Economic and Taxation Policies: Jobs, Growth and Prosperity

Lord Livermore Excerpts

Thursday 13th November 2025 Lords Chamber

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

My Lords, I congratulate the noble Lord, Lord Elliott of Mickle Fell, on securing this debate and on his thoughtful, interesting and wide-ranging opening speech. I very much look forward to reading his book, once I receive the free copy that I was promised. I also join the noble Lord in his heartfelt tribute to the late noble Lord, Lord Desai.

It has been most enjoyable today to listen to the contributions from so many distinguished noble Lords, and it is a pleasure to respond to this debate. It has been a particular pleasure to hear from noble Lords from the party opposite about how to grow the economy; it is perhaps a pity they did not take their own advice over the past 14 years.

We have heard in this debate from members of the previous Government about how to grow the economy and increase prosperity, despite growth in living standards being one of their greatest failures; we have heard from some of the most prominent supporters of Brexit about how to grow the economy, despite their own disastrous Brexit deal permanently reducing GDP by four percentage points, as mentioned by my noble friend Lord Eatwell; and we have heard from some of the most enthusiastic acolytes of Liz Truss about how to grow the economy—

[Lord Lamont of Lerwick (Con)]

If the Minister will allow me, he spoke about GDP being reduced by four percentage points. I assume he is referring to the OBR’s original projection, which was over the next 15 years. So far, we have not had the 15 years, and he is thoroughly misrepresenting the situation if he is implying that this has already happened.

[Lord Livermore (Lab)]

I do not think I have misrepresented the situation in any way, shape or form. The OBR forecast that around two-fifths of the 4% impact had already occurred by the time the EU-UK Trade and Cooperation Agreement came into force and that GDP will be 2.7% lower by 2025, with the remaining reduction occurring by 2030, meaning the economy will be over £100 billion smaller than it otherwise would have been.

As I was saying, we have also heard from some of the most enthusiastic acolytes of Liz Truss about how to grow the economy, despite the Liz Truss mini-Budget crashing the economy and sending mortgage rates spiralling. I think we have long since abandoned any hope of an apology to the British people from the party opposite for its record on the economy over 14 years, but what is still shocking is its inability to show even the slightest hint of self-awareness for the damage it did to the British economy over the past 14 years or any awareness that that damage continues to scar our economy today, as my noble friend Lord Davies of Brixton clearly set out.

The reality of that record over 14 years is stark, as my noble friend Lord Liddle said. First, there was austerity, mentioned by my noble friend Lady O’Grady of Upper Holloway, which took demand out of the economy at exactly the wrong moment and cut investment, undermining the economy’s ability to grow, and left us ill-prepared for the future. Then a disastrous and tragically misjudged Brexit deal—interestingly, not mentioned by the noble Lord, Lord Elliott, in his opening speech—imposed new trade barriers equivalent to a 13% increase in tariffs for manufacturing and a 20% increase in tariffs for services, reducing total trade intensity by 15%. As a result, as I have said, the economy will be over £100 billion smaller by 2030.

The combined effect of these costly mistakes was devastating. Had the UK economy grown by the average of other OECD countries over those 14 years, it would be more than £150 billion larger today. The previous Parliament was the worst ever for living standards. Inflation hit 11.1% and was above target for 33 months in a row. The noble Baroness, Lady Noakes, mentioned business investment. She may recall that, under her Government, the UK had the lowest private investment levels in the whole of the G7, productivity growth entirely stalled and output per worker grew more slowly than in nearly every other G7 country.

These policy errors, chronic instability and low levels of investment have left deep scars on the British economy, as my noble friend Lord Eatwell set out. As mentioned by the noble Lord, Lord Harper, alongside the forthcoming Budget, the Office for Budget Responsibility will set out the conclusions of its review into the supply side of the UK economy. I will not pre-empt those conclusions today, but the OBR may downgrade the historic assessment of the UK’s productivity and may conclude that the productivity performance we inherited from the previous Government was even weaker than previously thought.

[Lord Bridges of Headley (Con)]

Can the Minister clarify that his argument is that the Government have made no policy errors regarding their economic management over the last year?

[Lord Livermore (Lab)]

I am only five minutes into my speech; let us hear my whole speech before we conclude on that.

The OBR’s productivity assessment will be a look in the rear-view mirror, but the past mistakes of the previous Government do not need to determine our country’s future. While the record of the past 14 years may be even worse than previously realised, it underlines the importance of delivering higher and more sustainable economic growth, which has been the defining mission of this Government since we entered office. The noble Lords, Lord Elliott, Lord Harper and Lord Bridges, and the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, mentioned today’s growth figures. While they are, of course, lower than any of us would want to see, they confirm that the UK was the fastest growing economy in the G7 in the first half of this year and show just how much more there is to do.

We will move further and faster with our growth strategy, set out clearly many times and built on the three pillars of ensuring economic and fiscal stability, reforming the economy and increasing investment. It is welcome that the IMF has said that this strategy focuses on the right areas to increase productivity. This strategy recognises that growth comes not from government but from businesses and investors and that there is a role for a strategic state, not to step back and let businesses fend for themselves, but to act in partnership with business by systematically removing the barriers to growth that it faces.

The first pillar, stability, is the foundation all else is built on. That began with the Government’s first Budget last October. The noble Lords, Lord Harper, Lord Swire and Lord Leigh of Hurley, could not help but mention the £22 billion black hole in the public finances we inherited, which the previous Government sought to conceal from the OBR, but once again—

[Lord Harper (Con)]

Will the Minister confirm that at no point would the OBR, either in interviews or in its documents, confirm the existence of a £22 billion black hole because it absolutely did not?

[Lord Livermore (Lab)]

The report that it produced stopped before the conclusion of the previous Government. It stopped at that Government’s last Budget and of course they had several months left to run. The OBR reported on the period it was asked to report on, yet the previous Government still had several more months to run. The OBR has absolutely concluded that that information was concealed from it, and I think that is a very serious thing for us to know. Once again, noble Lords who mentioned it in their speeches today sought to deny and downplay that black hole—exactly the behaviour that got the country into the mess the previous Government left behind.

Faced with that inheritance, any responsible Government would need to act. One of the decisions we took was to increase the level of employers’ national insurance contributions to help repair the public finances, rebuild public services and restore economic stability, as mentioned by so many noble Lords in today’s debate. Contrary to what the noble Lord, Lord Bridges, said, I acknowledge, as we have always acknowledged, that there are consequences to responsibility and that the increase in employers’ national insurance would have costs to businesses and beyond, but the consequences of irresponsibility for the economy and working people would have been far greater, as we saw in the Liz Truss mini-Budget. Many noble Lords opposite mentioned the importance of small businesses, and I completely agree with them. The Government protected the smallest businesses from these changes by increasing the employment allowance from £5,000 to £10,500. This means that 865,000 employers will pay no national insurance contributions at all, and more than half of all employers will either gain or see no change.

Another area highlighted in this debate by the noble Lords, Lord Elliott and Lord Bilimoria, the noble Viscount, Lord Trenchard, and the noble Baronesses, Lady Noakes and Lady Neville-Rolfe, was the non-dom regime. It is right that everyone who makes their home in the UK pays their taxes here. The Government have therefore removed the outdated concept of domicile status from the tax system and introduced a new residence-based regime. The OBR has certified that the non-dom reforms the Government have implemented will raise £33.8 billion in total revenue, and that figure accounts for some non-doms who are ineligible for the new regime choosing to leave the UK in response to these reforms. The Government will of course continue to work with stakeholders to ensure that the new regime is internationally competitive and focused on attracting the best talent and investment into the UK.

