Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the capacity and resources available to the Prudential Regulation Authority and the Financial Policy Committee to carry out the additional responsibilities transferred to them under the Smarter Regulatory Framework.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.
In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.
Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.
The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.
The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what progress they have made in bringing forward statutory instruments under the Financial Services and Markets Act 2023 to replace retained EU law as part of the Smarter Regulatory Framework; and what is the expected timetable for completion of this process.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.
In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.
Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.
The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.
The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of paragraph 2.75 of the OBR's Fiscal Risks and Sustainability Report, published on 8 July, which states that the shift from defined benefit to defined contribution pensions increases fiscal risk as gilt holdings fall; and the finding that this will lead to an in increase in debt interest spending of £22 billion in today's terms.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
We have seen gradual changes to the structure of the pension market as a result of the shift from Defined Benefit to Defined Contribution schemes. Overall demand for gilts has, however, remained resilient throughout these periods of changing investor patterns and, as the OBR notes, these changes are widely known.
The government deliberately maintains a varied gilt issuance strategy to promote a well-diversified investor base, so that it is not overly reliant on demand from just one type of investor. Continuing to do so means that we expect that overall demand will remain robust in the future, even if there are changes in the demand patterns of particular investor groups.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the effect of the increase in employer National Insurance contributions and of the tax changes in the Autumn Budget 2024 on private sector investment.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Forecasting the economy, including the impact of Government policy decisions, is the responsibility of the independent Office for Budget Responsibility (OBR).
The OBR does not routinely publish estimates of the impact of individual policy measures on private sector investment. The October 2024 Economic and Fiscal Outlook – in particular paragraphs 3.67 to 3.73 – discuss the impact of the Budget package as a whole on the economy. [1]
[1] You can access the link to the October 2024 Economic and Fiscal Outlook here: https://obr.uk/efo/economic-and-fiscal-outlook-october-2024/
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the ratio of dependents, young and old, to the working age population (dependency ratio); and the risk to the long-term economic sustainability of the public finances posed by an ageing population and a declining birth rate.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Office for Budget Responsibility (OBR) is the Government's official forecaster responsible for assessing the UK economic and fiscal outlook. Its annual publication the Fiscal Risks and Sustainability (FRS) report incorporates biennial long-term projections and analysis of major potential fiscal risks.
In their July 2025 FRS report, the OBR identified that the ageing of the UK population and the associated decline in average health as risks to the UK’s fiscal outlook. Both are expected to increase health spending pressures over the longer-term, with the projected rise in spending on the state pension being the second-largest increase in non-interest spending after health in the OBR’s long-term projections. These are underpinned by OBR judgements on old-age and young-age dependency ratios.
In the last Autumn Budget, the government set out a clear fiscal strategy to stabilise the public finances and underpin growth. This involved introducing new fiscal rules which provide stability, put the public finances on a sustainable path and ensure our public services are sustainably funded.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of banks and other financial institutions declining to provide financial services to UK-based small and medium-sized enterprises which operate in the defence industry.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The government recognises that access to banking services is vital for people and businesses across the UK. It is this government's firm position that no firm should be denied access to banking services solely on the grounds they work in defence. The upcoming Defence Industrial Strategy will have small and medium-sized enterprises at its heart and will lay out the steps the Government is taking to support them.
We continue to monitor wider access to bank account provision but recognise this is largely a commercial matter. Firms have strict obligations to ensure the legitimacy of a business and protect against financial crime.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what plans they have to mandate investment in British assets; the timing of any proposed mandate; and when an impact assessment will be published.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
On 13 May 2025, 17 of the UK’s largest pension providers signed the Mansion House Accord.
The Accord is an industry-led voluntary commitment by signatories to invest 10% of their main defined contribution default funds in private markets, half of which will be in the UK, by 2030. This will mean £50bn of investment in private markets from these providers, including over £25bn in the UK.
As announced in the Final Report of the Pensions Investment Review, the Pension Schemes Bill includes powers that will enable the government, in future, to apply binding asset allocation requirements on workplace DC default funds.
The government does not anticipate it will use the reserve powers, which are designed to serve as a backstop for use if the defined contribution pensions industry fails to make sufficient progress following the voluntary commitment.
The legislation contains a range of safeguards, including a requirement that, prior to introducing any requirements, the government publish a report regarding the impact of the proposed measures on savers and economic growth. Additionally, the powers are time-limited and will expire in 2035 if they have not been exercised.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the unemployment rate and its impact on economic growth.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
In their Spring forecast, the OBR expect the unemployment rate will remain broadly flat for the rest of the year, falling to 4.1% by the end of 2027 and remaining at that rate for the rest of the forecast.
A key part of the Government’s growth mission is our commitment to get more people into work. That is why the Government has set a long-term ambition to achieve an 80% employment rate.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what assessment they have made of the decline in total factor productivity on the United Kingdom's economic growth potential; and what steps they plan to take to address this.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
Like many advanced economies, the UK has experienced a slowdown in productivity growth rates since the global financial crisis, but this has been sharper than our peers. UK productivity growth fell to the second slowest in the G7 under the previous government at an average of 0.6 per cent a year - lower than France, Germany and the US. Low investment and falling growth in total factor productivity (TFP) were key factors in this slowdown.
Increasing productivity is vital in driving economic growth. That is why growth is the priority mission of this Government and why we continue to take steps to boost productivity, including through boosting TFP.
This includes increasing the capital envelope by over £100 billion at the Budget in October and a further £13 billion at Spring Statement 2025 compared to the plans set out at Spring Budget 2024. We are also catalysing over £70 billion in private investment through the creation of the National Wealth Fund, removing barriers to investment through ambitious planning reforms, and championing growth-enhancing sectors through our modern Industrial Strategy.
Asked by: Baroness Neville-Rolfe (Conservative - Life peer)
Question to the HM Treasury:
To ask His Majesty's Government what steps they plan to take to reduce public sector borrowing, following the release of the latest Office for National Statistics figures for public sector net borrowing.
Answered by Lord Livermore - Financial Secretary (HM Treasury)
The Government’s approach to borrowing is set out in its fiscal rules – to move the current budget into balance so day-to-day spending is met by revenues, meaning the Government will only borrow for investment, and to reduce net financial debt as a share of the economy.
At the Budget in October, the Government took tough but necessary decisions on tax to put the public finances on a sustainable path. This is the responsible choice to reduce our levels of borrowing in the years ahead, so we can spend more on the priorities of working people and less on servicing debt.
The Chancellor has always been clear the fiscal rules are non-negotiable and the independent Office for Budget Responsibility (OBR) has confirmed the Government is on track to meet them. In its Spring forecast, the OBR forecast borrowing to fall in every year of the forecast – from 4.8% GDP in 2024-25 to 2.1% in 2029-30. By 2027-2028, the Government is funding day-to-day spending with revenues and only borrowing for investment.