Taxation (Energy and Vehicles) Bill

Lord Livermore Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 14th July 2026 Lords Chamber

Moved by

[Lord Livermore]

That the Bill be now read a second time.

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

My Lords, it is a pleasure to open the Second Reading debate on the Taxation (Energy and Vehicles) Bill. The measures contained in the Bill will support businesses across the UK as they deal with the immediate economic costs associated with the ongoing conflict in the Middle East. We did not start this conflict and we did not join it, but it is impacting our economy, including by putting pressure on energy markets and disrupting supply chains.

Despite these pressures, the latest economic data shows that the Government’s economic plan is working. Inflation last month held steady. Britain’s economy was the fastest growing in the G7 for the first quarter of this year. Borrowing is forecast to fall in every year of this Parliament and wages are continuing to rise.

However, as the Chancellor has said repeatedly, we must continue to be responsive to a changing world and responsible in the national interest. That is why we have taken action to support businesses and families, including by reducing VAT on summer activities from 20% to 5% and extending the 5p fuel duty cut until the end of the year, saving the average motorist £120 since last year. We have committed more than £50 million to help those struggling with the cost of heating oil. To support hauliers and farmers, we have cut red diesel by more than one-third until the end of this year. To help reduce costs for energy-intensive firms, we have expanded the British industry competitiveness scheme to more than 10,000 manufacturers. We are also providing targeted support to the chemicals and ceramics industries, protecting thousands of jobs and putting businesses on a secure footing for the long term.

The measures contained in this Bill go further to protect consumers and help firms deal with rising prices. It covers three areas: the energy generator levy, mileage rates and vehicle excise duty for heavy goods vehicles.

On the first measure, the electricity generator levy, the price of energy has risen since the war in Iran began, benefiting generators whose costs bear no relation to the price of gas. The Government’s objective is to ensure that those who benefit from these increased prices and volatility pay their fair share. That is why, in our first Budget, we extended and increased the energy profits levy. Last year, the Chancellor announced a new permanent windfall tax regime on oil and gas.

In April this year, we went further still by announcing an increase to the rate of the electricity generator levy and extending it beyond its original sunset date of 2028. The electricity generator levy recovers excess revenues made by generators that do not use gas when electricity prices are over a long-term average. To ensure that it does not disincentivise investment, any new investment since 22 November 2023 is exempt from the levy. The increase in the main rate of the levy from 45% to 55% is legislated for in this Bill. The extension will be legislated for separately. The Government will set out the fiscal impact of this increase at the Budget in the autumn, with the costing certified by the OBR in the usual way.

Raising the rate will help break the link between electricity and gas prices. Even though the UK is generating more electricity from sources such as nuclear and renewables, international gas prices still set the price of our electricity. This means that, when global gas prices spike, so do bills here in the UK.

By breaking the link between gas and electricity prices, we can help to insulate consumers from the volatility of future crises. The rise in the electricity generator levy will contribute to this by encouraging participation in the wholesale contracts for difference scheme. Currently, under a separate scheme known as contracts for difference, some electricity suppliers are guaranteed a stable, fixed price for the electricity that they produce. The new wholesale contracts for difference scheme will offer certain existing eligible generators that are not already signed up to contracts for difference the option to bid for a fixed price for the electricity that they generate.

Increasing the rate of the energy generator levy will therefore increase the appeal of a fixed rate under the new wholesale contracts for difference scheme, in turn helping to protect consumers from volatile gas-linked electricity prices. The Department for Energy Security and Net Zero will come forward later this year with a consultation on the wholesale contracts for difference scheme. The design of the post-2028 energy generator levy will be considered alongside this consultation.

The second measure contained in the Bill relates to mileage rates. As fuel prices have risen, so has the cost of filling up a car or van for those who drive for work. Despite this, mileage rates—the amount that workers are reimbursed for every mile they drive—have not changed since 2011. This has created a significant gap between the amount it costs to run and maintain a vehicle and the amount that workers are reimbursed for.

In recognition of these pressures, the Chancellor has announced the largest ever increase to mileage rates and the first uprating in 15 years. As a result, mileage rates have now increased from 45p to 55p for the first 10,000 miles. Beyond 10,000 miles, the rate will remain at 25p. This change will benefit employees using their own vehicle for work and those who are self-employed and use simplified expenses rates.

The increase came into effect on 6 April and the legislation before us gives statutory effect to this change. Overall, the increased rate will benefit around 2 million employees and 1 million self-employed individuals, saving over £120 a year for a worker doing 6,000 business miles.

Although employers are not required to reimburse at the new rates set out, if employees are reimbursed below the tax-free rate they can claim mileage allowance tax relief directly from HMRC. More widely, in March, the Chancellor announced a review of mileage rates as a whole. This review is ongoing and will inform the Budget this autumn.

The third measure in the Bill concerns vehicle excise duty on heavy goods vehicles. The road haulage sector plays a vital role transporting goods across the UK, but haulage firms are disproportionally exposed to higher fuel costs. That is why we are providing additional targeted support for the sector through the Bill, with a 12-month holiday from vehicle excise duty for the majority of heavy goods vehicles.

Eligible vehicles renewing their VED in this period will pay a reduced annual rate of £1. This will save a typical HGV £600, and those with higher liability will, in some cases, save more than £900, on top of savings from fuel duty. It will benefit around 46,000 UK-based road freight firms. Taken together with other freezes to fuel duty since the general election, the average HGV has saved over £2,000 compared with plans set out by the previous Government.

This Government have the right economic plan to deliver secure and resilient growth in a changing world, but as we have seen, including over recent days, the war in Iran continues to create uncertainty and volatility in the global economy, and therefore higher costs for businesses here in Britain. The Government have responded by providing immediate support to help with those additional costs, including through the measures contained in the Bill.

These measures will ensure that electricity generators that benefit from increased prices pay their fair share. They will support around 2 million employees and 1 million self-employed people who need to drive for work. They will deliver targeted help to the road haulage sector, ensuring that HGVs remain on the road to deliver food and other products to communities right across the country.

The Bill shows that, in the face of global pressures, the Government will continue to be responsive to a changing world and responsible in the national interest. I beg to move.

--- Later in debate ---

[Lord Livermore (Lab)]

My Lords, it is a pleasure to close this Second Reading debate on the Taxation (Energy and Vehicles) Bill. I am very grateful to the select group of noble Lords for their contributions and questions.

The measures contained in the Bill will support businesses across the UK as they deal with the immediate economic costs associated with the ongoing conflict in the Middle East. We did not start this conflict and we did not join it, but it is impacting our economy, including by putting pressure on energy markets and disrupting supply chains. That is why, as the Chancellor has said repeatedly, we must continue to be responsive to a changing world and responsible in the national interest.

The noble Baroness, Lady Neville-Rolfe, once again unfortunately sought to talk down Britain’s economy, yet the latest economic data shows that inflation in the UK held steady while it rose in other comparable countries. The noble Baroness and the noble Lord, Lord Redwood, spoke about economic growth, but they did not mention that Britain’s economy was the fastest growing in the G7 for the first quarter of this year. The noble Baroness also spoke about debt borrowing being forecast to fall in every year of this Parliament.

The measures contained in the Bill cover three areas: the electricity generator levy, mileage rates and the vehicle excise duty for heavy goods vehicles. The noble Baroness seemed keen to talk about almost anything other than the measures contained in the Bill, but when she did focus on them, she said that they were just short-term measures, a point also made by the noble Earl, Lord Russell. I disagree; the measures contained in the Bill will provide important immediate support to families and businesses as they deal with the consequences of the war in the Middle East, including the largest ever uprating to mileage rates and a significant reduction in the vehicle excise duty for haulage firms. The increase to the electricity generator levy also forms part of a wider long-term strategy to delink gas from electricity prices, helping to shield consumers from the impact of volatile prices. However, as I set out in my opening speech, the measures form just one part of the wider support we are providing to households and businesses, and we stand ready to go further where necessary.

The noble Baroness also asked about North Sea oil and gas. She knows that I agree with her that North Sea oil and gas production is an important and valuable resource and its workforce is a vital asset to our country. That is why we are harnessing our domestic supply by managing existing fields for their entire lifetimes, including by allowing tie-backs for those fields to ensure that they remain viable.

The first measure in the Bill concerns the electricity generator levy. The price of energy has risen since the war in Iran began, benefiting generators whose costs bear no relation to the price of gas. The Government’s objective is to ensure that those who benefit from these increased prices and volatility pay their fair share. That is why we are delivering an increase to the rate of the electricity generator levy from 45% to 55% and extending it beyond its original sunset date of 2028. Raising the rate will ensure that a greater percentage of exceptional generator revenues is made available to support businesses and households, and it will help break the link between electricity and gas prices by encouraging participation in the new wholesale contracts for difference mechanism.

The noble Baroness asked about the end date. The Government plan to extend the electricity generator levy beyond 2028 to encourage participation in the new contracts for difference mechanism and therefore provide more certainty to firms by offering a fixed price for the electricity they produce. We will work closely with industry to design the post-2028 electricity generator levy regime. DESNZ is planning to publish a consultation on the new contracts for difference mechanism later this year. The design of the electricity generator levy will be considered alongside this consultation.

The noble Lord, Lord Redwood, criticised the Government’s energy policy overall. My noble friend Lord Whitehead set that out, in probably greater detail than I can, in answer to the noble Lord’s question in the previous debate today. As the noble Lord knows, in this country we are particularly exposed to volatile gas prices, not least because the previous Government failed to invest in renewables. We need to invest in an economy that is as low carbon and based as little on gas as possible. By delinking from gas, a key part of the measures contained in the Bill, we can help to separate the price of electricity from the volatile price of gas internationally.

The noble Lord, Lord Fuller, said that we would increase the cost of electricity, but I believe that helping to delink from gas will do the exact opposite. The noble Lord also said that these measures would disincentivise future investment. They clearly will not do that, because the electricity generator levy has strong protections for new investment after 2023, which is exempt from the levy. The electricity generator levy is levied only on legacy renewable generators who stand to make extraordinary profits when high gas prices set the wholesale price without any commensurate increase in costs.

The noble Baroness, Lady Neville-Rolfe, asked about the wholesale contracts for difference scheme. Businesses have welcomed the announcement of the scheme and the certainty that these contracts will provide them with for years to come. The chief executive of the CBI said:

“If implemented correctly, voluntary contracts for difference could reduce the impact of gas on retail electricity prices and ensure the benefits of clean power can be realised across the economy”.


It is right that we now work closely with businesses on the detail, which is why they will have the opportunity to respond to the consultation that DESNZ is planning to run later this year.

My noble friend Lord Sikka asked a series of questions, which I will look at in greater detail. I will write to him, if I am able to do so.

The second measure contained in the Bill relates to mileage rates. I am grateful to the noble Lords, Lord Redwood, Lord Fuller and Lord Altrincham, the noble Earl, Lord Russell, and the noble Baroness, Lady Neville-Rolfe, for their support for this measure. As fuel prices have risen so has the cost of filling up the car or van for those who drive to work. Despite that, mileage rates have not changed since 2011. In recognition of these pressures, the Chancellor has announced the largest ever increase to mileage rates and the first uprating in 15 years.

