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?

--- Later in debate ---

[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—

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[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.

Defence, Security and Resilience Bank

Lord Livermore Excerpts

Tuesday 19th May 2026 Lords Chamber

[Lord Fox]

To ask His Majesty’s Government what consideration they have given to joining the proposed defence, security and resilience bank.

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

My Lords, while we are of course interested in working with NATO allies such as Canada, we have no current plans to join the defence, security and resilience bank. Our priority is to progress the proposed multilateral defence mechanism with a core group of EU and NATO allies and partners, including Denmark, Finland, Poland and the Netherlands. This mechanism will aim to aggregate demand, drive joint procurement, accelerate defence investment and increase the availability of critical capabilities such as munitions as we step up shared defence and security commitments.

[Lord Fox (LD)]

My Lords, as the Minister knows, financing rearmament is a challenge for all NATO countries, which is why I am a bit puzzled by the Government’s response. A viable defence, security and resilience bank would tick a number of important boxes: it would be multilateral; it would work with a greater number of allies; it would help project finance span election cycles; and it would cost-effectively pull in private finance. Yet last September the British Government ruled out joining the scheme, and this year when Canadian Prime Minister Mark Carney made a direct request, the British Prime Minister gave only a lukewarm response. Why is it not in the interests of this country to pursue the creation of this scheme, which could go alongside all other schemes?

--- Later in debate ---

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his Question. I am pleased to see that he has made a full recovery; I know he was battling a very heavy cold during our recent King’s Speech debate. I fully recognise that I am no defence expert, but I thought that the Prime Minister put this point particularly well in his recent Munich speech. He said that

“we must move forward together to create a more European NATO. As I see it, Europe is a sleeping giant … We have huge defence capabilities, yet too often this adds up to less than the sum of its parts. Fragmented industrial planning and procurement have led to gaps in some areas, and massive duplication in others. Europe has over 20 types of frigate, and 10 types of fighter jet. We have over 10 types of main battle tank, whilst the US has one. It’s wildly inefficient, and it harms our collective security”.

The noble Lord may well share that analysis and worldview. That is why the Government’s focus is, as I said, to work on the proposed multilateral defence mechanism with a core group of EU and NATO allies and partners, with the goal of establishing it by 2027.

[Lord Harper (Con)]

My Lords, on a note of agreement, I agree with the Minister—I think—on his position on the defence bank, which may surprise him. He set out the importance of defence procurement. Given that there was much speculative briefing over the past few days about the Government’s defence spending commitments, is he able to update the House on the much-delayed defence investment plan, which is very important in making those commitments, particularly to the British defence industry?

[Lord Livermore (Lab)]

As I am sure the noble Lord 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 it delivers the outcomes the UK needs for defence and for taxpayers, and it will be published shortly.

[Lord Spellar (Lab)]

My Lords, does my noble friend the Minister accept that there is a significant problem of access to finance for the defence industry, particularly for medium and small enterprises, driven partly by absurd bans on investment in our national defence by financial institutions? Given the failure, frankly, of the City and the Government to address this systemic problem, should we not at least give serious consideration to, and engage in discussions on, this initiative from the Canadian Prime Minister, Mark Carney?

[Lord Livermore (Lab)]

I agree with much of my noble friend’s analysis, but they are two slightly separate issues. The Government have been very clear that there is nothing contradictory between ESG considerations and defence, and that no company should ever be denied access to financial services solely on the basis that they work in the defence sector. The Government are working closely with the defence sector and with financial services to identify the extent of this issue, to reduce barriers to essential banking services and to support a resilient defence industry. More widely, the proposed multilateral defence mechanism will help improve value for money and address fragmentation in the defence sector through joint procurement. It will support greater standardisation and interoperability, helping to ensure that allies’ capabilities work together more effectively. It will increase the availability of munitions and other critical capabilities when we need them most. It will support a more resilient and efficient defence industrial sector, and it will accelerate defence sector investment.

[Lord Howell of Guildford (Con)]

My Lords, is the idea behind this plan to meet vital public expenditure needs without upsetting the bond markets too much? Can the Minister just explain a little more how it will work?

[Lord Livermore (Lab)]

The scale and precise focus of the mechanism remain to be determined, but the scope of those activities would include lending to sovereigns and to the sector and providing loans to supply chains and loans for capacity expansion. We anticipate that it will make a material contribution to defence spending and investment across those involved. The intention is that this mechanism will be established as an independent international financial institution underpinned by an international agreement and with sovereign countries as members in the first instance. As with other international financial institutions, paid-in capital will be expected to leverage in private sector funding by a multiple of that initial contribution.

[Baroness Kramer (LD)]

My Lords, I am now completely bewildered. I would have thought that, with the state of the gilts market, the Government would be leaping at the opportunity to find AAA financing for their defence expenditure, and on a multilateral basis. Are we dealing with the underlying problem of a Treasury that basically says, “not invented here”, rather than looking at an opportunity that has been virtually handed to it?

[Lord Livermore (Lab)]

No, and I do not quite understand why the noble Baroness is confused, because we are doing exactly what she says. We are setting up—or being part of—a proposed multilateral defence mechanism. I thought the noble Baroness would share a similar worldview in terms of wanting to see greater amounts of co-operation and procurement among a core group of EU allies and NATO allies and partners. What she is asking for is exactly what the Government are exploring.

[Lord Stirrup (CB)]

My Lords, does the Minister recognise that, when we refer to the defence industry these days, we are talking not about the traditional defence companies but about industry much more widely? We have seen clear examples of this in the Ukraine war. Will he therefore ensure that whatever multilateral funding arrangements we come up with, they are used to fund an agile, innovative, high-technology industrial base across Europe that can respond rapidly to crises, rather than going into purely the established defence sector?

--- Later in debate ---

[Lord Livermore (Lab)]

I am grateful to the noble and gallant Lord for what he says. I am sure I was aware of it, but probably not as aware as he is because I am nothing like the expert that he is. But, absolutely, that is exactly what the defence industrial strategy is designed to do. It outlines how the Government will support a strong, innovative defence sector to equip and protect the Armed Forces. It focuses on securing supply chains, boosting high-skilled jobs, investing in new technologies and ensuring national security, while delivering value for money and supporting economic growth. The substantial investment in the defence industrial strategy will drive R&D and innovation across the UK, including developing technologies such as AI, quantum and space capabilities.

[Baroness Neville-Rolfe (Con)]

My Lords, the recent noise around Labour’s leadership meltdown has drowned out the fact that the Government have still not announced a date for the publication of what has become the “defence invisibility plan”. Does the Minister agree that the proposed defence, security and resilience bank is a distraction from the need for NATO countries—and that includes the UK—to increase defence expenditure both significantly and quickly?