The noble Baroness, Lady Foster, and the noble Lord, Lord Bilimoria, among others, mentioned changes to agricultural property relief and business property relief. The Government made these changes better to target APR and BPR and to make them fairer. The reforms mean that, despite the tough fiscal context, we are maintaining very significant levels of relief from inheritance tax beyond what is available to others. These reforms mean that almost three-quarters of estates claiming APR, including those that also claim BPR, will not pay more inheritance tax.

The economic stability provided in our first Budget is underpinned by our fiscal rules, mentioned by my noble friend Lord Eatwell and the noble Lord, Lord Young of Cookham. Those rules allow us to invest more in capital, alongside a credible plan to grow our economy and bring debt down within this Parliament. We met these fiscal rules in the Budget last year and at the Spring Statement in March, and we will meet them again at the forthcoming Budget.

The second pillar of our growth strategy is to deliver whatever reforms are necessary to remove the barriers to growth faced by businesses and investors. These include planning reforms, which the OBR estimates will add 0.4% to GDP—the biggest policy-driven booster growth with no fiscal cost that it has ever scored. Our pension reforms will unlock £50 billion of investment for businesses and major infrastructure. Our skills reforms will equip firms with the skilled workforce they need to grow. We have begun a reset with the European Union, which I hope the noble Baroness, Lady Kramer, will support, despite not going as far as she argued for in her speech today. We have also reached a trade agreement with the US and signed a new trade deal with India. We have set out a new modern industrial strategy to target high-growth sectors. As mentioned by the noble Lord, Lord Risby, we are cutting the administrative costs of regulation on business by 25%, and we are delivering the Leeds reforms, the widest-ranging reforms to financial services regulation in over a decade.

The final pillar of our growth strategy is investment, which stability and reform are designed to increase. The Government have an important role to play here. The IMF has long warned that a lack of public investment was a significant barrier to growth. That is why we have committed an additional £120 billion of public investment over the next five years, made possible by reform of the fiscal rules. Our fiscal rules ensure that we do not need to cut capital spending, unlike the previous Government which planned to cut it even further, as my noble friend Lord Eatwell observed, which got us into this productivity hole in the first place. We are directing our additional capital investment into growth-driving projects, including new homes, improved transport connectivity and new nuclear projects such as Wylfa, as mentioned by my noble friend Lady O’Grady of Upper Holloway and the noble Lord, Lord Bilimoria, and we are catalysing private investment through the new National Wealth Fund and British Business Bank.

As so many noble Lords opposite have said today, the real prize is increased private sector investment in our economy. Whereas under the previous Government the UK had the lowest level of private investment in the G7, since the election private sector companies have committed over £325 billion-worth of investment into the UK, including during the US state visit in September and, as mentioned by my noble friend Lord Chandos, at the regional investment summit last month—the first, we hope, of many.

Real progress takes time and, as my noble friend Lord Chandos said, we cannot reverse 14 years of underinvestment overnight. But real wages grew more in the first 10 months of this Government than in the first 10 years of the previous Government. Under the previous Government, we saw the worst pay growth in a century, with barely 0.3% growth between 2010 and 2024. The noble Lord, Lord Elliott, spoke about living standards in his opening speech. Living standards are up 2.1% since the election, compared to the 1.8% fall over the last Parliament. That was the only Parliament on record where living standards were worse at the end of the Parliament than at the beginning, as referred to by the noble Lord, Lord Skidelsky.

Whereas the UK was ranked seventh out of seven for projected 2025 growth in the G7 under the previous Government, our growth was the fastest in the G7 in the first half of this year. But we do not expect anyone to be satisfied with growth of 1%. Today’s growth figures reinforce the fact we need to go further and faster, not repeating the previous Government’s mistakes of cutting investment but continuing to create the right conditions for growth.

The first part of our planning reforms will add an additional £6.8 billion to the size of our economy in the next five years, but the next part, our planning Bill, must complete its passage through Parliament before it can make a difference. Interest rates, which rose consistently in the last Parliament, have now been cut five times since the election, but at 4% they are still a constraint on business borrowing and a burden on family finances. Inflation is clearly much lower than the double digits seen under the previous Government, but the choices we make must be focused on getting inflation falling and creating the conditions for interest-rate cuts to support economic growth and improve the cost of living.

As mentioned by the noble Lord, Lord Elliott, in his opening speech, while we have taken action in the industrial strategy to reduce business energy costs by up to £420 million a year, they are still too high and we must go further.

Noble Lords, including the noble Lords, Lord Elliott, Lord Harper and Lord Bilimoria, mentioned the importance of employment. The latest figures show that 138,000 jobs have been created since the election. The OBR forecasts that over this Parliament employment will rise and unemployment will fall, but the figures published this week show exactly why we must go further to get Britain working and get our economy growing. I am grateful for the support for the youth guarantee from the noble Lord, Lord Skidelsky; and the noble Lord, Lord Howard, mentioned the importance of jobcentre reform.

Noble Lords, including the noble Lords, Lord Elliott, Lord Leigh of Hurley and Lord Massey of Hampstead, the noble Viscount, Lord Trenchard, my noble friend Lord Liddle and the noble Baroness, Lady Neville-Rolfe, mentioned the Employment Rights Bill. As noble Lords know, the Bill is still going through its final parliamentary stages. The Government are also supporting businesses to create jobs, innovate and grow, including by reforming our regulatory framework to reduce barriers to growth and investing in our economy.

Many noble Lords, including the noble Lords, Lord Young of Cookham, Lord Petitgas, Lord Horam and Lord Bridges of Headley, and the noble Baroness, Lady Stedman-Scott, mentioned welfare. The Government are committed to reforming our welfare state. We are shifting the focus from welfare to work, skills and opportunities. We have backed that up with £1 billion a year for employment support by the end of the decade. As my noble friend Lord Liddle said, the Government have also announced an independent report into young people and work, to be led by Alan Milburn, which will examine why increasing numbers of young people are falling out of work or education. He will publish his final report by next summer.

Many noble Lords, including the noble Lords, Lord Elliott, Lord Harper, Lord Petitgas, Lord Swire, Lord Wharton of Yarm, Lord Massey of Hampstead and Lord Kempsell, the noble Baronesses, Lady Stedman-Scott, Lady Fall and Lady Kramer, and my noble friend Lord Liddle, spoke about the forthcoming Budget in just under two weeks’ time. There has been much speculation about the forthcoming Budget, as mentioned by the noble Lord, Lord St John of Bletso, but, as my noble friend Lord Chandos rightly suggested, I am not going to comment on individual tax measures today. The Chancellor has asked the OBR to produce a new forecast. She will take decisions based on that forecast, and we will set out our fiscal plans at the Budget in the usual way. The Chancellor will, though, make those decisions mindful of the importance of growth and investment to businesses and to the economy, and it is vital that the tax system supports our growth mission.