The noble Baroness asked how the Government determined these uprated rates. In determining them, the Government considered the need to respond to the effect of the war in the Middle East on fuel costs after a prolonged period with no change, while balancing support for individuals with overall fiscal responsibility. She asked about the 25p rate. Our objective has been to focus support where costs are highest. The vast majority of drivers travel fewer than 10,000 miles a year. The 25p rate above 10,000 miles reflects the fact that the marginal cost of driving falls as mileage increases, with fixed costs such as insurance, servicing and depreciation covered by the higher 55p rate. Petrol and diesel motorists, including those who use their own vehicle for work, will also benefit from the extension of the 5p fuel duty cut to the end of this year.

The noble Lord, Lord Fuller, mentioned indexation. The decision the Government have taken on mileage rates is a targeted response to current cost pressures. The review announced by the Chancellor in March will consider the rate beyond 2026-27. Annual indexation is not currently the Government’s policy. The Government have already committed to a review of these rates and will set that out at the Budget.

The noble Earl, Lord Russell, asked about communicating to care workers. As he may know, the trade union UNISON has warmly welcomed this measure. I believe that we will communicate actively to its members.

The third measure contained in the Bill is the vehicle excise duty on heavy goods vehicles. The road haulage sector plays a vital role in transporting goods across the UK, but haulage firms are disproportionately exposed to higher fuel costs. That is why we are providing additional targeted support for the sector through the Bill, with a 12-month holiday from vehicle exercise duty for the majority of heavy goods vehicles. The noble Earl, Lord Russell, also asked about the power to extend this measure further, beyond one year. That would be perfectly possible in future Finance Bills and would not require any additional primary legislation.

The noble Lord, Lord Redwood, asked about smaller vehicles, not just HGVs, being included in this. Van drivers, for example, will benefit from the decision we have taken to extend the 5p fuel duty cut to the end of this year. Those who use their own vehicle for work will also benefit from the mileage rates increase in the Bill; that includes the 163,000 van drivers who are currently estimated to be claiming simplified expenses. It is right, though, that the Government balance direct support for firms with overall fiscal responsibility. Extending these measures to vans would cost an estimated £1 billion to £1.5 billion a year, but we will continue to keep this issue under review.

The noble Baroness, Lady Neville-Rolfe, asked about the impact of other taxes. Typical HGVs will save £600, while HGVs with higher vehicle emissions will save £912. In total, the decision taken since the general election to freeze fuel duty will save the average HGV over £2,000, compared with the previous Government’s plans.

This Government have the right economic plan to deliver secure and resilient growth in a changing world. The war in Iran continues to create uncertainty and volatility in the global economy and, therefore, higher costs for businesses here in Britain. The Government have responded by providing immediate support to help with these additional costs, including through the measures contained in the Bill. The Bill shows that, in the face of global pressures, the Government will continue to be responsive to a changing world and responsible in the national interest.

Bill read a second time. Committee negatived. Standing Order 44 having been dispensed with, the Bill was read a third time and passed.

Supply and Appropriation (Main Estimates) Bill

Lord Livermore Excerpts

2nd reading & Committee negatived & 3rd reading
Tuesday 14th July 2026 Lords Chamber

Moved by

[Lord Livermore]

That the Bill be now read a second time.

Bill read a second time. Committee negatived. Standing Order 44 having been dispensed with, the Bill was read a third time and passed.

Climate Change: Housing Insurability, Mortgage Lending and Financial Resilience

Lord Livermore Excerpts

Monday 13th July 2026 Lords Chamber

[Baroness Northover]

To ask His Majesty’s Government what assessment they have made of the long-term implications of climate change and nature loss for housing insurability, mortgage lending and household financial resilience.

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

My Lords, climate change clearly poses a long-term risk to financial stability and household resilience. The Government’s remit to the Financial Policy Committee ensures that it considers climate-related risks as relevant to its primary objective of maintaining financial stability. The Climate Change Committee’s recent report identified declining insurability and reduced mortgage access as credible risks, and the Government will reflect this evidence as they prepare the fourth national adaptation programme.

[Baroness Northover (LD)]

I thank the Minister for that reply. I hope he has read the adaptation report of the Climate Change Committee, in which it warns very clearly about the effects of increased flood and wildfire risk to the financial sector and the economy more generally. The Minister will remember the effect of the US subprime market on the UK economy from 2008 onwards. In the UK we can already see that property values, insurance availability and mortgage lending are all affected by climate change. Can he give further details as to how urgently the Government are addressing these risks?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her Question. I am very conscious that she is far more expert in these matters than I am. As she knows, the independent Climate Change Committee has made recommendations on the preparedness of the UK for current or future climate change risks. The Government will consider these recommendations as part of the next national adaptation programme.

The noble Baroness mentioned households and mortgages. The Bank of England’s assessment suggested that it would take a severe shock to borrowing costs, household incomes or the cost of essential goods to put aggregate debt servicing under pressure. The Government do not expect climate change to have an immediate impact on mortgages or household resilience, though they recognise the long-term pressures that climate change could have on a property’s value, insurability or suitability as security for mortgage lending. The Government will, of course, continue to work with industry to address any market failures.

[Lord Hunt of Kings Heath (Lab)]

My Lords, on the issue of financial resilience and climate change, has my noble friend seen the CBI report that came out a few weeks ago, showing that the net-zero economy is now worth over £100 billion and is promoting growth in all parts of the UK? Having said that, what does he make of the leader of the Opposition’s now opposition to net zero and wish to repeal the Climate Change Act 2008 and deselect Tory candidates who support net zero? What impact would that have on our economy?

[Lord Livermore (Lab)]

It is a great shame what my noble friend says about the Opposition; with such a significant issue as climate change and the importance of net zero, we want a cross-party consensus to drive forward the measures necessary in this country. He is absolutely right to say that economic growth is our number one mission, but without economic growth we cannot meet our climate change targets, and by investing in climate change measures we can drive greater levels of economic growth. If we step back from that, it would be a great shame and would do serious damage to our economy given that, as my noble friend says, the net-zero economy is growing so strongly.

[Baroness Hayman (CB)]

My Lords, the Minister is obviously correct that we really do need to step back from this divisive and completely unsubstantiated move away from the consensus on the need to do something about the changes in the climate we are seeing around us day in, day out.

What the Minister said about systemic risk to financial services and long-term risk was reassuring, but I wonder whether I could ask him to have a word with his noble friend, the noble Lord, Lord Stockwood, about the Financial Services and Markets Bill currently going through this House. There are grave concerns that the provisions we put in three years ago to a Bill that the Minister will remember are being watered down when they need to be strengthened.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. She is absolutely right in what she said about climate change. The Intergovernmental Panel on Climate Change—the world’s foremost authority on climate change science—established in its sixth assessment report that climate change is real and is being driven by greenhouse gas emissions. It predicts that if the rate of warming is not limited to 1.5 degrees centigrade above pre-industrial levels, we risk severe and irreversible damage to our planet and our people. Of course, it will be good if we maintain a cross-party consensus on the measures necessary to tackle that.

I heard what the noble Baroness said about financial stability. She will know that the Bank of England’s December 2025 financial stability report set out the committee’s assessment of climate-related risk to UK financial stability: it is low relative to other countries in the shorter term.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, the Minister has been saying some very important things about climate change: that it is happening and is very dangerous. But I do not really understand why he keeps using the term “longer term” because, quite honestly, it is happening now. It is not only about economic and financial stability but about the safety and well-being of people. It seems to me that this Government, judging from the legislation coming through at the moment, do not have any sense of urgency. Can the Minister take that back to his department and talk urgency?

[Lord Livermore (Lab)]

The Government have already committed significant investment in the transition to net zero, including £2.6 billion to decarbonise transport, £1.4 billion to support the uptake of electric vehicles, £2.7 billion a year for sustainable farming and nature recovery, and £13.2 billion to support the rollout of heat pumps and other low-carbon technologies as part of the warm homes plan, so I do not accept what the noble Baroness has said.

[Baroness Neville-Rolfe (Con)]

My Lords, London is the world’s leading international centre for commercial insurance and reinsurance, which is a subject of this Question. Does the Minister agree that insurance companies, with their considerable long-term expertise, are best placed to determine how the effect of climate change is reflected in premiums? Does he agree that, going forward, that knowledge should influence those—not least our planners—determining where it makes sense to build, so that we get on with housing and infrastructure as we need to do?

[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.

[Lord Livermore (Lab)]

As I said, the Climate Change Committee has assessed that the insurance gap is currently low relative to most countries. Flood risk, though, is the most immediate concern for UK households. The Environment Agency’s latest flood risk assessment indicated that around 6.3 million properties in England are at risk of flooding, increasing to 8 million as a result of climate change. The Government are working with Flood Re to ensure the scheme remains effective and financially sustainable through to its planned end date of 2039, and discussions are ongoing to understand and tackle the medium-term pressures.

[The Lord Bishop of Manchester]

My Lords, yesterday the Church of England General Synod reaffirmed its commitment to net zero. Back when we were first looking into that, I remember sitting down with the chief executive of one of the world’s largest insurance companies and asking him why he was so interested in climate change. He said that extreme weather events are the biggest risk for insurance companies. Does the Minister agree with me that if we are going to make insurance affordable, we have to reduce extreme weather events? It is not about adapting; it is about getting down to net zero.

[Lord Livermore (Lab)]

With the greatest respect, I think it might be both. We have to adapt and take long-term action to get down to net zero, as the right reverend Prelate says. I agree on both points.

[Earl Russell (LD)]

My Lords, once we reach three degrees of warming, no one can take on the risks, so there will be no more insurance and:

“The financial sector as we know it ceases to function”.


Those are the conclusions of Günther Thallinger of Allianz, who warns that Governments will be unable to backstop the resulting losses. Given this stark warning, what discussions have taken place with the Prudential Regulation Authority on the systemic financial stability risks of climate-driven insurance withdrawal?

[Lord Livermore (Lab)]

I am grateful to the noble Earl for his support for many of the Government’s measures in this area. As he knows, the Financial Policy Committee is responsible for identifying, monitoring and taking action to remove or reduce systemic risks with a view to protecting and enhancing the resilience of the UK financial system. The Government’s remit to the committee makes clear that it should continue to regard the risks arising from climate change as relevant to its primary objective. The Bank of England’s December 2025 financial stability report set out the committee’s assessment of climate-related risk to UK financial stability, which is that it is low relative to other countries in the shorter term.

Pension Access Rules: Impact on Terminally Ill

Lord Livermore Excerpts

Tuesday 30th June 2026 Lords Chamber

[Baroness Martin of Brockley]

To ask His Majesty’s Government, in light of the ongoing pensions review, what assessment they have made of the impact of current private pension access rules on the financial security of working-age people living with a terminal diagnosis.

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

My Lords, currently, individuals with a life expectancy of less than 12 months may take a serious ill health lump sum at any age, subject to medical evidence and scheme rules. This is tax-free below age 75, up to £1.073 million, after which it is taxed as income. However, while the current rules are intended to provide flexibility, the Government recognise that the permissive nature of these rules means that individuals may experience varying hurdles to access depending on their scheme. The Government wish to ensure a fair and compassionate approach to allowing access to pension savings in cases of terminal illness, and will, therefore, now consider this issue in further detail.

