Climate Change: Housing Insurability, Mortgage Lending and Financial Resilience

Lord Forsyth of Drumlean Excerpts

Monday 13th July 2026 Lords Chamber

[Lord Livermore (Lab)]

The noble Baroness is absolutely right about the importance of getting on with housing and infrastructure, and that is what this Government are seeking to achieve. She is absolutely right to say that a resilient and affordable insurance market is necessary for enabling businesses and households to recover quickly from climate events. The Climate Change Committee has assessed that the insurance gap is currently low relative to most countries. However, without sufficient adaptation, the number of properties that do not have the necessary insurance is expected to grow as climate risks increase. The Government are committed to ensuring that the long-term impacts of climate change are managed. The Government will strengthen the UK’s approach as part of the fourth national adaptation programme, which will set stronger adaptation objectives to improve preparedness for climate impacts.

[The Lord Speaker (Lord Forsyth of Drumlean)]

My Lords, the noble Lord, Lord Campbell-Savours, is taking part remotely. I invite the noble Lord to speak.

[Lord Campbell-Savours (Lab) [V]]

My Lords, on housing insurability, what consideration is being given to the problem of premium escalation and refusal to insure in areas that have not flooded but are shown as at risk on flooding mapping due to climate change? Would it not be helpful if we could have some review on how local authorities disseminate such information, its effect on premiums and how it is used during property conveyance? I declare an interest as a resident of an apartment where flood protection measures have enabled us to avoid the increased premiums I am referring to in this question.

Scottish Government: Social Security Benefits

Lord Forsyth of Drumlean Excerpts

Wednesday 24th June 2026 Lords Chamber

[Lord Livermore (Lab)]

I agree; I am strong supporter of not blaming the UK Government. As the noble Baroness knows, funding is assessed through the fiscal framework, which links welfare block grant adjustments directly to UK Government spending on equivalent benefits. These adjustments are calculated on a forecast basis and reconciled on outturn, ensuring that funding reflects actual spending over time. The Scottish Government are then responsible for spending decisions, including on benefit levels and eligibility. Any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.

[The Lord Speaker (Lord Forsyth of Drumlean)]

My Lords, the noble Lord, Lord Shinkwin, is taking part remotely. I invite him to speak.

[Lord Shinkwin (Con) [V]]

My Lords, in the event of our being at war, which some experts suggest is increasingly likely by 2030, the massive and urgent recalibration of resources to defence will inevitably mean that those who need most support due to their disability will be hit the hardest. What advice are His Majesty’s Government giving to the Scottish Government on the careful management of their social security budget so that they can mitigate the worst effects of such an eventuality on those whose disability makes them most dependent?

Inheritance Tax: Pensions

Lord Forsyth of Drumlean Excerpts

Monday 17th November 2025 Lords Chamber

[Lord Livermore (Lab)]

I remember the noble Lord’s Question last year. As he knows, I will not speculate on the next Budget now or comment on individual tax measures ahead of time.

[Lord Forsyth of Drumlean (Con)]

My Lords, does the noble Lord accept the principle that it is wrong to raise any tax of any kind on people who do not have the cash to pay it?

[Lord Livermore (Lab)]

As I say, given that all the normal nil-rate bands will continue to apply, an estate can pass on up to £1 million with no inheritance tax. If you are leaving £1 million, you probably have the cash to pay the tax.

Making Tax Digital

Lord Forsyth of Drumlean Excerpts

Wednesday 17th September 2025 Lords Chamber

[Lord Livermore (Lab)]

It is not for me to comment on the tax affairs of any one individual.

[Lord Forsyth of Drumlean (Con)]

Does the Minister recall his time on the Economic Affairs Committee and the report which was produced—I am not sure whether he was still on the committee at that time—on Making Tax Digital? It welcomed the move but thought it was important to take account of the burdens placed on small businesses and the costs that were involved. Surely at a time when the economy is, shall we say, not exactly performing as he might hope, might it not be better to look at this again, with a view to the levels of fines and the speed with which it is being implemented? There was considerable evidence then that HMRC was simply contracting out its job of collecting taxes to people who were trying to run businesses in difficult times. Surely that is not acceptable.

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. I of course remember my time on the Economic Affairs Committee, and I was privileged to serve when he was the chair of that committee. We produced many high-quality reports. I do not think I was on the committee at the time of the report that the noble Lord refers to, but I fully appreciate that there are costs to business of doing this—I think the recurring cost is estimated to be, on average, £110 annually. It is important to say that HMRC has worked with industry to ensure that a range of software is available, including free and low-cost software, and of course those costs do not take into account the benefits. There are important productivity and time-saving benefits.

