolution into road pricing. Why on earth were we not given a tax road map on this issue? Without that map, we will begin to see people become inhibited about buying EVs, perhaps unnecessarily. A road map should have accompanied a significant change on this scale.

I have one small comment—perhaps it is not so small—on the loan charge. I thought that the Government’s seeming acceptance of the McCann review, even if it did not deal with pre-2010 and already settled cases, would largely provide a resolution to this appalling mire. Then I realised that the discount that the Government are now going to use is capped at £70,000, leaving some 20% of those with open cases still absolutely in the mire. These are people who might once have been high earners but now typically are retired on modest incomes. So little more was needed for this nightmare to be resolved. I do not understand why the Government did not take that next step.

Lastly, the Government, as necessary, increased the fiscal headroom to £21.7 billion. We called loudly for such a change. I am slightly taken aback that one-third of the increase in the headroom relies on public sector efficiency savings on, frankly, a heroic scale. The noble Lords, Lord Willetts, Lord Wood and Lord Eatwell, and the noble Baroness, Lady Shawcross-Wolfson, talked about how questionable future public sector savings are, particularly on the scale included in the forecast. The markets have calmed for now, but they will not stay calm if we do not see that efficiency come through and if we do not see growth.

Meanwhile, as I wind and finish, the public sector and local government are still on their knees. Ordinary people are still struggling every day with the cost of living. Businesses’ appetite to invest is still muted. There really is only one way to make a step change out of this mess, and I am going to go back to where I started: will the Government please now accelerate the process of resurrecting a bespoke EU customs union relationship so that we can look forward to a future with resource and choice, and without facing the kinds of constraints that are evident in this Budget?

OBR Forecasts

Baroness Kramer Excerpts

Monday 1st December 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I begin by noting the resignation of Richard Hughes from his position as chair of the OBR and thank him for his service in that role, which he has occupied since 2020. We in the Opposition will carefully study the contents of the report that has been issued today into the highly regrettable early release of the economic and fiscal outlook. We welcome the seriousness with which the OBR has treated this matter.

We expect those in positions of power to act with transparency, openness and integrity. The only person who has shown any integrity in this process has demonstrated it by resigning. Perhaps the Chancellor might want to follow his example.

We must not let today’s report be a convenient distraction from the matter we are discussing, namely the accusations that the Chancellor misled the Cabinet, the markets and the public in the run-up to the Budget. On 4 November, three weeks before the Budget, the Chancellor held an extraordinary press conference to warn that a downgrade in the public finances meant that taxes would have to rise. She pointed to a supposed collapse in productivity and said this had consequences for working people and for the public finances too. No one compelled her to make that announcement. She chose to do so. She signalled openly that she was preparing to break the Labour manifesto by raising the basic rate of income tax, presenting this as unavoidable.

Yet we know that the picture she painted was not the full truth. There was a sin of omission. What she did not tell the public, Parliament or even her own Cabinet was that the public finances had actually improved. Higher than expected tax receipts had offset most of the productivity downgrade. By 31 October, four days before her press conference, the OBR had informed her that she in fact had a £4.2 billion surplus against the main fiscal rule and not a black hole. The omission of material fiscal information during the most sensitive period of the economic calendar is extraordinarily serious. The OBR was so concerned by the misconceptions circulating before Budget day that its chair took the highly unusual step of writing publicly to the Treasury Select Committee to correct the record. He confirmed that the Chancellor had been informed as early as 17 September that improved tax revenues largely wiped out the productivity downgrade. Yet on 4 November she chose to speak only of gloom, and working families, savers and businesses all made decisions as a result. People judged their financial futures based on those statements. The markets reacted; journalists reported. Those words and the briefings and selective leaks that followed came from the Chancellor, her officials and her Government, and they were incomplete, confusing and misleading. They came on top of weeks of U-turns, backtracking, redrafting and contradictory briefings. I think I have recalled this chaos in earlier debates.

What makes the whole saga even more inexplicable is this: if the Chancellor genuinely wanted more fiscal headroom, if she wanted to raise taxes in the name of prudence, then why on earth did she not simply say so? Instead, we had misreporting, mixed messages and false presentations of the facts, and for what? There is no obvious strategy, no coherent political rationale and no fiscal logic. It simply looks like serious, consequential incompetence at the very top of the Treasury. Let us be clear: this would be unacceptable at any time, but in the run-up to a Budget, when the markets are watching with greater intensity than at any other point, when households and businesses make real decisions based on what they believe the Government are telling them, when the entire country waits to hear how their taxes will be collected and their money will be spent, this is unforgivable.