[Baroness Martin of Brockley (Lab)]

My Lords, I thank my noble friend for his Answer. It is encouraging to hear that the Government will look again at this important issue. The rules on access to private pensions for terminally ill people were designed for an era when terminal diagnosis often meant death within months, but medicine has moved on. For cancer alone, around one-half of patients now survive 10 years or more, compared to just one in four in the 1970s. Can the Minister confirm that, when the Government look at this issue, they will ensure that access rules reflect modern clinical reality rather than leaving people who may live for many years with a terminal diagnosis unable to access funds that are rightfully theirs?

[Lord Livermore (Lab)]

I am very grateful to my noble friend for her question. I agree with her that the current definition for when someone with a terminal illness can access their pension savings is clearly outdated and does not align with wider legislation, including the DWP’s standard definition, so I can confirm that the Government will now review this. Individual private pension schemes also have their own requirements for terminally ill people to access their pension savings. The Government will therefore also examine the access options across these schemes and will consider what changes may be needed to ensure that people have appropriate access while safeguarding against the risk of financial hardship later in life.

[Baroness Kramer (LD)]

My Lords, I am very glad to hear the words of the Government and the Minister on this issue, because it is an issue where remedy is absolutely required. I add an additional point, which is that many of those who will die, sadly, of a terminal illness at a young age will have put money aside or been due a state pension had they lived to the normal end of life, and therefore the tax benefit that they get is very largely offset by the fact that they will never receive the state pension that is their due, so the net cost to the Government is not quite as some might think it is.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her support for what I said. As she said, unlike a personal workplace pension, which can potentially be drawn down earlier, a state pension can be accessed only at the state pension age, and there are no current plans to change this. However, for those nearing the end of their life, special benefit rules apply. These enable people who are nearing the end of their life to get faster and easier access to certain benefits without needing to attend a medical assessment and, in most cases, enable them to receive the highest rate of benefit. These rules apply to five benefits that support people with health conditions or disabilities: personal independence payment; disability living allowance; attendance allowance; universal credit; and employment and support allowance.

[Baroness Finlay of Llandaff (CB)]

The Government’s review is much to be welcomed, because of the disparity. Given that 33% of working-age people with children who are terminally ill are recognised as dying in poverty, will the Government also look at the ability of people who withdraw their private pension to access a full range of benefits, including universal credit, so that they are not jeopardised and we do not end up with a situation where people who are trying to invest in their long-term future are penalised for doing so?

[Lord Livermore (Lab)]

Yes, I think I can; I think that is broadly along the lines of what I covered in my previous answer—that those who are nearing the end of their life should be able to get faster and easier access to certain benefits. As the noble Baroness is asking, those benefits include support for people with health conditions or disabilities: personal independence payment; disability living allowance; attendance allowance; universal credit; and employment and support allowance.

[Lord Davies of Brixton (Lab)]

I very much welcome the response from my noble friend the Minister. It is of particular importance that the variation in the schemes’ practice is part of the review, and obviously a full consultation will be required. When people provided with a pension have been encouraged to think of it as a pot of money, does my noble friend agree that it is particularly important that, at times of great personal difficulty, they have the opportunity to realise what they have been told is theirs?

[Lord Livermore (Lab)]

Yes, I agree with my noble friend, and I am grateful to him for what he says about the review. As he says, individual private pension schemes have their own requirements for terminally ill people to access their pension savings. That does mean that, too often, individuals experience too many varying hurdles to access, depending on their scheme. The Government will examine the access options across these schemes and consider what changes may be needed to ensure people have appropriate access. To be clear, it is tax-free below the age of 75, up to a total sum of £1.073 million.

[Baroness Neville-Rolfe (Con)]

My Lords, The Pensions Review, along with a whole body of work done by organisations such as the Institute for Fiscal Studies, raises serious concerns about pension adequacy and retirement saving. What steps is the Minister taking to improve financial education and public understanding of the need to save adequately for retirement, particularly among groups such as the self-employed, who are less well served by the auto-enrolment system?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her ongoing championing of financial education. I know it is something that she feels passionately about and we have discussed it before. As she knows, financial education now forms part of the school curriculum in all UK nations. In England, financial education forms a compulsory part of the curriculum in mathematics at key stages 1 to 4 and in citizenship at key stages 3 and 4. Together, these cover personal budgeting, saving for the future, financial risk, managing credit and debt, and calculating interest. In terms of the adult population that she refers to, and small and medium-sized enterprises in particular, the DBT is considering this as part of its small businesses work, and I will certainly look into it further in light of her question.

[Lord Pitt-Watson (Lab)]

I also thank my noble friend the Minister for carrying out this review. In doing so, I wonder if it will be possible to address the problem of inconsistencies in regulation. For example, the definition of “terminal illness” is different in pensions regulation and for the DWP. Can we come up with just one definition which is clear, consistent and also kind, given the circumstances under which it is going to be turned to?

[Lord Livermore (Lab)]

There is a great deal in what my noble friend says. Obviously, I cannot prejudge the outcome of the review, but the principles that he sets out for what the definition should look like sound very sensible and important. We will now review the situation because, clearly, the definition currently is out of step and does not align with wider legislation, including the DWP’s standard definition. I cannot prejudge it, but I agree that it would be ideal if there was now one standard definition.

[Lord Forbes of Newcastle (Lab)]

My Lords, does my noble friend the Minister share my concerns about the levels of stress and anxiety that this issue causes people who not only face huge practical and emotional challenges as a result of their terminal diagnosis but also find themselves having to navigate a complex and inconsistent pension system, largely at the discretion of private providers? Can he, in the review and when discussing this with colleagues, give further consideration to the additional practical support many in these circumstances may need at such a difficult time in their lives?

[Lord Livermore (Lab)]

I am grateful to my noble friend. He is absolutely right that the current rules are obviously intended to provide flexibility, but the downside is that the permissive nature of those rules means that individuals may experience varying hurdles to access, depending on their scheme. That does not feel right, so that is exactly why the Government will now examine the access options across these schemes and will consider what changes may be needed to ensure people have the appropriate access. My noble friend is absolutely right about the stress and anxiety that must be experienced trying to navigate those different schemes with the different rules applying, so I absolutely agree wholeheartedly with what my noble friend says.

Covid Fraud

Lord Livermore Excerpts

Monday 29th June 2026 Lords Chamber

[Lord Foulkes of Cumnock]

To ask His Majesty’s Government what action they have taken regarding the recommendations in Pursuing Recoveries and Preventing Reoccurrence: Final Report of the Covid Counter Fraud Commissioner, published on 9 December 2025.

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

My Lords, on 23 June, I laid the Government’s response to the Covid Counter-Fraud Commissioner’s report before this House setting out our plan to pursue those who defrauded the state during a national emergency, to put money stolen by fraudsters back into the public services and to tighten our counter-fraud controls to make sure that this scale of fraud can never happen again.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, I am grateful to my noble friend for that reply, but does he not think it strange that Peter Murrell is in jail for embezzlement of £400,000 whereas not one person responsible for £10 billion of fraud has been charged, let alone convicted? Will the Government speed up their action to use legal methods against these people and recover the money, which, I am sure my noble friend will agree, will help balance his books?

[Lord Livermore (Lab)]

I am very grateful to my noble friend for his question and his continued determination to see justice in this matter, which I share. Covid fraud and corruption is an appalling financial scandal that has cost UK taxpayers dearly. I thank the commissioner, Tom Hayhoe, for his tireless efforts to chase down fraud so that public money can be used as intended on public services such as hospitals and schools, as my noble friend said. The Government will continue relentlessly to pursue Covid fraud to retrieve taxpayers’ money, to hold those responsible to account and to ensure that such failures can never be repeated. In his report, the commissioner made 22 separate recommendations. The Government have fully accepted 18 and partially accepted the remaining four. The Treasury will now establish a Minister-chaired scrutiny panel to review the implementation of the recommendations every six months for at least the next two years.

[Baroness Kramer (LD)]

My Lords, fraud during Covid—heinous though it was—was carried out mainly by individuals and individual firms. Do the Government accept that, with AI, the character of fraud has now evolved into highly co-ordinated operating systems falsifying identity, behaviour and documentation, and it escapes detection by using digital money—primarily stablecoin and primarily among that tether? Work by Juniper Research shows that in 2025, tech platforms earned £430 million from scam ads in the UK alone. Will the Government require the tech platforms to close down these crimes?

[Lord Livermore (Lab)]

While I absolutely accept what the noble Baroness says about the evolving nature of fraud, I am not sure that I fully accept it is becoming as overwhelming as she says. I understand that the FCA is engaged in cracking down on exactly the type of practice she outlines, and we fully support its actions to do so.

[Lord Pitkeathley of Camden Town (Lab)]

My Lords, I declare my interest as a previous small business owner. While greater transparency for regulators is clearly desirable, can the Minister confirm that the Government have listened to concerns from small businesses about making commercially sensitive profit and loss accounts publicly available? Can he also explain how the balance has been struck between improving fraud detection and protecting legitimate commercial confidentiality?

[Lord Livermore (Lab)]

I thank my noble friend for his question, and I agree with the underlying point he makes. In his report, the commissioner recommends that small companies and micro-entities be required to file profit and loss accounts with Companies House under the Economic Crime and Corporate Transparency Act 2023. I said before that the Government have only partially accepted four of his recommendations, and this is one of them. While small businesses and micro-entities will be required to file profit and loss statements, as announced in June 2026, this requirement will come into effect in April 2028—one year later than initially anticipated—to give companies and businesses time to prepare. Small companies and micro-entities will have the option to opt out of publishing their profit and loss information on the public companies register. These changes reflect the Government’s consideration of concerns raised by stakeholders following the June announcement. The opt-out option addresses legitimate concerns about the commercial sensitivity of profit and loss information for smaller companies. Publishing this data on a public register carries privacy and competitive risks that are disproportionate for businesses of this size.

[Lord Watts (Lab)]

My Lords, the company owned by the noble Baroness, Lady Mone, owes the taxpayer £120 million. People who defraud the benefit system by £100 or £200 end up in jail; why is she not in jail? Why do the Opposition not say anything about this type of fraud, which brings disgrace on this House?

[Lord Livermore (Lab)]

The Government have been clear that we expect robust action to be taken to protect the taxpayer, and we have fully supported the appropriate legal and insolvency processes being followed. As I understand it, PPE Medpro Ltd is now in liquidation, and matters related to the recovery of funds are therefore for the liquidators to pursue in line with their statutory duties. Any recoveries that can be made will be determined through those independent processes. It would not be appropriate for me to comment on those proceedings.

[Lord Sikka (Lab)]

My Lords, one of the problems with the commissioner’s report on Covid fraud is that it pays little attention to the role of consultants in devising various schemes. For example, the furlough support scheme did not ask companies to provide the national insurance numbers of employees; it was, therefore, open to fraud. Companies seeking loans were not required to say when they were formed and what their HMRC reference number was; again, it was open to fraud. Are the Government still using the same consultants? Have they taken any action to ensure that those consultants pay the price for the poor design of various schemes?