As regards Making Tax Digital for VAT, HMRC has carried out a detailed evaluation of the impact of that, which shows that two-thirds of businesses report time-saving benefits. Of businesses that were using digital accounting software for the first time, 80% reported significant benefits, a quarter reported improved productivity and one-third had used Making Tax Digital software for other business processes. At a time when productivity is such a challenge—an issue that we frequently discuss in this House—and when small businesses make up such a large part of the economy, if we can see two-thirds of small businesses making significant productivity gains, that is a benefit worth having.

Tax on Imports under £135

Lord Forsyth of Drumlean Excerpts

Monday 14th July 2025 Lords Chamber

[Lord Livermore (Lab)]

I know this is something that is close to my noble friend’s heart, and he has made those points to me several times. As I have said before, I am happy to take that as a Budget representation, but I am not going to speculate on the next Budget now.

[Lord Forsyth of Drumlean (Con)]

My Lords, would the Minister just like to confirm that, when he talks about working people, he means self-employed people and anyone with a payslip?

[Lord Livermore (Lab)]

I think that is a fair definition of that phrase, yes.

Spending Review 2025

Lord Forsyth of Drumlean Excerpts

Thursday 12th June 2025 Lords Chamber

[Lord Livermore (Lab)]

The right reverend Prelate set out a number of issues that he agreed with, and obviously I am grateful for his agreement with those. He talked about child poverty and he knows that—as the Prime Minister described it—our free school meals policy is a down payment on the work that we want to do to tackle and end child poverty. I was lucky enough to be part of a previous Government—I worked for a previous Chancellor—who reduced child poverty by 1 million children, so there should be no doubt about my personal commitment to reducing child poverty. I had to sit by, as did many of my noble friends, and watch the previous Government increase child poverty by 700,000. That is not something that any of us wanted to see; so he should be reassured that we absolutely prioritise this issue.

The right reverend Prelate asked about free school meals. The children of every family on universal credit will be eligible for those free school meals. He described the child poverty strategy as much delayed. I am not sure I would accept that. I think we have set out when it will come—alongside the Budget this autumn—and it will consider all the issues and representations that are put to it. There is quite a lot in this spending review to tackle child poverty. As I say, that is a down payment and I very much hope we will be able to do more.

[Lord Forsyth of Drumlean (Con)]

My Lords, I very much welcome the fact that the Chancellor reiterated yesterday, in the other place, a commitment to no unfunded increases in expenditure. Could the Minister reassure me about the other promise which she made in the autumn Budget—I am going to read it so I am not misrepresenting it—that there would be no further tax increases during the current Parliament? She said, “I will not increase your income tax; I will not increase your national insurance; I will not increase your VAT”. Does that promise still stand? How can it possibly stand with the Government’s debt interest bill now being £105 billion and rising and the costs of borrowing, because of the level of debt, actually being higher than they were at the time of the crisis under Liz Truss?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. On the specific question that he asked about whether the manifesto commitments that we have given to working people still stand, yes, they still stand. The manifesto very clearly says there will be no increase in working people’s income tax, national insurance or VAT. That commitment continues to stand. In terms of future decisions on tax and spending, as I have said already, I am not going to write now—it is not in my gift to write now—four years-worth of Budgets. As he knows, the OBR will produce a new forecast in the autumn for the Budget, and the Chancellor will take decisions at that point, based on that forecast. He can be assured, though, that, at all times, we will meet the fiscal rules, but I am not going to prejudge those decisions now.

I am not sure whether he was defending at that point the Liz Truss mini-Budget or not. He shakes his head vociferously. I do not blame him: I would not want to defend it either.

Economic Growth

Lord Forsyth of Drumlean Excerpts

Wednesday 11th June 2025 Lords Chamber

[Lord Livermore (Lab)]

I completely agree with my noble friend.

[Lord Forsyth of Drumlean (Con)]

On a constructive note, will the Minister give an undertaking to take an early opportunity to read the report that will be produced on Friday by the Financial Services Regulation Committee of this House, which sets out a clear agenda for how the regulators can help to establish growth in financial services, which should be a matter of consensus across the board? It certainly is a unanimous report by this House of the kind of quality that this House is famed for but which does not always result in immediate action by Governments.