[Lord Livermore (Lab)]

I welcome the noble Baroness’s conversion to spending more on defence; she had 14 years to do something about it but did not do anything. To ensure that the UK is prepared to respond to growing threats, the Chancellor has announced a £270 billion investment in defence over the course of this Parliament. We have already invested £5.6 billion more in defence this year alone compared with previous plans, and spending on defence is rising every single year of this Parliament. As the noble Baroness knows, NATO qualifying defence spending is set to rise to 2.6% of GDP by April next year. The Government have also set an ambition to spend 3% of GDP on defence in the next Parliament when economic and fiscal conditions allow. The defence investment plan will set out the MoD’s plans to ensure that resources are directed effectively to meet its priorities and deliver value for money for taxpayers. We are working hard to finalise that and it will be published shortly.

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

My Lords, will my noble friend confirm that much of the expenditure that he just referred to is in Scotland: in Edinburgh, in Fife, in the Clyde and in the islands? Does he think I am overoptimistic in hoping that the new Scottish Government will give some acknowledgement and credit to the UK Government for all that spending in Scotland?

[Lord Livermore (Lab)]

I start by saying what a pleasure it is to take a question from my noble friend again and to welcome him back to the House. He is known for his optimism, so I hope I can join him in that. But he is absolutely right: 68% of defence spending goes to businesses outside London and the south-east, bolstering regional economies in Scotland and the north-west, which is why our defence industrial strategy that I was discussing earlier is so vital.

VAT Relief: Business Donations

Lord Livermore Excerpts

Tuesday 19th May 2026 Lords Chamber

[Baroness Walmsley]

To ask His Majesty’s Government what assessment they have made of the impact of the VAT relief on business donations on goods to charities on food redistribution networks, including social supermarkets.

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

My Lords, the new VAT relief on business donations of goods to charity came into effect on 1 April this year and it is too soon yet to assess the impacts. We anticipate the relief will incentivise increased food donations to charities eligible for the relief, meaning increased donations reaching those in need. The CBI estimates that the relief will lead to an additional £72.5 million in total donations annually. We are monitoring any possible impacts on social supermarkets.

[Baroness Walmsley (LD)]

My Lords, while the intention of the policy is welcome, does the Minister recognise that it may create a perverse incentive for businesses to divert surplus food away from community organisations and enterprises such as Community Shop, which provide both affordable food and wider support for vulnerable groups? Will he accept any evidence that may come forward as a result of this policy that this perverse incentive is happening and then consider possibly tweaking the policy?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. The short answer is yes, of course. We are hopeful that this new relief will help boost the supply of essential items to charities, enabling them to reach the people and communities who need them most. The relief will also make it easier for businesses to give surplus stock a second life, supporting families and communities across the UK and strengthening the circular economy by reducing waste and landfill. I hope very much that what the noble Baroness says is not the case. I understand the disappointment of some at not being eligible for this relief. It was important to maintain the structure of existing charity tax reliefs. However, as she asks, we will continue to monitor any potential impacts and accept the evidence. She might like to know that HMT officials will shortly be meeting with the sector to discuss this further.

[Lord Evans of Rainow (Con)]

My Lords, what assessment have the Government made of VAT registration for high street businesses such as mini-markets, vape shops and the like? I recently bought a phone charger and was surprised not to see a VAT receipt, and that business—there are many businesses like this—had significant turnover, well above the VAT threshold. If they are not registered for and not paying VAT, and are not paying national insurance, the minimum wage and corporation tax, that cannot be fair to those legitimate business that do pay their taxes.

--- Later in debate ---

[Lord Livermore (Lab)]

I very much agree with the noble Lord. I think we may have discussed this once before, and I agreed with him then as well. As I understand it, HMRC is absolutely cracking down on this type of behaviour.

[Baroness Kramer (LD)]

My Lords, most foods subject to VAT are high in fat, salt and sugar and are often ultra-processed. Is there a danger that VAT relief will increase the donation of such foods to food banks and charities, putting people already at high risk of obesity and diet-related illnesses at even higher risk? Will the Minister consider excluding HFSS foods, at the very least, from VAT relief?

[Lord Livermore (Lab)]

I am aware of the concerns set out by some, including the noble Baroness, about the inclusion of foods high in fat, salt and sugar within the scope of this relief. The work that many of these companies, such as the Company Shop Group, do to support local communities is crucial, and it is important that the new VAT relief does not undermine their ability to do this work. We have not yet been presented with sufficient evidence to justify carving out from the relief foods high in fat, salt or sugar, but Treasury officials will monitor the situation carefully and maintain an open dialogue with the sector.

[Lord Dodds of Duncairn (DUP)]

My Lords, I welcome what the Minister said about this relief. Could he expand on what regard he had to Article 8 of the Windsor Framework, which requires part of the United Kingdom, Northern Ireland, to be aligned with the EU, rather than with the rest of the UK, in VAT and excise duties? Perhaps he could explain that for not just this instance but other instances where relief may not apply in Northern Ireland, part of the United Kingdom.

[Lord Livermore (Lab)]

I have to apologise to the noble Lord, I am afraid, because I do not know the answer to his question about the applicability of this relief to Northern Ireland under the Windsor Framework. I will investigate that and write to him.

[Lord Watts (Lab)]

My Lords, the banks have opened hubs in some very poor communities. Would it be a good idea for the supermarkets to do the same and put food hubs in decent locations in some of these areas where people find it difficult to get good food?

[Lord Livermore (Lab)]

The location of supermarkets is largely a commercial decision for the supermarkets themselves and not one for me, but I believe that that is exactly what the social supermarkets that the Question relates to are trying to do.

[Baroness Neville-Rolfe (Con)]

My Lords, we on these Benches very much agree that food and other waste should be minimised, and we sympathise with the objective of this measure. However, are the Government satisfied that the proposal will be effectively administered? I speak, of course, as a former retailer.

--- Later in debate ---

[Lord Livermore (Lab)]

I think we are satisfied.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, one thing the Government could perhaps do for people who are on very low incomes and suffering from food poverty is to cap the price of some essential items at supermarkets. Supermarkets make a huge profit from us customers, so capping a few prices might help the general population.

[Lord Livermore (Lab)]

I am not sure that it is for the Government to cap prices. We are working closely with supermarkets to ensure that they are keeping costs down, and competition is thriving in the sector to help keep costs down for consumers. The noble Baroness knows that we are absolutely committed to tackling poverty and ending mass dependence on things such as emergency food parcels and other charitable support. It is why, most importantly, we are tackling the root causes of child poverty and scrapping the two-child limit, which will lift 450,000 children out of poverty by the end of this Parliament.

[Baroness Winterton of Doncaster (Lab)]

My Lords, it can often be the case that the people who might benefit most from donations such as this are not always aware of the positioning of them. I wonder whether more could be done with local authorities to ensure that there is good signposting for people—perhaps, as the Minister said, through family hubs or schools—so that people know where to go in order to benefit from these donations.