[Lord Livermore (Lab)]

I am afraid I do not know whether we are still using the same consultants; I am more than happy to check for the noble Lord.

[Baroness Neville-Rolfe (Con)]

My Lords, I think we need to stand back and take a broad view of the problems. We all know that Covid was a challenge right across government and that fraud was an issue. However, the important thing is to do better next time, which is why we set up the Public Sector Fraud Authority in 2022 and introduced the use of AI into fraud detection, which helped with some of the sort of problems that have been raised. Given the doubt expressed in parts of the report, is the Minister confident that the Government of the day will, in practice, do significantly better next time? I am looking for a commitment here.

[Lord Livermore (Lab)]

I can fully understand the noble Baroness’s desire to stand back from this. On entering government, this Government found that £674 million of contracts were in dispute. However, we also inherited a recommendation from the previous Government that any attempt to reclaim that money should be abandoned. The commissioner’s report set out that £10.9 billion was lost to fraud and error from Covid spending. Failed pandemic-era PPE contracts cost the British taxpayer £1.4 billion and over £1.9 billion of bounce-back loans have been flagged as suspected fraud to the British Business Bank. The commissioner also found that the previous Government’s over-ordering of PPE and delays in quality-checking meant that £762 million is unlikely to ever be recovered, with substandard PPE gowns, masks and visors remaining uninspected for up to two years, preventing recovery of public money. Covid fraud and corruption is an appalling financial scandal which has cost UK taxpayers dearly. The noble Baroness asks for a commitment that we will do better next time; I think we could hardly do any worse.

[Lord Pannick (CB)]

My Lords, can the Minister say how much of the billions of pounds of public money which was wasted due to fraud and corruption in relation to Covid has now been recovered?

[Lord Livermore (Lab)]

As I said in my previous answer, the estimated level of fraud and error stands at £10.9 billion. Some £1.6 billion has so far been recovered and a further £1.5 billion is in the act of being repaid. The Public Authorities (Fraud, Error and Recovery) Act has extended the limitation period for Covid cases by a further six years, giving us longer to recover the outstanding amounts.

[Lord Anderson of Swansea (Lab)]

Does my noble friend not find it somewhat surprising that no Back-Bench Member of the Opposition thought it worth while intervening on a matter which affects one of their own?

[Lord Livermore (Lab)]

Obviously, whether they choose to intervene or not is a matter for them.

[Lord Spellar (Lab)]

My Lords, does my noble friend the Minister find slightly odd the intervention from the Opposition Front Bench? Surely if we are to send a message for future contracts, dealing with fraud in previous contracts is essential, otherwise people will think they can get away with it. Why does he think that the Opposition spokesperson was so keen to brush this under the carpet?

[Lord Livermore (Lab)]

I completely agree with my noble friend. It is vital that we deal with past instances of fraud. As he said, that must act as a deterrent to future acts of fraud. We will continue to pursue these fraudsters and ensure that we get as much money back as we possibly can.

Scottish Government: Social Security Benefits

Lord Livermore Excerpts

Wednesday 24th June 2026 Lords Chamber

[Baroness Suttie (LD)]

My Lords, on behalf of my noble friend Lord Bruce of Bennachie, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

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

My Lords, following the devolution of social security powers, the Scottish Government are responsible for funding and administering social security benefits, with funding transferred from the UK Government. Funding for devolved social security is provided through welfare block grant adjustments that transfer funding from the UK Government to the Scottish Government. In the most recent financial year, this amounted to £5.8 billion for the Scottish Government. Decisions on how funding is used are for the Scottish Government.

[Baroness Suttie (LD)]

I thank the Minister for that Answer. In 2025-26, the total social security spend in Scotland was £6.9 billion, which amounts to £1.3 billion more than that which is transferred by the Treasury. It is far from clear how the SNP Government will manage to sustain this level of funding. Does the Minister agree that, to the extent that the Scottish Government have added top-ups, it is important to make it clear that the looming deficit from this and other unbudgeted expenditure is entirely the Scottish Government’s responsibility and they should not blame it on the UK Government—although they will undoubtedly try?

[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?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question but I do not agree with the assumption underlying it. Of course we must spend more on defence, but we must also continue to support those who need that support the most. As I said in answer to the first Question, spending on benefits is a choice for the Scottish Government and must come from within their own budget.

[Lord Macpherson of Earl’s Court (CB)]

My Lords, does the noble Lord the Financial Secretary agree that fiscal responsibility should lie at the heart of the devolutionary settlement? Does he agree that maintaining fiscal credibility would be a particular challenge in the event of Scotland becoming independent? Is he aware that the Irish Free State had to cut the state pension by 10% in 1924 to maintain parity with sterling? Might he draw that to the attention of those who advocate Scottish independence?

--- Later in debate ---

[Lord Livermore (Lab)]

I did not know the specific example that the noble Lord sets out and I am grateful to him for educating me, as he has done many times in the past. I agree that Scotland, in my view, is better off as part of the union and that independence would be disadvantageous to the people of Scotland and to the Scottish economy. I agree very much with what he says about continuing fiscal responsibility, both in Scotland and in the whole of the UK.

[Baroness Smith of Llanfaes (PC)]

My Lords, unlike Scotland, which has taken on significant social security powers and used them directly to address child poverty in Scotland, Wales has limited control over the welfare system. Does the Minister agree with the principle of Gordon Brown’s report that nothing that is devolved to Scotland could not be devolved to Wales if the Senedd wants it?

[Lord Livermore (Lab)]

I worked for Gordon Brown for quite some years. I did not always agree with him and I am not sure I do on this occasion. The noble Baroness knows that the fiscal framework sets a funding floor to ensure that the Welsh Government receive a fair level of relative funding. A review of the framework is triggered when relative funding falls to 115%. The Government remain committed to working with the Welsh Government to ensure the smooth delivery of their funding settlement, and there are ongoing discussions about funding flexibilities and their fiscal framework as part of this.

[Baroness Davidson of Lundin Links (Con)]

My Lords, the Scottish Fiscal Commission has forecast that over a million Scottish adults will be in receipt of disability payments by 2031 under the new Scottish social security system—that is over a fifth of the projected population. The divergence from Barnett consequentials in just this area is forecasted to be £1.2 billion, which will come, as the Minister says, either from spending cuts or rises in taxation—taxation rates already being the highest in the UK, reaching 48%. To help the Scottish Government balance the books and to give some relief to the Scottish taxpayer, I ask the Minister: what, if any, analysis has been done to assess the varying disability rates across the different parts of the UK, and what health interventions have proven successful in lowering those rates?

[Lord Livermore (Lab)]

As the noble Baroness knows far better than I do, the fiscal framework is designed to ensure that funding is fair and fiscally neutral at the point of devolution. It provides the Scottish Government with funding that reflects UK Government spending, while also giving them full responsibility for policy decisions in devolved areas. So, as I have said, any additional spending on benefits is a choice for the Scottish Government and must come from within their own budget.

The noble Baroness alludes to wider welfare reform. She will be well aware that spending on welfare increased by £88 billion in the last five years of the previous Government. I do not think anyone believes that the system that we inherited is working. It abandoned too many people to a life on benefits, it wrote off too many people as too sick to work, and it condemned too many children to be too poor to eat, which is exactly why we are reforming the system. She will know that we have launched the Milburn review, focusing on the causes of youth unemployment in particular, and he will come back with specific recommendations later this year.

[Baroness Kramer (LD)]

My Lords, the noble Lord, Lord Bruce, tabled this Question in part because he is appalled that so many people he speaks to in Scotland think that the whole of their benefit comes from Scottish-only taxes, not just the top-up. Ahead of the Brexit referendum, many people whose areas had received millions in EU support declared that their area had never received a penny because the EU contribution was unacknowledged or obscured. Is it time to improve communication and strengthen the union by making it clear that the whole of the UK contributes to benefit funding in Scotland, as well as in the other nations?

[Lord Livermore (Lab)]

There is a lot in what the noble Baroness says. I obviously agree with her, as I often do, on the matter of the European Union. I agree with what she says; it is very much worth looking at.

[Lord Cameron of Lochiel (Con)]

My Lords, the Minister may be aware that it has cost the taxpayer more than £650 million to set up Social Security Scotland, yet there are countless examples of claimants who are on benefits administered by both Social Security Scotland and the Department for Work and Pensions who have had money deducted because of a lack of communication between the two agencies. What action can the UK Government take to improve communication between both departments to make sure that those in genuine need of support are not penalised?

[Lord Livermore (Lab)]

I did not know about what the noble Lord says. I am more than happy to take that back to my DWP colleagues and to discuss it with them.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the Scottish Government are using this social security spending to deliver a more humane system that treats people with dignity. We have recently had the family finances project from the University of Glasgow and the University of Manchester, which shows that the Scottish child payment has reduced levels of food insecurity and material deprivation for children by about eight percentage points compared with comparable populations in England. Will the English Government follow suit?

[Lord Livermore (Lab)]

I think the noble Baroness means the UK Government. I know that the Scottish Greens are in coalition with the SNP in Scotland, so presumably she supports what they are doing. As I have said already, it is a matter for the Scottish Government. They have full responsibility for policy decisions in devolved areas and any spending they choose to undertake must come from within their own budgets.

Further Education Colleges: Recovery of VAT

Lord Livermore Excerpts

Tuesday 9th June 2026 Lords Chamber

[Lord Forbes of Newcastle (Lab)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I draw attention to my role as president of Capital City College Group.

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

My Lords, further education colleges are publicly funded and provide free education. No VAT is charged on these services, meaning colleges cannot recover VAT on their costs. Further education colleges are currently outside the scope of VAT refund schemes that allow some public bodies, such as schools maintained by local authorities, to recover their VAT. The Government are continuing to look into the VAT position of these colleges.

[Lord Forbes of Newcastle (Lab)]

I thank my noble friend the Minister for that response. As he correctly identifies, since 2011, FE colleges, unlike councils, academies and almost all other public sector organisations, have been unable to reclaim VAT costs from the Government’s refund scheme. LSE research estimates this to be a loss to the sector of £200 million a year. This puts college students at a funding disadvantage compared to their peers in state-funded schools and reduces resources for courses in government priority areas such as construction, engineering, digital and health. Given that colleges deliver disproportionately to young people from more disadvantaged backgrounds, and in the context of the current national crisis of young people not in education, employment or training, will the Government commit to reviewing this funding inequity for the FE sector as part of their cross-departmental response to the Milburn review?

[Lord Livermore (Lab)]

I am grateful to my noble friend for his question. As I have said, the Government are continuing to look into the VAT position of these colleges. Of course, admitting further education colleges to a VAT refund scheme would be a change in tax policy. As my noble friend knows, the Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances. I agree with my noble friend about the importance of FE colleges. That is why we are investing in FE colleges: £1.7 billion to support them to maintain their estates; £375 million to expand capacity for post-16 education; £590 million to support priorities such as recruitment and retention; and £295 million into 29 technical excellence colleges to support key sectors for growth including construction, engineering and manufacturing.

