UK Infrastructure: 10-year Strategy

Baroness Kramer Excerpts

Tuesday 24th June 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, it is widely accepted that one of the problems that besets the UK economy is the low rate of capital investment in both the public and private sectors. It must be a good thing if the Government assess what will be needed in the way of capital investment and attract resources accordingly. I accept that, for many years, policies on all sides have been less than satisfactory, and I am not in a party-political mode today.

I am in favour of having a planned programme over a planned period, such as a five-year timeframe for capital spending. I welcome the new maintenance fund. My experience in business is that it is essential to provide for maintenance in respect of all capital investments. Having said all that, we are some way from having a coherent and detailed programme for future infrastructure, with the incentives that we need for success. Against that background, which is broadly supportive, I have a number of questions for the Minister.

There remain areas of uncertainty around governance, delivery, capacity and funding. It would be helpful if the Minister could explain how and when these vital details will be revealed in future. It is really important to be clear, at a time when we are often reminded by the Government of the fiscal challenges they face, where the money is coming from.

It appears from the strategy that the Government hope that a substantial portion of this investment will come from off-balance-sheet public/private partnerships. Does the Minister recognise that this is an assumption from the Treasury rather than a hard pledge of cash? If sufficient private investment is not secured, does the noble Lord plan to use public money to fill the gap, or will the Treasury consider legislation to compel private funds to invest in government programmes—an approach that will deter investors in the UK?

Incorporating private finance into the new strategy is a welcome ambition, and I am glad to see the readiness to learn from the past. However, we must ask what changes the Treasury will make to how it engages in PPPs, given the failings around HS2, Metronet and Norfolk and Norwich hospital, to make sure we do not encounter these problems again.

Furthermore, the question that my honourable friend Richard Fuller raised in the other place was not properly answered. What proportion of the £725 billion is newly committed, as against previously announced money? As noble Lords will be aware, investment on this scale and across these timeframes must come with assurances of continuity and origin. I hope that the Minister can address these questions in his response.

The focus in the strategy is, rightly, centred on delivery. One important area in the strategy is housing. The Government have signalled their ambitious intention over the next five years to contribute 1.5 million new homes to the national stock. But the strategy actually funds 580,000 homes over 10 years through Homes England, an average of some 50,000 homes a year. Even on the lowest net migration forecast—350,000 a year—this is far below what is required each year just for migration-driven growth in housing demand. This is not the whole housing picture. However, our concern is that this offers so little net gain for current households waiting for a home. We will explore this further during the passage of the planning Bill, but I would welcome any clarification that the Minister can offer today.

Another area is aviation. The strategy and recent government announcements around aviation are welcome, both on infrastructure and on things such as aerospace redesign. However, as a recent debate in this place highlighted, limitations in the Government’s broader strategy around things such as the European geostationary navigation overlay service, EGNOS—known as the GPS on steroids—mean that these changes will have only a limited impact. Airports such as Exeter, Shoreham and Inverness previously relied on EGNOS to avoid costly infrastructure upgrades but will incur greater costs because they are no longer party to this service.

Does the Minister agree that we need to make sure that, alongside the new spending, we are pursuing non-fiscal policies that enable it to be effective? A key area is skills, which barely get a mention in the 10-year strategy. Yet I know from my time as chair of the Built Environment Committee and as a developer at Tesco that skills in construction, planning and environmental and community engagement matter a great deal. We have become increasingly short of the skills we need to build the hospitals, roads, railways, nuclear facilities, housing, prisons and water and flood defences that we need for a successful country and a successful strategy. I know from the Cabinet Office that, despite the very welcome advances in IT and AI, there is just not enough capacity in terms of skills or supply chains to build all we need. Is this something that concerns the Minister, and what plans does he have to solve the problem?

All of this speaks to the wider question of how we make sure that this money is spent intelligently to deliver value for money, and in a way that grows our economy and promotes productivity. A fundamental question is what our projected return on investment for this strategy actually is: £725 billion, albeit over a long period, is a great deal of money, so our net benefit must also be substantial in order to justify it. I hope the Minister can clear that point up for us.

A related question is: what sort of assessments went into choosing the areas to spend on? Transport spending is welcome, but is the Minister directing investment into the forms of transport that local communities benefit from the most, or does he risk further white elephants? How have the choices been made? Ensuring that we spend infrastructure money wisely, strategically and with an eye to the future is essential if we are to see the sorts of improvements in growth that the Chancellor and the whole country want. In doing so, we must target spending, combine it with wider enabling policy changes and ensure that we do not allow reforms to the Green Book and to local investment to lead to funding for white elephants.

We support the ambition behind this strategy. Long-term investment in infrastructure is a vital step if we are to address the real challenges facing our economy, our services and our communities, but this cannot be an exercise in headline figures or lofty announcements. If this plan is to succeed, the Government must show how the money will be secured, how it will be spent wisely and how it will deliver, for each project, tangible long-term benefits across the whole country—not just for now but for a changing economy and for future generations. How this policy fits in with yesterday’s industrial strategy will also be a vital consideration that we will examine carefully.

[Baroness Kramer (LD)]

My Lords, like my colleagues in the other place I welcome this strategy, which if well managed can significantly improve the UK’s potential for growth. My colleague, the MP Sarah Olney, who responded to this Statement in the other place, focused very much on the absence of a serious discussion of skills in the paper. She did not get a very satisfactory answer. I hope that we will hear something more from the Minister today, because that is the Achilles heel of a great deal of this Statement. However, I am going to focus not on the specific projects or on the issues that were covered in the other place but on some critical aspects of the financing.

As the noble Baroness, Lady Neville-Rolfe, indicated, the strategy proposes an updated version of public/private partnerships. I was recently privileged to chair a round table. Under Chatham House rules, I cannot tell you who was there by name, but there were leading developers, contractors and, basically, the money. To my amazement, and completely in contrast to most public statements, everyone started out by arguing against such a flawed model. Through an hour’s discussion, we identified some conditions under which a PPP could work. I will happily share that report, when it is prepared, with the Minister. The most significant condition was that the public sector has to field an educated buyer team with world-class negotiating skills, with world-class engineering, legal and financial knowledge in support. According to the people we talked to, such teams have not been in evidence.

The second most significant condition was that the projects must be specified in very fine detail, far more so than for a conventional financing and, especially if outcomes-based, allowing only for minimal variances. This condition, which many people will agree is essential for successful PPPs, seriously limits the eligible projects. I would like to hear from the Minister how much of a gap this might mean if these issues are pursued, as I hope they will be.