[Lord Livermore (Lab)]

I very much agree with my noble friend. It is one of the reasons why Sure Start was so important and so successful under the previous Labour Government. It was an absolute tragedy that the previous Tory Government scrapped the Sure Start scheme, and we saw a massive increase in child poverty as a result. My noble friend is absolutely right about signposting. To go back to the original Question, it is part of the good work that social supermarkets do in communities up and down the country.

[Baroness Boycott (CB)]

My Lords, I declare my interest: I was partly responsible for founding Feeding Britain and bringing the first social supermarkets to London. People talk about the fact that only 8% of food waste makes its way towards either a food bank or a social supermarket. There is a staggering amount of food high up in the food chain in companies that cannot be bothered and the ludicrous situation of some companies manufacturing yoghurts to fulfil contracts to produce anaerobic digestion for renewable energy. The Government could do an enormous amount by opening up this can of worms—this secret source of wasted food—and getting it down the chain to people who need it. A lot of it happens to be very healthy food, such as tins of beans.

[Lord Livermore (Lab)]

The noble Baroness is far more expert in these matters than I am, but I fully understand what she is saying. I am sure that there is a lot in what she says and I am sure that the Government will look closely at it.

[Baroness Walmsley (LD)]

My Lords, in relation to the question from my noble friend Lady Kramer, does the Minister agree that applying the new nutrient profiling model to surplus food diverted to various organisations could make it easy to carve out less healthy food from the VAT relief?

[Lord Livermore (Lab)]

I totally understand what the noble Baroness is saying. I do not think I said that it was not possible to do that; I said that we had not yet been presented with sufficient evidence to justify doing that. As I say, we will keep monitoring the situation carefully and we will maintain an open dialogue with the sector.

[Lord Spellar (Lab)]

My Lords, before my noble friend the Minister might be tempted down the route of putting price restrictions on food coming from supermarkets, would it not be better to wait and see whether the experiment in Scotland actually succeeds?

[Lord Livermore (Lab)]

For the avoidance of doubt, I was not tempted to go down that path. Having heard from my noble friend, I am even less tempted to do so than I was before.

[Lord Bellingham (Con)]

My Lords, will the Minister say something about the role of supermarkets in helping food banks?

[Lord Livermore (Lab)]

This tax relief is designed to help businesses donate surplus food to social supermarkets. This Government are dedicated to reducing reliance on food banks, which is exactly why we are taking the measures on child poverty that I previously described.

Middle East: Economic Update

Lord Livermore Excerpts

Tuesday 28th April 2026 Lords Chamber

[Baroness Kramer (LD)]

My Lords, the impact of the Iran war has made previous economic forecasts pretty much redundant. We talked last week about warnings from the IMF and the OECD, repeated today by the noble Baroness, Lady Neville-Rolfe, which essentially assess that the UK would suffer more than any other G7 economy. This conclusion is being reinforced by recent inflation and unemployment numbers. The Government’s response has been limited and very much a “wait and see”. Uncertainty is a reason for resilient action, not a reason for inaction. We need to see action now from the Government.

Each day, as an ironic consequence of the war, the Treasury is taking in some £20 million more in taxes, including VAT and the electricity generation levy, so why are the Government not using this money proactively to help people with spiralling living costs? That money could be reducing petrol prices at the pump through a temporary cut in fuel duty. It could be used to cut rail and bus fares or to reduce the price of home EV charging. Families need help now—they need early reassurance on the energy price cap after June and a cancellation of the 5p duty rise due in September.

We strongly support reform of the energy pricing system. Our manifesto made a clear commitment to break the link between gas prices and electricity prices—ours was the only manifesto that had that in black and white—so we are glad that the Government have taken up that approach and that they are moving to a contracts for difference model. But we are still concerned about energy costs for individual households; for small businesses, including hospitality; and for the food and agricultural sector, which has such an impact on the cost of living.

So will the Government now work with the banks to introduce a scheme of low-interest loans for householders who want to adopt energy-saving measures but need a way to finance the upfront cost? Will the Government press Ofgem to investigate the broken energy market, which is in effect blocking small businesses and hospitality from accessing good energy deals? My colleague in the other place, Daisy Cooper, met last week with Ofgem, and it is absolutely clear that there is a case for the energy retail market to answer here in dealing with small businesses and specifically with hospitality. Will the Government recognise the particular need to act on costs in the food and agribusiness sectors, which are being so impacted by this war? That impacts clearly and directly on the cost of living for ordinary people.

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

My Lords, I am grateful for the questions and comments from the noble Baronesses, Lady Neville-Rolfe and Lady Kramer. The noble Baroness, Lady Neville-Rolfe, started her comments by focusing on the IMF’s revised forecasts that were published last week and that we discussed briefly in this House then. As both noble Baronesses know, the IMF reduced its expectations for GDP growth in the UK and increased its expectations of inflation. Both of these build on its judgment that the UK is more exposed to energy price shocks than our counterparts—a problem that the previous Government, as I have pointed out before, failed to address over 14 years. This builds on the IMF’s observation, following the last energy crisis, that the UK had higher inflation than other countries in the aftermath of Liz Truss’s disastrous mini-Budget and the previous Government’s untargeted and unfunded support package, which contributed to a more persistent rise in inflation and interest rates in this country than elsewhere.

I noticed, though, that the two noble Baronesses did not mention the positive economic news that came out last week. The latest GDP figures show that the economy grew faster than expected in the three months to February and that growth for the three months to January was upgraded. Last week’s data releases also showed unemployment coming down, real wages continuing to rise and borrowing in the year to February falling by £20 billion compared with last year. Neither noble Baroness mentioned any of those figures in their comments.

The noble Baroness, Lady Kramer, said that previous forecasts are now redundant and that we have no resilience. Previous forecasts are not redundant because they show that, going into this crisis, Britain was well placed to weather this conflict. At the time of the spring forecast, inflation was at 3% and set to fall to target; that compares with 11% at the start of Russia’s illegal invasion of Ukraine. We were in a much stronger position at the outset of this crisis, in terms of inflation, than we were then.

The spring forecast also showed that borrowing was set to fall more over this Parliament than in any other G7 economy. GDP per capita was forecast to rise by 5.6% over this Parliament, compared with a fall of 0.2% in the previous Parliament. We had increased headroom to more than £23 billion, making the right decisions to make sure that we had the necessary fiscal buffers to weather this conflict. As a result, we are well placed.