The noble Lord, Lord Elliott, spoke of the importance of innovation and enterprise, mentioned also by the noble Lord, Lord Marks of Hale, while the noble Baroness, Lady Fall, rightly spoke about the importance of supporting scale-up businesses. The current rate of corporation tax is the lowest in the G7, and that is supplemented by generous business investment reliefs that directly support investment, including full expensing, R&D tax reliefs and the patent box regime.

The noble Lord, Lord Bridges, mentioned headroom. As the Chancellor said earlier this week, we will continue to

“build more resilient public finances—with the headroom to withstand global turbulence … giving business the confidence to invest and leaving government freer to act when the situation calls for it”.

We have been clear about the principles that will guide the forthcoming Budget. It will protect the NHS and public services from a return to austerity, because it was austerity that choked off investment that would have put our country on a path to recovery after the financial crisis. Instead, we will protect investment in our economy and build on the progress already made to repair the public services. The Budget will support growth, enabling businesses to create jobs and innovate. It will improve the cost of living by doing what is necessary to protect families from high inflation and high interest rates, and it will keep debt under control because the less we spend on debt interest, the more we can spend on the priorities for working people, as the noble Baroness, Lady Kramer, rightly said,

I am grateful to all noble Lords who have spoken in today’s debate, but we will take no lectures from the party opposite, which presided over 14 years of instability, low productivity and economic decline. Where it delivered the slowest projected growth in the G7, growth in the first half of this year was the fastest in the G7. Where it presided over the worst Parliament ever for living standards, living standards have increased by 2.1% since the election. Where it oversaw the worst pay growth in a century, real wages grew more in the first 10 months of this Government than in the first 10 years of the previous one. Where it continually cut capital spending and deterred investment, we are investing for the long term, with £120 billion over the next five years, alongside £325 billion committed by the private sector since the election.

The OBR may conclude shortly that the productivity record of the previous Government was even worse than previously thought, but we will not let those past mistakes determine our country’s future. This Government will invest in the NHS, support growth and improve the cost of living. We will continue to build strong foundations for our economy because that is the only route to securing Britain’s long-term future.

[Lord Elliott of Mickle Fell (Con)]

My Lords, I will be brief. I thank the Library for its excellent briefing note, and all noble Lords for their thoughtful contributions. It has been a superb and stimulating debate; we should consider making it an annual fixture in the Lords calendar.

There are lots of points I would love to pick up on, not least on welfare, the notion of an exit tax, even capital controls, but I get the sense from the House that the thing noble Lords would like to hear from me most on is perhaps Brexit. It was mentioned by the Minister, the noble Lord, Lord Eatwell, and the noble Baroness, Lady Kramer.

There was a lot of talk about the OBR report. I have read that report and it is based on projections brought together before the referendum, before we knew what sort of deal it would be from the EU. It is actually a very old report. Since 2016, it is worth noting that UK economic growth, although less than expected, has been higher than most western European countries. UK trade—

[Lord Livermore (Lab)]

It is just worth noting that the OBR updated those forecasts in 2024 and 2025 and maintained its view that it will reduce GDP by four percentage points.

[Lord Elliott of Mickle Fell (Con)]

It is also worth noting that UK trade with the EU is now higher than it was in 2019, as is UK trade with the rest of the world. The referendum was over nine and a half years ago and we left the EU five and a half years ago. I think it is time to take responsibility for what is going on now with economic growth. The Government should be commended for some measures which have increased economic growth, such as the post-Brexit trade deals—not possible without Brexit—with the US, the Gulf states and India.

I liked the intellectual honesty of saying that we should rejoin the customs union and think the Government should be more intellectually honest if they talk about Brexit. It is worth noting, though, that were we to rejoin the EU, what would the annual membership fee now be? Perhaps £22 billion a year—that would be another £22 billion to think about. I hope the Government consider some of the proposals put forward in the Budget and I beg to move.

Cryptocurrencies: US Regulation

Lord Livermore Excerpts

Wednesday 12th November 2025 Lords Chamber

[Lord Davidson of Glen Clova]

To ask His Majesty’s Government what assessment they have made of the risks to the finance system in the United Kingdom arising from the loosening of regulation of cryptocurrencies in the United States of America.

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

My Lords, the UK is engaged with the US on crypto asset risks through international fora, and we have created a joint UK-US Transatlantic Taskforce for Markets of the Future, for enhanced collaboration on digital assets. The Government are legislating this year for a crypto assets financial services regulatory regime, with the Financial Conduct Authority as the lead regulator, so consumers are protected and firms have the certainty needed to invest and grow in the UK.

[Lord Davidson of Glen Clova (Lab)]

I thank my noble friend the Minister for his Answer. The risks normally associated with cryptocurrencies are volatility, fraud, money laundering and access to criminality. Have these risks been assessed by the Government, and if so, with what result?

--- Later in debate ---

[Lord Livermore (Lab)]

I am grateful to my noble and learned friend for his question. The Government’s approach to crypto assets seeks to strike the right balance between giving firms regulatory certainty and ensuring the sector has the space and flexibility to innovate. The Government recognise that our financial stability, as well as the other considerations that my noble friend mentioned, are associated with crypto assets, but they need to be balanced against supporting innovation and ensuring the UK positions itself as a competitive global destination for digital assets. Internationally, the UK financial authorities have been working, through the Financial Stability Board, to assess and develop supervisory and regulatory approaches to address the global financial stability risks posed by crypto assets and global stablecoins. We are also currently working to put in place a comprehensive domestic regulatory regime for crypto assets as financial services, to ensure the UK has the necessary protections for crypto asset usage.

[Lord Vaizey of Didcot (Con)]

My Lords, I declare my interest as the chair of the All-Party Group on Crypto and Digital Assets. The Minister’s remarks are very welcome. Does he agree with me that the risks around crypto are the risks of not regulating it? With one in four people in Britain now trading cryptocurrency —half of them under the age of 35—regulation has never been more needed. In essence, the key issue is time: we need to get on with it.

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question and pay tribute to his considerable expertise in this matter. I agree with what he said. Crypto assets have the potential to play a significant role in the financial services sector, and the economy more broadly, including through greater transparency, efficiency and security. We are already seeing the benefits that stablecoin can provide in cross-border payments by reducing costs and improving efficiency. Unlocking the full potential for digital assets and blockchain technologies requires payments that interact with them directly, and stablecoins can play an important role in achieving that. It is therefore important for the UK to harness those opportunities and—I agree with him on this—to bring forward legislation, and we will do so.

[Baroness Kramer (LD)]

My Lords, my concern is about the geopolitics. Much of the UK’s trade today is conducted in offshore dollars, which sit beyond the reach of the US Government. As dollar stablecoin replaces traditional dollars, the US Government will get their hands on levers to pressure us and others by threatening to curtail access. Are the Government looking at the key issues of monetary sovereignty? The regulators clearly are not.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. She is not correct to say that the regulators are not looking at that; of course they are taking it into account. She is absolutely right that the US is taking forward US-denominated stablecoin. It is very important that the UK does the same. The Government see stablecoin playing an important role in the diverse and competitive UK payments landscape. We hope that firms will see the advantages of being regulated as stablecoin issuers in the UK and will seek permissions under the new regime for that.