In the light of the chaos the Government have created around this Budget, can the Minister answer three simple questions? Can he confirm that the Chancellor was aware of a £4.2 billion surplus against the main fiscal rule on 31 October? Can he tell the House, if the Chancellor wanted to increase tax to improve headroom and fund extra spending on welfare, as he suggested, why she did not simply say so in her scene-setting speech? Finally, will the Government finally subject themselves to an investigation by the Financial Conduct Authority and the Permanent Secretary to the Treasury into possible market abuse by all those in No. 10 and at the Treasury who would have had access to relevant confidential information? If the Government have nothing to hide, they will have nothing to fear from such an investigation.

[Baroness Kramer (LD)]

My Lords, this really has been a bit of an omnishambles with announcements, scene-setting musings, U-turns, misstatements and leaks—speculation that, for a time at least, spooked the markets, raising interest rates on government debt and causing such uncertainty that businesses and individuals delayed or abandoned decisions. We in this House have felt for the Minister, who has tried to hold the line by refusing to speculate despite being inveigled by pretty much all of us to try to make him do so. Frankly, all around him, others were simply flying kites.

On the issue of the OBR, Richard Hughes has taken the honourable step of resigning. Like others, I agree that he is very much the embodiment of a dedicated civil servant and has contributed much to the economic welfare of this country. Can the Government tell us, now that they recognise the seriousness of the breach, whether it is possible that attempts to access this information actually rise to the level of criminality? Are we looking at a possible issue around that? Also, is the security review being extended to other entities at arm’s length from the Government that might also have significant information but not the security that is necessary?

On the Chancellor, we need to understand much better why statements about tax receipts were omitted from the discussion on 4 November. This sits within the context of the omnishambles that I described. I am very concerned, for the future, that this form of extreme kite-flying—not just on this Budget; we have certainly seen it on earlier Budgets—has become so normalised that it has, in effect, killed off purdah. I am not sure that that is good for either the economy or how the markets behave.

In that case, will the Government recognise that they need to overhaul the whole Budget process? In the Swedish example, the Parliament gets to debate the Government’s Budget before it is set in stone, to propose alternatives and to make amendments; that is then followed by a period of scrutiny and accountability. Will the Government now bring forward a new approach to this process—one that enhances accuracy and transparency and properly restores both public trust and the role of Parliament?

[Lord Livermore (Lab)]

I am very grateful to both noble Baronesses for their contributions and questions.

The noble Baroness, Lady Neville-Rolfe, began by paying tribute to Richard Hughes, his actions today and his record of public service. I was very fortunate to work with him while I was a special adviser in the Treasury; he was my private secretary while I was a special adviser. I absolutely know what the noble Baroness said about his commitment to public service, so I join her in those words. The Chancellor said earlier today:

“I want to thank Richard Hughes for his public service and for leading the Office for Budget Responsibility over the past five years and for his many years of public service”.


This Government are committed to protecting the independence of the OBR and the integrity of our fiscal frameworks and institutions.

The noble Baroness, Lady Neville-Rolfe, spoke about misleading. I fundamentally reject that. The Chancellor has been completely honest and consistent with the public in everything she has said. On 4 November, the Chancellor said that her priorities were cutting the cost of living, NHS waiting lists, debt and borrowing. The Budget delivered precisely on those priorities. The Chancellor was clear that, if there were a productivity downgrade, that would mean lower tax receipts. The OBR confirmed that tax receipts are £16 billion lower than they otherwise would have been. The Chancellor said that she intended to build more headroom, and she did—to £21.7 billion. The Chancellor was clear that policy choices would need to be paid for; the Budget shows that those cost £6.9 billion. The Chancellor was clear that challenging decisions would need to be taken on taxation and spending, and she froze thresholds for a further three years. So, as I say, the Chancellor was completely honest and consistent with the public in everything she said.

I note that the noble Baroness, Lady Neville-Rolfe, spoke of a “supposed” productivity collapse, as if she were trying to make light of the fact that the OBR looked back at the past 14 years and revised its view of what the previous Government had done to the economy downwards. It looked at the chronic lack of investment, Brexit, the mini-Budget and all of the other things the previous Government had done, and it was forced to downgrade productivity—the performance of the economy—as a result. It put that forward and said that that did lasting damage to the economy. The noble Baroness described that as “supposed”, so I would like her to acknowledge that that was real and has real, lasting consequences.