[Lord Deben (Con)]

Does the Minister accept that there are some areas where the law has already told the HMRC that it ought not to be demanding VAT—for example, agricultural shows—and that it refuses to accept the law and keeps on standing in the way of spreading what it has had to do for the Great Yorkshire Show to other shows? It is also true that the HMRC has lost its case about plug-in electric cars and is supposed to reduce the VAT to the same level as you pay at home. At the moment, it is penalising people who do not have a drive, and therefore people who do have a drive get their VAT very much lower. Why does he not intervene and make the HMRC accept the law?

[Lord Livermore (Lab)]

There is a lot there. I am confident that HMRC accepts the law and is following the law, but I am more than happy to look into the points that the noble Lord raises.

[Lord Mohammed of Tinsley (LD)]

My Lords, I will return to colleges and the original Question from the noble Lord, Lord Forbes. I want to follow up on the issue that he raised about the amount of VAT that is collected from colleges—about £200 million, if I heard the noble Lord right. What assessment have the Government done of the opportunity cost in improved facilities, more equipment and staff training that could be delivered if colleges were able to get that £200 million in VAT refunded?

[Lord Livermore (Lab)]

As I have already said, the Government are aware of this issue and we are looking into the VAT position of these colleges. As I have also said, we have significantly increased the amount of funding that is going to FE colleges to do the exact things that the noble Lord is asking for: £1.7 billion to support colleges to maintain their estates and £375 million to expand capacity for post-16 education, among other investments.

[Lord Johnson of Marylebone (Con)]

My Lords, although the funding gap has halved in the last 10 years, FE continues to play second fiddle to HE in many respects beyond this important VAT issue. Does the Minister agree with the Milburn review that colleges face a further disadvantage because of the way funding is provided on a lagged basis, which disincentivises them from taking on NEETs who are less likely to complete their studies and therefore bring funding to the institution than other types of students?

[Lord Livermore (Lab)]

There is a great deal to be said in favour of what Alan Milburn sets out in his interim review. He has published his interim review, setting out the drivers of youth unemployment. Clearly, some of the issues that the noble Lord raises are important to that and a factor in the rise in economic inactivity among those with health conditions. Alan Milburn will set out his final report later in the year, at which point he will set out his policy recommendations. I look forward to him doing so.

[Baroness Blackstone (Lab)]

My Lords, picking up what the noble Lord, Lord Johnson, said, the FE college sector really is the poor man of the education system in this country. This follows years of neglect by previous Conservative Governments. My noble friend the Minister read out a number of different improvements in the resourcing of these colleges, but does he agree that there also needs to be greater parity of pay? Those who work in FE colleges are worse paid than those who teach sixth formers and much worse paid than those who teach in universities, despite neither of those groups being particularly highly paid. Will he look into this, with the Department for Education, to see whether there can be some improvement in pay and in the training of leaders in FE colleges, so that we can have better skills training in order to support the economy and a better deal for those young people who do not want to follow an academic route and go to university?

[Lord Livermore (Lab)]

I agree with my noble friend’s overall point that we want greater levels of parity between FE colleges and other educational establishments. The Government are delivering those measures through our post-16 skills White Paper on developing the skilled workforce that our economy needs and on reaching the target of two-thirds of young people participating in higher-level learning. FE colleges are a vital part of that. One thing that I have not read out is that, in recognising rising student numbers, the Government are providing £87 million of exceptional in-year growth payments to colleges this year and are increasing funding by nearly £800 million next year.

[Baroness Neville-Rolfe (Con)]

My Lords, as noble Lords know, I am huge supporter of vocational education, so I welcome this Question. Does the Minister agree with the noble Lord, Lord Forbes, that it would cost the Exchequer £200 million to extend the scheme in the way proposed? More generally, do the Government consider that the criteria to reclaim VAT are fit for purpose?

[Lord Livermore (Lab)]

Both of those points are swept up in the point that I have already made: the Government are continuing to look into the VAT position of these colleges.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, another funding disparity currently planned for the next academic year relates to funding for free meals for students from poorer backgrounds. I strongly welcome the expansion of eligibility for free meals, but, in my experience, teenagers who attend FE colleges are no less hungry than those who attend schools. Will my noble friend agree to look again at the funding uprating for free meals?

[Lord Livermore (Lab)]

I am grateful to my noble friend for her question. I hear what she says and reassure her that the Government are aware of this discrepancy and are actively looking into it.

[Lord Redwood (Con)]

Why do the Government so often favour a model that takes a lot of tax off institutions, people and companies and then has to give some back by way of grant to help pay for it? Is that not just a double handling charge that we do not need?

[Lord Livermore (Lab)]

Yes, although overhauling the entire VAT system would be something of a long-term project.

[Baroness Garden of Frognal (LD)]

My Lords, I endorse everything that the noble Baroness, Lady Blackstone, said about the disparity in pay between FE lecturers and schoolteachers, and the iniquity of that. FE is simply not treated in the same way as other educational systems. The Minister keeps saying that the Government are looking into this. Can he put a timescale on that? Are they looking into it this year, next year or way in the future?

[Lord Livermore (Lab)]

As I have said, we are looking into the VAT position of these colleges. I am not in a position to put a timescale on that just now.

Middle East: Economic Response

Lord Livermore Excerpts

Monday 1st June 2026 Lords Chamber

[Baroness Kramer (LD)]

My Lords, till sales at UK supermarkets slowed to growth of just 0.2% in the three weeks to mid-May. Families do not know how they will cope with higher fuel costs, higher council tax and expected inflation. I am sure the Minister will tell us that the Government have tried to ease costs on the most vulnerable, and I support those actions. But with no relief in sight from the consequences of Trump’s Iran war, will the Government look seriously at the emergency £2 billion transport relief package proposed by my colleagues, to be funded by the Treasury’s unforecast boost in tax receipts: a cut in fuel duty by 10%, a slash in bus fares to £1, a slash in rail fares by 10% and a cut on VAT on public EV charging to 5%?

Does he also recognise that this is not a short-term crisis? The Government will have to find ways to reverse or offset the national insurance increase to small employers, especially in hospitality and leisure. They must break the link between electricity prices and the oil price, intensify the move to contracts for difference to spur on renewables, provide an effective programme for individuals and small businesses to install energy saving, and overhaul business rates at least to exclude all new business investment in energy saving from business rate consequences. Can he take this series of actions, which would make a significant difference?

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

I am very grateful to the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, for their comments and questions. The noble Baroness, Lady Neville-Rolfe, ended her remarks with her usual doom and gloom and talking down the British economy. Unfortunately, she did not mention any of the positive economic news that we have heard in the last few weeks.

She shares with us a belief in the importance of growing the economy and knows that that is our number one objective. She did not mention the fact that last week’s figures confirmed that Britain’s economy was the fastest growing in the G7 for the first quarter of this year. She did not mention that we beat the OBR’s spring forecast, with economic growth at 0.6% in the three months to March. She did not mention the fact that, because of the resilience in our economy, last week the IMF upgraded Britain’s growth forecast for this year.

She also did not mention the positive news on public finances that borrowing last year was £20 billion lower than in the previous year and is falling in every year of this Parliament. She did not mention the fact that the IMF backed our economic plan, saying that the Government’s fiscal framework strikes

“a good balance between deficit reduction and growth-friendly spending”.

She did not mention any of the things that we are doing to ease the cost of living, including that interest rates have been cut six times since the election, that real wages have continued to rise in every month of this Government and that inflation fell in April faster than expected, making the UK the only G7 economy where inflation fell last month. She did not mention any of those things, and I think that continuing to talk down the economy when we are doing all that we can to help it through this difficult period, with the war in the Middle East, does not benefit anyone.

She talked about the cost of the measures that we are introducing and about the foreign branch profits. I hope she will agree with us that, when a country faces challenges because of higher oil and gas prices, we must ensure that those who benefit from increased prices and volatility pay their fair share.

She will remember that, in our first Budget, the Government extended and increased the energy profits levy, last year we announced a new permanent windfall tax regime for oil and gas price shocks, and last month we increased the electricity generator levy, alongside further action to weaken the link that the noble Baroness, Lady Kramer, mentioned between high gas and electricity prices.

Now, the Government are making specific changes to the taxation of foreign branch profits, changing how companies are taxed in relation to their overseas activities. The noble Baroness will know that, until now, some businesses have structured their affairs with taxable branches to pay little or no corporation tax on UK profits. The change that we are introducing removes the ability to achieve disproportionate relief for overseas costs without UK taxation or future profits. The change, from 1 September 2026, for oil and gas-extracting UK resident companies will ensure that the UK continues to have a robust and effective corporation tax regime in line with international best practice and will ensure the effective taxation of profits attributable to UK activities.

The noble Baroness talked about the cost. She is absolutely right to say that we expect these reforms to raise hundreds of millions of pounds per year and that they will fully fund the package of measures announced by the Chancellor. The costings will be certified by the OBR forecast in the usual way at the next fiscal event.

The noble Baroness talked about zero tariffs and rightly said that they are out for consultation. Obviously, that is the case and I am pleased that she agrees with that. She mentioned the impact on trade deals. These are temporary suspensions to tariffs and so will lapse long before any trade deals are negotiated. So I think we will be able to see immediate improvements in the cost of living, and perhaps over time there will be trade deals that achieve that more permanently.

The noble Baroness talked about high energy costs and blamed them on the drive to net zero. I think we had an Oral Question in this House when the IMF put out its previous forecasts, and she will know that the IMF said that we faced higher energy costs in this country exactly because the previous Government had failed to take action to make the UK more self-sufficient in energy. So blaming the solution to the problem and saying it is the problem itself is a little perverse. The problem for the UK is that we are too exposed to imports of energy and we are, as she knows, taking action as a Government to reverse that.

The noble Baroness knows I agree with her when it comes to oil and gas production from the North Sea and how important and valuable that is. She asked me specifically about two fields, Jackdaw and Rosebank. She will know that the development proposals are a matter for the North Sea Transition Authority and the Offshore Petroleum Regulator for Environment and Decommissioning. I am unable to comment on the specifics of any individual project while the regulatory process is under way, or on the investment decisions of individual operators. As I understand it, the Secretary of State for Energy Security and Net Zero will be making a decision regarding the environmental impact assessments of these projects in the coming months.

I am pleased that the noble Baroness welcomed the support for the ceramics industry. She is right to say that there are far longer-term issues at play in terms of the competitiveness of many of our industries: the foundational sectors so important to the industrial strategy. That is why we have already increased support for our most energy-intensive companies through the British industry competitiveness scheme that we announced a couple of weeks ago.

The noble Baroness asked me about defence spending. As she knows, the defence investment plan is the first zero-based review of defence spending in almost two decades. It will set out the MoD’s plans to ensure that resources are directed effectively to meet its priorities. The Government are working hard to facilitate this and to ensure that the plan delivers the outcomes the UK needs for defence and for taxpayers. I shall repeat what I said previously: it will be published shortly.