My second finance issue is specific to London, which will not receive government funding for much new infrastructure, even though it drives the national economy. If that is to be the case, London needs to be able to go directly to the financial markets at scale, to raise money against future value added, to build projects—and without the constraints associated with the current tax increment financing schemes, which are heavily laden with Treasury control. Once refined, this could extend to other parts of the country. I stress the urgency of dealing with this issue. London is the UK’s golden goose.

My last issue is to warn the Government again against abusing the regulated asset base as a mechanism to finance small modular nuclear reactors. In the Conservative era, the estimate that we were given on the Economic Affairs Committee for the then Government’s plans was an £80 increase to annual energy bills for ordinary people—£10 for each of eight SMRs. It was clearly an underestimate then and would be even more so now.

Does the Minister agree that the ordinary bill payer must not be treated as the stuffee—believe it or not, that is the common-parlance term—who must carry the risks and costs while others take both the immediate and future profits?

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

I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their comments and questions, and for their broad support and welcome for this strategy.

The noble Baroness, Lady Neville-Rolfe, began in her non-partisan mode, which I will try to replicate if I can. She talked first about the low rate of investment, and she is absolutely right. When we came into power, we saw the lowest rate of private sector investment as a share of GDP in the G7; we clearly have to turn that around. We saw public sector investment repeatedly cut, which is one of the reasons why we changed the fiscal rules in the way that we did, to incentivise capital investment and try to protect it from being cut to subsidise day-to-day spending. I am very grateful to the noble Baroness for her support for that investment and for the plan that is in front of us.

I am grateful to her for welcoming the maintenance fund. As we speak, there is a £46 billion backlog in the public sector maintenance of our schools, hospitals, prisons and courts. As part of this plan, we are putting £5 billion into the maintenance backlog for the NHS, £3 billion into our schools by 2030, and £600 million into courts and prisons. That is really important, so I am pleased that there is cross-party support for it.

The noble Baroness, Lady Neville-Rolfe, talked about governance and delivery capacity. I completely agree with her on the point about delivering value for money. Obviously, the strategy is not just about giving long-term certainty of investment, in terms of the numbers—she is quite right to say that—but what sits beneath them. The strategy is about trying to do things differently and to make sure that we get the strategic planning behind the investment that we are making.

That is the insight that sits behind the creation of NISTA, the National Infrastructure and Service Transformation Authority. It brings together under one roof infrastructure expertise combined with the policy and strategy insight of the National Infrastructure Commission and the delivery specialism of the Infrastructure and Projects Authority. Every two years, it will do a report into the delivery of this strategy. It will give Ministers real-time advice and expertise on specific projects. I hope that that goes a long way to solving some of the issues that the noble Baroness talked about.

The noble Baroness also talked about where the money is coming from. The announcements, as part of the spending review envelope, were fully funded and fully costed as part of that process and are within the current fiscal envelope. Beyond that, we have said that we will guarantee that investment spending will grow by at least inflation for the period beyond the spending view for a total of 10 years, which gives people certainty about the level of infrastructure investment that we are making.

The noble Baroness, Lady Neville-Rolfe, talked about PPPs, and the noble Baroness, Lady Kramer, also talked extensively about this. I agree with a lot of what she said and respect her great expertise on this matter. She talked about the criteria for success, and lessons clearly need to be learned from our previous experience of PFIs and PPPs. The Government are absolutely committed to that. There are several reports now available to us; the NAO’s lessons learned report, for example, provides vital information on what we can do differently and can do better.

The noble Baroness, Lady Kramer, said that, once you apply those criteria, it severely limits the number of projects for which you can use PPPs. To answer the question from the noble Baroness, Lady Neville-Rolfe, I do not think that this is about huge, widespread use. We clearly want a widespread degree of private sector capital coming in and financing infrastructure, and we want to continue to invest alongside the private sector and the private sector to step up and fund things.

We see a role for PPPs but in a very limited way and where their role will clearly be appropriate. We have said specifically that we will explore the feasibility of using new PPPs—learning lessons and applying the right criteria—for taxpayer-funded projects in very limited circumstances where they could represent value for money. We have given two specific examples where we think they could do that. One good example is Euston—the HS2 station—where we will investigate the use of PPP models for user-funded infrastructure. The other is the Lower Thames Crossing, where, again, we think there is the potential for the criteria that the noble Baroness mentioned to apply. There are a limited number of examples but those are two where there is a clear case to be made.

On housing, I completely agree that 1.5 million new homes is a stretching target. It absolutely remains our commitment and we think we are on course towards achieving it. We put a record amount of funding—the greatest for several generations—into social housing. The noble Baroness is clearly right that the potential occupiers want that housing now, which is why that funding has gone in. She wanted reassurance, and I can say that we firmly believe that we are on course towards that housing target.

Both noble Baronesses talked about skills, and I completely agree. It is good that we are in the spirit of consensus and cross-party thinking here. Obviously, with these commitments, it is absolutely right that we need people to build the things that we want built. Clearly, we can always do more, but we have made a strong start. We have made a record commitment to invest in skills—£1.2 billion of additional investment per year by 2028-29 to support current and future workforce needs.

I know that we are in a cross-party mood, but I have to reflect the fact that the degree of underfunding that we inherited was substantial. We had to put in significant amounts of money—billions of pounds—just to stand still and just to plug the gap that existed between needed provision and the funding that was there. Having to plug that gap limits the extent to which we can move forward.

However, we have provided funding to support over 1.3 million 16 to 19 year-olds to access high-quality training—some 65,000 additional learners per year by 2029. The spending review has delivered £625 million to train up to 60,000 construction workers. In the industrial strategy yesterday, we announced that we will introduce new short courses for priority skills as part of the growth and skills levy, continue to roll out foundation apprenticeships and deliver a targeted package for engineering skills. We have specific packages for engineering and construction, both of which are priority occupations in the infrastructure strategy and the industrial strategy.

How do we choose the investment? We always talk about growth, and I think noble Lords can see that much of this investment is targeted towards the sectors that will, I hope, really drive our growth agenda—transport, energy and housing just to name three.

On the questions about London from the noble Baroness, Lady Kramer, I cannot give any commitments today on the future financing model, but I completely share her support for London and her reflection of it as the golden goose. Future investment in London will be central to driving the economy.