The noble Baroness also said that public finances had “improved”. I do not understand how going from a headroom of £9.9 billion at the Spring Statement to a headroom of £4.2 billion before any measures were taken into account is an improvement in the public finances. It is important to point that out.

The noble Baroness said that there is no “fiscal logic” to this Budget. Is she saying, therefore, that she thinks that the headroom of £4.2 billion is sufficient? Is she saying that, if the Chancellor had come before Parliament and announced £4.2 billion of headroom, that would have been an acceptable level of headroom, given the global uncertainty that we face? So, no—there was very clear fiscal logic to this Budget.

The noble Baroness asked me three specific questions. Did the Chancellor know that there was a £4.2 billion surplus on 4 November? Yes, she did. On 4 November, the Chancellor had £4.2 billion of headroom before those policy choices were accounted for, meaning that, once those policy choices were accounted for, there would be a deficit of £2.7 billion before any additional headroom was built. The Chancellor was extremely clear that she intended to build more headroom. The noble Baroness also asked: if the Chancellor wanted more headroom, why did she not say so? I suggest that the noble Baroness goes back and reads her speech from 4 November, because she specifically said that she wanted to build more headroom to create a greater margin against events. The noble Baroness also asked me about the FCA but, frankly, that is a matter for the FCA to decide.

I am grateful to the noble Baroness, Lady Kramer, for her comments. She said that this Budget process had perhaps been dominated by more process questions than normal. I totally agree with her; it has been dominated by process before, during and after the Budget speech. I have some sympathy with her pleas for a return to purdah; it would certainly make my life more easy, and would have made life easier for me in the run-up to the Budget. She also praised Richard Hughes for his record of public service; I entirely agree with her.

The noble Baroness asked whether the contents of this review rise to the level of criminality. As the Statement that my right honourable friend the Chief Secretary gave in the other place says, we have only just received this report; we and the Treasury Committee should take time to consider it.

The noble Baroness gave some suggestions about how other countries run Budget processes. I am not sure that we will be reforming the process to quite that extent, but I have full sympathy with what she says. It is important that we take the Budget process and Budget secrecy extremely seriously—and we do.

Inheritance Tax: Pensions

Baroness Kramer Excerpts

Monday 17th November 2025 Lords Chamber

[Lord Livermore (Lab)]

I do agree with everything the noble Lord said. I enjoyed discussing these matters with him when he was a Treasury official and I was a special adviser. I probably learned a lot of this from him then, so I completely agree with what he said. To repeat, the purpose of pension savings is to fund retirement. If taxpayers are spending £78 billion a year on that, it is very important that it is used for its intended purposes rather than for estate planning, as the noble Lord says.

[Baroness Kramer (LD)]

My Lords, does the Minister agree that in real life, many people restricted their lifestyles, spending and gifting in order to build a sufficient defined contribution pension that could pay, if needed, for years in a care home—not knowing how long they would live or their health condition—and because they did not want to burden the state or their children? They now see that they were being gullible in believing the assurances that anything unused could go to their loved ones free of inheritance tax, and that the Government simply regard their sense of responsibility as rather stupid. What would the Minister say to those people?

[Lord Livermore (Lab)]

More importantly, what would I say to the noble Baroness? I would say that she is saying things that are completely misleading. As I have said already, estates will continue to benefit from all the normal nil-rate bands, reliefs and exemptions available, so an estate can pass on up to £1 million with no inheritance tax, and spouses are fully exempt from inheritance tax. It is also important to say that we have equal treatment here. There is equal treatment for inheritance tax purposes between pension and non-pension assets, and I think that is perfectly fair within the system.

Economic and Taxation Policies: Jobs, Growth and Prosperity

Baroness Kramer Excerpts

Thursday 13th November 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, the Budget is only days away. I believe that the noble Lord, Lord Liddle, may be the only person who can say that he is looking forward to it. Last week, the Chancellor made a paving speech which made it clear that huge tax rises are coming. Most of us expect to see higher income tax—that would be no surprise. However, we have none of the details, and that is where the devil lies, so this debate is in some ways only part of a prologue.