Some of the figures that came out last week, which neither noble Baroness mentioned, show that our economic plan was indeed working, but no one denies that we must do more on economic security so that the UK does not continue to be more exposed to energy price shocks than our counterparts. Since the election, we have invested in clean, homegrown energy, in renewables and in nuclear. Last week the Chancellor announced steps to go further: harnessing our domestic supply of oil and gas production in the North Sea, which the noble Baroness, Lady Neville-Rolfe, mentioned; further removing barriers to new renewables investment; and reforming our energy system by further weakening the link between high gas and electricity prices. I am grateful to the noble Baroness, Lady Kramer, for her support for that measure. I believe our economic plan was the right one before the war started; it is even more essential now in a world that is even more uncertain.

The noble Baroness, Lady Neville-Rolfe, spoke about defence spending. We are delivering the biggest sustained increase in defence spending since the Cold War. The Chancellor has approved access for the Ministry of Defence to use the special reserve to deploy additional capabilities in the Middle East, meaning that the net additional costs of these operations will be funded by the Treasury. We are investing £270 billion over this Parliament, after years of our Armed Forces being neglected under the previous Government. We will increase defence spending to 2.6% of GDP from 2027, and we are increasing spending on defence by £5 billion in this year alone. In answer to the noble Baroness’s specific question, the defence investment plan will be published in due course.

The noble Baroness, Lady Neville-Rolfe, mentioned oil and gas in the North Sea. As she knows, I agree with much of what she said on that point. Oil and gas production from the North Sea is an important and valuable resource, and its workforce is a vital asset for this 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. Last week, in advance of legislation, we published further details on tie-backs, which external analysis has predicted could result in tens of millions more barrels of oil being available for UK supply. Last week’s announcement also gives industry greater clarity to support investment in these projects and maximise the supply of our existing sites to support our energy security. The Government will legislate to introduce these changes in due course.

The noble Baroness asked specifically about Jackdaw and Rosebank. Development proposals are a matter for the North Sea Transition Authority and the Offshore Petroleum Regulator for Environment and Decommissioning. I am not able to comment on the specifics of any individual project while the regulatory process is under way, or on the investment decisions of individual operators. The Secretary of State for Energy Security and Net Zero will make a decision regarding the environmental impact assessments for these projects in the coming months.

The noble Baroness, Lady Kramer, asked about action to tackle energy bills. As she knows, we do not yet know what the full impact of this conflict will be, so we must be agile in responding appropriately at each moment. It remains the case that the best way to protect families and businesses is rapid de-escalation of this conflict. She knows that we have taken action already in a previous Budget, when we reduced energy bills by £150. We also froze rail and bus fares, as she asked, and we froze prescription charges, so we have done many of the things that she is calling for. She knows, too, that the price cap is giving households certainty on their bills until July, ahead of the winter months when people use 78% of their gas.

It is important to point out, as we respond to this crisis, that we must learn from the mistakes of the past. The previous Government pushed up borrowing, interest rates, inflation and mortgage costs with an unfunded, untargeted package of support under Liz Truss. Both noble Baronesses mentioned the importance of inflation; we must absolutely learn the lessons of the past. We are planning for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our fiscal rules to keep inflation and interest rates as low as possible.

[Lord Clarke of Nottingham (Con)]

My Lords, one of the big problems that the Government faced when they took office was an unsustainable level of public debt and a totally unsustainable level of debt interest being paid by taxpayers each year on that debt. The Government saw clearly at the time that one thing they had to do was to stop the welfare budget exploding as it is and increasing so rapidly. They introduced some modest measures, which they then dropped as soon as they faced discontent from left-wing Back-Benchers in the House of Commons.

Do the Government intend to allow the welfare bill to increase by the hundreds of billions of pounds forecast at the moment? Do they intend to do nothing to alter the financial incentives, which they have made better for large families, not to seek work if they have established a good claim to benefits? These are major national problems that really ought to be tackled in the face of this worrying economic position, and the Government, almost two years into office, seem to be slipping into inaction, with a complete lack of leadership, allowing Back-Benchers in the House of Commons to leave the problem to fester.

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. We are repairing the public finances. At the time of the spring forecast, borrowing was set to fall more over this Parliament than in any other G7 economy. We are now borrowing below the G7 average, something that was not achieved in any of the 14 years of the previous Government. Just last week, we saw borrowing in the year to February fall by £20 billion compared with the previous year.

The noble Lord is absolutely right, of course, that the welfare system requires reforming. In the last five years of the previous Government, spending on welfare increased by £88 billion so, clearly, reform is necessary. There might not be consensus on what to do about it, but no one would believe that the system we inherited is working. It abandoned too many people to a life on benefits, wrote off too many people as too sick to work and condemned too many children to be too poor to eat. That is not a system that does not require reform, and reforming it we are.

To tackle fraud and error, we are increasing the proportion of face-to-face assessments for PIP from 6% in 2024 to 30%, saving £4.6 billion. We are rebalancing universal credit to incentivise people to work, rather than encouraging inactivity. We are redeploying 1,000 work coaches to support sick and disabled people who were previously left without contact. We are also supporting people to move into work, with £3 billion of investment into the pathways to work employment support and a £1.5 billion investment in the youth guarantee and the growth and skills levy.

[Lord Fox (LD)]

My Lords, returning to defence spending, the Minister referred to the biggest sustained increase in that spending. If it happens, we will welcome it, but it does not happen until the defence investment plan is published. I noted the slight smile on his face when he said, “in due course”, but if that money is not forthcoming then the GCAP project will not have its next stage payment. If it is not forthcoming, there will be SMEs across the country waiting for contracts to go but will not be able to fulfil them, because they will be out of business. Last week, the noble Lord, Lord Dodds, and I heard the Estonian Defence Minister specifically call out the United Kingdom for being slow to come up with the money. When will the Treasury release the defence investment plan, because, if it does not, there will be consequences?

[Lord Livermore (Lab)]

Of course there are consequences; I agree completely with the noble Lord. He talks of a hypothetical of the defence investment plan not happening. It will happen and, as I have said already, it will be published in due course.

[Lord Bridges of Headley (Con)]

My Lords, in response to my noble friend Lord Clarke’s question, the Minister spoke of the cuts that the Government are planning to make to the welfare budget. Is he saying that those cuts are sufficient and that that is all the Government will be doing?

[Lord Livermore (Lab)]

I do not have a crystal ball and I cannot look ahead to everything the Government will be doing, but I can tell the noble Lord, as I said to his noble friend, that we are reforming the welfare system.

[Lord Redwood (Con)]

In Washington, the Chancellor pledged to avoid unnecessary trade restrictions. Can we look forward to the Government cancelling the bad idea of introducing a large carbon border tax or tariff, which would be a penalty on British consumers and a further boost to costs, making British industry less competitive?

[Lord Livermore (Lab)]

No, and I disagree with the noble Lord, as I am sure I do on many issues. He talks about trade restrictions. He obviously championed a Brexit which put up massive trade restrictions with our nearest trading partners—

[Lord Redwood (Con)]

Tariff free!

