National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Neville-Rolfe Excerpts

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

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

My Lords, I will also speak to Motions B, C and D. On Motions A, B and C, the other place has disagreed with Amendments 1B, 5B and 8B as they would interfere with public revenue. The other place did not offer any further reason, trusting that this reason is deemed sufficient. On that basis, I hope that noble Lords are content not to insist on Amendments 1B, 5B and 8B.

I turn to Motion D. The other place has disagreed with Amendment 21B for the reason that the Government and the OBR have already outlined the impacts of this policy change. I have no doubt that the amendments tabled at previous stages of the Bill by the noble Baronesses, Lady Neville-Rolfe and Lady Noakes, and the noble Lord, Lord Londesborough, were well intentioned, and I am grateful to them for ensuring that these important matters have been properly addressed during our debates.

More broadly, I assure all noble Lords that giving careful consideration to and properly assessing the impact of the Bill is a priority for this Government. I commit on behalf of the Government to continually monitoring and assessing the impacts and effects of these policies.

Specifically with regard to special educational needs and disability, which has been the subject of several such amendments, the Government recognise the challenges within the SEND system, where outcomes for children and young people are often poor. The Government understand that change is urgently needed and we are committed to delivering long-term, sustainable change.

On the issue of SEN transport, while the Government do not expect the changes to national insurance to have a significant impact on home-to-school travel for children with SEND, I can commit that all these issues will be fully considered as part of the forthcoming spending review. On that basis, I hope that noble Lords will be content not to insist on Amendment 21B. I beg to move.

[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.

Spring Statement

Baroness Neville-Rolfe Excerpts

Thursday 27th March 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

Let us start by standing back and considering this Statement—which is really an emergency budget—and the Government’s actions more generally against their stated economic objectives. The main one, emphasised by Ministers many times, is growth. Fine—we all want growth. One would expect, therefore, that the Government’s policies and actions would be consistent with that objective, but they are not. First, the Chancellor and other Ministers talked down the economy, ruining morale. Then she chose to put taxes up by £40 billion, depressing animal spirits further and taking tax in the UK to its highest level in the last 50 years. The most egregious announcements were the wholly unexpected jobs tax of £25 billion—devastating businesses and social enterprises such as hospices—and, out of the blue, the farms tax, which imposes IHT on family businesses and undermines confidence across the country.

The Government also gave large pay rises to their friends in the unions, without any productivity strings. Even today, they are proceeding with the Employment Rights Bill, which will undoubtedly have negative effects on the supply side and hence on growth. Interestingly, the OBR has said—ominously, for the Government—that it has yet to take a view on the Bill’s effect on growth, should it pass. If growth is the main objective, the Government’s economic policies are, quite simply, incoherent.

The Government are also in a mess about the position of the OBR. The OBR is given a status by the Government above anything warranted. UK fiscal policy now appears determined by the need to meet detailed targets derived from the Government’s rules and the OBR’s estimates. Instead, the Government need to take informed common-sense choices that promote growth and, crucially, confidence in our economy, using best estimates as a guide to sensible behaviour.

In short, the Chancellor appears, wrongly, to believe that openly fiddling with the numbers to please the OBR leads to positive economic outcomes. It does not. Paul Johnson, the director of the Institute for Fiscal Studies, concluded yesterday by saying that

“the Chancellor has all but guaranteed … another six months of damaging speculation and uncertainty over tax policy”.

It does not take an economist to see that these conditions are damaging for growth, business and people across the country. Our economy needs certainty and stability. The Chancellor’s Statement leaves our country vulnerable, and it will be British business and the British taxpayer who pick up the pieces when her plans come into contact with reality.

My first area of questioning is: how would the Treasury react to adverse events—if, for instance, the UK were to become the victim of tariffs, which seems all the more likely this morning? It has no reserve for a rainy day. The OBR’s model suggests that the introduction of tariffs could

“entirely eliminate the headroom against the fiscal mandate”.

Can the Minister say which taxes the Government would hike, or which services he would cut, to keep in line with the Chancellor’s recklessly tight limits?

We are not in a good place, as can be seen from the numbers published yesterday. Public spending is far too high as a share of GDP. It is forecast to rise to 45% in 2025-26 and will still be at 43.9% in 2029-30, according to the OBR. Moreover, debt interest is at an appalling £101.3 billion, rising to £105.9 billion in 2029-30. The prospects for improving the position are modest. The OBR has halved its forecast for growth from 2% to 1% this year, and growth thereafter remains relatively anaemic, despite some welcome policy changes that I will come on to.

As we have discussed on previous occasions, growth and productivity are intimately linked, and we desperately need productivity to grow, especially in the public sector. The measures announced so far will not go very far to improve it. If we want growth, we need a step change in the public sector and a bigger share of the economy in the more productive private sector.