[The Earl of Devon (CB)]

My Lords, at the same time that the US is loosening regulation, as the Minister mentioned, the FCA is midway through its multi-year review of a comprehensive crypto asset regulatory regime. Can the Minister confirm that that review is proceeding in accordance with the published crypto road map? Is there any concern that the crypto sector and the UK’s innovation will be hampered by increased regulation at a time when other jurisdictions are loosening their regulations?

[Lord Livermore (Lab)]

I am not sure I share the noble Earl’s characterisation of the distinction between the two regimes. The US will legislate for their interests, and we will legislate for ours. The US passed legislation for the regulation of stablecoin in the summer. US regulators will publish their regulatory rules in mid-2026, with a backstop date of January 2027 for the US regime to go live. In the UK, the Government published draft legislation in April, with the final legislation due before the end of the year. Alongside that, the FCA is at an advanced stage in its consultations on the details of its regime, with a view to finalise its detailed rules and requirements in 2026. As I said at the outset, we have also created a joint UK-US Transatlantic Taskforce for Markets of the Future, to enable enhanced collaboration on digital assets.

[Lord Ranger of Northwood (Con)]

My Lords, I welcome the comments from the Minister on this topic and note my interest as co-chair of Digital Markets and Digital Money APPG. Two weeks ago, I was in Washington and met members of the US Securities and Exchange Commission—its chair, Paul Atkins, and its commissioner, Hester Peirce—to discuss “Project Crypto”, the road map it announced in August to modernise regulations for the digital asset economy. Its goal is to enable American financial markets to move on-chain and to position the US as a global leader in blockchain and crypto by creating a clearer, more innovative-friendly regulatory framework. While recognising the need to manage risks in financial stability, does the Minister agree that the greater danger to the UK is falling behind jurisdictions such as the US, if they move faster to enable innovation in crypto and digital assets?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question and pay tribute, too, to his expertise in this matter. There is a lot of truth in what he said, which is partly why HM Treasury has jointly established the transatlantic task force with the US Treasury. The purpose of the task force is threefold: first, to identify and explore options for short to medium-term collaboration on digital assets, while legislation and regulatory regimes are still developing; secondly, to identify options to improve links between our capital markets, to enhance the growth and competitiveness of both UK and US markets; and, thirdly, to report, ideally, within 180 days. It is chaired by officials of HM Treasury and the US Treasury, including representatives from the UK and US regulators responsible for capital markets, so that we can share lessons between the two authorities.

[Lord Brennan of Canton (Lab)]

My Lords, do the Government have in mind any lessons from history when considering the potential consequences on the finances of ordinary people of a regulatory race to the bottom with regard to any kind of financial instrument?

[Lord Livermore (Lab)]

Possibly, but I do not at all share the characterisation made by my noble friend of a regulatory race to the bottom. As I have said, we will regulate in the UK’s national interest. The Government will bring forward the final legislation to create a financial services regulator regime for crypto assets this year. Clearly, we must strike the right balance between giving firms regulatory certainty, protecting consumers and ensuring that the sector has the space and flexibility to innovate.

[Baroness Neville-Rolfe (Con)]

My Lords, these markets are global. Can the Minister tell us what contingency plans the Bank of England and the Treasury have in place should a major crypto company in the US collapse, with consequences for UK savers and markets, now as well as once the legislation has gone through? When we last discussed this subject, the Minister helpfully agreed that the Government might present a discussion paper, which would help us all. When might we expect that, given the pace of change in this important area?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. As she knows, the Bank of England is the independent regulator for systemic stablecoin and will design its regime as necessary to manage the associated risks. On 10 November, just earlier this week, the Bank of England launched a consultation to seek industry feedback on its systemic stablecoin regime, building on the initial proposals set out in its 2023 discussion paper. This includes up to 60% of backing assets to be held in short-term sterling-denominated UK Government debt securities, consistent with emerging regulatory regimes internationally, and the proposed cap of between £10,000 to £20,000 for individuals and £10 million for businesses applying for systemic stablecoins and only after consultation. The Treasury and the Bank of England are maintaining a close and ongoing dialogue on the legal and regulatory treatment of stablecoins in support of the Government’s objective to make the UK a global destination for digital assets. In terms of any wider discussion paper, I am very happy to continue discussing that point.

[Lord Fox (LD)]

My Lords, my question concerns the Bank of England’s control over money supply. At what point, when the public are adopting cryptocurrencies, does the Bank lose control of the money supply? What calculation has the Treasury done, or has the Treasury done in conjunction with the Bank of England, to maintain national control over our money supply?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. The Bank of England’s Financial Policy Committee and the multilateral Financial Stability Board currently agree that crypto asset markets do not currently pose material risk to financial stability in the way the noble Lord describes but that stability risk may grow as connections between the traditional financial services sector and crypto markets increase. International and UK financial authorities have been working through the Financial Stability Board to assess and develop supervisory and regulatory approaches to address global financial stability risks posed by crypto assets and global stablecoins.

National Insurance: Partnerships

Lord Livermore Excerpts

Monday 10th November 2025 Lords Chamber

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

My Lords, the Government do not comment on tax speculation outside of fiscal events. The Chancellor will set out the Government’s fiscal plans at the forthcoming Budget.

[Baroness Neville-Rolfe (Con)]

My Lords, given that professional services contribute some 12% to GDP, and that almost all the UK’s leading accountancy and law firms operate as LLPs, has the Minister examined the potential for unintended consequences such as increased incorporation or outsourcing, which could reduce, rather than increase, the overall tax take? I originally tabled this Question to probe the bad but rumoured idea of taxing GP partnerships in this way. Can the Minister at least rule that out?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. However, she knows that I am not going to speculate or give a running commentary on the next Budget now. There has been much speculation, as is usual ahead of a Budget. A lot of that speculation is irresponsible. I am not going to comment on individual tax measures now. We will do things in the usual way. The Chancellor has asked the OBR to produce a new forecast. She will make decisions based on that forecast. We will set out our fiscal plans at the forthcoming Budget. The Chancellor will do so mindful of the importance of growth and investment to businesses and the economy.

[Lord Carlile of Berriew (CB)]

My Lords, does the Minister, as an expert in taxation matters, agree that in reality, the great majority of those who are partners in limited liability partnerships do not have any of the autonomy of self-employed persons but are treated as having such autonomy, and that it would be logical for all those who are in reality employed persons to be treated in the same way by the tax system?

[Lord Livermore (Lab)]

I am sorry to disappoint the noble Lord, but I am afraid I am not going to comment now on individual tax measures.

[Baroness Bowles of Berkhamsted (LD)]

My Lords, does the Minister recognise that the self-employed sector creates growth and increases economic participation and that self-employed people are risk absorbers without access to various state benefits? Is the suggestion floated concerning LLPs potentially the thin end of the wedge to attach more tax to all self-employment? Possibly, there is an issue, in that LLP status transfers risk from partners to societies at no cost to the partners. If there is a moral case for payment for that risk transfer, surely, it must be separately investigated, not wangled through national insurance.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question, the first part of which I agree with. On the rest of it, as she knows, I am not going to comment on individual tax measures right now.

[Lord Bridges of Headley (Con)]

My Lords, may I ask the Minister a very simple question? In terms of his definition of a working person, is a partner in a law firm a working person?

[Lord Livermore (Lab)]

I applaud the noble Lord’s attempt at his question. I am not going to comment on individual tax measures right now.