The noble Baroness asked about supermarkets, finally. As she knows, it is quite right that we have discussions with supermarkets, as we have with fuel retailers and high street banks, to discuss ways we can work together to ease the cost of living on households. But, as I said to her, I think in a previous Private Notice Question, this is not about price caps, as some speculation has suggested; we would never advocate for that, and it is not for us to tell supermarkets how to run their businesses.

The noble Baroness, Lady Kramer, focused primarily on quite a long shopping list of support that her party would like to see introduced. Obviously, we did introduce some support last week, as the Chancellor set out, but I am not convinced that the funding that the noble Baroness thinks is there for her package of support actually is. Unfunded commitments are not the way to ease the cost of living crisis. We saw exactly that with the Liz Truss Government, and we saw exactly that with the previous Conservative Party Government. Introducing unfunded support now would mean higher inflation and higher interest rates in the long term, meaning that the very people we are trying to help now would pay more for their rent, bills and mortgages in the long term. I do not believe that is a sustainable way to help people with the cost of living crisis.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

Before we move on to Back-Bench questions, I have been asked to remind noble Lords that the next 20 minutes are only for Back-Bench questions and not for Front Benches.

[Lord Howell of Guildford (Con)]

My Lords, the Minister will remember—at least I think he will remember—that, after 1945, the best brains of Britain, America and some other countries got together to rebuild the entire financial stability and structure of international institutions on the rubble of the Second World War. Today, nearly all those institutions are in very serious trouble. Is there enough attention being paid by us and other countries to rebuild them in a way that will restore financial stability generally? Without that, all our own efforts are going to be minimised.

[Lord Livermore (Lab)]

I do not personally remember 1945, although I have read about it. The noble Lord is absolutely right on the importance of international institutions. The G7 has been a very important institution in this crisis and in previous crises, and the Government are fully committed to the G7, in particular, playing its full part and to making sure that the IMF and many of our institutions play their full part in dealing with all international crises.

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

My Lords, with AI causing reductions in apprenticeship training and with minimum-wage resistance from employers, why do the Government not look, in addition to the laudable initiatives that they are introducing, at the 1980s community programme? It emphasised environmental improvement, the arts and charities. It took young people off benefits and put them into work in local communities, at a time when dangers from anti-social activities were developing from long-term inactivity and unemployment. Ministers might read the speech of former MP Graham Allen of 29 July 1988 on the Nottingham operation of the programme in his constituency. It is a lesson to be learned from the past.

[Lord Livermore (Lab)]

I am grateful to my noble friend for what he said. I will certainly look up the speech and programme that he mentions, and will recommend it to my colleagues in the Department for Work and Pensions as they work with Alan Milburn on his review. As all noble Lords know, Alan Milburn published the interim report of his review and his final review is coming out in the autumn. The kind of scheme that he mentions is worth looking at and, as I say, I will look up the speech that my noble friend mentioned.

[Baroness Butler-Sloss (CB)]

What are the Government doing about small nuclear plants?

[Lord Livermore (Lab)]

Does the noble and learned Baroness mean small nuclear reactors?

[Baroness Butler-Sloss (CB)]

Yes.

[Lord Livermore (Lab)]

The deal to introduce the first of its kind has been signed with Rolls-Royce, and it is going to be located in north Wales. I think this is incredibly exciting technology and we want to see more of it. We want to see more private sector investment in this technology and in advanced nuclear reactors. We absolutely want to see far more investment in nuclear in this country. As I say, we have signed deals for small modular reactors, and we want to see more private and public sector investment in them.

[Lord Hintze (Con)]

My Lords, we do indeed have a great country, as the noble Lord said, and we should not be talking it down. But, that said, we should be having proper policy conversations. GDP growth by itself gets us nowhere. If we want to know about prosperity and real value for our citizens, we need to look at GDP growth per capita. I have raised this question a number of times and it has not been answered, which is disappointing to me. Why is this being ignored when all we want to do is make a political point?

The other point of which I want the House to be aware is about transfer payments, whether to farmers, businesses or whomever. As I am sure the noble Lord knows, they have zero value to GDP if they are true transfer payments. Transfer payments, whether to welfare or to whomever else, are a way to poverty.

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[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question, but I am slightly mystified by his saying that he has raised it before and that it has not been answered. I think I have addressed it every time he has raised it in this House. He asks me the same question every time, and I think I have answered it every time.

The OBR’s forecast measures GDP per capita. We draw attention to that, and it fell under the last Parliament of the previous Government. That was a big driver of the cost of living crisis. It is currently forecast to rise by 4% in this Parliament. The Government put great score by this, as it is very important that we see GDP per capita rising. I think I have said that to the noble Lord many times, so I agree with him. It is rising in this Parliament and it fell under the previous Government. That is very important. Living standards have risen faster in the first 10 months of this Government than they did in the first 10 years of the previous Government, so it is something that we are very focused on.

[Lord Fuller (Con)]

My Lords, over three months ago, I was one of the first people to raise in this House the consequences on food security from the war in the Gulf. I declare my interest as somebody involved in the fertiliser industry, which makes me one of the better-informed commentators in this space. All around the world, nation states are taking steps to secure supplies. The EU is modifying its scheme to increase supply and mitigate costs. Other nations are implementing export bans. Ukrainian strikes on Russian production, taken together with the damage in the Gulf, are putting 50% of the world’s nitrogen fertiliser production at risk, and that has not been fully appreciated. Now, of course, sulphur shortages are creating a phosphate catastrophe. In this country, we hardly have tariffs on imported fertiliser, so announcing that as a concession is not going that far. The Government’s response, thus far, has been to propose insane fertiliser taxes that will drive food price inflation to new heights, increasing the price of beer, bread and biscuits. With the Cereals event, where British farmers congregate, next Tuesday and Wednesday—

[Lord Fuller (Con)]

With the Cereals event next Tuesday, what good news can the Minister give to farmers who are planning for harvest 2027? When are the Government going to take the impact of this seriously and can these extra charges, which do nothing to reduce carbon emissions globally and increase the importation of the most polluting fertilisers produced from coal fire in China?

[Lord Livermore (Lab)]

I am very grateful to the noble Lord for the informed comments that he makes. As he said, he is a very informed commentator on these issues. I think that the last time we were discussing the same topic he asked a very similar question, and I shall give him a very similar answer. We convened the supermarkets to talk to them about the cost of food. The Chancellor also convened food producers to talk to them about security of supply and the issues that the noble Lord talks about. He mentioned fertiliser and other incredibly important inputs into the sector. The Government are, of course, in very close contact with the industry and are developing all contingency measures, depending on how the situation develops. I think none of us quite knows how the Iran war will develop and the impacts that it will have, and obviously the severity of the impact will depend on its duration. However, I can assure the noble Lord that the Government take it seriously—I think that was his core question, to make sure that we are taking it seriously—and we are obviously preparing for all eventualities.

[Lord Redwood (Con)]

The Minister is right that they are taking it seriously. Given the huge pressures from fertiliser prices, energy prices and higher taxes, will the Government as a matter of urgency to tackle food prices cut the taxes on farms and redistribute some of the subsidy to promote food growing, which is what we want?

[Lord Livermore (Lab)]

We are spending billions of pounds on exactly what the noble Lord asks about. I am not sure how he would fund the tax cut that he proposes, but, as I have said before, unfunded tax cuts are certainly not the way to help the cost of living crisis.

[The Lord Bishop of Manchester]

My Lords, as this debate has continued, I have become increasingly concerned that the phrase “Middle East” in the title is referring to somewhere between Nottinghamshire in the north and Northamptonshire in the south. The Middle East to me is a series of countries where war is currently raging and people are suffering incredible consequences—I am thinking, for example, of Afghan refugees in Iran, who are one of the most vulnerable groups there, and many other Iranian citizens, and thinking of some of the Palestinians in the West Bank. Is this not the time, as well as looking after our own people, for the Government and Treasury to think about increasing our overseas aid to mitigate some of the severe harm that is being done to some minority communities or oppressed communities in different parts of the Middle East?

[Lord Livermore (Lab)]

I am grateful to the right reverend Prelate. As he will know, the Government set out their plans for the aid budget in the last spending review. He is absolutely right that the conflict in the Middle East poses very significant challenges to the world economy and to many of the people in the region and beyond. We do not yet know what the full impact of the conflict will be; that will depend on its severity and duration. Likewise, the Government have been very clear that this war is a mistake that will bring significant extra costs to bear, not only on the British people but on people right around the world, as the right reverend Prelate said.

[Lord Mackinlay of Richborough (Con)]

My Lords, it must be noted that the Government are enjoying and using many of the Brexit dividends that were given to them: that is zero tariffs on anything they please; that is using subsidy—not a mechanism I particularly promote—in various places, notably, in the exchange here this afternoon, on Stoke-on-Trent’s ceramic industry; and the Government are able to do whatever they wish, in whichever field they wish, to promote economic growth. We see that also in the gracious Speech with the potential nationalisation of steel. Can the Minister give some sort of answer to the House as to whether he agrees with some of the Cabinet who wish to see the UK re-enter the single market and a customs union, which would stop most of those economic measures that are currently in the hands of the Government at a stroke? Does he agree with that? Is he at all concerned with the EU reset, which will have many of the same restrictions?

[Lord Livermore (Lab)]

It really does take a Brexit zealot to say that. Cutting tariffs may gain us 0.001% of GDP whereas Brexit itself has cost us a minimum of 4% of GDP, although estimates now say that it ranges from 6% to 8%. We are seeking to mitigate at the margins the huge damage done to the UK economy by Brexit, so the idea that this is some kind of Brexit benefit is absurd. Should we in due course re-enter the European Union? My personal view is that that is an inevitability: of course the UK will at one point re-enter the EU because that is absolutely in our national economic interest. In the meantime we are doing the European reset, and that is incredibly important in helping growth in our economy.

[Baroness Bennett of Manor Castle (GP)]

My Lords, a number of the questioners on this Statement have referred to the small scale of many of the measures in the Statement. One of them is that it confirms that bus travel across England will be free for children aged between five and 15 through the month of August. That might be compared to Scotland, where Green Party policy was brought in and continues with free bus travel permanently for all those under 22. Will the Government at least consider extending this measure to a broader age group and over a longer period? The Minister referred to the Milburn review. Young people often need to travel on buses to go to training, to job interviews and indeed to jobs, and free bus travel would be a great help to them.

[Lord Livermore (Lab)]

I find myself having the unusual experience of agreeing with the noble Baroness. Bus use is incredibly important. It is highest among lower-income households for trips outside of London. People in the lowest household income quintile make around 1.7 times as many trips as the average person and 3.7 times as many of those in the highest income quintile, so it is a very progressive policy. I am pleased that the Chancellor was able to provide the DfT with over £100 million of additional funding for free bus travel for children aged five to 15 for the month of August. That costs £100 million just for one month, so this is not an inexpensive policy. Clearly, extending it further would be a matter for the next spending review.

[Baroness McIntosh of Pickering (Con)]

I wish to raise the issue of the increase in price and the shortage of supply of red diesel and the impact that that is having on farming and food production. Is that something the Government are monitoring, and might they take steps to alleviate the damage being caused to farming communities?