Defence spending was a key element of the Statement, and we on these Benches support an increase in funding for our Armed Forces. However, the Chancellor has not been clear about how and where the money from overseas development aid is going. Can the Minister kindly clear this up?

We support reform of planning and more housebuilding, on which the growth forecasts depend. However, can this be realised quickly? The plan is to invest £2 billion in social and affordable housing in 2026-27, which is, I understand, lower than the average under the previous Government. I welcome the £625 million to train up to 60,000 more construction workers. However, with my experience of the sector, I have doubts as to whether the proposed changes will speed up planning sufficiently or provide the skills needed in the building and planning trades quickly enough to fill current gaps and fire up major expansion.

We also believe that welfare reform is necessary, but it must be done in the right way and the process in the run-up to this Statement was, frankly, shambolic. For a very complicated subject, this is no way to proceed.

Before I sum up, perhaps the Minister can clear up one puzzle. I cannot understand how the OBR can legitimately assume—see the table on page 10 of the Green Book—that employment is going to rise by 400,000 people this year when everything seems to be going in the opposite direction.

The Chancellor’s decision to leave herself with such little headroom means that the Government’s fiscal policy is not about making the right decisions to support our economy in the long run. It is now about fiscal fine-tuning, which leaves us inflexible, vulnerable to external events and liable to future tax rises—which the Chancellor failed to rule out. Since the Budget, our economy has been wallowing in the doldrums of stagflation. Unemployment is up, the gilt rate has remained sky-high, businesses are staring down the barrel of crippling national insurance hikes, and we face the punitive Employment Rights Bill.

When we discuss all these technical terms and percentages, we need to be clear that what the Chancellor announced yesterday will hit taxpayers in this country hard. They will notice the effects of this Statement in their everyday lives. That includes those who are affected by her welfare changes, those who will be made redundant as a result of her national insurance hikes, and those who may find themselves paying more tax come the Budget later this year. It is these factors which affect living standards. We need to build an economy that supports investment, rather than encourages some of our most talented entrepreneurs to move overseas; to see high levels of employment; to allocate money sensibly to efficient public services; and to show flexibility in the light of external events—thus directly improving the lives of people across our wonderful country.

I am afraid that the Statement delivered by the Chancellor yesterday did not meet these standards. We need a Treasury, and a Chancellor, willing to make the decisions needed to support business, promote growth and confidence, and make Britain productive again.

[Baroness Kramer (LD)]

My Lords, when I listened to the Chancellor yesterday, the only thought that kept chasing through my head was that this is someone who is completely out of touch with the real experience of people today. The whole Statement glossed over a halving of the growth forecast for this year to 1%, and the reality of benefit cuts. These and ongoing high inflation—an average of 3.2% forecast for this year—are pains that people will experience in their daily lives.

The average loss for an individual on PIP is £4,500 a year. According to the Resolution Foundation, a couple on universal credit, where one is disabled and the other is a full-time carer, could lose £10,300 a year.

We all agree that people need to work if they can, but this is not primarily a back-to-work programme; it is a cutting programme. It does not just hit vulnerable individuals; it hits their communities and will have a knock-on effect particularly in disadvantaged areas of the country. It looks to me as though the cuts are very much front-loaded and back-to-work support is back-loaded. Can the Minister tell me if that is correct?

As a result of the cuts, a quarter of a million people of working age will now fall into poverty, and worse, 50,000 children—I am using the Government’s own numbers. Was this really Labour’s goal? Should this not have been the time to revive the bank levy, raise tax on online gambling, close capital gains loopholes and increase the digital services tax? I will say more on that tax in a moment.

Even at the end of the forecast period, despite all the pain, borrowing is expected to be £3.5 billion higher than forecast in October, and the Chancellor will be faced with very little headroom—only £9.9 billion. Can the Minister tell us how much of that headroom disappeared just last night with Trump’s tariff announcements? The headroom also relies on very uncertain expectations of a major increase in productivity. In other words, uncertainty about tax rises and spending cuts will continue; they were not ended by this Statement. That uncertainty will further undermine any possible growth scenario.

Since the focus of this Statement was supposed to be growth, why was there nothing in it for small businesses, which face a crunch in just a few days as the rise in employer NICs kicks in? It is no wonder that the Federation of Small Businesses reports the lowest levels of confidence post-Covid. When the Chancellor spoke of cutting red tape, she could at the very least have focused on the endless Brexit red tape. If she had announced negotiations on rejoining the customs union and removing the current trade barriers, small businesses would be quickly planning a return to exporting and recovery of their roles in European supply chains.

And there was nothing in the Statement to shore up social care, GPs, dentists, hospices and all the services which are crucial to the NHS and to the return-to-work project, but which are making cuts now as higher employer NICs hit home.