[Lord Sikka (Lab)]

My Lords, whether someone trades through a company or a partnership is a personal choice. That choice should not be incentivised by the national insurance system. It is wrong to hand incentives to rich accountants and lawyers to dodge employers’ national insurance just because they trade as partnerships. That differential treatment encourages abuse and avoidance strategies. Does the Minister agree, and if not, can he give reasons?

[Lord Livermore (Lab)]

My reason is very simple: I am not going to speculate on the next Budget now. I am, of course, grateful for my noble friend’s expertise in these matters.

[Lord Pannick (CB)]

My Lords, will the Minister accept that it not speculation but fact that the legal services sector brought in exports worth £9.5 billion last year? Will he also accept that it is fact, not speculation, that to increase the tax burden would inevitably damage the ability of law firms to attract cases such as international arbitration and dispute resolution from abroad when we are in competition with Singapore, Dubai and other litigation centres?

[Lord Livermore (Lab)]

I certainly agree with the first fact that the noble Lord set out, and I am happy to do so. On his second fact, that is inviting me to speculate, which I think I have made clear I am not going to do.

[Lord McLoughlin (Con)]

My Lords, without asking the Minister to speculate on what might be in the Budget, will he tell us what was meant when the Chancellor and the Prime Minister said they would not increase income tax?

[Lord Livermore (Lab)]

Again, I think that that may be inviting me to speculate on the next Budget. I am not going to give a running commentary on the speculation there has been so far. The Chancellor will set out the Government’s tax policy at the forthcoming Budget.

[Baroness Wheatcroft (CB)]

My Lords, will the Minister accept that although he continues to tell us that he is conducting his responses in the normal way ahead of a Budget, it is not the normal way, ahead of a Budget, for the Chancellor to give a speech to a press conference which is simply about the Budget?

[Lord Livermore (Lab)]

The Chancellor is entirely at liberty to set out what she wants to set out at any given point. As I said, there has much speculation ahead of the Budget. I am not going to comment on the Budget. We will do things in the usual way. She has asked the OBR to produce a new forecast for the Budget. She will take decisions based on that forecast and set them out at the forthcoming Budget.

[Baroness Kramer (LD)]

My Lords, will the Minister advise his colleagues that any new partnership NICs applied to LLPs will exclude small entities that genuinely are a variant on self-employed organisations, with similar risks, precarious income, limited benefits and lack of employment opportunity, and are, indeed, a very important path for a lot of people returning to employment or getting into employment for the first time?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I am not quite sure how many more ways I can say this: she is inviting me to comment on tax speculation, and I think I have made it clear that I am not going to do that.

[Lord Leigh of Hurley (Con)]

My Lords, going back to the last election after Labour were previously in power, Labour had to leave a note saying that there was no money left. The next time, it will have to leave a note saying that there is no money left and no entrepreneurs left. Has the Minister read the Walker report, which shows that the HMRC assessment of non-doms leaving the country was underestimated by 50% because it looked at people only on a remittance basis and had not taken into account wealthy investors who are not under PAYE, and who are leaving the country in droves?

[Lord Livermore (Lab)]

If the noble Lord wants to talk about the amount of money that is left, I am very happy to point him to the £22 billion black hole in the public finances that we inherited and that his Government sought to hide from the Office for Budget Responsibility. The same OBR has certified that the non-dom reforms the Government have implemented will raise £33.8 billion in total revenue over the five-year forecast period. This figure accounts for some non-doms who are ineligible for the new regime, choosing to leave the UK in response to these reforms. The Government will continue to work with stakeholders to ensure that the new regime is internationally competitive and focus on attracting the best talent and investment into the UK.

[Lord Garnier (Con)]

My Lords, in his earlier answer, the Minister said that much of the speculation was irresponsible, which suggests that some of it was not. Could he please list it?

[Lord Livermore (Lab)]

No. As I think I have made clear, I am not going to comment on individual tax measures.

[Lord Watts (Lab)]

Does the Minister agree with me that, if there are going to be tax increases of any sort, they should be fair and should not be borne by people who are paying PAYE, who have no choice about paying their tax—but that everyone over there seems to think that everyone else should have an opportunity to avoid it?

--- Later in debate ---

[Lord Livermore (Lab)]

I am grateful to my noble friend for his question. I am not going to comment, as he knows, on individual tax measures, but I think we can be clear that the priorities for the forthcoming Budget will be protecting our NHS and public services from a return to austerity. It should be a Budget for growth that supports businesses to create jobs and innovation; we should improve the cost of living, doing what is necessary to protect families from high inflation and high interest rates; and we should keep debt under control.

[Lord Johnson of Lainston (Con)]

My Lords, I think there may be a misunderstanding about what LLP structures are. Will the Minister agree with me on the importance of these structures, which enable people to pool their own labour? This is not a loophole; it is an opportunity for people to come together, and they are effectively charging tax on employing themselves. Will the Minister agree with me that, in principle, LLPs are a good idea, and that getting rid of them would be throwing the baby out with the bathwater? We have just had a baby in the Chamber, so I am very reminded of that. If he could answer my question, I would be very grateful.

[Lord Livermore (Lab)]

I do not know if the noble Lord was paying attention for the last 10 minutes, but I have made it extremely clear that I am not going to comment on individual tax measures.

Public and Private Sector Productivity Trends

Lord Livermore Excerpts

Thursday 30th October 2025 Lords Chamber

[Lord Londesborough]

To ask His Majesty’s Government what assessment they have made of the United Kingdom’s productivity trends across both public and private sectors.

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

My Lords, in the decade from 2010, the UK economy saw the lowest productivity growth since the Napoleonic Wars, which led to the lowest growth in living standards ever recorded. This Government also inherited a situation where public sector productivity was 7.2% below pre-pandemic levels. Reversing that poor productivity performance is the number one mission of this Government. As part of our growth strategy, we have set out measures to increase productivity, including reforms to planning and skills, record levels of investment in R&D, new investment in transport connectivity, a modern industrial strategy and a 10-year infrastructure strategy.

[Lord Londesborough (CB)]

My Lords, I thank the Minister for his reply. Low productivity has indeed been a running sore for almost 20 years now. Frankly, there are no real signs of progress, which is why the OBR is poised to downgrade its trend forecast and leave the Chancellor with an even deeper black hole. We need a major reset, so is it not time to set up an office for productivity alongside the Office for Budget Responsibility if we want to achieve per capita growth and fiscal discipline? This would be an office with experts with first-hand industry experience delivering on productivity, including how to lead, manage, train, set targets, and reward and incentivise our workers in public and private sectors.

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question and suggestion. On the progress that has been made, he will know that the drivers of productivity are fundamental and deep-seated challenges that exist in our economy, that they are long-standing, and that obviously we cannot come in, click our fingers and improve that productivity performance—it will take time. For example, investment is one of the most important drivers of productivity. That requires changes to our planning system and the planning Bill is still going through this House, so of course it is going to take time. As I say, the productivity performance that we inherited from the previous Government has been too weak. Austerity, Brexit and the Liz Truss mini-Budget have left deep scars on the British economy that are still being felt today, but those past mistakes do not need to determine our future. That is why, as part of our growth strategy, we have set out measures to increase productivity in the British economy.