Spending Review 2025

Baroness Kramer Excerpts

Thursday 12th June 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, the spending review Statement, delivered by the Chancellor in the other place yesterday, made it clear, in no uncertain terms, that the Treasury has lost authority in determining how the Government spend taxpayers’ money. How else can the Treasury explain a spending review in which the Government will add another £140 billion to the national bill in extra borrowing, forecast over the period set out by the Chancellor? How else can the Treasury explain a cost burden so substantially increased that the Government are unable to rule out tax rises in the autumn? How else can the Treasury explain why it is subsidising tax reductions in Mauritius, but making decisions which will limit domestic economic growth?

Ministers are lauding a spending review which does not address the fundamental issues which we have raised in your Lordships’ House many times. Only a few weeks ago, we had an excellent debate on the crisis we face in light of the scale of our national debt. This situation has been made worse as a direct consequence of the spending review. Ensuring value for money in public expenditure—another issue we have raised time and again—has been virtually ignored.

However, I thank the Minister for the long overdue investment in nuclear at Sizewell C, on small modular reactors with Rolls-Royce and on the nuclear fusion prototype in Nottinghamshire. I just hope these will not take too long. They are essential to an energy balance, so we avoid the sort of problems we have seen in Spain.

Following on from our discussions last week on the transport package, I also welcome the extension of the £3 cap on bus fares, albeit only until 2027. London-based politicians do not understand how important buses are to so many of the less well-off in this country, especially in rural areas which are bearing the brunt of this Government’s policies in other ways. The introduction of a five-year planning cycle for capital is also positive.

However, I am very concerned at the way the Chancellor has hit police spending and defence to find yet more money for the NHS. Police chiefs are very anxious, and there is still no plan to reach the 3% we need on defence. The NHS is one of the major winners from the spending review, claiming over £29 billion per year in additional funding. But unlike our Conservative record, this new money from the Labour Government has come with no productivity conditions and no demands that services be improved or patient outcomes bettered. This is a major problem. In recent years, we have seen record levels of spending poured into the health service, yet productivity has not kept pace. According to the Office for National Statistics, NHS productivity still remains below pre-pandemic levels. We have an inverse ratio: the more money the Government give the NHS, the worse it functions.

What we are witnessing is a shortage not of funding but of effective reform. The NAO and other independent bodies have highlighted how much of this new funding has been absorbed by rising costs and staff pay.

I am grateful to the Government for allowing an extra 20 minutes for Back-Benchers to ask the many questions they will have on the detail of this Statement. To be honest, I would have preferred a full debate on this, as it sets the scene on expenditure choices for the rest of the Parliament.

Moreover, in the round, the Statement is a cause for concern. As the shadow Chancellor put it succinctly, “Spend now, tax later”. The fiscal rules have been loosened so the Government can borrow more and lay out a succession of goodies in a £190 billion spending spree.

There should have been much more focus on the nearly £100 billion of interest we are now paying on our national debt and on how to get that down—a debate on how we balance the nation’s books. Investment is separated out under the fiscal rules, but I am afraid it still has to be paid for. Is this investment being wisely invested?

To mention one angle, the promised new Green Book is not a new book but the findings of a review. It concludes—as I expected, given the changes that the Conservative Government made—that the current methodology is not biased towards certain regions. However, I was surprised to read that the existing Green Book puts too much emphasis on cost-benefit ratios and that a ratio of less than one might be fine. I am really worried about this as an encouragement to the approval of white elephants.

This, of course, is against a troubling economic background. Unemployment has hit a four-year high of 4.6%. A first estimate for May showed a 109,000 decline in jobs, which, if confirmed, would be the worst month since the height of the pandemic in April 2020. Since the Spring Statement, persistently higher gilt yields have blown a £5 billion hole in the Chancellor’s £9.9 billion buffer. Productivity was 0.2% lower in the first quarter of the year compared with the same period in 2024. The UK’s total rate of investment has been the worst in the G7, on average. On top of it all, the ONS today announced a 0.3% decline in GDP growth—partly, no doubt, because of the hikes in national insurance, which have hit businesses so hard. These are facts. The Chancellor should have taken corrective action in the spending review, but we can see that more taxes and higher council tax are coming.

Finally, I will come back to the Minister on a couple of points that he keeps making. He has alleged, often and aggressively, that when many new projects were announced by the Tories, no money was provided. That is, of course, because we rightly delayed the spending round until after the election. We, like the Government, would have allocated the money for what we had planned following a classic review.

This is linked to my other concern, about which I have been very patient with the Minister: that we had and have no plans for saving money to finance necessary spending. This is an inexactitude. Apart from the strong growth trajectory at the time of the election, undermined by Labour’s doom and gloom, we were on course to reduce the public sector. Instead, the civil service has risen in the past three months to over 516,000 full-time equivalent, the highest level since 2006—in contrast, according to Civil Service World, to the total of 384,000 FTE in September 2016, when I was serving in the Conservative Government.

This Government have chosen to give pay rises to the public sector costing £9 billion—and more, if you add on the future cost of their pensions—without the kind of link to productivity that any sensible managers insist on when a generous pay package is offered. Add to that the £30 billion for the Chagos Islands, which is funding reduced taxes in Mauritius not the UK, £8 billion on Great British Energy, and the abandonment of our ambitious plans for welfare reform and our attack on waste, of which, sadly, this week’s Blue Book is a pale imitation.

The truth is that the Government are busy creating their own black hole with all of this, and it has been topped up by the £1 billion reversal in the winter fuel allowance. We all understand why that was done, but it destroys confidence in the Chancellor’s determination not to raise taxes. My fear is that we will run into the autumn with anaemic growth, persistent inflation and a large new tax bill.

[Baroness Kramer (LD)]

My Lords, I recognise that the Chancellor faces real constraints, and this morning’s GDP figures for April underscore the problem. However, I am not going to use this opportunity to spend a lot of time talking about growth. It is such a big issue that we need some separate debate time set aside for it.

On these Benches, we are pleased with the significant allocations for the NHS and for housing in the spending review, though we are concerned that there are no targets for social housing, since we need at least 150,000 new social homes a year. I ask the Minister: given this additional money—which I know is only £3.9 million a year, but still, it is additional money—will we see that number of social homes come through annually? That really is the need that must be met.

However, nobody will be surprised that I was disappointed—almost to the point of devastation, quite frankly—to see adult social care overlooked, with no uplift until 2028, despite the reality that the situation is grim as we speak and that, without properly functioning adult social care, improvements to the NHS will be seriously undermined. If the Casey review is the hold-up, it should be and could be completed this year.