I conclude by pressing the Government on the digital services tax. This exists not as some kind of windfall tax or as a special punishment for tech companies; it is a modest attempt to claw back a portion—some £800 million this year—of aggressive tax avoidance by the mega US tech companies. We have just voted into law with the Finance Act an undertaxed profits rule, which would let us claw back much more of that money lost to tax avoidance by this group, in the range of £2 billion to £3 billion a year. However, the Government are now hinting that the digital services tax will be cancelled and the undertaxed profits rule mothballed if they offend the Americans—I refer the Minister to a Treasury press release on 17 January.

The Chancellor spoke, as she should, of reducing tax avoidance by British people and companies, but why should American firms be exempted? Will the Minister give me an answer? Are the Government going to turn a deliberate blind eye to aggressive tax avoidance by the US mega tech companies in the faint hope of winning favour with President Trump, while at the same time they slash benefits to disabled people, burden social care and small businesses, eviscerate overseas aid and need to increase spending on defence?

Strategic Priorities Statement: Defence

Baroness Neville-Rolfe Excerpts

Tuesday 25th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I will absolutely pass that on to the Chancellor.

[Baroness Neville-Rolfe (Con)]

My Lords, defence is the single most important activity of the state, and it is therefore unfortunate that many ESG funds have excluded investment in defence stocks, hitting our innovative UK companies. Does the Minister agree that the rebranded National Wealth Fund must lead the way more clearly and work with private sector funds to spur significant investment in the UK defence sector, as well as in other priority areas?

[Lord Livermore (Lab)]

I do agree with that, because the noble Baroness described exactly what the National Wealth Fund is there to do: to work closely with the private sector to catalyse more private sector investment in industries that we consider to be priority sectors. As the rest of this Question has shown, defence is very much one of those priority sectors.2

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Baroness Neville-Rolfe Excerpts

Consideration of Commons amendments and / or reasons
Monday 24th March 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, it is with some regret that I do not insist on my Amendment 8 and its consequential amendments. I am disappointed that financial privilege has been invoked to prevent a full and proper debate in the other place on the potential damaging impact that reducing the class 2 secondary threshold by a brutal 45% will have on jobs and growth for small businesses and organisations employing fewer than 25 staff. I fear the Government will look back on 6 April, the day the new NICs regime kicks in, as a day of economic self-harm—a second April Fools’ Day, if you like.

I do propose to move Amendment 8B in lieu. In the spirit of pragmatism, my amendment, like that from the noble Lord, Lord Scriven, would simply bestow on the Treasury the power—through statutory instrument—to specify exemptions on the lowering of secondary class 1 thresholds for businesses, charities and, indeed, all organisations employing fewer than 25 people. We are talking about 10 million jobs across the UK that are not protected by Clause 3’s increase in the employment allowance, which offsets the NICs increases but, typically, only for those employing three or fewer staff. Given the potential damage to employment, wages and growth, why would the Government not want this weapon in their armoury in what will be a very difficult year ahead for small employers, who also face close to 7% increases in the national minimum wage and added compliance costs with the new Employment Rights Bill?

I support Amendments 1B and 5B in the name of the noble Lord, Lord Scriven, which strike me as an entirely sensible and pragmatic exemption tool to give to the Treasury given the very challenging circumstances facing care homes, hospices, pharmacies and other primary care providers.

Finally, I also support Amendment 21B in the name of the noble Baroness, Lady Neville-Rolfe, which seeks a review of the impact of NICs increases by sector. The impact note that came with the Bill was extraordinarily light on detail, especially when you consider that the Bill commits employers across these sectors to more than £5 billion per annum in additional NICs and impacts more than 10 million jobs.

I asked the Minister in Committee how many jobs in each sector would be impacted by the increase in NICs—a fairly basic question, one could argue, and yet no answer has been forthcoming. We heard on Report that such assessments would be

“econometrically impossible”.—[Official Report, 25/2/25; col. 1672.]

I respectfully disagree. We are asking for sectoral impact assessments that cover such key issues as the number of jobs impacted and the impact on vacancies, job creation, redundancies, labour activity and output, and wages. It was an entirely reasonable request and one the Treasury should readily embrace.

[Baroness Neville-Rolfe (Con)]

My Lords, the amendments in this group, including my Amendment 21B, address the very real negative impact of this jobs tax that the Government refuse to acknowledge. The Bill is the most important economic measure they have put forward so far and it makes significant changes to millions of businesses and social enterprises on a very short timescale. These businesses have raised concerns that are reflected in a flat-lining of growth, as worried owners seek to anticipate such a brutal change. Noble Lords from across the House have raised the consequences a number of times, yet the Government remain unreceptive.