[Lord Leigh of Hurley (Con)]

My Lords, on the point from the noble Lord, Lord Londesborough, would the Minister consider looking at how the figures are compiled? Personally, I think that the contribution from the services sector is underplayed and undervalued in the calculation of productivity. Would the Minister also recognise the contribution from the 13 leading business representative bodies—indeed, pretty much every business in the UK—that the Employment Rights Bill will reduce productivity and growth?

[Lord Livermore (Lab)]

On the noble Lord’s first point, I am very aware of some issues around the data, and I believe the ONS has been reviewing it along the lines he suggests. On the Employment Rights Bill, he will know that labour supply is also a fundamental component of driving productivity, and that a more motivated and more secure workforce is a more productive workforce. I hope he will take that into account.

[Baroness Kramer (LD)]

My Lords, we hear this week that only 11% of UK SMEs say they use technology to a great extent to automate or streamline operations. Do the Government understand that the slow pace of adoption of new technology by SMEs—many of which have not even adopted first-generation technology—lies at the heart of our productivity problem, which is why it remains incomprehensible that the Government keep adding burdens on SMEs? I know the Minister cannot tell us what is in the Budget, but can he at least tell the House that he recognises the problem?

[Lord Livermore (Lab)]

Yes, I absolutely recognise the problem and I agree with 90% of what the noble Baroness said. The only part I disagreed with was when she criticised the Government. I agree: digital adoption and AI adoption will be central to solving the productivity problem. SMEs are vital to that. It is why digital adoption was a key part of our small business strategy. I hope we can work together on this important issue.

[Lord Howell of Guildford (Con)]

My Lords, the period from 1970 to 1990 was a time of rapidly increasing productivity, of rapidly increasing Japanese investment in particular, and of great reduction in trade union restrictive practices, which the Japanese would not put up with. What lessons does he draw from that for today?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his insight from that period. He is absolutely right. It was a time of high productivity; it is a shame that the second Conservative Government after that did not maintain it. We now have to deal with the inheritance from that Government. He is right to say that private sector investment is a key driver of productivity, so the lesson I draw from that period is that we have to encourage greater levels of private sector investment. Under the previous Government, private sector investment fell to the lowest in the whole G7. We have so far welcomed £120 billion in private investment and a further £150 billion during the US state visit last month alone.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, does my noble friend the Minister agree that we are very good at telling other people what to do? Is it not time that we started having a look at our practices and productivity to see whether we can run Parliament and the Commons much more effectively than we are at the moment?

[Lord Livermore (Lab)]

I am very happy to say that that may be a question for someone other than me.

[Baroness Bull (CB)]

My Lords, the Minister will know that, with 52% of the adult population having numeracy levels at or below those of a primary school leaver, low numeracy acts on a drag on the UK economy, leading to a critical skills gap and, ultimately, limiting productivity. Does he agree that unless we address low numeracy, as we have addressed core reading skills, we will struggle to achieve the economic growth that is at the core of his Government’s ambitions?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I agree. Fundamental skills are vital to improving our productivity. Labour quality is a key driver of productivity. The skills agenda is vital to that. That is why we recently set out measures to tackle that in the skills White Paper. I hope the measures she speaks about will also be looked at carefully.

[Baroness Neville-Rolfe (Con)]

My Lords, I very much agree on skills, but a large part of the productivity problem in the UK has been in the public sector. This is hardly surprising, since the Government awarded huge public sector pay rises last year without a direct productivity link. Civil service numbers have also increased. Low productivity and growing headcount are not a happy state of affairs. How does the Minister plan to improve that rather dispiriting situation?

[Lord Livermore (Lab)]

The noble Baroness is correct to say that public sector productivity is a major issue. I know that it is something she cares about deeply. Obviously, she will be aware that the Government inherited a situation where public sector productivity was 7.2% below pre-pandemic levels; that is obviously and clearly unacceptable. She said that pay rises were awarded without any link to productivity. That is factually incorrect. At the spending review, the Government established a programme of public sector service reform to drive greater productivity. Every department has committed to at least 5% savings and efficiencies over the spending review period, with the Office for Value for Money working closely with departments to agree bespoke targets. This will result in savings and efficiencies equivalent to nearly £14 billion a year by 2028-29, and public sector productivity has already risen by 1.5% since the election.

[Lord Fox (LD)]

My Lords, in 1964 the then Labour Government sought to separate the Treasury into two pieces: one to look after the short-term fiscal tax-raising element and one to look at economic development. The same tension exists today. Can the Minister tell your Lordships how the Treasury is balancing them? At the moment, it looks as if short-term fiscal concerns are outweighing long-term economic needs.

[Lord Livermore (Lab)]

I disagree with the noble Lord. I do not think that there is any tension between economic stability and economic growth. As I say, under the Liz Truss mini-Budget we saw the damage that grotesque economic instability did to business confidence and business investment in this country. Maintaining stability—that starts with stability in the public finances—is why our fiscal rules are so important to our growth mission. Stability is the precondition for economic growth in this country, so the two go very much hand in hand.

[Lord Bird (CB)]

My Lords, would the Government agree that, because we have a low-wage economy, we also have a low-investment economy? That is shown in the fact that 80% of all the transactions carried out by our banks, which were formerly owned by us, are in buying and selling private property, not in investing in new businesses and the kind of investment that the Government are now calling for.

[Lord Livermore (Lab)]

I am not quite sure what the question was. I do not think that I agree with noble Lord’s diagnosis.

Rules on Duty-Free Goods

Lord Livermore Excerpts

Wednesday 22nd October 2025 Lords Chamber

[Baroness Hoey]

To ask His Majesty’s Government what plans they have to ensure that the same rules on duty-free goods apply for those flying from Belfast to the European Union as those flying from the rest of the United Kingdom.

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

My Lords, duty-free shopping between Northern Ireland and the EU would require the application of personal allowances and associated border checks to prevent the uncontrolled flow of tax-free goods into either Northern Ireland or the EU. The enforcement controls required for this would run counter to the Windsor Framework and to the principle of the frictionless movement of people and goods between Northern Ireland and Ireland.

[Baroness Hoey (Non-Afl)]

My Lords, I thank the Minister for that rather predictable Answer. Could I press him? Does he understand the frustration and anger that families in Northern Ireland have when they travel on their well-earned holidays to sunny parts of the EU and cannot get duty-free, while other citizens of the rest of the United Kingdom can? Does he understand that not having duty-free is costing Northern Ireland’s small airports about £5 million a year? Does he have any sympathy or empathy with the people of Northern Ireland? Will he make a commitment that when His Majesty’s Government are involved in the much-heralded reset, this will be one of the issues—it may seem a minor issue to some people, but it is quite an important one—to be negotiated with the European Union to change?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. She says that my Answer was predictable, but one thing that was entirely predictable was the impact of Brexit, which she campaigned for. Back in 2016, Sir John Major and Sir Tony Blair said clearly that Brexit would present specific challenges for Northern Ireland, given its land border with an EU member state and the importance of safeguarding the Good Friday agreement, yet the noble Baroness dismissed those concerns. Now that the reality of Brexit does not match up to the fantasy version which the noble Baroness had, she seeks to blame others for the consequences of her own actions.