The Chancellor also suggested that she would back the fair pay agreement for adult social care workers sought by Care England. She absolutely should—care workers deserve every penny—but did I hear correctly that she will not fund it? The total package is £2 billion a year, and just the living wage and sick pay portion is £805 million a year. That kind of money puts in jeopardy not only many care providers but many local councils. If the Minister says that there was an uplift for councils, then not only does that rely on a 5% council tax increase in most councils but the additional money will be fully swallowed up by SEND, which is also in a dire situation. Will the Minister please explain what seems completely inexplicable: the overlooking of adult social care?

I also ask for clarification on defence spending. The Chancellor said she would raise it to 2.6% by 2027—which is the right direction—but is it correct that when she spoke, she treated spending on the secret services and on the Ukraine war as defence spending? If we speak in the terms that we have all been using up to now then the 2027 spend is, in my estimate, below 2.4%. I hope the Minister will tell me I have simply misunderstood. Will he help explain what exactly is going on with this defence spending? To me, all this confusion is underscoring the importance of cross-party talks, which my party has proposed, so that we collectively find a way to reach the necessary 3% well ahead of 2034. Boy, would I appreciate some clarification on what on earth is happening within that budget.

I am pleased to see new funds for the British Business Bank, whose greatest weakness, frankly, is its tiny size. However, to which bit of its activity is the additional money to be directed? I am particularly concerned about small business lending, and it could make a serious difference if much of the new funds are directed into the BBB’s Community ENABLE fund and its growth guarantee scheme. Who will make that call, is it dedicated, and does it have a target? Could the Minister please tell us more?

I could raise a lot of other questions, but I am anxious to hear properly from the Minister. I came away from the spending review, the Blue Book and the speech asking endless questions to which I could not find answers. I thought that I was going rather brain-dead. Then, I heard Paul Johnson of the IFS talk about the documents being so opaque that he was asking questions and could not find answers. If he cannot, we need help. Could we have clarity in the future, but in the meantime could the Minister please serve as our clarity?

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

I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their comments and questions on yesterday’s spending review Statement.

It would have been perfectly credible for the noble Baroness, Lady Neville-Rolfe, to say she cannot support any of this investment because she did not support any of the difficult decisions that we took to make this investment possible. It also would have been perfectly credible for her to come here today and say she has changed her mind, now supports the difficult decisions that we took and therefore will support the investment that those difficult decisions have permitted.

Unfortunately, the noble Baroness did neither of those things. We heard her support for the huge amounts of spending we announced yesterday for the nuclear programme—for example, £30 billion into nuclear. We heard her support the £3 bus fare cap, even though her party had refused to fund it any longer than last December. Yet she has opposed every difficult decision every time we have stood here for almost a year now. She has opposed every single difficult decision we have taken to repair the public finances and fund the public services. Even today, she was opposing the changes to the fiscal rules that enabled the additional investment spending we have made. She supported the nuclear spending, which is investment spending, but she opposed the fiscal rule change that enabled that spending. That simply is not credible.

The party opposite cannot support the investment in the spending review without supporting the money to pay for it. We all know exactly how we ended up with a £22 billion black hole in the public finances. That is exactly the approach that Liz Truss took in her mini-Budget, which crashed the economy and sent mortgage rates spiralling. We will not be repeating that mistake. The shadow Chancellor is distancing himself from the Liz Truss approach, and the noble Baroness should distance herself from that approach too. She talked about the money that is being allocated. I am not sure she understood the process of the spending review: the envelope was set by the Chancellor last spring. She cannot say in any way that we have lost control or are deviating from that envelope, because the Chancellor allocated every single penny of that envelope and not a single penny more. I fully understand what she is saying—that she understands that—but, in that case, I do not understand why she made the criticisms she did. The Chancellor was simply allocating the envelope that she set out in the spring.

The noble Baroness also said that the last Government delayed the spending review. We all know why the last Government delayed the spending review: because their sums did not add up. They had a £22 billion black hole at the heart of it, and they knew that the moment they did a spending review that black hole would be revealed. That is the reason why they delayed the spending review.

The noble Baroness talked about growth and the performance of the economy. In the first quarter of this year, the UK was the fastest-growing economy in the G7. Under the forecasts inherited from the previous Government, this year the UK would have been the slowest-growing economy in the G7. If she wants to compare growth stats, I am more than happy to do that with her all day. The figures out today show that April was a challenging month, given global headwinds. That was the month in which the tariffs were imposed by the US, and it was before we had agreed the trade agreement with the United States. If you dig into those growth figures, you can see that a lot of it is driven by a decline in exports because of that. It underlines the need to continue to deliver on our growth mission.

The noble Baroness talked about facts. The facts are that living standards are now forecast to grow four times faster than in the previous Parliament. Real wages have already grown by more in the first 10 months of this Labour Government than in the first 10 years of the previous Conservative Government. She often talks about productivity and GDP per capita, but GDP per capita fell in the last Parliament. It is now forecast to rise by 5.6% in this Parliament. On top of that, the IMF has upgraded our growth forecast, as did the OBR in the Spring Statement.

It is disappointing to me that the noble Baroness often says that she and I agree on growth, but she did not mention any of the growth-boosting measures included in this spending review. She did not mention that capital spending would increase growth by 1.4% in the long term. She did not mention the £39 billion affordable homes programme, which is vital for growth. She did not mention the record amounts of R&D funding rising to £22 billion a year. She did not mention any of the major rail projects to connect our towns and cities and make sure that growth is felt right throughout the United Kingdom. She did not mention the skills budget and the amount of money we are spending on skills. It is disappointing that she says she supports growth but then does not welcome or mention any of the investment that we are doing to get that growth.

The noble Baroness mentioned borrowing and the public finances. Average borrowing in this Parliament will be 2.8% of GDP, compared with 5.6% of GDP over the previous 14 years. She talked about the investment rule. Obviously, we have changed that fiscal rule—quite rightly—to enable the much-needed investment infrastructure to deliver stronger growth in the future. She opposes that change to that fiscal rule and yet somehow also claims to support the investment that the rule brings about.

The noble Baroness talked about tax. Yesterday’s spending review allocated the envelope set out by the Chancellor in the spring. These record settlements have been made possible only by the tough but necessary decisions we took in the Budget last October. On future decisions on tax and spending, I am not going to write four years’ worth of Budgets at this moment, even if that was in my power. The independent OBR will produce a new forecast in the autumn for the Budget. The Chancellor will take decisions at that point based on that forecast, and I will not prejudge those now.

The noble Baroness asked me about funding of the winter fuel during Question Time earlier. As she knows, we will set that out in full at the time of the Budget.