At every stage of this Bill’s progression, we have raised the concerns of the healthcare sector about the effects on care homes, pharmacies, dentists, GP surgeries and hospices. It will have a real impact on people’s lives. I am particularly concerned about the hospice sector. The recent extra funding provided is capital funding and will not support day-to-day functions. Hospice UK has reported that the burden of the increase in employer NICs will be £44.3 million a year, which will not be covered by the £26 million of revenue funding for children and young people’s hospices, previously mentioned by the Minister. Last year, children’s hospices were provided with £25 million through the children and young people’s hospice grant. Can the Minister tell us how much of his £26 million is additional funding and how much is in fact recurring?

--- Later in debate ---

[Baroness Kramer (LD)]

My Lords, we on these Benches do not dispute that the Government were handed a dire fiscal situation; the question is what taxes they choose to raise to remedy it? We feel that they have made the wrong choice in this instance.

With these amendments in lieu—certainly those from my noble friend Lord Scriven and the noble Lord, Lord Londesborough, from the Cross Benches—we have proposed that, in key areas, power is provided to the Government and to the Treasury to reverse that decision in these narrow circumstances if they discover, as they see this event play out, that the choices they made were not those that they thought they had made. It is very unusual from these Benches for us to be willing to provide what is, in effect, a Henry VIII power to the Government, and that we do so reflects our deep anxiety. This is not political game playing; we are deeply anxious about what will happen with community health, social health, small businesses and the knock-on consequences of all that.

I want to thank the noble Baroness, Lady Noakes, because it was her thought in Committee that one way to at least find some common ground would be to pass powers over to the Secretary of State. That is the pattern that we have followed. I hope that the Government will see that they are not forced to act in any way by two of these amendments in lieu; they are being given the opportunity and the possibility, and we hope they will accept them in that spirit.

The noble Baroness, Lady Neville-Rolfe, has proposed an amendment in lieu which would require an impact evaluation. I have to say to the Minister that, when he spoke at the opening of this debate about how few businesses would be impacted by the increase in employer NICs, I began to think that he had not been given the central information that he should have been given. If he were to look, he would discover that that vast number of companies that are not affected are those with three employees or fewer, but that those small companies that we look to for scale-up and to drive growth are impacted.

Again, this underscores the fact that to roll it out effectively—and I fully accept that this is new and has not been the pattern of past Governments—we need to move to a time when we get much more detailed impact evaluation as we deal with these issues in this House. We on these Benches hope very much that the Government will accept the three amendments in lieu. If they do not, then we will support all three.

[Baroness Neville-Rolfe (Con)]

My Lords, we have worked together on these three modest, common-sense amendments, and we will also support them if it comes to a vote.

[Lord Livermore (Lab)]

My Lords, I am very grateful to all noble Lords who have taken part in this debate. As I have outlined, the measures contained in this Bill are necessary to repair the public finances, to rebuild public services, to protect working people and to invest in Britain. This includes an historic investment of an additional £25.7 billion for the NHS that is helping to bring down waiting lists more quickly and puts an end to over a decade of underinvestment and neglect. In doing so, the Government have kept their promise to working people to not increase their income tax, their national insurance or their VAT. We have always acknowledged that there are costs to responsibility, but the cost of irresponsibility would have been far greater.

The noble Baroness, Lady Neville-Rolfe, asked about the impact of the Bill on hospices. The Government of course recognise the vital role that hospices play in supporting people at the end of life and their families, and the cost pressures that the hospice sector has been facing over many years. That is why, as several noble Lords have mentioned, we are supporting the sector with a £100 million increase for adult and children’s hospices to ensure that they have the best physical environment for care, and £26 million revenue funding to support children’s and young people’s hospices. All charities, including hospices set up as charities, can also benefit from the employment allowance, which this Bill more than doubles from £5,000 to £10,500.

On assessments, as I have said previously, the Government and the OBR have already outlined the impacts of this policy change. This approach is in line with previous changes to national insurance and previous similar changes to taxation; the Government do not intend to provide further impact assessments.

The revenue raised from the measures in this Bill will play a critical role in repairing the public finances and rebuilding our public services. Any future changes which exempt certain groups would have cost implications, necessitating higher borrowing, lower spending or alternative revenue-raising measures. For these reasons and the other reasons that I have already set out, I respectfully ask noble Lords not to press their Motions containing Amendments 1B, 5B, 8B and 21B.

--- Later in debate ---

[Lord Livermore (Lab)]

My Lords, in moving Motion B, I will speak also to Motions C, D, F, G and J to V. The other place has disagreed to Amendments 2, 3, 4, 6 and 7 and Amendments 9 to 20, as they interfere with public revenue. The other place did not offer any further reason, trusting that this reason is sufficient. On that basis, I hope that noble Lords are content not to insist on Amendments 2, 3, 4, 6, 7 and 9 to 20. I beg to move.

