Spring Statement

Lord Kennedy of Southwark Excerpts

Thursday 27th March 2025 Lords Chamber

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

My Lords, I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their questions and comments. Let me start with economic growth, this Government’s number one mission. The noble Baroness, Lady Neville-Rolfe, spoke about the global context in the Spring Statement, and the Chancellor yesterday quite rightly pointed both to the rapidly evolving global threat and to a global economy which is becoming much more uncertain.

The OECD recently downgraded its forecast for every G7 economy this year, and yesterday, the OBR revised down its growth forecast for 2025 from 2% to 1%. The noble Baroness, Lady Neville-Rolfe, blamed this on the decisions taken in the October Budget, which wiped the slate clean and repaired the public finances from the mess that we inherited. They were not easy decisions, but the truth is that they were the right decisions. Imagine if we were now facing this global economic uncertainty with a £22 billion 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 the resilience of our economy? What flexibility would that have provided for the Government now to increase defence spending in the face of this changing world?

The noble Baroness, Lady Neville-Rolfe, said that we need stability, but she opposes any action to get it. I am afraid that it simply is not credible to say that we should not have repaired our public finances nor rebuilt the foundations of our economy. Are we satisfied with the growth forecast? No, of course, we are not, which is why we are taking the serious action needed to grow our economy in the future and to go further and faster to invest in infrastructure with the Planning and Infrastructure Bill—which the party opposite opposes—and a third runway at Heathrow, increasing investment with pensions reform and a new national wealth fund, and dismantling red tape and burdensome regulation in every sector of our economy. This is a serious plan for economic growth with the right long-term decisions.

The noble Baroness, Lady Neville-Rolfe, focused on future growth, but she did not mention the pleasing fact that the Office for Budget Responsibility yesterday considered and scored one of the central planks of our plan for growth, concluding that our planning reforms will permanently increase the level of GDP by 0.2% by 2029 and by 0.4% of GDP within the next 10 years. That is the biggest positive growth impact that the OBR has ever reflected in its forecast for a policy with no fiscal cost. Again, the noble Baroness, Lady Neville-Rolfe, did not mention that the Chancellor was able to confirm yesterday that the OBR has upgraded its growth forecast next year and every single year of the forecast thereafter, so that by the end of the forecast, our economy is larger now compared to the OBR’s forecast at the time of the Budget.

The noble Baronesses, Lady Neville-Rolfe and Lady Kramer, asked about tariffs. As they will know, we are pursuing an economic agreement with the US, and we are discussing what this means for the UK. That is our focus. We will continue to stand up for free and open global trade, because tariffs would damage both our economies. Those conversations continue. I am not going to give a running commentary, but we should see where we get to in the next few weeks.

The noble Baroness, Lady Kramer, asked me about the digital services tax. The Chancellor said very clearly yesterday that it is up to the UK Government to set tax policy for the UK economy. The digital services tax was intended to be temporary until there was a global agreement as part of pillar 1 and 2 of the OECD agreement, but we believe that companies should pay tax in the countries in which they operate. This is why we introduced the digital services tax in the first place, and our views on that have not changed.

The noble Baroness, Lady Neville-Rolfe, spoke about living standards, but she did not mention that living standards will now grow this year at double the rate expected at the time of the Budget and will rise twice as fast in this Parliament compared to the last. The noble Baroness, Lady Kramer, asked about inflation. Having peaked at over 11% under the previous Government, the OBR forecasts that CPI inflation will average 3.2% this year, falling quickly to 2.1% next year and meeting the inflation target of 2% from 2027 onwards. The noble Baroness, Lady Neville-Rolfe, asked about employment. The OBR expects employment to increase by 1.2 million over this forecast period and unemployment to fall to 4.1% by 2029.

Yesterday, the Chancellor also set out the consequences that increased global uncertainty has had on our public finances, and the noble Baroness, Lady Neville-Rolfe, spoke about the fiscal rules. I was disappointed to hear her follow the Liz Truss path of criticising the Office for Budget Responsibility. The fiscal rules are the embodiment of this Government’s unwavering commitment to ensuring economic stability, because we saw in the Liz Truss mini-Budget what happens when a Government lose control of the public finances. Mortgage rates soared, for which working people are still paying the price. That is why our fiscal rules are non-negotiable and why we will always deliver economic stability.