Although I congratulate the noble Lord, Lord Elliott, on obtaining this debate, it was rather curious that, in his litany of causes of the current economic condition in which we find ourselves, he overlooked mentioning Brexit, which was, in fact, the deepest blow by far. The Government finally have the guts to say that out loud, but they have not turned towards pushing for a customs union, which is the obvious cure. Using figures from Frontier Economics on the GDP uptick that would come, and from the Commons Library on tax yield, rejoining the customs union could be expected to provide an additional £25 billion a year in tax revenue to the UK Treasury. The economic benefit that arises from that change completely exceeds the impact of any proposal we have heard from any Bench today. That is important and we need to recognise it.

Meanwhile, I do not doubt the £22 billion legacy black hole that the Minister often talks about; it was echoed by the noble Viscount, Lord Chandos, the noble Lord, Lord Davies, and others. Public services are on their knees and the need to invest in infrastructure after years of neglect is surely a given. Perhaps most dangerously of all, people are feeling the cost of living pain, many to the point of breaking. Living standards matter.

Clearly, we need growth and productivity, and I was glad that the noble Baroness, Lady Fall, focused on scale-up in part of her discussion. However, I am expecting a horrible forecast from the OBR because although some monthly figures show productivity growth, it is off such a low base that the benefit is marginal. In that vein, I warn the Government against looking to small businesses to fill the Budget hole. This is exactly the sector that needs to be investing to get productivity going. We heard concerns about that from quite a number of speakers, including the noble Lords, Lord Leigh and Lord Kempsell.

The self-employed should not be targeted either. That includes small LLPs, which are often just two people and simply a variant on self-employment, with similarly precarious income, limited benefits and no employment protection.

It is important to recognise, particularly in this discussion on levels of economic inactivity—referred to by the noble Baroness, Lady Stedman-Scott, and the noble Lords, Lord Petitgas and Lord Skidelsky, most extensively—that, in today’s economy, this sector, the self-employed and small business sector, has the most promise to get disengaged people of working age either back into work or into work for the first time. We have to look to that and support that group.

Whatever the Government choose to do, they also need to calm the gilts markets. We are paying a significant premium, even over France with all of its woes. According to CBRE Investment Management, a 1% reduction in gilt yields reduces the UK’s borrowing levels by a cumulative £21 billion over five years. Part of that calming is achieved by creating credible fiscal headroom, which has not happened in previous Budgets. I say to the Minister that it will have to be a really important feature of the Budget.

In this situation, where are the greatest emergencies? My party has identified two. The first is the fragile state of the hospitality industry, mentioned by the noble Lord, Lord Risby. It is the backbone of so many high streets and communities. We call on the Government to slash VAT by 5% for pubs, restaurants and entertainment and accommodation venues with immediate effect and until April 2027. Ordinary folk looking for small pleasures will benefit too.

The other and perhaps even more urgent need is to provide relief to ordinary people by removing the main renewable levy from people’s energy bills, not discarding the funding for tackling climate change but replacing it with Treasury funding until April 2027, by which time a new renewables obligation scheme should have been developed and should be in place. This would slash a typical energy bill by £90 a year, bringing it to its lowest level since the energy crisis began in 2022. The two measures would cost through to April 2027 a total of £12 billion and save a typical family £270 over the next 18 months.

However, we in my party are responsible. The Government have scoffed in the past when we have argued for a windfall tax on the banks, which are still benefiting from high interest rates. The IPPR has proposed a scheme that targets the windfall interest payments received by commercial banks as a result of the QE-related reserves they hold at the Bank of England. The tax would expire when the base rate returns to 2% or when quantitative tightening concludes, anticipated to be after 2030. It could raise £30 billion in total between now and 2030. That is less than half of what is needed for the two proposals I have just outlined, which would cost £7.5 billion and £4.5 billion respectively.

In the past, I have proposed taxes that could raise significant money for the Exchequer in a way that is fair, increasing from 2% to 10% the digital services tax on global tech companies—who are, frankly, absolute masters at tax avoidance—and doubling the remote gaming duty on online gambling. Those two together would raise almost £3 billion a year.

I will return to my opening comments. Because of the scale of the issues we face, the biggest increase in tax revenue could come from renegotiating and rejoining a customs union with the EU. Frankly, the only pain that would be experienced would be a pain to the pride of the Brexiteers. We would all be benefiting in our pockets.