[Baroness Neville-Rolfe (Con)]

My Lords, the Government have rejected a number of amendments which call for the exemption of various sectors from the jobs tax, citing financial privilege. The amendments would have protected small business, providers of transport for students with special educational needs, small charities, providers of early years education and hospices, which we have already heard a lot about today, because of their desperate situation, from my noble friends Lord Leigh, Lord Ashcombe, Lady Monckton and Lady Noakes.

The Government’s refusal to acknowledge the damaging impacts that this tax on jobs will have is very concerning. The tax is in complete contrast to their insistence that they are the party of growth. Indeed, the most recent GDP statistics from the ONS indicate that the economy shrank by 0.1% in January. The way the Government are now taxing the more productive private sector to pay for a huge increase in less productive public projects and salaries means, I fear, that this trend will continue.

We have recast our review clause into a modest one, which we will be voting on shortly. We will not oppose the government amendments in this second group, but I give notice that we are planning to seek assistance for those providing SEND transport in the Bus Services (No. 2) Bill.

[Baroness Kramer (LD)]

My Lords, briefly, we regret very much that the other place rejected amendments that would have exempted key groups such as universities, nurseries and those providing SEND transport—essential services that provide key support will be under huge financial pressure. We have had to be selective. We have offered the Government opportunities to take powers in the areas where we think the greatest damage will be done most rapidly. Therefore, we will not press the Government on these amendments.

--- Later in debate ---

Moved by

[Baroness Neville-Rolfe]

At end insert “, and do propose Amendment 21B in lieu—

21B: After Clause 3, insert the following new Clause—
“Review of effect on certain sectors
(1) The Chancellor of the Exchequer must, within six months of the day on which this Act is passed, lay before Parliament a review of the impact of the measures contained in this Act on the persons and sectors in subsection (2).
(2) The review must consider the impact on—
(a) charities with annual revenue of less than £1 million;
(b) early years providers;
(c) hospices;
(d) the hospitality sector;
(e) pharmacies;
(f) small businesses;
(g) social care;
(h) transport for children with special educational needs or disabilities.””

[Baroness Neville-Rolfe (Con)]

My Lords, I beg to move Motion W1 and to test the opinion of the House.

Closed-Ended Investment Companies: Cost Disclosure

Baroness Neville-Rolfe Excerpts

Monday 24th March 2025 Lords Chamber

[Lord Livermore (Lab)]

Yes, I do share the noble Baroness’s concern, which is exactly why we have done all the things that I have set out so far in this Answer. The Government’s policy regarding saving is that we think it is a good thing and we want to encourage more of it.

[Baroness Neville-Rolfe (Con)]

Does the Minister agree that the most important objective in the savings area is to ensure that sufficient investment opportunities are available, whatever their nature, to allow and encourage UK investors to save and invest, especially in UK stocks? Will he outline how the Government intend to support products that facilitate private investment in important areas such as property and infrastructure, as closed-ended funds are generally well suited to that?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. What she is saying is right; the Government share her view. That is exactly why the Chancellor established the pensions review, for example, in her recent Mansion House speech. Her view is that the pensions review could unlock billions of pounds in additional investment in fast-growing businesses and infrastructure while improving outcome for savers. That is exactly the objective of that policy.

Finance Bill

Baroness Neville-Rolfe Excerpts

2nd reading & Committee negatived & 3rd reading
Wednesday 19th March 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I start with a note of regret that participants in this vital debate are given an advisory time of only five minutes. As the Official Opposition’s spokesman, I can speak for a little longer, but the time set aside seems inadequate to deal with all stages of such an important Bill—especially on top of consigning the national insurance contributions Bill to the Moses Room. We have distinguished economic and financial experts in this House, and we should make it easier to hear from them in prime time. I look forward to the maiden speech of the noble Baroness, Lady Caine of Kentish Town, and to welcoming her to their number.

It seems a long time since the Chancellor delivered her Budget and James Murray, the Exchequer Secretary, introduced the Bill in the other place. At that time, the Chancellor was destroying morale and animal spirits by talking the economy down, and then bashing business with the highest tax burden in the history of our country. Now, growth is flatlining—as we predicted—and the legacy of fragility lives on, with 10-year bond rates currently at 4.6%.

I have some sympathy for the Minister, as it was necessary to deal with the challenges facing the country—not least improving productivity, which is the long-term way to sustainable growth. That also means tackling the public sector, which the Health Secretary, Wes Streeting, has shown the determination to do, not least with the abolition of NHS England and the multiple tiers of staffing that he hopes to tackle.