The noble Baronesses, Lady Neville-Rolfe and Lady Kramer, both asked about defence. As the Chancellor made clear yesterday, increasing defence spending is a strategic necessity, and that is why we will be spending 2.5% of GDP on defence by 2027. The noble Baroness, Lady Kramer, asked about the precise definitions: 2.5% will absolutely be the case by 2027. If she wants to include the intelligence agency spending and the other spending she mentioned, it is 2.6%, but it is 2.5% excluding those things—I can give her that absolute certainty. Our ambition is to reach 3% in the next Parliament when fiscal and economic conditions allow, but we will not be putting arbitrary dates on when we will meet that.

I have two final points: the noble Baroness, Lady Neville-Rolfe, asked about efficiency and productivity. This is the first zero-based review done into spending for 18 years. The previous Government had 14 years to do a zero-based review, if they really cared about efficiency in public spending, and they did not do one at all over the course of 14 years.

The noble Baroness did not mention any of the reforms we are doing in the NHS. In fact, she sounded quite sceptical of additional money going into the NHS, which is a great shame as we know it is the most treasured public service in this country. She did not mention digitisation, for example—putting £10 billion into the NHS app to make it far more efficient in its spending. We are doing a great deal more on efficiency savings. All departments have identified at least 5% savings and efficiencies by 2028-29.

Finally, the noble Baroness, Lady Kramer, spoke about social care. I am grateful to her for welcoming some of the other additional spending, particularly on the NHS and housing, for example. She talked about social housing: we have made the £39 billion investment into the affordable homes programme. That is crucial for growth, as she said.

I pay tribute to the noble Baroness, who has consistently campaigned on social care. The spending review provides an increase of over £4 billion available for adult social care in 2028-29, compared with 2025-26. That includes an increase to the NHS’s minimum contribution to adult social care via the better care fund, in line with the Department of Health’s spending review settlement. This will support the sector to improve adult social care, with further details to be set out shortly.

The noble Baroness asked about the fair pay agreement. As the Chancellor said yesterday, we remain committed to delivering a fair pay agreement in line with our manifesto commitment, and we will set out further details of that shortly. She also asked about the British Business Bank. There will be an increase to £25.5 billion, and it will set out further details as to how that will be allocated. In the industrial strategy in a few weeks’ time—access to finance is obviously a major issue for all those sectors—we will set out how the British Business Bank can help with those access to finance issues.

Economic Growth

Baroness Kramer Excerpts

Wednesday 11th June 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. He did indeed show his characteristic objectivity. I will simply say that, where GDP per capita fell in the last Parliament, GDP per capita is forecast to rise by 5.6% over the course of this Parliament.

[Baroness Kramer (LD)]

My Lords, I hope the Minister will agree that to achieve growth in the UK we need a liquid and effective investor market. Despite London Tech Week, Wise plans now to shift its listing from London to New York and on Monday Spectris, Alphawave and Oxford Ionics, all key creative tech companies, announced that they would be taken over by US investors. In 2024, UK equity funds suffered £9.6 billion in outflows when most other equity funds had huge inflows—a pattern that dates from Brexit. I understand that the Government plan to press the pension sector to invest in UK companies, but what other steps are they taking to restore those key investment flows that used to come from Europe into the UK and to counter the US’s use of tariffs to incentivise the takeover of British tech?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. She mentions the outflows. The outflows in 2024 were less than in any previous year over the last 14 years so, although they are not what we want to see, they are perhaps not as doom-laden as she might want to make out. The Chancellor set out extensive capital market reforms in her last Mansion House speech. She has another Mansion House speech due on 1 July, at which point we will also publish the financial services growth and competitiveness strategy. I hope that will help to answer some of the questions that the noble Baroness asks.

Mansion House Accord

Baroness Kramer Excerpts

Wednesday 14th May 2025 Lords Chamber

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

I am grateful to the noble Baroness for her questions. I am sorry that she started her remarks with the word “disappointing”, because this is a really important initiative by the industry and one that the Government very much welcome. Of course, it builds on the work that the previous Conservative Government did, which the previous Conservative Chancellor began, so I hope that there is cross-party support for these steps. This is very important to our growth mission, by increasing investment in infrastructure, and it supports better outcomes for savers. As the noble Baroness will know, this is an industry-led, voluntary accord. Pension funds are choosing to do this, because evidence shows that high-growth assets can boost returns over time. We are confident that schemes are moving in the right direction, and this accord shows what government and business can achieve together, when working in partnership. The pension schemes Bill will contain more details about how these developments will be monitored to make sure that change is delivered.

[Baroness Kramer (LD)]

My Lords, we all want to see more investment in the UK’s productive economy, but what protection is to be provided for people with small DC pension pots who cannot risk losses and see their pensions as a savings product, not as an investment, especially if that investment is high-risk and illiquid, as envisaged in the original Mansion House accords?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. This commitment is voluntary and led by the industry, because the industry knows and is choosing to do this—because the evidence shows that higher-growth assets can boost returns to savers over time, as the noble Baroness, Lady Neville-Rolfe, said, in line with international counterparts, such as in Canada and Australia. Their pension funds and the levels of private asset allocation in those schemes is far higher. Pension savers will benefit from this accord through diversified savings, with potentially higher returns.

Bank Resolution (Recapitalisation) Bill [HL]

Baroness Kramer Excerpts

Consideration of Commons amendments and / or reasons
Monday 12th May 2025 Lords Chamber

[Lord Vaux of Harrowden (CB)]

My Lords, I want to ask the Minister a question that arises from this change. First, though, it is over six months since we debated these amendments. That does seem like an awfully long time for the Bill to disappear into limbo and come back, particularly when other Bills are being rushed through this House.

I wanted to ask the Minister to explain more about whether the resolution process could be used for larger banks, but I think he has actually answered that question. I am not sure his answer gives me an awful lot more confidence or comfort, but I am not going to oppose the Commons amendments. However, in the last six months, various comments have come from the PRA or the Bank of England about the fact that this Act, as it will be, may allow them to take some banks out of the MREL process. I wondered if the Minister might wish to comment on that and whether there are any consequences the other way round.

[Baroness Kramer (LD)]

My Lords, I have to say that I appreciate the explanation that we have just had from the Minister, but I and others remain disturbed by the Government’s decision not to accept the amendment, which was not just rational but well crafted, introduced by your Lordships in this House. The underlying Bill was initially presented to the House as providing a mechanism to save significant small banks from failing by recapitalising them from the Financial Services Compensation Scheme, rather than having to turn to the taxpayer. Regulated banks, as this House will know, are then required to replenish the FSCS when it is depleted for any reason, but, because the thrust of the language was around small banks—that was the intent, and that was the discussion that is in all the notes—this House very much agreed to it, with just a few probing points engaged with.