Cryptocurrencies: US Regulation

Baroness Kramer Excerpts

Wednesday 12th November 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question and pay tribute to his considerable expertise in this matter. I agree with what he said. Crypto assets have the potential to play a significant role in the financial services sector, and the economy more broadly, including through greater transparency, efficiency and security. We are already seeing the benefits that stablecoin can provide in cross-border payments by reducing costs and improving efficiency. Unlocking the full potential for digital assets and blockchain technologies requires payments that interact with them directly, and stablecoins can play an important role in achieving that. It is therefore important for the UK to harness those opportunities and—I agree with him on this—to bring forward legislation, and we will do so.

[Baroness Kramer (LD)]

My Lords, my concern is about the geopolitics. Much of the UK’s trade today is conducted in offshore dollars, which sit beyond the reach of the US Government. As dollar stablecoin replaces traditional dollars, the US Government will get their hands on levers to pressure us and others by threatening to curtail access. Are the Government looking at the key issues of monetary sovereignty? The regulators clearly are not.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. She is not correct to say that the regulators are not looking at that; of course they are taking it into account. She is absolutely right that the US is taking forward US-denominated stablecoin. It is very important that the UK does the same. The Government see stablecoin playing an important role in the diverse and competitive UK payments landscape. We hope that firms will see the advantages of being regulated as stablecoin issuers in the UK and will seek permissions under the new regime for that.

National Insurance: Partnerships

Baroness Kramer Excerpts

Monday 10th November 2025 Lords Chamber

[Lord Livermore (Lab)]

The Chancellor is entirely at liberty to set out what she wants to set out at any given point. As I said, there has much speculation ahead of the Budget. I am not going to comment on the Budget. We will do things in the usual way. She has asked the OBR to produce a new forecast for the Budget. She will take decisions based on that forecast and set them out at the forthcoming Budget.

[Baroness Kramer (LD)]

My Lords, will the Minister advise his colleagues that any new partnership NICs applied to LLPs will exclude small entities that genuinely are a variant on self-employed organisations, with similar risks, precarious income, limited benefits and lack of employment opportunity, and are, indeed, a very important path for a lot of people returning to employment or getting into employment for the first time?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I am not quite sure how many more ways I can say this: she is inviting me to comment on tax speculation, and I think I have made it clear that I am not going to do that.

Public and Private Sector Productivity Trends

Baroness Kramer Excerpts

Thursday 30th October 2025 Lords Chamber

[Lord Livermore (Lab)]

On the noble Lord’s first point, I am very aware of some issues around the data, and I believe the ONS has been reviewing it along the lines he suggests. On the Employment Rights Bill, he will know that labour supply is also a fundamental component of driving productivity, and that a more motivated and more secure workforce is a more productive workforce. I hope he will take that into account.

[Baroness Kramer (LD)]

My Lords, we hear this week that only 11% of UK SMEs say they use technology to a great extent to automate or streamline operations. Do the Government understand that the slow pace of adoption of new technology by SMEs—many of which have not even adopted first-generation technology—lies at the heart of our productivity problem, which is why it remains incomprehensible that the Government keep adding burdens on SMEs? I know the Minister cannot tell us what is in the Budget, but can he at least tell the House that he recognises the problem?

[Lord Livermore (Lab)]

Yes, I absolutely recognise the problem and I agree with 90% of what the noble Baroness said. The only part I disagreed with was when she criticised the Government. I agree: digital adoption and AI adoption will be central to solving the productivity problem. SMEs are vital to that. It is why digital adoption was a key part of our small business strategy. I hope we can work together on this important issue.

Rules on Duty-Free Goods

Baroness Kramer Excerpts

Wednesday 22nd October 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question and insight. I will say up front, as I have said before, that we are committed to implementing the Windsor Framework in good faith and to protecting the UK internal market. We will work constructively with all stakeholders—the EU, the Northern Ireland Executive, businesses, and political parties and civic society in Northern Ireland—to achieve that aim, taking into account the implementation deadlines. As the noble Baroness said, the Windsor Framework agreement secured substantial legally binding changes and flexibilities that do improve things. I hope that the EU reset will further improve things, and I therefore urge all noble Lords to support it.

[Baroness Kramer (LD)]

My Lords—

[Lord Grocott (Lab)]

My Lords—

[Captain of the Honourable Corps of Gentlemen-at-Arms and Chief Whip (Lord Kennedy of Southwark) (Lab Co-op)]

We will hear from the Lib Dems next and then my noble friend Lord Grocott.