The worst and biggest mistake in the Budget was the hike in national insurance—the jobs tax—especially the lowering of the threshold, not least because it will not deliver the hoped-for savings. The OBR has said that by 2029-30, the annual yield from these NIC increases will be slashed by nearly £10 billion through the job cuts and lower nominal wages these measures will inflict. Moreover, a further £5 billion a year will be needed to compensate public service employers. We will come back to these issues at ping-pong next week.

The second mistake, which will hit entrepreneurs, family businesses and the farming community, is the class-driven raid on IHT—the family farms tax. We look forward to hearing the results of the consultation and hope that the noble Lord, Lord Wood of Anfield, the new chair of the Economic Affairs Committee, will follow convention and arrange a sub-committee to look at the changes before the details are finalised.

The third mistake is the ideologically driven tax grab on private schools—the education tax. The Bill introduces the first-ever tax on education, and I will major on this because it is provided for in the Bill before us. The Minister has also done so, albeit from a different perspective. Since 1 January 2025, all education, boarding and vocational training provided by private schools in the UK has been subject to VAT at the standard rate of 20%. Alongside this, the Government are removing charitable business rates relief for independent schools in England, meaning they will, for the first time, face the additional burden of local business taxes from April 2025.

To be clear, this is a new, punitive tax on education. Its imposition part-way through the academic year will cause—and has already caused—significant disruption to the education of thousands of children. It harms parents on modest incomes who have worked hard to send their children to the school they believe is best suited to them, and will make independent schools unaffordable for military families, who make the greatest sacrifice by serving in our Armed Forces.

Most of all, the Government’s education taxes will have a disastrous impact on pupils with special educational needs and disabilities, especially on those in independent and state schools who lack education, health and care plans. Over 100,000 children with special needs—many of whom are in independent schools—will be hit. The Government have acknowledged that the policy will have a “disruptive impact” on pupils with SEND, potentially forcing them out of their schools as fees become unaffordable, which will overwhelm the state-funded system and burden local authorities with a surge in EHCP applications.

Ultimately, this tax on education could, according to the Adam Smith Institute, cost the taxpayer £1.6 billion a year if it forces a quarter of pupils into the state sector. This policy is a direct attack on aspiration. It punishes those who have worked hard to succeed and we will only begin to see the real damage at the start of the next academic year. Parents will deprive themselves of much to avoid taking a child out of school during the year, but, in the autumn, hard-pressed parents will in many cases have no choice but to remove their children from private education.

The Government have also broken their manifesto promises with the Budget and the Finance Bill. Their pledge was:

“We will ensure taxes on working people are kept as low as possible”.


Yet, they have increased the tax burden to a historic high of 38.2% by 2029-30.

Rather than creating an environment that promotes investment and growth, the Bill makes our tax system less competitive. It abolishes the remittance basis of taxation for non-domiciled individuals and raises the main rates of capital gains tax—from 10% to 20%, and from 18% to 24%, respectively. It reduces investor relief and increases stamp duty.

These measures do not lay the foundations for the growth we need; they erode the incentives for businesses to invest and create jobs in the UK. We are seeing the consequences. More than 10,000 millionaires left Britain last year, up from 4,200 in 2023. With his growth hat on, can the Minister confirm how the Government will ensure that the UK remains an attractive place to work and invest in? What has happened to the enterprise economy?

The Government made another promise. They said:

“The dream of homeownership is now out of reach for too many young people”,


and vowed to

“support first-time buyers who struggle to save for a large deposit”.

However, once again, the promises have been broken. Millions of young people have now learned that those were empty words.

The Government have confirmed that stamp duty relief for first-time buyers will be slashed this month. This means that first-time buyers purchasing homes worth over £300,000 will pay thousands more in tax under this Budget. Rents will also be pushed higher as a result of this stamp duty hike, as stated by Paul Johnson of the Institute for Fiscal Studies. This will further squeeze young people, who are already struggling to make ends meet. It is plainly clear: the Government are not prioritising the future of young people as they should.

The Bill also perpetuates the Government’s flawed energy policy, which fails to prioritise our energy security. It increases the energy profits levy to 38%, bringing the headline rate on oil and gas activities to 78%, and extends that rate for another year, removing investment allowances.

The real-world consequences of this ideological policy are dire. Offshore Energies UK has warned that the change will stifle investment and put 35,000 jobs at risk. If investment falls—the OBR concludes that capital expenditure will be down 26% over the forecast period—the country will become more dependent on imported energy. This will not only compromise the UK’s energy security but expose consumers to price fluctuations, leaving them vulnerable to global supply disruptions.

The Government are relying on the levy to help fund GB Energy and support the transition to clean power. However, if investment in UK oil and gas declines, the revenue generated by the levy will diminish, eroding the very schemes that they claim will create a “green energy superpower”. We should be maximising our homegrown energy, not undermining domestic production.