Thank goodness that we have a lot of very good brains in this House. The combination of my noble friends Lady Bowles and Lord Fox and the noble Baronesses, Lady Noakes and Lady Vere, realised that there was a significant loophole in the language. We did not realise in the beginning that any of this could be applied to the larger banks; that became clear only as those pursuing the legislation became more aware of the implications of its content. Now we have a Bill that permits the regulator to use the FSCS as its mechanism to rescue large banks. Let us be frank: it completely changes the whole profile of both risks and consequences. The amendment would have effectively closed that loophole.

The larger banks, as the Minister has said, already have their own dedicated process to recapitalise in case of failure, a process that was introduced after the 2008 crisis. The Bank of England requires each large bank to hold a tranche of MREL—in plain English, bail-in bonds—which can be converted to capital by the regulator in case of failure, with the consequence that the bank is thereby rescued. We need to understand why that is not considered by the Government to be an adequate system. The Minister has just said—if I understood him—that the regulators will always require that bail-in bonds are used first, and the FSCS is a resource of last resort. But that is not in the legislation. The legislation allows the regulator to turn first to the FSCS and ignore bail-in altogether. He will be very conscious that the Swiss regulator, with the failure of Credit Suisse, completely ignored the bail-in capability and chose other routes to manage the rescue of Credit Suisse.

Those who hold bail-in bonds—the investors who buy them—are extremely well remunerated for carrying the risk associated with a bail-in bond. I am trying to work out why they can now look at this legislation and begin to assume that they will have the benefits of receiving a risk premium for holding those bonds but never actually find that those bonds are forced into use in case of a failure. How can we rely on just a code to continue to determine that bail-in will be the first resort and not a later resort or no resort at all? Are the Government basically saying that there are now many circumstances they have identified in which bail-in is neither usable nor adequate? I refer to the Swiss example. What are the consequences for financial sustainability if we are saying that bail-in is a slightly busted system? Have there been blandishments from the various investors who have purchased bail-in bonds, trying to pressure the Government into creating an alternate route? What are the consequences for our small- and medium-sized banks if the FSCS is depleted by big bank failure?

The Minister says that the regulators will not ask for an unaffordable contribution from the various banks to replenish the FSCS, but it is our mechanism that ensures small depositors’ accounts. Who is going to do the replenishment if the number is too great to ask the banks to commit to it? I am quite troubled by this change in responsibility for where risk lies that is embedded in the Bill. If the Minister is so sure that the items in the code should be giving us reassurance, why have they not been introduced in this Bill as part of the legislation?

[Baroness Neville-Rolfe (Con)]

My Lords, this is an important Bill, which provides the Bank of England with extra flexibility to manage bank failures, particularly those of smaller banks, in a way that strengthens protections for taxpayers. It reflects proposals by the last Government in the light of experience with the demise of Silicon Valley Bank. As such, it had cross-party support and, starting in the Lords, was a good example of expert scrutiny across the House.

Special thanks go to my noble friend and predecessor Lady Vere, my noble friends Lady Noakes and Lady Penn, the noble Lords, Lord Vaux of Harrowden and Lord Eatwell, the noble Baronesses, Lady Kramer and Lady Bowles, officials on all sides—of course, not forgetting the Whips—and, above all, the Financial Secretary to the Treasury, the noble Lord, Lord Livermore. I thank him both for the government amendments, notably that which was made to Clause 3 on the involvement of the Treasury Committee and the House of Lords Financial Services Regulation Committee, and for the timely publication of the draft code of practice, which helped us to overcome some substantial difficulties, as he has already mentioned.

Banking and financial services are very important to the success of the British economy. In 2022, the UK financial system held assets of around £27 trillion and in 2023 the financial insurance services sector contributed £208 billion to the UK economy. Legal regimes which govern how our banking and financial sectors operate need to promote growth and competitiveness and be easy to navigate and use. They must also balance ambition with prudence—an understandable driver of the Bill.

Noble Lords will recall the amendment we successfully added that was championed by my noble friend Lady Vere. This sought to prohibit the use of the funds from the Financial Services Compensation Scheme to recapitalise large financial institutions, defined as those which had reached an end-state MREL. The object was to reflect in law the Government’s stated objective of using the resolution framework in the event of a smaller bank requiring intervention, thus preventing the associated risk of contagion. The truth is that the Banking Act 2009 provides a robust framework for dealing with the large banks that have achieved end-state MREL status. They and the Bank of England should not be taking comfort from the fact that they could fall back on an ex-post levy of the banking sector through the FSCS in times of trouble. Resources should be focused on the SME banking sector, as the noble Baroness, Lady Kramer, reiterated.

In view of this, I am joined by noble Lords across the House in expressing disappointment that Members in the other place voted to remove this amendment from the Bill. We are confident that it would have improved the Bill in meeting its objective and helped to embed the balance I spoke of. However, we must accept that Treasury Ministers, with their battalions of support in the other place, wish to maintain flexibility; for example, as the Minister explained, to deal with a large, unexpected redress claim leaving the taxpayer exposed, although this is very much a backstop arrangement, with a £1.5 billion cap, as the Minister confirmed. So I do not propose to test the opinion of the House again.

It was also disappointing to see the rejection of other prudent proposals put forward by colleagues in the other place in good faith. Regardless, I hope the Government will consider these proposals seriously as we try together to create a system which is balanced and simple and promotes growth—an objective that the Minister and I share.

We support the thrust of the Bill, which continues the work that we did in government to support our banking sector, protect consumers and safeguard the public finances. However, there are still outstanding questions which I hope the Government can address today or in writing. They are even more important now that the Vere amendment has been rejected.

The Financial Conduct Authority and the Prudential Regulation Authority have proposed an FSCS operating budget for 2025-26 of £109 million. This budget covers the FSCS’s administrative expenses and does not represent the total funds available for compensation payouts. Over the three financial years from 2021 to 2024, the FSCS paid just £10 million in compensation relating to deposit claims, due primarily to the defaults of 11 credit unions and one small bank. Will the Minister kindly outline the steps the Government are taking to minimise the operating costs of the FSCS?