[Baroness Kramer (LD)]

My Lords, will the Government please start to renegotiate our entry into the customs union? It would eliminate the issues raised by the noble Baroness, Lady Hoey, and many others and increase prosperity for us. There is a very simple and direct set of answers.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question and I pay tribute to her consistency on this matter. We share many similarities in our observations and analysis of the impact of Brexit. She will know that we are engaged in the EU reset, which will achieve substantial benefits for growth in the UK and for British citizens travelling around the European Union. I urge her to support the reset.

GDP Per Capita

Baroness Kramer Excerpts

Monday 20th October 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, the UK is the sixth-largest economy, measured by GDP. But, on the measure of GDP per capita, it is only the 18th largest. Our demographic profile, with a heavily aging population, is a key reason for this. This year, we expect to reach the scary benchmark of having more deaths than births. Of course, we need to upskill our population in advancing technology. Do the Government accept that we rely on net immigration to sustain the economy in the public sector and that there is no way out of that?

[Lord Livermore (Lab)]

I hear what the noble Baroness says. The OBR is currently considering the economic and fiscal impacts of the immigration White Paper published in May and will report back in its forecast in the autumn. Of course, she is right that we are in a global race for talent, with many countries seeking to improve the attractiveness of their immigration systems for highly talented individuals. The immigration White Paper announced that the Government will review the visa offer for highly talented individuals by expanding the high potential individual visa and reforming the global talent and innovator founder visas. We have also agreed that we will work towards an ambitious youth mobility scheme with the EU, creating maximum economic and cultural opportunities between the UK and the EU. Any scheme would give young Brits the opportunity to travel, to experience other cultures and to work and study abroad.

Stablecoin Ownership

Baroness Kramer Excerpts

Thursday 16th October 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. Before I answer him directly, perhaps I may also pay tribute to the Lord Speaker. He has been a friend to me since I first joined this House when he was an MP. I pay tribute to his outstanding service as Speaker of this House.

The noble Lord is correct to say that stablecoins have huge potential to play a significant role in both retail and wholesale payments. We are already seeing the benefits that stablecoin can provide in cross-border payments; for example, by reducing costs and improving efficiencies. He is absolutely right that it is important for the UK to harness these opportunities for the ongoing competitiveness of the UK financial services sector.

However, I do not think it is fair to say that the US is going any faster than the UK. Reading media coverage, we may conclude that, but the reality is that the US passed legislation for the regulation of stablecoin in the summer. US regulators will publish their regulatory rules in mid-2026, with a backstop date of January 2027 for the US regime to go live. In the UK, the Government published draft legislation in April, with final legislation due before the end of the year. Alongside this, the FCA is at an advanced stage in its consultation on the details of its regime, with a view to finalising its detailed rules and requirements in 2026. This will allow firms to be authorised and running in the UK regime by 2027.

[Baroness Kramer (LD)]

My Lords, let me join in paying tribute to the Lord Speaker. I do not know whether to congratulate him, or say it is with great regret that he is in a situation in which he needs to stand down. We have all appreciated his service so much. A great deal more will be said on future occasions.

Stablecoin is not just an issue of digital payments and the efficiency of the pipeline, although you might think that from listening to the conversation. The move towards a global rollout of dollar and renminbi stablecoins has huge implications for monetary sovereignty. A sterling stablecoin has implications for the gilt markets and, hence, the public finances. Does the Minister begin to understand my concern that neither the Government nor the regulators have a grip on this and are considering the issues only narrowly—frankly, at a snail’s pace; I am astonished at the comments that he made just now—which means that we risk acting too late to protect our own national interest?

[Lord Livermore (Lab)]

I do not accept what the noble Baroness says. There are, of course, financial stability and other considerations associated with stablecoin, but these need to be balanced against supporting innovation and ensuring the UK positions itself as a competitive global destination for digital assets. As I set out in my Answer to the original Question, I do not accept that the UK is in any way moving too slowly. The Government will bring forward final legislation to create a financial services regulatory regime for crypto assets this year, which will include issuing qualifying stablecoin in the UK. This will provide crypto asset firms the regulatory certainty needed to invest and help drive innovation in our financial services sector, and at the same time ensure that customers are protected from the worst harms when they make use of crypto asset services.