[Lord Livermore (Lab)]

As the noble Baroness will know, as she is far more expert in these matters than I am, in order to support farmers and the freight industry we have cut duty on red diesel. Red diesel costs almost doubled at their peak and are now around 50% higher than their pre-crisis levels, so the Government are going further, cutting the duty rate on red diesel by over one-third, reducing the rate to its lowest level for over 20 years. This takes effect from 15 June and remains in place until the end of 2026. The noble Baroness will also know that we have cut regular fuel duty by 5p, and diesel will be 11p per litre cheaper throughout 2026 than it would have been compared to plans inherited from the previous Government.

[Lord Bellingham (Con)]

The Minister said that the UK was “too exposed to energy imports”, and he mentioned that he was therefore keen to see the opening of the Rosebank and Jackdaw fields. Many of us are encouraged by what he said, but can he now commit to following Norway’s example and commit the Government to going ahead and opening further North Sea oil and gas fields so as to further improve our energy security?

[Lord Livermore (Lab)]

Just to be clear, I said that oil and gas production in the North Sea is an important and valuable resource, and I support its continued use. I did not comment on Jackdaw and Rosebank specifically because I am not able to do so at this point, but the noble Lord will know that we are harnessing our domestic supply by managing existing fields for their entire lifetime, including by allowing tiebacks for those fields to ensure that they remain viable. I believe that when the Chancellor set out those measures in advance of legislation, we published further details on tiebacks, which external analysis has predicted could result in tens of millions more barrels of oil being available for UK supply. The announcement that we made gives industry greater clarity to support investment in these projects and maximise supply from our own existing sites in order to support our energy security, and the Government will legislate in due course to introduce these changes.

[Baroness Wheatcroft (CB)]

My Lords, attractions such as zoos and galleries have been campaigning for a long time for a cut in VAT. They argue that such a cut would result in equally high spending, because once people got over the threshold they would spend more in shops and restaurants, and that the Government would get their money. If this is proved to be successful, will the Minister accept that VAT cuts are not just for August?

[Lord Livermore (Lab)]

The noble Baroness knows that we have introduced a temporary cut in the rate of VAT on summer attractions, from 20% to 5%. Over the summer holidays, from 25 June to 1 September, all children’s menu meals served in a restaurant, and children and family tickets for cinemas, theatres, exhibitions, concerts and shows, will be subject to a reduced 5% rate of VAT. Entrance to attractions such as amusement parks, fairs, museums, wildlife parks and adventure parks will be subject to the reduced rate of VAT for both children’s and adults’ tickets. As I say, those measures apply from 25 June to 1 September, which I suppose will give us a real-world opportunity to examine the points that the noble Baroness makes. Obviously, any extension of that would be a matter for the next spending review.

Higher Earners: Emigration

Lord Livermore Excerpts

Thursday 21st May 2026 Lords Chamber

[Lord Leigh of Hurley]

To ask His Majesty’s Government what assessment they have made of the number of individuals earning more than £100,000 per annum who left the country in 2025.

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

My Lords, not all taxpayers are required to notify HMRC when they leave the country. As such, the Government do not hold comprehensive data on the number of individuals leaving the UK by income level. The Government are committed to ensuring that the UK remains a competitive and attractive location for internationally mobile talent and investment. We continue to support growth through a competitive tax framework and a world-leading business environment.

[Lord Leigh of Hurley (Con)]

The Minister is right: HMRC has no idea of the number of people who have left the country with a high income. The Chartered Institute of Taxation and I have tried to find the information, but it does not exist. However, most helpfully, the Sunday Times last Sunday looked at people on the Companies House database who have told Companies House that they are leaving the country. It estimates that as few as one in six and as many as one in three of the people on the Sunday Times wealth list have left the country. Can the Minister explain why he thinks that is and how this helps the growth agenda?

[Lord Livermore (Lab)]

As the noble Lord says, the data is not available, so I am not sure that he can make the conclusions that he seeks to make. The data will not be available until we have the January 2027 self-assessment data, which is the most reliable data. The costings that were certified by the OBR for the previous Government’s and this Government’s reforms account for a potential behavioural response. They factor in an assumed level of migration from non-doms, just as they did for the previous government reforms. The OBR has said that there is no evidence to change the estimated impact of the reforms on migration. This has always been a highly mobile population. For example, in 2023-24, there were 9,100 arrivals and 9,500 leavers, so the noble Lord knows that this is nothing new. The reforms to the tax treatment of non-doms have been designed specifically to make the UK competitive, with a modern, simple tax regime that is also fair.

[Baroness Kramer (LD)]

My Lords, I have a personal interest in this. Do the Government recognise that outdated tax treaties are driving away talent that the UK wants, especially in life sciences and AI? Many overseas nationals, especially Americans, end up paying significantly more tax than any equivalent UK-only citizen. It is not a non-dom issue but a failure to modernise relief to deal with tax savings such as ISAs, investments in mutual funds and the complexity of death duties. Will the Government get to grips with this?

[Lord Livermore (Lab)]

The new residents-based regime is more competitive for new arrivals than the previous rules. It is more attractive than the previous approach. They can bring their foreign income and gains into the UK without attracting an additional tax charge. These changes will encourage individuals to spend and invest these funds in the UK.

[Lord Watts (Lab)]

My Lords, is it not the case that if you are a patriot you are obliged to pay your fair share of tax and that people who do not want to do that are not patriots?

[Lord Livermore (Lab)]

We must ensure that the wealthiest pay their fair share of tax towards the public finances. Equally, successful businesses and entrepreneurs who create jobs and wealth are the engine of economic growth in this country and we must do all that we can to support them.

[Baroness Wheatcroft (CB)]

My Lords—

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[Baroness Wheatcroft (CB)]

My Lords, does the Minister agree that the tax avoidance industry in this country appears to continue to thrive? If so, how does he explain that?

[Lord Livermore (Lab)]

This Government have been very clear that we will close down any tax loopholes that we can while ensuring that the tax regime remains highly competitive. That is exactly what we are doing.

[Lord Bellingham (Con)]

The Minister talked about celebrating entrepreneurs and business creation. According to City A.M., nearly 6,000 British business owners have quit the UK over the past two years. Why is this?

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[Lord Livermore (Lab)]

As I have already said, there is no reliable data to back up the noble Lord’s claims. The reliable data will be available in January 2027, when the self-assessment returns are made. The data does not exist to make the noble Lord’s claims. The UK is a great place to start a business, but our companies are not scaling at the same rate as their US peers. We are taking action to ensure that they do, that the business environment in this country remains competitive and that we have a competitive tax regime.

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, is my noble friend the Minister aware of the hard data provided by Patriotic Millionaires, which shows that the strong majority are proud to live in this country, believe that it is patriotic to pay their fair share of tax and, in fact, are prepared to pay a little more, particularly to help young people?

[Lord Livermore (Lab)]

I am aware of the points that my noble friend makes and agree with much of what she says. As I say, successful businesses and entrepreneurs who create jobs here and wealth in the UK are the engine of economic growth and we need to support them to succeed. As my noble friend says, we must also ensure that the wealthiest pay their fair share towards the public finances.

[Baroness Neville-Rolfe (Con)]

My Lords, we should encourage rich people to reside and stay in the UK, as, for example, the top 1% of those paying income tax contribute 29% of receipts. Unfortunately, government policies not only on non-doms but on inheritance tax and other taxes have encouraged them to leave in large numbers—young as well as old people. Since this is against the national interest, will the Government adjust their policies to reverse this unfortunate trend and study the detail further?

[Lord Livermore (Lab)]

No, and I do not think the noble Baroness can make those claims based on the data that is available, as I have already said. The previous Government’s reforms assumed that there would be migration of non-doms. This Government’s reforms assume that there will be migration of non-doms, and the OBR has said that there is no evidence to change the estimated impact of the reforms on migration. Reforms to the tax treatment of non-doms have been designed specifically to make the UK competitive, with a modern, simple tax regime that is also fair. The noble Baroness mentioned other tax reforms; in the round, the Government’s reforms to the non-dom regime and to capital gains tax keep the UK an attractive place in which to live and invest, while ensuring that everyone who is a long-term resident pays their taxes here, helping to fairly fund our public services.

[Lord Wallace of Saltaire (LD)]

My Lords, does the Minister remember the argument, at the time of the Brexit referendum, that the divide in Britain was between the intellectual elite, who were people from anywhere, and the real people of Britain, who were people from somewhere? Are we not hearing an argument that it is the rich who are the people from anywhere, who do not have any particular loyalty to Britain and who might move, and that the rest of us are much more patriotic? Could we not hope to hear an argument from the Conservative Party and Reform that the rich should also be patriotic and committed to this country?

[Lord Livermore (Lab)]

I absolutely understand the points that the noble Lord is making but am not sure that it is for me to speak on behalf of any other party. I just point to my noble friend’s remarks about Patriotic Millionaires: the vast majority of people in this country feel patriotic about their country and want to pay their taxes here.

[Lord Grade of Yarmouth (Con)]

My Lords, for the avoidance of doubt—as the lawyers are fond of saying—it would be interesting to know from the Minister whether someone earning more than £100,000 a year and paying their taxes can still be classified as a working person.

[Lord Livermore (Lab)]

A working person is someone who goes out to work.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, will the legislation in relation to Members of this House envisaged in the King’s Speech deal with those who are refusing to pay their fair share of tax?

[Lord Livermore (Lab)]

I am happy to say that that is probably not a matter for me.

[Baroness Deech (CB)]

My Lords, is not the problem that the people who are fairly paying their tax feel that they unfairly have to support a vast number—maybe just as many—who are living on welfare and benefits, and that the people who work hard have to support those who do not? I sense a growing feeling of unfairness.

[Lord Livermore (Lab)]

I would just point out to the noble Baroness that the vast majority of people on benefits, as she puts it, are also in work—working hard every day to provide for their families. It is quite right that the state should help them to do so.

[Lord Robathan (Con)]

My Lords, the point is that £100,000 is not a huge amount of money. I am glad that the Labour Peers want to pay, but it is very important to encourage people to stay here to keep their money in the country. If they are taxed beyond belief, they will leave. That is not just any old Conservative Peer but people throughout the streets. The Minister must know that, but does he agree?

[Lord Livermore (Lab)]

The noble Lord says that £100,000 is not very much money. He may like to know that average earnings are around £33,000, which is well below the higher-rate threshold, and around 80% of taxpayers pay only the basic rate.

Supermarkets: Voluntary Price Caps

Lord Livermore Excerpts

Wednesday 20th May 2026 Lords Chamber

[Lord Sharpe of Epsom]

To ask His Majesty’s Government what plans they have to ask supermarkets to introduce voluntary price caps or freezes on essential food items; and what assessment they have made of the impact of such measures on food prices, supply, competition and investment.

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

My Lords, the Chancellor has held a round table with supermarkets to discuss the role that retailers can play in bearing down on food prices and the additional steps that the Government can take. This comes on top of the action that the Government have already taken to reduce the cost of living, which has helped drive today’s larger than expected fall in inflation.