The FSCS is a quango, which is overseen by a quango, in conjunction with another quango. The fact that it uses an industry funding model does not change this. The money in its operating budget is money that is not being utilised in the banking sector, which employs millions of people and contributes billions to our economy and to growth. Does the Minister agree that the FSCS should focus on efficiency and on keeping as much money as possible available to banks for their use and not tied up unnecessarily in its operating budget and that, like other regulators, it should have regard to the Government’s overall objective of growth?

I end by saying that this is a broadly sensible proposal designed to safeguard public finances, ensure the security of our financial sector and limit public risk. We will support the Government in their ambition to achieve the objectives of the Bill, but I hope the Minister will seriously consider the points that have been raised today and will take the opportunity to clear up some of the questions that have been asked.

Inheritance Tax: Impact on Rural Businesses

Baroness Kramer Excerpts

Thursday 1st May 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. As she may know, as is standard practice, we will publish a tax information impact note alongside the draft legislation before the relevant Finance Bill. My honourable friend the Exchequer Secretary has engaged extensively with stakeholders in this area, including with the Ulster Farmers’ Union. We have fully listened to the issues that the noble Baroness raises. However, it is worth saying that individuals will still benefit from 100% relief for the first £1 million of combined business and agricultural assets, and above that amount there will be 50% relief, meaning that inheritance tax will be paid at a reduced effective rate of up to 20%. That is considerably more generous than in any other part of the economy.

[Baroness Kramer (LD)]

My Lords, the problem is not just the damaging inheritance tax changes but delinked payment reductions, as we debated yesterday, sky-high energy bills, a botched trade deal and extreme weather. Defra anticipates that 7% or 8% of farms will not survive, and most people accept that that is on the optimistic end of the scale, and the sale will be to corporates that have no real link with, and put very little into, the local economy. In the analysis that the Minister says is coming, will there be a broader analysis of the state of the rural economy—not just macro-level analysis, and not even regional analysis, but something that genuinely focuses on the rural economy because it needs different solutions?

[Lord Livermore (Lab)]

It is worth saying that the Government are investing £5 billion across this year and next year to support the transition to a more sustainable and productive sector, including the biggest budget for sustainable food production and nature recovery in our history. I do not necessarily accept the characterisation that the noble Baroness seeks to put forward of what is going on and what this Government are doing. As I say, there will be a full impact assessment at the time when the legislation is published, and I am sure it will cover many of the things that the noble Baroness asks about.

Tax: Changes

Baroness Kramer Excerpts

Tuesday 29th April 2025 Lords Chamber

[Lord Livermore (Lab)]

No, we are not. The UK’s main rate of capital gains tax is lower than in any other European G7 country, as is our corporation tax rate. Our new residence-based regime is simpler and more attractive to new arrivals than the non-dom regime it replaces—the regime put in place by the party the noble Lord supported for 14 years.

[Baroness Kramer (LD)]

My Lords, my eldest granddaughter is a British subject and an American citizen. She lives in the UK and has started to earn some money, only to find that she cannot avail herself of something like an ISA because it would be taxed from day one in the US and vice versa. This is one of anomaly after anomaly and Catch-22 after Catch-22 that the UK Government have refused to address. Does the Minister understand that, with non-dom status gone, this is becoming a major problem and driving out people who are tax resident in more than one country?

[Lord Livermore (Lab)]

I absolutely understand the point the noble Baroness is making, but I do not necessarily agree that it is driving out the people she describes. I completely understand her point, but I am not sure I agree with the conclusions she is reaching.

National Debt: It’s Time for Tough Decisions (Economic Affairs Committee Report)

Baroness Kramer Excerpts

Friday 25th April 2025 Lords Chamber

[Baroness Kramer (LD)]

My Lords, first I congratulate the noble Lord, Lord Bridges, and the committee on taking on such a significant but challenging issue. I have great respect for the committee. I am one of its more distant alumni, if you like, but my years as a member were not just enjoyable but a brilliant opportunity to learn. I say to those who manage the parliamentary diary that bringing this debate seven months after the publication of the report, with four minutes for some of the most expert Back-Benchers we have, is simply not wise.

We are holding this debate in the age of Trump, when chaotic tariff wars have become a reality and the IMF has seriously downgraded growth forecasts for the UK and across the globe. The committee warned that we need sustainable debt which allows a contingency for unknown unknowns, of which Trump must be pretty much the worst possible, but I hope the committee acknowledges that this takes years to build. It is not within the capacity of a new Government, in less than a year in office, especially when handed a scorched earth by the last Government.

I also dispute the committee’s list of the shocks that have undermined our economy. Yes, it lists the financial crisis, Covid, Russia’s war in Ukraine, extended use of QE, but there is no acknowledgement in the report of Brexit. To ignore Brexit is in effect to get into a car and try to find your way forward while wearing a complete blindfold. A 4% scarring by Brexit, year in and year out, is the difference between a resilient UK and a struggling UK, and we have to recognise that.

I have a final disagreement. I am with those who believe that investment should be treated differently from day-to-day spending when we set debt targets if we are ever to tackle the short-term mindset that keeps undermining our economic future. I see this as essential for the growth agenda and for revival across all the regions of the UK, but I think we all acknowledge that, even without Trump and the reversal of globalisation that now seems under way, the UK faces very difficult economic headwinds. We have collapsed public services. We just listened to the noble Baroness, Lady Grey-Thompson, and I think everybody recognises that she speaks the truth. We have inadequate infrastructure and housing right across the country, an ageing population—others have spoken about the demographic challenge we face—but also economic inactivity. As the noble Lord, Lord Browne, says, we have inadequate defence spending in a very unstable world. We have low business investment, low productivity, high public debt and high taxes. Climate change, just like AI, is both an opportunity and a risk, depending on whether we drive to be a leader to seize the benefits and turn these into opportunities, or hang back and just bear the cost. I call for us to be a leader; indeed, green industries are currently a key growth area and one of our few areas of real success, which one would not know from listening to this debate.

I find it fascinating that, when I read the reports this week of the appalling figures from the ONS on soaring public debt and declining business activity, when I read the analysis and the follow-up, the focus falls on our failure and loss of exports. This is where I suggest we should concentrate our efforts. I believe that the Government need to move rapidly towards an EU customs union: we have to drive vigorously to revive our whole export profile. It has to be backed by a coherent, ambitious industrial strategy. I know that that is due soon, but it will be critical and it genuinely needs to tackle the full range of issues that are necessary for growth. Frankly, I think we should be taking full advantage of the brain drain from America. Growth was not the topic of this report, but the report says that this is where we should be focusing our conversations now. The noble Baroness, Lady Cash, talked about the young people who are our future: I can think of so many levers that would forward small business, scale-ups, new opportunities, and that is where we should be concentrating, rather than getting trapped in this current analysis.