The Chancellor yesterday restored in full the headroom against the stability rule, moving to a surplus of £9.9 billion in 2029-30. The noble Baronesses, Lady Neville-Rolfe and Lady Kramer, said that this was insufficient, but it is considerably higher headroom than the £6.5 billion headroom left by the previous Government, and we are of course not now carrying a £22 billion black hole in the public finances. We believe that we have got the balance right, and nobody should be in any doubt about how seriously we take the fiscal rules.

The noble Baroness, Lady Neville-Rolfe, asked about the savings from our reforms to welfare. When the Secretary of State for Work and Pensions set out the Government’s plans, she rightly said that the final costings will be subject to the OBR’s assessment. The OBR has said that it anticipates the package will save £4.8 billion in the welfare budget.

The noble Baroness, Lady Kramer, in her assessment ignored the fact that we are investing £1 billion to help people back into work. She also knows that the impact assessment that she referred to does not take into account in any way the consequences of that £1 billion investment; it does not take into account the consequences of anyone getting back into work. She will rightly know that the OBR will do that assessment and come back in the autumn with updated figures.

The noble Baroness, Lady Neville-Rolfe, asked about our spending plans. She said spending was too high, so I would be fascinated to know now where she intends to cut that spending from. The Spring Statement confirms that day-to-day spending is growing in real terms in every single year of the forecast period—by an average of 1.2% a year, in real terms, from 2025 to 2029. The spending review envelope is fully protected. That means we are spending £50 billion more on day-to-day spending in 2028-29 than the previous Government’s plans. I would be interested to know what, of that £50 billion, the noble Baroness, Lady Neville-Rolfe, would like to cut.

In the Budget last October, we increased capital investment by £100 billion over the course of the Parliament, including investing in transport, beginning the delivery of 1.5 million homes, supporting new industries and protecting record R&D funding. The OBR has looked at the growth impact across a decade; it is clear that particularly our capital investments—which the party opposite opposed—will lead to a significant 0.4% increase in growth. We are not cutting capital spending, as the party opposite did time and time again, because that choked off growth.

The noble Baroness, Lady Neville-Rolfe, asked about tax. I know she would not expect me, even if I could, to write the next Budget now. The Government are delivering on the fiscal strategy set out at the Budget last October, and we are going further and faster on growth because our planning reforms show that changes to tax and spend policy are not the only way to strengthen the public finances.

Over the past nine months, this Government have restored stability to our economy, giving the Bank of England the confidence to cut interest rates three times since the general election. We have begun to rebuild our public services with record investment in our NHS, bringing waiting lists down for five months in a row. We have increased the national living wage to give 3 million people a pay rise from next week. The backdrop to this Spring Statement was a world changing before our eyes. The responsible decisions we have taken mean that we can now act quickly and decisively in this more uncertain world to secure Britain’s future and deliver prosperity for working people.

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

My Lords, I have doubled the time available for Back-Bench questions to 40 minutes. The House wants short, sharp, succinct, to-the-point questions, not speeches. We will go around the Chamber, seeking to get as many noble Lords in as possible. Please note that, when a noble Lord asks a question, it is unlikely that the next question will come from the same Benches.

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[Lord Lansley (Con)]

My Lords—

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

We will hear from my noble friend Lady Hayter and then from the noble Lord, Lord Lansley.

[Baroness Hayter of Kentish Town (Lab)]

I congratulate the Government on grasping the nettle of the security challenge caused by Putin to the integrity of both Ukraine and the UK, and on repairing the damage that the party opposite did to our Armed Forces and growing it now for new challenges. Does my noble friend the Minister agree that our own national security and economic stability are absolutely linked? Does he also agree that we need a strong, resilient economy independent of global uncertainty and that the welcome increase in defence expenditure will boost jobs and growth across the whole of the UK?

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[Lord Davies of Brixton (Lab)]

My Lords—

[Lord Kennedy of Southwark (Lab Co-op)]

We will hear from the noble Lord, Lord Wigley, next and then from my noble friend Lord Davies of Brixton.