[Lord Sharpe of Epsom (Con)]

My Lords, I am grateful to the Minister for his Answer. The Government should understand and know that price controls do not work and do not reduce prices. They instead suppress supply, create shortages, and ultimately leave consumers worse off and more exposed to food insecurity. I must say that, when we first heard these stories, we feared that the ghost of Stalin was roaming the corridors of the Treasury. For the avoidance of doubt, will the Minister today give an unequivocal commitment that the Government will rule out price caps, voluntary or otherwise, entirely? Can I suggest that he confers with noble Lords in this House, including on his own Benches, who will confirm that the supermarket industry is fiercely competitive?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his questions. I agree with his last point, if not all of what he said. I understand exactly what he set out, which is why we are not doing what he suggests we are doing. We are of course having discussions with supermarkets—that is the right thing to do—as we have with all sectors. The Chancellor has held round tables with fuel retailers, supermarkets and high street banks, among other industries. It is right that we discuss ways we can work together to ease the cost of living for households. This is not about price caps, as some speculation has suggested. We will never advocate for that, as it is not for the Government to tell supermarkets how to do their jobs. We are taking action across the board, with rail fare freezes, prescription fee freezes and £150 off energy bills. These are the driving factors behind today’s bigger than expected fall in inflation. Further, today, the Chancellor extended the 5p cut on fuel duty and introduced further new fuel duty support for HGVs and farmers.

[Lord Fox (LD)]

My Lords, I am pleased to hear that the Government are talking to supermarkets about the role they might have in prices, because prices are an important worry for people right across the country—they really are going up. In the course of those discussions, did the Government talk about their role in bringing down prices and with supermarkets? The input costs that supermarkets face have gone up dramatically; some of those things a Government cannot control, but some of those things they can. They can control employer contributions for NICs and the level of business rates—so ask not what the supermarkets can do for you but what you can do for the supermarkets to bring down the cost.

[Lord Livermore (Lab)]

There is definitely something in what the noble Lord says, although I am not sure that I quite agree with where his question ended up. He is right to say that families are struggling with the cost of living, and they will be worried about the prospect of food prices rising again following the conflict in the Middle East. That is why, in April, major food and farming trade bodies came together with the Government to share intelligence, assess emerging pressures and agree on how we can keep our food sector resilient and stable. As I say, the Chancellor held a round table with supermarkets to discuss the role that retailers can play in bearing down on food prices, and, as the noble Lord asked, additional steps that the Government can take.

[Lord Redwood (Con)]

Will the Minister congratulate the supermarkets on being competitive, with good prices, despite all the costs the Government are imposing on them? Does he agree that their net profit margins are very low, showing that the problem of rising food prices rests elsewhere?

[Lord Livermore (Lab)]

As I said yesterday in response to similar questions, we want the most competitive supermarket sector we can possibly get, and it is not for the Government to tell supermarkets how to do their jobs.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I asked the Minister yesterday about caps on food prices and he said then that that was not the role of the Government. Having said that, the suggested freeze is voluntary, as I understand it. Given that supermarkets— I think I might get booed here—squeeze producers of all kinds, farmers and their customers, making huge profits, should the Government not be a little bolder and actually think about the people for once?

[Lord Livermore (Lab)]

The end of the noble Baroness’s question is preposterous. This is not about price caps, as some speculation has suggested. As I said yesterday, we would never advocate for that, and I repeat that it is not for the Government to tell supermarkets how to do their jobs.

[Baroness Gill (Lab)]

My Lords, food poverty and food security need a joint focus. Examples of best practice can be found in our neighbourhoods, in Italy’s approach to local food systems, where there is a 50% reduction in business rates for greengrocers selling produce from within 50 miles of their town, or in the Liège food-land belt initiative, which sponsors the growth of farmers’ co-ops to supply 50% of their own food needs. Have the Government explored these alternatives to addressing the cost of living crisis?

[Lord Livermore (Lab)]

I am not in a position to stand here and suggest a 50% business rates reduction for any business, but my noble friend is absolutely right on the importance of taking action across the board to help reduce the cost of living. As I say, we have frozen rail fares, frozen prescription fees and taken £150 off energy bills—these are the driving factors behind today’s bigger than expected fall in inflation.

[Lord Harper (Con)]

My Lords—

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[Lord Harper (Con)]

I am grateful to the Government Chief Whip. The Minister will be aware that the Scottish Government are proposing compulsory caps on the prices of basic foodstuffs in supermarkets that operate in Scotland. Can the Minister confirm for the benefit of your Lordships whether that power is actually within the devolved competence of the Scottish Government?

[Lord Livermore (Lab)]

That may be subject to UK internal market and single market regulations. I am happy to check and confirm that to the noble Lord. As I have said, this is not about price caps, as some speculation has suggested, and we would never advocate for that.

[Baroness Walmsley (LD)]

My Lords, does the Minister agree that any deal that the Government might do with the supermarkets to cut prices in exchange for delaying regulations on healthy food would be short-sighted, against public health and damaging to the NHS?

[Lord Livermore (Lab)]

I absolutely understand the importance of the regulations that the noble Baroness is talking about. As her noble friend said, this is about what we as a Government can do, such as easing existing regulations on supermarkets, which would then enable them to keep costs down for consumers.

[Lord Balfe (Con)]

My Lords, 50 years ago I was working in the retail sector when the right honourable Baroness Williams, who was a Member of this House some time later, was the Minister for food prices. At the end of her term of office, she admitted that it was a hopeless task to try to curtail food prices or to ration them. Can I suggest that the Government dig out the files from 50 years ago, read them and then maybe reconsider whether this rather extreme idea from Scotland is worth pursuing any further?

[Lord Livermore (Lab)]

The noble Lord asks me to reconsider an extreme idea that we are not considering, so I think we should be okay on that point. The times he talked about were very different. I do not think anyone would advocate for that now, and we certainly are not.

[Baroness Foster of Aghadrumsee (Non-Afl)]

My Lords, I very much welcome that the Minister has ruled out supermarket price fixing, because the people who would be pressurised by such fixing are the farmers and the producers. They are already under incredible pressure from the power of the supermarkets. I am concerned that this will gain some traction and that, even though it is not government policy, the supermarkets might take this up. Are there any plans to meet farmers’ representatives to discuss those issues?

[Lord Livermore (Lab)]

The noble Baroness is absolutely right. The Government are aware of the challenges and the cumulative pressures facing food and drink manufacturers, and farmers in particular. I hope that she will welcome our announcement today on red diesel, for example, to support farmers who face substantially increased costs on fertiliser and fuel. The Government have announced that we will cut the duty rate on red diesel by over a third per litre, to the lowest rate for over 20 years.

[Lord Purvis of Tweed (LD)]

My Lords, if the House allows me, I will quote a headline from the Daily Telegraph:

“Rishi Sunak scraps plan for supermarket price cap after backlash … Downing Street had been considering a voluntary cap scheme for major supermarkets, modelled on similar plan in France”.


In the Government coming to the conclusion that this would be the wrong way forward, instead of going back 50 years we can go back to 2023. What did the current Government learn from the attempt under Rishi Sunak as Chancellor to introduce the very caps that have been described by those on the right-hand side as Stalinist?

[Lord Livermore (Lab)]

I would not necessarily recommend that the noble Lord rely on a headline in the Daily Telegraph as the basis for his assumptions of what the Government are or are not considering.

[Lord Purvis of Tweed (LD)]

It was the previous Government.

[Lord Livermore (Lab)]

I understand that, but, as I already said, this Government are not considering price caps, as some speculation has suggested, and we would never advocate for that.

[Baroness Boycott (CB)]

My Lords, I would like to ask the Minister about several factors that seem to be occurring at once. The first is that floods in Morocco, Spain and Sicily have badly affected salad crops at the beginning of the year. Further, Cambridgeshire had just 5% of its annual rainfall in April and many farmers cannot plant crops, and we now know from American scientific research that there is a 61% chance of a super El Niño this year. We will therefore face severe shortages of fresh food and other food. What are the supermarkets doing? What are the Government doing to engage them and farmers in conversations about the situation here in August, September and October, and indeed going into the winter? From everything I understand, this is potentially very serious. It is not about price fixing; it is about how we keep people in healthy food, rather than ultra-processed food from a factory.

[Lord Livermore (Lab)]

I do not underestimate at all the significant climate factors to which the noble Baroness refers. I have said that, in April, major food and farming trade bodies came together with the Government to share intelligence, assess emerging pressures and agree on how we can keep our food sector resilient and stable. It is why the Chancellor held a round table with supermarkets to discuss the issues that I have already mentioned and many of the issues raised by the noble Baroness.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords—

--- Later in debate ---

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, could my noble friend the Minister indicate whether ongoing discussions are taking place with the Groceries Code Adjudicator, who is the overall ombudsman, to negotiate between suppliers and the 10 largest supermarkets and to protect consumers?

[Lord Livermore (Lab)]

We are engaging with a wide range of stakeholders and I am sure that we will continue to do so.

[Lord Lamont of Lerwick (Con)]

My Lords, I am extremely pleased that the Minister has confirmed that price controls, if they came in, would be voluntary. However, we have also been informed by his replies that it is going to be voluntary in exchange for a regulatory incentive. If certain regulations will be repealed in exchange for price controls, does that not show that such regulations—whether they are on the environment, food safety or anything else—should have been considered for repeal or for lightening anyway?

[Lord Livermore (Lab)]

I am sure that there is much in what the noble Lord says. On regulatory burdens, the Prime Minister has set a 25% target to bring the cumulative cost of regulation down. We have already announced £1.5 billion of gross annual administrative savings so far, and we expect to set out further savings in due course.

[Lord Sahota (Lab)]

My Lords, first, I congratulate the Government on bringing inflation down to 2.8% and removing the 5p fuel duty. If the Government had a quiet word with the supermarkets making excessive profits of billions and billions of pounds, telling them to take it easy and not make that much profit, I am sure that the public would welcome that kind of interference, because the public would like cheaper food in every supermarket.

[Lord Livermore (Lab)]

I agree with the first half of my noble friend’s point but not necessarily the second half—I think there was an “if” in there, which is important. As I have said already, we are taking action across the board to ease the cost of living: we are freezing rail fares and prescription fees, and we have taken £150 off energy bills. These are the driving factors behind today’s bigger than expected fall in inflation, which my noble friend mentioned. Further, today, the Chancellor has extended the 5p cut on fuel duty to the end of the year.

[Lord Hannan of Kingsclere (Non-Afl)]

My Lords, at a time of rising economic populism, there is a responsibility on all of us in this House, and especially Ministers, to be calm, factual and accurate. To follow on from the remarks of my friend the noble Baroness, Lady Jones of Moulsecoomb, and the noble Lord, Lord Sahota, there is a widespread view among the public that supermarkets are making huge profits. A survey by the Institute of Economic Affairs found that the median voter thinks that supermarkets make a 50% profit, whereas the actual figure is about 3%. Will the Minister take this opportunity to repeat the very basic economic verity that price rises are a signal to producers to make more of something and that if prices are artificially frozen then there is less incentive to bring that product to market, so you end up with a worse shortage and higher prices than you had before you started?

[Lord Livermore (Lab)]

As always, the noble Lord is very interesting. I simply say that I always strive to be calm, factual and accurate.