[Lord Livermore (Lab)]

It was estimated at the time to be costing us some 4%, subsequently estimated to be 8%, of GDP, so he has put up massive tariff barriers with our biggest partner, which is not something that is in favour of free trade. He talks about it being tariff free, but he knows that the trade barriers in place are equivalent to some 20% in terms of tariff.

[Lord Ahmad of Wimbledon (Con)]

My Lords, I declare my interest as a member of the International Relations and Defence Committee. Does the Minister agree with the assessment made by the chair of the committee, the noble Lord, Lord Robertson, about complacency in the Government? Bearing in mind that the theme of this Statement is the Middle East and the Strait of Hormuz, we have seen the Prime Minister, together with President Macron, announce UK leadership as and when this conflict ends—we hope it will be soon—in marshalling and providing support for the Strait of Hormuz. With the defence investment plan due, to quote the Minister, “in due course”, does he think that is a sufficient response, bearing in mind the urgency of providing our allies, particularly those in the Gulf, with the required support?

[Lord Livermore (Lab)]

I have the greatest respect for my noble friend Lord Robertson but I disagree with him. Looking at the decisions that the Prime Minister and Chancellor have taken, we are delivering the biggest sustained increase in defence spending since the Cold War. As I have said already, and I am sure will continue to say, the defence investment plan will be published in due course. The noble Lord spoke of the international action that the Prime Minister has led; he knows that the Prime Minister has led global action by convening with the President of France a summit of nations to work together to support freedom of navigation through the strait. He will know that the UK will continue to play its part through engagement with many industries, including the insurance industry, to support shipping when the conditions allow.

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

My Lords, does the Financial Secretary agree that, rather than increasing revenues, an oil price of more than $100 a barrel is far more likely to reduce them because of the wider effect on the economy? Does he agree that, at a time like this, when revenues are likely to be hard to come by, the Government should be very cautious about agreeing to increased spending proposals of the sort we have been listening to today?

[Lord Livermore (Lab)]

I agree with the noble Lord on that point. He is far more expert in these matters than me and was in the Treasury through many more crises than I have been, so he has great experience in this matter. He is absolutely right that the IMF showed last week that the impact on the size of our economy and GDP could be significant. No one quite knows yet what the full impact of this conflict will be; that will depend on its duration and severity. However, we must be agile in responding appropriately at each moment.

The noble Lord is absolutely right that, as we respond to this crisis, we should learn from the mistakes of the past. The previous Government, as I have said already, pushed up borrowing, interest rates, inflation and mortgage costs with an unfunded, untargeted package of support under Liz Truss. That package gave the most support to the wealthiest households: between 2022 and 2024, under the previous Government, households in the top income decile received an average of £1,350 of direct energy bill support. That left us with high levels of national debt and a cheque written then for a bill that is still being paid today. The party opposite talks about the importance of inflation, but we will not tackle inflation through an unfunded, untargeted package of support like we saw in the past.

[Lord Howell of Guildford (Con)]

My Lords, as the Minister says, no one quite knows yet the impact, particularly on the oil and gas sector. I declare an interest as a co-author of the original 1979 plan for sharing oil reserves in the event of a crisis. The crisis then was, of course, far bigger—not smaller, as the IEA says—than anything we are facing now.

Can I offer the Minister one piece of advice on the Government’s response? I know it is part of a much bigger jigsaw. The short-term impact of an oil shock, small or large, in any region, may be to push prices up, but they always come down very quickly, and the oil price is nearly always lower after these kinds of upsets than it was before. There is plenty of oil on the high seas, and plenty of oil can be added into the world’s supplies. And I gather that, if you have a big enough yacht and know the right people, you can get through the Strait of Hormuz without much difficulty. I suggest to the Minister that the greatest danger of using the oil price situation as an excuse for a lot more controls, caps on prices and so on, is that that will cause more danger and suffering than any possible shortage or temporary disruption in refined oil, imported or exported. Please could the Minister tell his colleagues to go very carefully in that area?

There are all sorts of other, bigger issues, but the current oil crisis is small beer compared with what we have had in the past. The economy can handle it pretty well without too much direction and involvement of a complicated kind, which could make things much worse and increase suffering.

[Lord Livermore (Lab)]

I am particularly grateful to the noble Lord for his optimism, which is much needed at times. Let us hope that he turns out to be correct. As I have said already, the long-term consequences of this are hard to predict at this point; they will depend on the severity and duration of the conflict. However, I think the noble Lord is saying that we need to make sure that our response is temporary and does not have long-lasting impacts. One of the principles that the Chancellor has set out for our response is that it should be temporary.

[Lord Scriven (LD)]

My Lords, one of the implications of what has happened in the Middle East is that the United Arab Emirates has announced that it is withdrawing from OPEC, which will have an impact on global oil market volatility. In the light of this new scenario, are the Government planning to take extra steps to shield energy-intensive industries from potentially very large swings in oil prices?

[Lord Livermore (Lab)]

The noble Lord is absolutely correct to say how important it is to do that. That is why we have taken further action to weaken the link. Last week, the Chancellor announced plans to weaken the link between high gas and electricity prices and to prevent spikes in energy prices from driving up inflation and costs for households. That is why the delinking steps that we have taken are so important.

The Chancellor also announced the extension of the British industrial competitiveness scheme, which was a commitment in the industrial strategy. That will reduce electricity costs from April 2027 by around 25% for electricity-intensive manufacturing frontier sectors in the industrial strategy and foundational sectors in their supply chains. Last week, the Chancellor announced that over 10,000 businesses are now expected to benefit from the scheme, rather than 7,000 as previously planned. Eligible businesses will also benefit from a one-off backdated payment in 2027, covering the support firms would have received if the scheme had been in place from April 2026. The consultation on scheme design and eligibility was published last week.

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

My Lords, does my noble friend the Minister agree that conflict in the Middle East underlines the case for ever-stronger relationships with the EU, including on trade? Secondly, does he agree that on industrial strategy, the priority must be protecting plants and jobs? To what extent can we use our considerable procurement power to ensure that we protect the jobs and skills in this country?

[Lord Livermore (Lab)]

I do agree with what my noble friend said. Already, even before this crisis, the damage that Brexit was doing to our economy was apparent. As I say, at the time of Brexit it was estimated it would cost about 4 percentage points of GDP. That has now risen to between 6 and 8 percentage points of GDP. Obviously, cutting ourselves off from our closest trading partner was never going to be good for the economy, and that has been seen absolutely to be the case. It is why this Government have put in place the reset with our European friends, and we are deepening our trade relationships. The Chancellor set out her intention to deepen further our economic relationship with the European Union in her recent Mais Lecture, and I hope we will see more action on that in the near future.