[Lord Wigley (PC)]

My Lords, is the Minister aware that in a Radio Wales interview this morning on yesterday’s Spring Statement, the Chancellor of the Exchequer did not seem to be aware that the First Minister of Wales, Eluned Morgan, had written to her two weeks ago about the serious financial issues facing Wales and still had not had a substantive reply? The Chancellor also did not seem to be aware that housing is a devolved matter in Wales or of how many new jobs her announcement about Newport will generate. In these circumstances, will the Government appoint a Welsh MP to a ministerial role in the Treasury explicitly to deal with matters relating to Wales?

Independent School Fees: VAT

Lord Kennedy of Southwark Excerpts

Thursday 13th March 2025 Lords Chamber

[Lord Naseby (Con)]

My Lords—

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

We have plenty of time. We will hear from the noble Earl, Lord Clancarty, and then we will go to the Conservatives.

[The Earl of Clancarty (CB)]

My Lords, while I welcome any relief for the music and dance schools, does the Minister accept that the £45,000 cut-off point for a whole family is too low? When will that be reviewed? Should not the Government do everything possible to encourage UK students into our creative schools, including the Yehudi Menuhin School, whose remarkable students we had the privilege of hearing in the Lords last week?

Non-domicile Status

Lord Kennedy of Southwark Excerpts

Tuesday 28th January 2025 Lords Chamber

[Lord Grocott (Lab)]

My Lords—

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

There is plenty of time for both noble Lords to ask a question. We will have the noble Lord, Lord Petitgas, first, and then my noble friend.

[Lord Petitgas (Con)]

My Lords, do the Minister and the Government have any hard evidence, perhaps through a recalculation of the effects of the Bill on non-doms, that this news that was announced in Davos will have a tangible effect on the emigration of a lot of these non-doms? This does not look like a U-turn at all—for which the Government should be commended— but rather more like an L shape. The reason why I am asking this question is because the key criticism from the non-doms, and the reason why they are leaving, is that if someone lives here as a non-dom for four years they will have a 10-year tail on the inheritance on all their offshore assets. That is clearly something that is not acceptable to most of them. What I heard in Davos does not change that, and therefore I am not sure it really changes very much.

National Insurance Contributions (Secondary Class 1 Contributions) Bill

Lord Kennedy of Southwark Excerpts

Wednesday 8th January 2025 Lords Chamber

[Lord Livermore (Lab)]

I am not as expert in procedure as the noble Lord. I am happy to defer to my noble friend.

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

I am happy to confirm that you cannot have Divisions in Grand Committee.

[Baroness Williams of Trafford (Con)]

The noble Lord has just taken the words out of my mouth. I was just about to address the procedure, which is that you cannot have Divisions in Grand Committee. This Bill may be small and technical, but it will have a massive impact on people up and down the country. For that reason, I beg to test the opinion of the House.

National Insurance: GDP

Lord Kennedy of Southwark Excerpts

Thursday 19th December 2024 Lords Chamber

[Baroness Sugg (Con)]

My Lords—

[Lord Kennedy of Southwark (Lab Co-op)]

I think it is the turn of the noble Baroness.

[Baroness Sugg (Con)]

My Lords, can the Minister respond to the question from my noble friend on the Front Bench about the impact of national insurance contributions on the care sector, and specifically on hospices?

Crown Estate Bill [HL]

Lord Kennedy of Southwark Excerpts

3rd reading
Monday 18th November 2024 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

That the Bill be now read a third time.

[Lord Kennedy of Southwark]

My Lords, I have it in command from His Majesty the King to acquaint the House that His Majesty, having been informed of the purport of the Crown Estate Bill, has consented to place his interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

United Kingdom Declining Birth Rate

Lord Kennedy of Southwark Excerpts

Wednesday 6th November 2024 Lords Chamber

[Baroness Manzoor (Con)]

My Lords—

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, it is the turn of the Lib Dem Benches.

[Baroness Walmsley (LD)]

My Lords, in providing additional childcare places, will the Government ensure that the additional staff are well trained and highly skilled? Perhaps we should be replacing the word “childcare” with the phrase “early education”, to make sure that children develop well and to give parents going back to work the confidence that their children will be properly looked after.

Independent School Fees: VAT

Lord Kennedy of Southwark Excerpts

Monday 21st October 2024 Lords Chamber

[Noble Lords]

My Lords—

[Lord Kennedy of Southwark (Lab Co-op)]

Can we hear from the noble Baroness, Lady Foster?