Let me be very clear: the Windsor Framework is the best workable solution to Northern Ireland’s unique circumstance. The noble Baroness asked whether I have empathy—absolutely I do. Placing Northern Ireland in a uniquely beneficial position within the United Kingdom, by being part of the UK internal market and the EU single market for goods, provides significant opportunities for growth and ensures that there is no hard border on the island of Ireland. She mentioned the reset. As part of the EU reset, the EU and the UK have agreed to negotiate an SPS agreement. I urge the noble Baroness to support that reset.

[Baroness Ritchie of Downpatrick (Lab)]

My Lords, does my noble friend the Minister agree that it would be much better for Members of your Lordships’ House to argue for and underpin the value of dual market access whereby businesses and communities in Northern Ireland can avail themselves of access to the UK internal market and the EU single market? I agree with my noble friend when he said that Brexit was the cause of all these difficulties. It would be better if noble Lords sought to work to eradicate the difficulties and challenges presented by the Windsor Framework to underpin our local economy.

[Lord Livermore (Lab)]

I am very grateful to my noble friend for her question and I agree with every word she said. The Windsor Framework is the best workable solution to Northern Ireland’s unique circumstances. As she said, it places Northern Ireland in a uniquely beneficial position within the United Kingdom—which I hope we can make a lot of—by being part of the UK internal market and the EU single market for goods. That provides significant opportunities for growth and ensures that there is no hard border on the island of Ireland.

[Lord Weir of Ballyholme (DUP)]

My Lords, the Minister highlighted the principal rationale for there not being duty-free at Northern Ireland airports when flying to the EU as the need to maintain frictionless trade with the Irish Republic, presumably on flights to the Irish Republic. Is the Minister aware that not a single flight goes from Northern Ireland to the Republic of Ireland? Does he agree that we are left in the absurd position of creating an additional problem to solve a problem that, in practice, does not actually exist?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. I will clarify this for him. The original Question asked about flights from Belfast to the European Union, so that is what this Question is about. I will be very clear. If we have duty-free, we have to have allowances. If we have allowances, we have to have checks and enforcement. If we have checks, we have to have border infrastructure, and border infra- structure is contrary to the Windsor Framework and the Good Friday agreement.

[Lord Bellingham (Con)]

My Lords, one of the key outcomes of the Windsor Framework was the plan for green lanes for goods leaving the UK but staying in Northern Ireland rather than being transported to the Republic. Can the Minister tell the House what progress has been made on the introduction of those green lanes?

[Lord Livermore (Lab)]

This may have been another of the fantasies that people had about certain Brexit outcomes rather than reflecting reality. What we have ended up with—I pay tribute to the previous Government for negotiating this—is the Windsor Framework, which, as I said, is the best workable solution to Northern Ireland’s unique circumstances. We absolutely support the implementation of the Windsor Framework.

[Baroness O'Loan (CB)]

My Lords, the Minister described a very glowing situation in Northern Ireland, which is not necessarily the experience of the people in Northern Ireland, subsequent to the Windsor Framework. While accepting that the Windsor Framework is what we have to live with at the moment, does the Minister accept that there are many problems, that people cannot get access to many goods and services, and that goods are increasingly not being supplied to Northern Ireland because of the bureaucratic difficulties and economic costs? Would the Minister commit to considering all these matters and to bringing forward a reset that actually benefits Northern Ireland?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question and insight. I will say up front, as I have said before, that we are committed to implementing the Windsor Framework in good faith and to protecting the UK internal market. We will work constructively with all stakeholders—the EU, the Northern Ireland Executive, businesses, and political parties and civic society in Northern Ireland—to achieve that aim, taking into account the implementation deadlines. As the noble Baroness said, the Windsor Framework agreement secured substantial legally binding changes and flexibilities that do improve things. I hope that the EU reset will further improve things, and I therefore urge all noble Lords to support it.

[Baroness Kramer (LD)]

My Lords—

--- Later in debate ---

[Baroness Kramer (LD)]

My Lords, will the Government please start to renegotiate our entry into the customs union? It would eliminate the issues raised by the noble Baroness, Lady Hoey, and many others and increase prosperity for us. There is a very simple and direct set of answers.

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question and I pay tribute to her consistency on this matter. We share many similarities in our observations and analysis of the impact of Brexit. She will know that we are engaged in the EU reset, which will achieve substantial benefits for growth in the UK and for British citizens travelling around the European Union. I urge her to support the reset.

[Lord Grocott (Lab)]

My noble friend, on this Question and a number of others that I have heard him reply on, demonstrates the passion that he feels for the European Union. It is a passion not shared by everyone. Some of us remember that the 40 years when we were in the European Union were not exactly flowing with milk and honey as far as the British economy was concerned.

--- Later in debate ---

[Lord Grocott (Lab)]

My noble friend will notice the support he gets from the Liberal Democrat Benches.

Can I have my noble friend’s assurance that we stand very strongly by the Labour Government’s manifesto promise that there will be no question of us rejoining either the customs union or the single market?

[Lord Livermore (Lab)]

I am sure my noble friend and I agree on many things, but Brexit is not one of them. I hope that when he talks about our experience in the European Union he will acknowledge the OBR’s calculations that, had we remained in the European Union, by the end of this Parliament the economy would be £100 billion larger than it will be otherwise. That is a significant disbenefit of Brexit. As my noble friend knows, the manifesto stands.

[Baroness Neville-Rolfe (Con)]

My Lords, returning to the Question, we on these Benches fully recognise the importance of the agreements reached between the previous Administration and the European Union. However, there is a legitimate question about whether practical solutions could now be explored to address the specific anomaly. Will the Minister consider supporting a joint UK-EU technical group to examine practical options for restoring duty-free parity for Northern Ireland travellers, which could overcome the difficulties the Minister outlined? That process could be undertaken without undermining the Windsor Framework.

[Lord Livermore (Lab)]

Let me be absolutely clear, again. If you have duty-free, you have to have allowances. If you have allowances, you have to have checks and enforcement. If you have checks, you have to have border infrastructure, and if you have border infrastructure, that will be contrary to the Windsor Framework and the Good Friday agreement.

GDP Per Capita

Lord Livermore Excerpts

Monday 20th October 2025 Lords Chamber

[Lord Leigh of Hurley]

To ask His Majesty’s Government what assessment they have made of the latest estimates of the current GDP per capita, and of the factors contributing to it.

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

My Lords, the latest data from the ONS shows that GDP per capita has risen by 0.9% over the past year, in line with the OBR’s forecast, and this is the second fastest in the G7. This compares with a fall of 0.1% during the previous Parliament. The increase in GDP per capita in the past year is due mainly to the strong rebound in both private consumption and investment. Of course, we want to go further, which is why economic growth is the Government’s number one priority.

[Lord Leigh of Hurley (Con)]

Indeed so, but the Minister will be aware that the ONS’s latest figures show that in the most recent quarter, economic growth per capita grew by only 0.2%—less than half than in the previous quarter. Will he accept that this is entirely due to the Government’s policies on the national insurance increase, the lack of business confidence because of the Employment Rights Bill, and the wholly unnecessary delay in the Budget? Would he like to clarify his previous remarks about the effect of Brexit being 4% on growth and productivity, when he knows very well that the OBR said that that would be over 15 years? This means that on a per annum basis, the effect is teeny and within the margin of error.