[Lord Livermore (Lab)]

I am very grateful to the noble Lord for his question. I absolutely will read the report as soon as it is published. I was lucky enough to serve on the Economic Affairs Committee when the noble Lord was its chair and I know he is now the chair of the committee producing this report, so I know it will be a report of incredible quality and I look forward to reading it. I know the Chancellor shares many of the committee’s objectives when it comes to financial services, and I hope the noble Lord will see much of that agenda laid out in her next Mansion House speech. I look forward to debating the report with him in this House in due course.

Mansion House Accord

Lord Forsyth of Drumlean Excerpts

Wednesday 14th May 2025 Lords Chamber

[Lord Livermore (Lab)]

I am shocked that my noble friend uses the word “leak”—I have no idea what he is talking about. As I have said, it is important that this is a voluntary commitment and that it delivers the investment promised for the UK economy. As I say, funds are voluntarily—it is industry led—choosing to do this because evidence shows that high-growth assets can boost returns over time, and we are confident that the schemes are now moving in the right direction. But equally, as I say, the pension schemes Bill will have more details in it about how these developments will be monitored over time to make sure that that change is delivered, because in the end what we all want to see is higher levels of investment.

[Lord Forsyth of Drumlean (Con)]

My Lords, if the Minister is right that this is an entirely voluntary scheme, why is it necessary for the Government behind the scenes to threaten to make it mandatory?

[Lord Livermore (Lab)]

Because it is very important that this voluntary commitment delivers the investment that is promised for the UK economy.

UK-US Trade

Lord Forsyth of Drumlean Excerpts

Monday 12th May 2025 Lords Chamber

[Baroness Gustafsson (Lab)]

What we see in this relationship with the US is an opportunity to think about the opportunity it presents to all our British industries and how we can open that up to best effect. When we think about farming, the key area of the trade in beef is a real opportunity here. For the first time, the US ban on importing British beef has been lifted, and 13,000 tonnes of British beef can now be exported to the US. That is a real advantage for UK farming.

[Lord Forsyth of Drumlean (Con)]

My Lords, it is delightful to hear the Minister extolling the real opportunity that comes from a future deal with the United States. Last week I asked the Front Bench to confirm that none of this would be possible if we were still in the European Union. I was told that was a matter of opinion. Can the Minister confirm that this is a fact?

[Baroness Gustafsson (Lab)]

I will offer up that I agree that that would be a matter of opinion.

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

Lord Forsyth of Drumlean Excerpts

Friday 25th April 2025 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

My Lords, it is a pleasure to take part in this debate. I add to the congratulations to my noble friend Lord Bridges, as chairman of the committee, and its members for producing this—I was going to say “timely” report, but this debate is some seven months after the report was published and quite a lot has changed in that time.

Short of national security, it addresses the biggest issue facing the country. That we have an advisory speaking time of four minutes tells you everything about the way in which Parliament is increasingly becoming the decorative part of the constitution. We now, apparently, take on huge, unlimited, unknown debt in nationalising industries over a weekend and give powers to civil servants to force people in private companies to do things on pain of being sent to prison if they do not—and Parliament has no say. It is clearly important that we address this issue not just in Parliament but in the country.

The lesson of this report is that our people—the constituents of the Members at the other end of this building, our families—have no idea of the crisis that is facing our country and the threat that it presents to our ability to deliver pensions and important public services.

Even this week we learn that borrowing has turned out to be £15 billion more than expected. In the year to March, as the noble Lord, Lord Londesborough, said, we spent £151.9 billion more than we had in income, and we are relying on growth, which we have not seen since 2008, to rescue us from that situation. As the report points out, there are fundamental strategic reasons why we need to tackle this now, and the longer we wait to bite the bullet the bigger the problem will be.

These reasons include the fact that, in the 1980s, we thought we had a peace dividend, but now we realise that we should not have spent that money, but we had committed that expenditure to welfare and other matters. The baby boomers were creating wealth and now they, like me, are a burden on the state in one form or another. The notion that we can finance the triple lock on pensions, however popular it may be, is ridiculous in these circumstances. We need to get the country to understand that and to lower its expectations for the future.

We had growth in world trade. Now we have an—I hesitate to use an adjective—Administration in the United States who are determined to destroy world trade. I assume that we should forgive them, for they know not what they do, but the impact on growth will be enormous. As my noble friend Lord Bridges pointed out, life expectancy is increasing; this and the success of the National Health Service point to further pressures that will be difficult to sustain.