[Baroness Foster of Aghadrumsee (Non-Afl)]

My Lords, I am grateful to the noble Lord. Is the Minister aware of the disproportionate impact that this tax will have on Christian schools in Northern Ireland given the structure of the education system there? Given that, will a specific impact assessment be carried out?

Building Societies Act 1986 (Amendment) Bill

Lord Kennedy of Southwark Excerpts

2nd reading
Friday 10th May 2024 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

That the Bill be now read a second time.

[Lord Kennedy of Southwark (Lab)]

My Lords, I am delighted to present this Bill to your Lordships’ House for its Second Reading today. I should declare to the House that I am a director of the London Mutual Credit Union, and while it is not a building society, it is a full member of the Building Societies Association, as it offers mortgages, and the BSA is very much in support of this Bill.

I thank all noble Lords who have signed up to speak in this debate and look forward to each of the contributions that will follow shortly. I am particularly delighted that my good and noble friend Lord Naseby will be speaking. We have worked together many times to support the co-operative and mutual sectors on legislative measures, and I am pleased to have his support again today.

In the last Session, I was able to get the Co-operatives, Mutuals and Friendly Societies Act 2023 on to the statute book following the success of my honourable friend in the other place, the Member for Preston, Sir Mark Hendrick, in steering it through the House of Commons. That Act of Parliament is permissive legislation that enabled mutual organisations to have the ability to opt into a restriction on the use of their assets. The co-operative and mutual sectors enjoy cross-party support, which is one of the strengths of the movement. This Bill has benefited from that cross-party and industry support. I am grateful to my honourable friend in the other place, the Member for Sunderland Central, Julie Elliott MP, for taking this Bill through the House of Commons. She did so with great skill, and we are all grateful to her.

Building societies were originally established to allow people to pool their savings and to buy a home. The world’s first building society was Ketley’s Building Society, founded in 1775 by Richard Ketley, the landlord of the Golden Cross, in Snow Hill, Birmingham. Since then, these important mutuals have played their part in enabling people to own their home. Owning the roof over your head is something that most people in the UK aspire to, and building societies have enabled generations of people to buy their own home.

I am grateful to the Library of the House of Lords and the Building Societies Association for their excellent briefing notes, and to officials at His Majesty’s Treasury for producing the Explanatory Notes explaining the purpose of the Bill in such clear detail. The Bill builds on the Building Societies Act 1986, which is a good piece of legislation that has worked well. The Bill allows for targeted, specific improvements to update and modernise the existing legislation. It comprises four clauses, which I will explain briefly.

Clause 1 amends Section 7 of the Building Societies Act 1986 and enables the Treasury to make secondary legislation, using the affirmative resolution procedure, to allow certain funds to be disapplied from counting towards the 50% retail funding limit. The funds to be exempted from the building societies wholesale funding calculation are set out in the Bill. These are Bank of England liquidity insurance facilities; debt instruments raised to meet minimum requirements for own funds and eligible liabilities; and sums received by the society under a sale and repurchase agreement entered by the society with a view to complying with a specified PRA rule.

Further, Clause 1 would allow the Treasury, through secondary legislation, to specify named funds, descriptions of funds and PRA rules relevant to the sums received under sale and repurchase agreements. Taken together, the clause allows for the exclusion of certain types of funding from the funding calculation, which requires building societies to obtain at least 50% of their funding from member deposits, thereby allowing them to acquire more funds without fear of breaching the funding limit.

Clause 2 allows for building society member meetings to be attended virtually, allows those members to speak and vote, and allows for proportionate measures to confirm the identity of those members attending and participating in the meeting.

Clause 3 extends the powers in Section 104 of the 1986 Act, again using the affirmative resolution procedure, with reference to common seals and the execution of documents, enabling provisions to be updated and processes to be modernised and allowing building societies to take advantage of them.

Clause 4 sets out that the Bill extends to the whole of the United Kingdom and comes into force two months after it becomes law—so it is small in size but not in its proposed effect. It will enable more funds to be made available to members, help more people own their own home, modernise processes and allow for greater participation of members and the more efficient execution of documents. All these changes need primary legislation, which is why we have this Bill today. Other measures will be introduced using secondary legislation outside of this Bill, which will help the sector further.