There are three other points that I hope the Minister may be able to clear up. First, what are the Government’s plans for the digital services tax, particularly in the light of adverse comments from Washington about the future of the tax in any trade deal? I was in favour of the introduction of the tax as a means of reducing the discrimination against physical retail that has been so damaging to our high streets. Any reassurance would be most welcome.

Secondly, the Government acknowledged that the transitional provisions for remittance by non-doms were faulty and helpfully tabled an amendment in the other place, now paragraph 6 of Schedule 9. However, I have been advised by the Chartered Institute of Taxation that this is also defective, so that, for example, individuals who brought money into the UK to buy a house several years ago would now face a big retrospective tax charge. To stop yet further departures from the UK to avoid such perverse effects, could the Minister make a statement that the Government recognise the issue and commit to a further amendment in the next Finance Bill?

Thirdly, and this is important, will the Minister repeat the Chancellor’s commitment that the Government will not extend the freeze of income tax and national insurance contribution thresholds beyond April 2028?

I conclude by reminding the House that the Government inherited the fastest-growing economy in the G7, with inflation under control, unemployment halved and the deficit reduced, yet the measures in the Bill do nothing to boost growth or to secure our stable future. The combination of the jobs tax, the family farms tax and the education tax has devastated business confidence, put the future of British farming in jeopardy and is disrupting the education of hundreds of thousands of children. This was a Budget that failed to rebuild the foundations of our nation, as promised. It does not deliver the economic growth that we need. It does quite the opposite. The Government pledged that their prime mission would be to boost economic growth. Instead, they have consistently talked down the British economy and growth has evaporated. Ministers must act in the Spring Statement next week to correct the mistakes they made and put the British economy back on track.

Independent School Fees: VAT

Baroness Neville-Rolfe Excerpts

Thursday 13th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to my noble friend for his question. As I have said, the continuity of education allowance is designed to provide clearly defined financial support to ensure that the need for frequent mobility, often involving overseas postings, does not interfere with the education of the children involved.

[Baroness Neville-Rolfe (Con)]

My Lords, VAT on independent school fees is an unpleasant, class-based change of the kind sometimes adopted by the party opposite. This increased private school fees by 12.7% this January, according to the ONS. We will debate this matter next week with the Finance Bill, but does the Minister not feel rather embarrassed that his Government are the first one to tax education?

[Lord Livermore (Lab)]

If the noble Baroness wants to talk about what she is embarrassed about, I am very happy to talk about the previous Government’s record over the past 14 years. This was a necessary decision that will generate additional funding to help improve public services, including for the 94% of pupils who are in the state sector.

Capital Investment and Share Ownership

Baroness Neville-Rolfe Excerpts

Thursday 13th March 2025 Lords Chamber

[Lord Livermore (Lab)]

As the noble Lord describes, there have of course been positive examples of PFI projects. For example, more than 100 hospitals were built by the previous Labour Government’s PPP programme. The Government are absolutely committed to harnessing private investment and restoring growth. On the latter part of his question, as I said before, the 10-year infrastructure strategy will be the point at which we set out the Government’s view of that, and it will be published alongside the spending review in June.

[Baroness Neville-Rolfe (Con)]

My Lords, does the Minister agree that we should be wary, not least because of the experience with PPI in things such as schools and hospitals, which several noble Lords have mentioned, about the establishment of public/private partnerships? Can I encourage him to be a little more forthcoming? What does he see as the risks? How will the Government assess value for money for the new schemes, perhaps with the help of the Infrastructure and Projects Authority, which he mentioned, whose work I respect?

[Lord Livermore (Lab)]

I am afraid the noble Baroness cannot encourage me to be more forthcoming. As I have said, the 10-year infrastructure strategy will be the point at which we set out the Government’s approach to private investment in infrastructure. I think she will agree with me that private investment is vital for the country’s infrastructure. The Chancellor has established the British Infrastructure Taskforce, made up of some of the UK’s biggest financial companies. That will support the Government’s infrastructure goal and ensure that the strategy is credible and deliverable.

Carbon Border Taxes

Baroness Neville-Rolfe Excerpts

Wednesday 12th March 2025 Lords Chamber

[Lord Livermore (Lab)]

I am very tempted to agree with my noble friend. I think that what he says is absolutely the case.

[Baroness Neville-Rolfe (Con)]

My Lords, UK energy prices are far too high, notably for industrial uses such as steel, cement and ceramics, and for manufacturing, which are vital to the UK economy. Does the Minister agree that the arrangements for a carbon tax here and any border mechanisms must always be considered against the need to reduce energy costs for users and, as has been foreshadowed, to keep prices down, especially for hard-pressed consumers?