Whenever there is a consensus on anything, one ought to worry. There was a consensus on quantitative easing and on lockdown, and now we are paying the price for that quantitative easing—for printing money on a vast scale. It has left the country more vulnerable to rises in interest rates and more dependent on the kindness of strangers and foreign investors, at a time when the world as a whole is under severe pressure. The latest estimate is that QE will cost us some £150 billion. The decline in the workforce to support all of this is such that, by 2070, there will be one person in work for every person in retirement. That is a huge burden to place on the next generation.

Therefore, this report should be taken seriously by the Government and by the Opposition. We need a consensus in our country, to explain to our people the crisis that we are facing, in the context of the world crisis, and to cut our cloth according to our ability to pay.

--- Later in debate ---

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

My Lords, it is a great pleasure to respond to this debate on the Economic Affairs Committee’s report on the national debt, and a privilege to do so alongside so many distinguished and genuinely expert noble Lords. It has been an incredibly impressive and well-attended debate, and I thank all noble Lords for their contributions.

[Lord Forsyth of Drumlean (Con)]

I am most grateful to the Minister. He is a former member of the Economic Affairs Committee, and he is right to pay tribute to the importance of the subject. Will he make representations to his colleagues who are responsible for the business of the House? It really is not acceptable to have a debate on a committee report such as this on a Friday when people are limited to four minutes to speak.

[Lord Livermore (Lab)]

I absolutely hear what the noble Lord says and will of course pass those comments on.

I congratulate the Economic Affairs Committee on its report and the committee’s chair, the noble Lord, Lord Bridges of Headley, on his excellent opening speech, which achieved the extraordinary feat of summarising in just 12 minutes such a wide-ranging and in-depth report. As the noble Lord, Lord Forsyth, just mentioned, I had the privilege of serving on the Economic Affairs Committee under his chairmanship, so I know the amount of time and effort that go into producing reports such as this. As the Chancellor did in her response to the committee last November, I thank all members of the committee and the committee staff for producing this thoughtful and considered report.

As the report rightly recognises, and as the noble Lords, Lord Bridges, Lord Razzall, Lord Lamont and Lord Londesborough, highlighted, the UK’s national debt has risen rapidly over recent years, from around 64% of GDP in 2010 to over 98% in August last year, the highest level since the 1960s. Latest figures to the end of March this year show public sector net debt at 95.8% of GDP, which still remains high by recent historical standards. As the noble Baroness, Lady Wolf of Dulwich, said, debt interest payments alone now stand at £105.2 billion this year—that is more than we allocate to defence, the Home Office and justice combined.

The title of the report speaks of “tough decisions” to prevent national debt from being on an unsustainable path. The Government agree. That is why in the Budget last October, we took action to fix the foundations of our economy and repair the public finances, as the noble Lord, Lord Horam, observed. That included repairing—and noble Lords would expect me to say it—the £22 billion black hole in the public finances that we inherited. That meant making difficult choices. They were not easy decisions, but they were the right decisions.

Since the committee’s report was published in September last year, and then the Budget in October, as many noble Lords have rightly said today, the world has changed further significantly. As the noble Lords, Lord Burns and Lord Forsyth, and the noble Baroness, Lady Kramer, observed, new tariff barriers are now disrupting global trade. Borrowing costs have risen in all major economies; volatility in global markets has seen bond yields rise, including in the US; and growth has been downgraded across the world, with the IMF now predicting global growth to be 0.5% weaker than it was expecting as recently as January.

Of course, the UK has not been immune to these challenges. As the noble Lord, Lord Bridges, said, the OBR downgraded the UK’s growth forecast for this year at the Spring Statement, reflecting the worsening global outlook, and earlier this week the IMF did the same. In this context, maintaining sustainable public finances is a shared challenge for major economies right across the globe.

Against this backdrop, the decisions we took in the Budget to fix the foundations look ever more necessary. Imagine if we were now facing this global economic uncertainty with that black hole still in the public finances. What confidence would that have given to the Bank of England to cut interest rates? What signal would that have sent to investors about the stability and resilience of our economy?

The OBR will produce an updated forecast in the autumn, and despite the kind invitation of the noble Lord, Lord Bridges, I will not speculate now on the impacts of recent global events on the fiscal outlook ahead of that. But, as the committee’s report rightly concludes, global instability underlines the need to put debt on a sustainable trajectory and build resilience to future shocks. It also reaffirms the importance of stability as the foundation of our approach.