In terms of the industrial strategy, I absolutely agree with my noble friend. That is why, for example, as I was just saying, the British industrial competitiveness scheme is so important in helping electricity-intensive manufacturing frontier sectors. That was a commitment given in the industrial strategy that has now been put in place. What my noble friend says about procurement is absolutely right. The noble Baroness, Lady Neville-Rolfe, will know how hard it is to change procurement rules in government, but I absolutely agree wholeheartedly with what my noble friend says.

[Lord Swire (Con)]

My Lords, when the Minister rehearsed his list of government initiatives and investments, he left one thing out: the issue of gas storage. Can he tell the House this afternoon how many days of gas we have in storage in the UK at the moment available to us, and what the Government are proposing to do to expand that capacity?

[Lord Livermore (Lab)]

I do not actually have with me the figure of the number of days of gas storage. I apologise if I should have that figure with me: I am more than happy to find it and to write to the noble Lord.

[Lord Londesborough (CB)]

My Lords, as a fair-minded Cross-Bencher, I acknowledge that there have been some encouraging signs in the first quarter, particularly GDP growth and employment in February. But I also recall that we had a brief fireworks display in Q1 last year, followed by a flatlining of the economy throughout H2. Now, as we know, as a result of the war in Iran, both the IMF and the OECD have marked down the UK’s employment forecast by more than any other G7 economy. So I hope the Government will be true to their pledge to be the fastest-growing economy in the G7—noble Lords will remember that pledge—by doing all they can to prove those forecasts wrong: none more so than for our SMEs, as we have heard, particularly our start-ups and scale-ups, which are swimming against the tide of rising taxes and increasing costs. What meaningful encouragement are the Government offering our SMEs, specifically to stimulate growth activity, investment and output, if we are to believe in this growth mission?

[Lord Livermore (Lab)]

I am very grateful to the noble Lord for his question. I have much experience of his fair-minded Cross-Bencher activities, and I am always grateful to him for his comments. He is absolutely right that there was encouraging economic news last week. As I said, the latest GDP figures show the economy grew faster than expected in the three months to February, and that growth for the three months to January was upgraded. He is obviously also right to say that Iran now presents serious challenges for our economy, and for all global economies. He is also absolutely right to say that it is important that we beat the forecasts. We have beaten the forecasts before: we beat them last year and I am confident we will be able to do so again.

We must continue to bear down on inflation and to build our energy security, both of which we have discussed already. Of course, we must continue with our growth plan. We must continue investing in growth-enhancing capital, transport and housing, for example, with record investment in R&D. We must continue reforming the planning system, to get Britain building; we must continue deepening our economic relationship with the European Union; we must make sure we have the fastest adoption of AI in the G7, which we have set as an objective; and we must deliver an effective regional growth strategy, so that growth and the increase in living standards are felt throughout our country.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, the Treasury gets criticised for being too short-termist these days. I am wondering whether it undertakes market research among the public about the extent to which there may be an opportunity to get greater investment from them if we were ambitious enough to try one or two tactics such as, for example, reviving post-war credits. That produced money for the Government when they needed it and paid a return. People invested very widely after the last war, a long time ago; I am looking backwards. Looking forwards and at the Front Bench of the Tories, they are very much in support of public/private partnerships. When are we going to get that moving? I believe that, if we did market research, we would find that there is a view among the public that they would be willing to invest and this would provide new revenue.

--- Later in debate ---

[Lord Livermore (Lab)]

My noble friend is consistent in his support for public/private partnerships. He knows that I agree with him on that. He is also a consistent champion of greater levels of retail investment. He will know that we have launched a new model of public/private partnerships. We have said, for example, that they could be suitable for projects such as the Lower Thames Crossing, and we will look at additional projects where that model could add additional investment to our economy.

Online Challenger Banks

Lord Livermore Excerpts

Monday 27th April 2026 Lords Chamber

[Lord Ranger of Northwood]

To ask His Majesty’s Government what assessment they have made of how online challenger banks assess and process new applications for accounts.

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

My Lords, the decision to provide banking services is largely a commercial one. Banks have strict obligations to ensure the legitimacy of a new customer and to protect against financial crime, and all new customers opening an account must be subject to due diligence under the money laundering regulations. The regulations are not prescriptive about how this should be done. The FCA expects banks to treat customers fairly and to take a proportionate approach commensurate with their assessment of the risk.

[Lord Ranger of Northwood (Con)]

My Lords, I thank the Minister for that Answer. I welcome the support and the need for regulation of new challenger banks—and all banks—but, in my career of delivering public services with innovation, I have noticed the need to balance innovation with fairness. From personal experience, and more from what I have heard from a great many members of the public, this balance does not seem to be right at the moment in a sector that I really feel we want to champion: fintechs and challenger banks. So does the Minister feel that the balance between the innovation and the growth we are looking to see is right, when we see services providing no explanation or opportunity for engagement when making decisions such as offering banking services, especially as we are now looking at an era of digital assets and agentic banking, where we would like to see fairer digital services for all?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question and for our brief conversation last week about some of the issues he has experienced. He will be aware that many of the issues he raises are ultimately commercial decisions for individual financial institutions, and how they choose to communicate with their customers and potential customers are largely decisions for themselves. He will know that, where a bank decides not to allow an account, it can disclose why it has made that decision, but it is not generally required to do so or to provide detailed reasons. In some cases, banks are legally constrained in what they can or are able to say. I think the noble Lord is interested in the use of AI in some of these decisions. The FCA is clear that automation does not remove a firm’s responsibility; it must retain effective oversight of automated decisions and ensure that decisions are fair and made in accordance with regulatory requirements. But, as I say, the decision about how and whether to communicate that is largely a commercial one for the individual financial institution.

[Lord Stirrup (CB)]

My Lords, has the Minister seen reports that members of defence companies are being refused accounts with challenger banks? The whole issue of de-banking, the difficulty that defence companies are having in finding suitable accommodation to rent, and the removal, with the assistance of the Edinburgh Council, of Leonardo’s recruiting advertisements from the city’s trams are all surely indications that ESG concerns are being used for overtly political purposes. Is this not yet another baleful consequence of the Government’s failure to lead a national conversation on defence, which they themselves admitted was so badly required?

[Lord Livermore (Lab)]

I thought I was going to be able to agree with everything the noble and gallant Lord said—right up until the last sentence. I agree with 99% of his question, and I absolutely agree that access to finance for defence firms is incredibly important. The instances that he cites are troubling, and I share his concerns about them. Access to finance is a significant issue for defence firms, particularly SMEs. No company should ever be denied access to financial services solely on the basis that it works in the defence sector, and the banking sector should never take a blanket approach to any one sector. The Government are actively engaging with banks to ensure that they understand the importance of the defence sector and the FCA’s work to understand why banks might close or reject accounts. Where it has found areas in which firms need to improve customer outcomes, the Government expect firms to consider the FCA’s findings.