[Lord Livermore (Lab)]

Yes—I agree with the noble Baroness that energy prices are too high. I just wonder what the previous Government did to tackle that over 14 years. This Government have invested in CCUS, for example, which the previous Government did not. I do not know whether the noble Baroness agrees with our investments in that; she opposes the revenue-raising measures that we have taken to raise the funds to invest in those measures. It is an interesting question, but I of course agree with her. That is why the tax is designed in exactly the way that it is.

Crown Estate Bill [HL]

Baroness Neville-Rolfe Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 4th March 2025 Lords Chamber

[Baroness Neville-Rolfe (Con)]

My Lords, I thank my noble friend Lord Forsyth for his work on salmon, highlighted in Amendments 2 and 2A, and the Minister for the response he set out at the beginning of these proceedings. As we know, genetically modified escapees infect wild migratory fish with sea lice and disease and interbreed with wild populations. Worldwide, salmon farms have led to significant environmental damage and pose a real risk to other species. We increasingly see recognition of this. Various standards for fish farming have been introduced, and countries such as Australia and Denmark have banned the practice.

We support the sustainable farming of wild Atlantic salmon or other fish species. However, that must not come at the expense of wild populations. We acknowledge that the Bill is relevant to only one existing salmon farm, and that the main problem is in Scotland, which is devolved. Given the comments of my noble friend Lord Forsyth and the noble Lord, Lord Wigley, I hope that the Minister will make it clear whether the audit envisaged by the Government will also be relevant to improving things in Scotland, which have been highlighted in our discussions.

[Lord Forsyth of Drumlean (Con)]

Forgive me if this point has already been made, but, on this idea that this is only about Scottish salmon, it is crucial that people understand that all the salmon migrate to the Arctic waters in the far-north North Sea. Therefore, English salmon are having to go past this environmental disaster in Scotland. It is very pertinent to England, and to suggest that there is only one salmon farm in these territorial waters is to miss the point about the most threatened example of the Atlantic salmon, which are those that come from English and Welsh rivers.

[Baroness Neville-Rolfe (Con)]

I very much take my noble friend’s point. I was thinking, in clarification, that problems in Scotland would be addressed by the measure that the Minister has very helpfully brought forward today, so that this is looked at in the round wherever the salmon may be. I think that my noble friend and I are at one about this.

Government Amendment 1 seeks to restrict the permanent disposal of interest in the seabed. It would ensure that the commissioners may not dispose of the seabed without the consent of the Treasury. In Committee and on Report, noble Lords across the House, including, as has been said, my noble friends Lord Holmes of Richmond and Lady Vere of Norbiton, raised concerns about the disposal of the Crown Estate’s assets and emphasised the duty of the commissioners to protect the seabed. As stewards of our seabed, the Crown Estate and its commissioners bear a profound and unique responsibility to ensure its protection. It is not merely an asset; it is actually the foundation of our oceans and a vital natural resource that supports marine life and holds cultural and ecological significance. In a spirit of compromise, we can accept the Government’s amendment and reformulation.

In conclusion, I warmly thank the Minister for his efforts to meet our concerns on the Bill. That includes what he has not mentioned, the important 25% cap on borrowing that will be in the framework document, and it includes the agreement on pre-appointment scrutiny. I thank all noble Lords across the House—it has been a cross-party effort—who have taken part in the scrutiny of the Bill. I particularly thank my noble friend Lord Forsyth of Drumlean again for his persistence in this matter, and success. Above all, I thank my predecessor and noble friend Lady Vere of Norbiton, and my noble friend Lord Roborough, for their work on the Bill.

[Lord Livermore (Lab)]

My Lords, I thank all noble Lords who have spoken today. I am very grateful to the noble Lord, Lord Forsyth, for what he said and his agreement on the way forward. As the noble Baroness, Lady Neville-Rolfe, knows, the Crown Estate is devolved to Scotland, so the measures I have set out will not apply to Scotland and I cannot ensure that they will.

In answer to the noble Lord, Lord Wigley, as the Crown Estate is not devolved to Wales, the audit that the Crown Estate will conduct will apply to England, Wales and Northern Ireland. However, I do not believe that there is a salmon farm in Wales, so I do not know whether the audit will apply, but, clearly, all salmon farms on Crown Estate land in England, Wales and Northern Ireland will be looked at.

In answer to the noble Lord, Lord Bellingham, the outcome of the audit will be set out in the Crown Estate’s annual report, which will be published in June, giving an opportunity for scrutiny. In answer to the noble Earl, Lord Russell, in terms of the seabed, the Crown Estate is limited to 150-year leases.

I am glad that we have been able to agree to the changes made by the other place to this Bill. Once again, I thank all noble Lords for their efforts on the Bill since last July.