I was delighted, as I said earlier, when my good friend the honourable Member for Sunderland Central in the other place asked me to take this Bill through this House. In my 14 years of membership of this House, I have sat here as a Labour and Co-op Member of the House of Lords. I have been a member of the Co-operative Party for nearly 40 years. It has had an agreement with the Labour Party since 1918 to seek public office only jointly. The Co-operative Party has always sought to champion the positive role that co-ops, mutuals and friendly societies can play in our economy, in our society and in a variety of different spheres to improve people’s lives and give them the power to have a greater say in the things that matter to them. I am also delighted that Members from all parties support the Bill, and that it has the support of the Government. It is a really important measure which deserves support. I beg to move.

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[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, I thank all noble Lords who have spoken in this debate. My noble friend Lord Naseby’s support for the Bill, and his support of the mutuals financial sector over many years, have been very welcome. He is highly respected in the sector. It has been a pleasure to work with him on these issues over many years.

The noble Lord, Lord Holmes of Richmond, in his support for the Bill, highlighted the updating that enables virtual meetings to take place. He made an important point about when secondary legislation would be brought into force. He used the words “scale”, “growth” and “competition”. I very much agree with the noble Lord on those points. We are in complete agreement. I am grateful to the noble Baroness, Lady Kramer, for her support of the Bill and for setting out MREL and explaining it much more clearly than I could have done. I thank her very much for that. It is much appreciated.

My noble friend Lord Livermore again gave the support of His Majesty’s Opposition for the Bill. I am grateful to him. He said how important the Bill was to enable additional lending capacity to enter the market, allowing people to borrow funds and buy their own homes. My noble friend referred to me being the Opposition Chief Whip. I view myself as a very friendly, happy and co-operative Chief Whip—particularly when people are agreeing with me.

I thank the Minister and the Government for their support. I agree with the Minister very much about the importance of the mutual sector and those organisations that are rooted in their communities. We clearly must keep pressing the Government to get the regulations sorted out. Maybe there is scope for a few Oral Questions. Maybe it will get me off leasehold. Anyway, we will come back to that at a later date.

Finally, I refer to the points that the noble Baroness, Lady Kramer, made about any well-intentioned amendments. We can always make things better, but can I plead with noble Lords here? However well-intentioned they are, any amendments will ensure that the Bill fails. It is really important that we do not have any well-intentioned amendments turning up. This Bill does what it says on the tin. The industry supports it, the Government support it—we all support it. We now need to get it through the House with the minimum of fuss.

Bill read a second time and committed to a Committee of the Whole House.

Co-operatives, Mutuals and Friendly Societies Bill

Lord Kennedy of Southwark Excerpts

3rd reading
Friday 16th June 2023 Lords Chamber

Moved by

[Lord Kennedy of Southwark]

That the Bill do now pass.

[Lord Kennedy of Southwark (Lab Co-op)]

My Lords, in these few brief remarks, I pay tribute to the Bill’s sponsor in the other place, Sir Mark Hendrick, the Member for Preston. I also pay tribute to Peter Hunt, Mark Willetts and all the team at Mutuo, an organisation that has done fantastic work in the co-operative sector over recent years and had many bits of legislation passed. They have done a wonderful job, and we thank them very much for all their work.

The Bill is passive: it requires no co-op, mutual or friendly society to do anything whatever, but it enables them to take action, if they want, to protect their organisations and prevent unwanted attempts to demutualise. So it is a welcome piece of legislation. I thank the Government and the Opposition for their support, and the noble Lord, Lord Naseby, for his support on these matters over many years. I also thank the Treasury and Treasury officials for their support. I beg to move.

[Lord Naseby (Con)]

My Lords, this is a vital Bill for the mutual movement of the United Kingdom. It prevents any predator trying to take away the capital put in by individual members of the society, and it is absolutely vital that this goes through. I recognise that another element sitting on the statute book that complements the Bill is the Mutuals’ Deferred Shares Act 2015, which I had the honour of taking through this House some time ago. I say to my noble friend on the Front Bench that we in this country now have a huge opportunity to benefit in the same way that Canada and Holland have from the mutual movement. It is ready to move forward, and we now look to His Majesty’s Government to implement the Bill and take the mutual movement forward. I particularly thank the noble Lord on the Front Bench on the other side of the House for all that he has done to take it this far.