[Baroness Kramer (LD)]

My Lords, does the Minister find, as I have done, in conversations perhaps not dissimilar to those with the noble Lord, Lord Ranger, that the challenger banks and fintechs are largely serving the same group—although perhaps more efficiently—that is served by the high street banks? Therefore, will he look much more seriously at the potential not just of banking hubs but of community development financial institutions and a way to combine them, so that small businesses can finally get access to the loans and services they need and that individuals who remain excluded finally have access to the banking sector?

[Lord Livermore (Lab)]

I agree in large part with what the noble Baroness says. As she will know, as part of the small business strategy, the Government have introduced a range of measures to remove barriers to accessing finance for SMEs. She will know, too, that access to banking services is vital for businesses across the UK. While provision of financial services to companies is largely a commercial matter, the Government of course believe that all customers should be treated fairly.

On access to banking for consumers and banking hubs, we have set out an ambition to have 350 banking hubs. Cash Access UK will deploy a banking hub wherever the industry co-ordinating body responsible suggests that one is appropriate.

[Lord Popat (Con)]

My Lords, during my time as a trade envoy to Rwanda and Uganda, I noticed first hand that UK businesses could open a bank account in those countries in less than five minutes, but it will take three months, if they are lucky, to open a bank account here. The Minister mentioned that it is a commercial decision, but is heavily legislated for through the Bribery Act, the money laundering Act and many others. Can the Minister please look into this, particularly for SMEs that are starting new businesses and are having real difficulty opening a bank account?

[Lord Livermore (Lab)]

The noble Lord will know that the money laundering regulations rightly mean that, for new customers opening an account, banks are required to take due diligence measures to verify the customers’ identity, assess the intended purpose of the account and flag any suspicious transactions to law enforcement. The regulations are not prescriptive in setting out specific steps that banks should undertake to satisfy customer due diligence, but instead require them to take a proportionate approach, which I think is what the noble Lord is asking for. Each bank will therefore have its own policies and procedures, and those policies should be informed by each bank’s own assessment of the risk faced by its services and customers, based on sources such as the national risk assessment of money laundering and terrorist financing.

[Lord Watts (Lab)]

My Lords, this year has seen a massive increase in offshore unregulated betting. Are these challenger banks following the same procedures and checks as the normal high street banks?

[Lord Livermore (Lab)]

Yes, they would be required to do so.

[Lord Vaizey of Didcot (Con)]

My Lords, the anti-money laundering regulations are imposed on people who are politically exposed without any nuance whatever, and not in accordance with the legislation or regulations, which require banks to assess people on a case-by-case basis—nor are customers told why they are being refused. There appears to be no mechanism for any kind of appeal or redress. Will the Minister talk with the FCA and the numerous ombudsmen who appear to work on this area and at least allow customers to talk to a human being rather than a computer that is programmed to say no in all circumstances?

[Lord Livermore (Lab)]

I fully recognise and understand many of the things the noble Lord says. I understand that being a politically exposed person means enhanced scrutiny and administrative burdens and has impacted many noble Lords. Banks and other regulated firms must apply additional checks to customers who meet the definition of a politically exposed person, as well as to their relatives and close associates. That is to mitigate the increased risk that they are targeted for bribery and corruption attempts. While those checks are important, it is essential that they are proportionate to the risks posed; checks should account for the nature of the proposed business relationship and the potential for the product to be misused.

The noble Lord will know that changes to the money laundering regulations now require banks to treat domestic politically exposed persons as inherently lower risk and, in the absence of any other high-risk factors, banks should apply due diligence measures proportionately. In July 2024, the FCA also published its review of the treatment of politically exposed persons, which identified a range of required improvements by the firms that it assessed.

[Baroness Neville-Rolfe (Con)]

My Lords, I think we all recognise that there is a balance to be found between protecting the consumer and encouraging enterprise and growth in this area. But my observation, the observation of many Peers and my own experience of trying to open a new account with Metro Bank is that there is a vast bureaucracy around the FCA and money laundering rules and that that is disadvantaging our challenger banks. Does the Minister agree that the current system tends to favour incumbents, which obviously harms growth and consumers? What practical steps can the Government take to help challenger banks meet the standards efficiently and compete on a level playing field, which we need for innovation?

[Lord Livermore (Lab)]

I do not think I agree with the noble Baroness on the question she asked about disadvantaging challenger banks. As I have said already, the regulations are not prescriptive in setting out specific steps that banks should undertake to satisfy customer due diligence; instead, they require them to take a proportionate approach. Each bank therefore has its own policies and procedures, which should be informed by each bank’s own assessment of the risks faced by its services and customers.

World Economic Outlook: UK Growth and Inflation

Lord Livermore Excerpts

Wednesday 22nd April 2026 Lords Chamber

[Lord Londesborough]

To ask His Majesty’s Government what assessment they have made of the estimate in the International Monetary Fund’s latest World Economic Outlook, Global Economy in the Shadow of War, published on 14 April, that the UK will have the lowest per capita growth and the joint highest inflation rate in the G7 this year.

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

My Lords, we did not start this war, but it affects us. The IMF’s updated forecasts build on its judgment that the UK is more exposed to energy price shocks than our counterparts—a problem this Government are tackling but which the previous Government failed to address in 14 years. The IMF has described our plan as the appropriate response and forecasts that the UK will be the fastest-growing European G7 economy this year and next.

[Lord Londesborough (CB)]

I salute the Minister for his stout defence and robust response, but it is not altogether shared by the gilt markets: witness our highest borrowing costs for 18 years. It is not just the IMF but the OECD—both have cut their growth forecast for the UK by a greater margin than for any other G7 country. Yes, they flag up the openness of our economy and the gas-intensive nature of our energy mix, but they also point to the UK’s zero per capita growth throughout the second half of last year. With inflation now rising, is the Chancellor not premature in making repeated claims of having built stability and resilience in our economy?

[Lord Livermore (Lab)]

No, I do not think she is, because the spring forecast showed precisely that: that Britain is well placed to weather this conflict. Inflation was at 3% and it was set to fall to target; borrowing was set to fall more over this Parliament than in any other G7 economy; GDP per capita was forecast to rise by 5.6% over this Parliament, compared with a fall of 0.2% in the previous Parliament; and we had increased headroom to over £23 billion. As I say, all these things mean we are well placed to weather this conflict. On the actual outturn data, last week’s figures show that the economy grew faster than expected in the three months to February, growth for the three months to January was upgraded, and yesterday’s labour market figures for February showed unemployment coming down and real wages continuing to rise.