Let me explain in part why. I do not think the report intends it, but it could easily be read as calling for us to focus on creating a new fiscal framework now. It is not the fiscal framework I would have chosen. If we were debating this back in September, when the report was published, I would have been talking about the Lib Dem manifesto at the last general election, which, whether you liked it or hated it, was certainly recognised as being fully costed. It would have been a very different kind of debate with a different focus. Now, I am looking at the world and saying that, at this time of absolute turmoil, when we do not even know that announcements that have been made today will change the growth profile to benefit it, disarm it or disadvantage it even more, when we face such a level of complete chaos, I hope that the Government will not feel that they have to jump forward and make immediate change, because, quite frankly, if the businesses that I talk to hear that there is going to be a dramatic change in the fiscal framework, they will basically be resorting to tranquillisers and therapy. There is a real need now for some measure of calm and stability; it is difficult, but the Government absolutely have to provide it.

The report says that we should not just muddle through, and that would be my normal instinct—do not muddle, seize the occasion and start making new decisions—but, at this point in time, I honestly have to say that muddling through until this chaos settles might actually start to look like success.

Basel 3.1

Baroness Kramer Excerpts

Thursday 3rd April 2025 Lords Chamber

Asked by

[Baroness Kramer]

To ask His Majesty’s Government what assessment they have made of the impact of delaying the implementation of Basel 3.1 on measures by the Prudential Regulation Authority and the Treasury to address base erosion and profit shifting.

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

My Lords, the Prudential Regulation Authority, in consultation with HM Treasury, decided to delay the implementation of the Basel 3.1 reforms in the UK until 1 January 2027, taking into account competitiveness and growth considerations, given the current uncertainty around the timing of their implementation in the US. The delay to Basel 3.1 has no bearing on the base erosion and profit shifting policy agenda, where the Government are committed to ensuring that multinationals pay their fair share of tax in the UK.

[Baroness Kramer (LD)]

My Lords, seven mega US tech companies avoid some £2 billion a year in UK corporation tax by using base erosion and profit shifting. The 2% digital services tax clawed back £800 million of that this year, and it is due to be replaced under Basel 3.1, as agreed by the OECD, G7 and G20, with the undertaxed profits rule, put into UK law in the Finance Act last week. It would claw back significantly more. Can the Government tell us if they are prepared to abandon the DST and mothball the UPR at the behest of the Americans? How can UK companies compete when their US rivals are permitted in the UK to avoid at least two-thirds of the tax that UK companies have to pay?

[Lord Livermore (Lab)]

My Lords, as the Chancellor has said clearly, we will continue to make sure that businesses pay their fair share of tax, including businesses in the digital sector. The UK’s digital services tax is a fair and proportionate approach to taxing business activities undertaken in the UK, and it remains the UK’s intention to repeal it once a multinational solution is in place. We will continue to work with the US to understand its concerns and consider how these can be addressed in a way that meets both countries’ objectives. I will not give a running commentary now on those discussions.

--- Later in debate ---

[Lord Livermore (Lab)]

Yes, and this Government are absolutely clear: we are on the side of working people.

[Baroness Kramer (LD)]

My Lords, I will come back to the Minister, who has been trying hard to answer these questions without telling us too much. He will be aware that there have been different comments within his own Administration about whether the digital service tax is indeed in the mix in the trade negotiations that are apparently taking place with the States. We understand that there is great hope from the UK Government that there will be a positive outcome of those negotiations within the next two weeks. Is he telling us that the DST and the mothballing of the UPR are not on the table as part of that discussion?

[Lord Livermore (Lab)]

As I have said already, we will continue to make sure that businesses pay their fair share of tax, including businesses in the digital sector. We want the best deal for the UK, so I am not going to undermine negotiations by commenting on the talks or on what is or is not up for negotiation. The Prime Minister has been clear that we will only agree to a deal that is in our national interest.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Kramer Excerpts

Consideration of Commons amendments and / or reasons
Monday 31st March 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I simply thank the Minister and, again, all who have been involved in the passage of this difficult Bill, especially those who have supported me and my noble friend Lord Altrincham. We have had seven days of debate in the House and nine successful votes, in collaboration with other Benches. That demonstrated the serious concerns about this Bill, right across the House.

There is a strong feeling, echoed externally in our hospices, in hospitality, on the high street and in many other places, that the Bill is not the best way to meet the challenges that the country faces, and that it will endanger the growth we need so badly. However, this is a House of scrutiny, and the other place has taken a different view. As a responsible Opposition, we will not seek to defeat this Bill, no matter how deeply we feel about it. His Majesty’s Government must be able to set their tax policy, and of course we respect that.

I should add that I am grateful to the Minister for his closing words, especially in relation to SEND transport, and for his undertaking to monitor—as I think he said—the impacts and effect of the Bill going forward. We will hold him to that. Moreover, he knows that I and one or two others will continue to encourage the Treasury to learn from all of this and experiment with fuller sectoral assessments in the future.

[Baroness Kramer (LD)]

My Lords, the amendments that underlie Motions A and B that came from the House of Lords were in the name of my colleague and noble friend Lord Scriven. On his behalf, and on behalf of my Benches, we recognise that we have come to end the of the road on this Bill and we will not press for any further amendments.

I will make a couple of comments. I have just come from a fairly extensive meeting with R3, the insolvency and restructuring professionals’ body. Those around the table were telling me of the cascade of small businesses that are already going into voluntary insolvency because of the increasing costs that they face this April. When the Minister says that he will look at evaluating the Bill and its impacts, I hope he will make sure that his view casts across that territory, because it is obviously fundamental to the agenda for growth. Within those discussions, of course, were many private social care providers. A number of the smaller ones—at least three of the practitioners around the table—were dealing with insolvencies triggered over the last few weeks.

From what the Minister said, I hope that he and his Government will recognise that they now need to use other means to step in and shore up the key sectors that are faced with costs they cannot sustain and are therefore closing services which we absolutely need. I hope very much that his commitment to ongoing evaluation will incorporate all of that and be granular—we were hopeful when we heard his words on SEND transport, because that is quite a granular issue—rather than the overarching kind that we have been dealing with in this House.

However, the Minister has always been gracious. I understand that this has been exceedingly difficult and that the Government face very difficult and strenuous times. We recognise that, at this point, we can take this Bill no farther. We thank everyone who has participated, from all Benches, and all the people in our back offices and Whips’ offices who have provided so much support.