That is why, as the noble Lord, Lord Bridges of Headley, asked about, in the Spring Statement we again took tough decisions so that we continued to meet our non-negotiable fiscal rules, even when they were tested. That meant restoring in full the headroom against the stability rule, maintaining a surplus of £9.9 billion in 2029-30. It is why we continue to work with international partners, as the Chancellor has done at the IMF spring meetings this week, to make the case for free and open trade.

The noble Lords, Lord Bridges, Lord Burns and Lord Lamont, and the noble Baronesses, Lady Noakes and Lady Cash, all mentioned the importance of economic growth. It is why we are doubling down on our growth agenda of stability, investment and reform, including £13 billion of new capital spending in growth-generating projects announced at the Spring Statement, as well as support, for example, for a third runway at Heathrow and a new Oxford-Cambridge growth corridor, as my noble friend Lord Liddle spoke about.

As the noble Lord, Lord Griffiths, mentioned, this week’s IMF report makes it clear that the “landscape has changed” and has downgraded the growth prospects of all G7 nations. However, the UK remains the fastest-growing European G7 country, and the IMF has recognised that this Government are delivering reforms which will drive up long-term growth in the UK. Our upcoming modern industrial strategy, mentioned by the noble Baroness, Lady Kramer, and spending review will say more about how we intend to drive long-term sustainable investment and boost productivity.

The committee’s report includes a number of key recommendations, central to which is the committee’s call for an “overhaul” of the UK’s fiscal framework. The Government’s thinking was clearly along very similar lines, and in the Budget in October, we implemented the most significant change to the fiscal framework since 2010—as my noble friend Lord Wood said. I congratulate him on becoming the new chair of the Economic Affairs Committee, and I look forward to working with him.

The new framework we have put in place is designed to support long-term growth, by ensuring the UK’s debt is put on a sustainable path and by prioritising sustainable public investment. First among these reforms are the Government’s non-negotiable fiscal rules, the embodiment of our unwavering commitment to economic stability. The first rule, the stability rule, moves the current Budget into balance, so day-to-day spending is met by revenues, and ensures that the Government will borrow only for investment, which the noble Lord, Lord King of Lothbury, questioned. This rule differs from the previous Government’s borrowing rule, which targeted the overall deficit rather than the current deficit and created a clear incentive to cut investment that is detrimental to growth, as the IMF has made clear.

The noble Lord, Lord Lamont, asked about the primary surplus, which the OBR forecast to move from a deficit of 1.9% of GDP in 2024-25 to a surplus of 1% by 2029-30. The Government understand and respect the argument made by the committee in respect of the fifth year. However, the Government’s position is that targeting the third year of the forecast provides a strong anchor for fiscal sustainability, while providing the necessary flexibility to respond to macroeconomic shocks in the short term.

Our approach is supported by the OECD, which recommended that the UK should

“shorten the time horizon of fiscal rules”.

Similarly, the Institute for Fiscal Studies has made it clear that a fiscal rule targeting debt falling in the fifth year of the forecast is

“more arbitrary and gameable than most”.

The second rule—the investment rule—ensures net financial debt falls as a proportion of GDP. This keeps debt on a sustainable path, while allowing the step change in investment our economy needs.

The noble Baronesses, Lady Wolf of Dulwich and Lady Noakes, and the noble Lord, Lord Forsyth, raised the issue of definitions. Net financial debt is an accredited official statistic that has been measured by the Office for National Statistics since 2016 and forecast by the Office for Budget Responsibility since that date. It recognises that government investment delivers returns for taxpayers by counting not just the costs of investment but the benefits.

The noble Lords, Lord Burns and Lord Howell of Guildford, spoke about the importance of investment to economic growth, as did my noble friends Lord Wood, Lord Liddle and Lord Davies of Brixton. As a result of this second fiscal rule, we were able to increase capital investment by over £100 billion in the Budget in October, boosted by an additional £13 billion announced at the Spring Statement. The OBR has confirmed that we are meeting both fiscal rules, and borrowing is forecast to fall in every year of the forecast—from the 5.3% of GDP that we inherited to 2.1% in 2029-30.

In addition to our fiscal rules, the Government’s Charter for Budget Responsibility contains a further serious of measures to improve certainty, transparency and accountability in our fiscal framework.