[Lord Hintze (Con)]

My Lords, does the Minister agree that the only genuine way to look at the prosperity of our citizens in this country is GDP per capita? Does he also agree that one of the big detractors of growth in GDP per capita is the growing and significant welfare spend? If not, why not?

[Lord Livermore (Lab)]

I am very happy to agree with the noble Lord on the first part of his question: as I have said already, GDP per capita at the time of the spring forecast was forecast to rise by 5.6% over this Parliament. That compares with a fall of 0.2% in the previous Parliament—the worst Parliament on record for living standards. On welfare spending, as he knows, the previous Government increased welfare spending by £88 billion.

[Baroness Kramer (LD)]

My Lords, the Government keep looking in the rearview mirror. The IMF report and today’s inflation numbers are telling us that forecasts made in January essentially now go into the bin, and what we need are policies to deal with uncertainty and provide resilience. The new BICS provides energy-intensive industries with some benefits, but no money will flow for a year. When will firms know what that money will be and when they will get it so that they can plan? Is anything going to be put in place for food and agriculture? We are seeing a real rise in food prices and potential food shortages. Small businesses are, frankly, on the brink. Are there new policies to come forward that will provide the resilience we need?

[Lord Livermore (Lab)]

The noble Baroness is absolutely right to point to the need for economic resilience. As she knows, we must do more on economic security so that the UK does not continue to be more exposed to energy price shocks than our counterparts are. Since the election, we have invested in clean homegrown energy—renewables and nuclear. Yesterday, the Chancellor announced steps to go further, harnessing our domestic supply of oil and gas production from the North Sea, further removing barriers to new renewables investment, and reforming our energy system by further weakening link between high gas prices and electricity prices. The noble Baroness asked specifically about BICS; she will know that the consultation on scheme design and eligibility was published last week.

[Lord Watts (Lab)]

My Lords, is it not the case that inflation, economic growth and living standards were improving until we had the problem with Iran? Is it also not the case that, as soon as that problem has gone, the Government have the policies to drive the economy?

[Lord Livermore (Lab)]

My noble friend is absolutely right. The economy, at the time of the spring forecast, showed that we are well placed going into this conflict. Inflation was at 3% and is set to fall to target—a much lower starting point than when Russia illegally invaded Ukraine. Borrowing was set to fall more over this Parliament than in any other G7 economy. We had increased headroom for over £23 billion, giving us the buffer to respond to these shocks, and GDP per capita was forecast to rise. Therefore, my noble friend is absolutely right. Outturn data for February, the final month before this conflict began, showed that the economy grew faster than anyone was expecting.

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

My Lords, I encourage the Financial Secretary not to become mesmerised by IMF forecasts. The British economy has proved remarkably resilient over the past 18 years in the face of a succession of shocks. Generally, the Government have got into difficulty when the Treasury and the Bank have done too much rather than too little. Can he confirm that any interventions will be targeted and that the Government will maintain their inflation target and stick to their fiscal rules?

[Lord Livermore (Lab)]

I absolutely confirm to the noble Lord all three of those points. As he knows, the price cap is giving households certainty on their bills until July, ahead of the winter months. As we respond to this crisis, we must absolutely learn from the mistakes of the past, some of which he mentioned. The previous Government pushed up borrowing, interest rates, inflation and mortgage costs with an unfunded, untargeted package of support under Liz Truss, and they gave the most support to the wealthiest households. We will not repeat the mistakes of the previous Government. We are planning for every eventuality so that we can keep costs down for everyone and provide support for those who need it most, acting within our fiscal rules, as the noble Lord said, to keep inflation and interest rates as low as possible.

[Baroness Neville-Rolfe (Con)]

My Lords, the economic forecasts set out by the IMF and, indeed, by the noble Lord, Lord Londesborough, are very concerning from a national standpoint. Party passions aside, I believe that we must pursue a national growth path in the national interest. That needs to include a reduction, not an increase, in regulation, especially in building and planning; a cut in welfare spending, as we have heard; support for enterprise; and full utilisation of our energy resources. Does the Minister agree with that?

[Lord Livermore (Lab)]

Yes, and we are doing most of that, but the noble Baroness is opposing most of it. She said that we need to pursue a growth path. She will know that one of the most important things for growth is keeping inflation and interest rates as low as possible, but her party has unfunded proposals to deal with this crisis that would stoke inflation and put up interest rates. Exactly the wrong thing to do now would be to have a knee-jerk response to this crisis that would put household finances at risk. During the last energy shock, the previous Government got the response completely wrong, which meant higher inflation, higher interest rates and higher taxes. We will not repeat those mistakes.

[Lord Leigh of Hurley (Con)]

As well as the OECD report, the respected EY Item Club has said that the economy will flatline in the second and third quarters, leading to a real risk of recession. Deloitte has said that business confidence is at its lowest since Covid, and unemployment is thus now expected to rise to 5.8% by 2027. One of the reasons for that is the Employment Rights Act. The Prime Minister may not respect employees’ rights but business does, and business is stopping hiring for that reason. Given the war, is it not time to soften the effects of the Employment Rights Act?

[Lord Livermore (Lab)]

The noble Lord pointed to some forecasts that are being made, but he then drew the wrong conclusion. I point him to the conflict going on in Iran: that is not a war that we started, but it will affect us. As I have already said, we went into this crisis with the economy well prepared to weather it, which we are doing. The outturn figures for last week showed that the economy grew faster than expected in the three months to February. When the data for January came out, the noble Lord asked me a topical Question, which I answered. That data was upgraded this week for that exact month, but he did not mention that. He keeps talking about one month, but one month comes after another—they tend to add up. The outturn figures from before the conflict began showed that the economy was growing faster than anyone expected. Of course this war will have an impact on our economy, and it is this Government’s responsibility to ensure that working people weather that in the right way.

[Lord Wallace of Saltaire (LD)]

My Lords, I declare an interest as a recipient of very considerable welfare payments in the form of my old-age pension and my wife’s old-age pension. The whole discussion about cutting welfare seems to leave out the very substantial chunk of welfare that goes to those of us who are retired. Does the Minister think that all the effort in cutting welfare has to be on the young, or does he think that any discussion about cutting welfare has to include the old as well?

[Lord Livermore (Lab)]

Clearly, we need a welfare system that works. No one believes that the system that we inherited is working. It abandoned too many people to a life on benefits, wrote off too many people as too sick to work and condemned too many children to be too poor to eat. That is why we are reforming the welfare system.

Credit Institutions and Investment Firms (Miscellaneous Definitions) (Amendment) Regulations 2026

Lord Livermore Excerpts

Monday 20th April 2026 Lords Chamber

Moved by

[Lord Livermore]

That the draft Regulations laid before the House on 4 March be approved.

Considered in Grand Committee on 15 April.

Motions agreed.