[Lord Livermore (Lab)]

The answer to all the noble Lord’s questions is no. He points out that GDP per capita grew by 0.2% in the second quarter of this year; that compares with 0.1% over the entirety of the previous Parliament. If he wants to make comparisons, I am more than happy to do that. I do not accept the points he makes about the Government’s other policies. We are currently the fastest-growing economy in the G7. On his points about Brexit, the OBR has been very clear that Brexit has permanently reduced the size of our economy by 4%. Its calculations are absolutely clear on that point.

[Lord Watts (Lab)]

My Lords, does the Minister agree with me that GDP would have been higher had we not had a Government previously who wrecked the economy, wrecked public services, gave us Brexit and left us with massive debt?

[Lord Livermore (Lab)]

My noble friend is absolutely correct. The previous Government gave us austerity, taking demand out of the economy at exactly the wrong moment; a Brexit deal, which reduced GDP by 4%; and the Liz Truss mini-Budget, which crashed the economy. We will take no lessons from the party opposite when it comes to growing the economy.

[Baroness Kramer (LD)]

My Lords, the UK is the sixth-largest economy, measured by GDP. But, on the measure of GDP per capita, it is only the 18th largest. Our demographic profile, with a heavily aging population, is a key reason for this. This year, we expect to reach the scary benchmark of having more deaths than births. Of course, we need to upskill our population in advancing technology. Do the Government accept that we rely on net immigration to sustain the economy in the public sector and that there is no way out of that?

[Lord Livermore (Lab)]

I hear what the noble Baroness says. The OBR is currently considering the economic and fiscal impacts of the immigration White Paper published in May and will report back in its forecast in the autumn. Of course, she is right that we are in a global race for talent, with many countries seeking to improve the attractiveness of their immigration systems for highly talented individuals. The immigration White Paper announced that the Government will review the visa offer for highly talented individuals by expanding the high potential individual visa and reforming the global talent and innovator founder visas. We have also agreed that we will work towards an ambitious youth mobility scheme with the EU, creating maximum economic and cultural opportunities between the UK and the EU. Any scheme would give young Brits the opportunity to travel, to experience other cultures and to work and study abroad.

[Lord Londesborough (CB)]

My Lords, can the Minister confirm that the Government’s pledge still holds—specifically, that the UK will deliver the G7’s fastest growth in GDP per capita for two straight years by the end of this Parliament—and explain why investors, both debt and equity, should buy into this view?

[Lord Livermore (Lab)]

Yes, I can absolutely confirm that that remains our mission. Our growth mission is to have the fastest-growing economy in the G7. We are currently the fastest-growing economy in the G7, and the IMF recently revised up the growth forecast for this year, the second time it has done so. I think both the IMF and the OECD currently forecast that the UK will be the second fastest-growing G7 economy this year. Our growth mission also includes living standards; since the election, living standards are up 2.1% compared with the 1.8% fall over the last Parliament—the only Parliament on record in which living standards were worse at the end of it than at the start. We also have a commitment on GDP per capita, as the noble Lord rightly says; the OBR currently forecasts GDP per capita to rise by 5.6% over this Parliament.

[Lord Massey of Hampstead (Con)]

My Lords, the ONS reported recently that 53% of the population are net recipients of state benefits and therefore make a very modest, to say the least, contribution to GDP. Meanwhile, 1% of the population are producing 13% of GDP and paying 28% of our tax. Whether we like it or not, the UK is becoming ever more financially dependent on its top earners but at the same time making it less attractive for them to stay and contribute to the UK. The evidence is mounting—we saw it from France yesterday—that people are considering moving their assets abroad and potentially leaving the country. So does the Minister agree with me that, whatever your ideological view of wealth distribution might be, the UK needs to focus on retaining its high earners, and does he recognise that if only 10% of the top 1% leave—that is 35,000 people—our fiscal black hole would increase very substantially?

[Lord Livermore (Lab)]

That is a very long question but I can give the noble Lord a very short answer. Yes, of course, I agree with him. It is very important that we retain our high earners and retain as much talent in this economy as we possibly can.

[Lord Sikka (Lab)]

My Lords, the equitable distribution of income to enable people to buy goods and services is essential for sustained economic growth, but all is not well. At Melrose, the CEO to average worker pay ratio is 1,112; at Tesco 375; at Marks & Spencer 261; at Associated British Foods 218; and 195 at Sainsbury’s. In view of this scale of inequity, what is the Government’s plan to secure equitable distribution of income for workers and, in doing so, also secure economic growth?

[Lord Livermore (Lab)]

Clearly, we need to make sure that we retain top talent in this country, as the previous questioner asked me about, but we also need to make sure that we increase the living standards right across the income distribution, and particularly for working people. My noble friend will know that wages continue to grow and that in the first 10 months of this Government, real wages rose more than in the first 10 years of the previous Government.

[Lord Fox (LD)]

My Lords, one of the problems facing the Treasury and the Bank of England is the quality, or lack of it, of workforce data. Can the Minister tell us what progress is being made with the ONS to improve the quality of the data that the Government have to make their decisions?

[Lord Livermore (Lab)]

The noble Lord is absolutely correct. That is currently a significant issue. As I understand it, the ONS is reviewing that data, and that review is ongoing.

[Baroness Neville-Rolfe (Con)]

My Lords, per capita GDP is, of course, a proxy for productivity in the longer run, and I am very concerned that productivity has become an increasing problem for the UK economy. What do the Government plan to do about it, in both the public sector and the private sector?

[Lord Livermore (Lab)]

The noble Baroness is absolutely correct to say that productivity is a long-standing problem in the economy. As I understand it, productivity fell to the lowest in the G7 under the previous Government, so clearly it is important that we have prioritised that. One of the most important things we are doing for productivity is increasing investment in our economy. We have revised the fiscal rules to enable us to increase investment in the economy, and I regret very much that the party opposite opposed those changes to the fiscal rules.

[Baroness Curran (Lab)]

My Lords, can my noble friend the Minister explain to the House the role of record levels of public investment and how they contribute to economic growth? In his answer, lest we forget, can he remind the House of the financial legacy that we inherited from the last Government—particularly the amount of the financial black hole?

[Lord Livermore (Lab)]

My noble friend is very generous in inviting me to mention the £22 billion black hole. She is correct that capital spending is a significant driver of growth in our economy. The OBR estimates that the increases in capital spending that we have seen have increased growth by 0.14% over five years, 0.43% over 10 years and 1.4% in the long term. It is very regrettable that the party opposite opposes those capital spending plans.

Stablecoin Ownership

Lord Livermore Excerpts

Thursday 16th October 2025 Lords Chamber

[Lord Ranger of Northwood (Con)]

My Lords, in light of the Lord Speaker’s Statement, let me be the first to thank him for his outstanding service. I look forward to the following months of working with him. I beg leave to ask the Question standing in my name on the Order Paper and I refer to my registered interests as a NED for the ALICE Group and co-chair of the Digital Markets and Digital Money APPG.

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

My Lords, stablecoins stand to play an important role in driving innovation in digital assets. It is important for the UK to position itself as a competitive global destination for digital assets, including stablecoins, while also addressing relevant consumer protection and financial stability risks. The Bank of England is engaging closely with the digital assets sector on its proposals for the regulation of systemic retail stablecoin.

[Lord Ranger of Northwood (Con)]

I thank the Minister for that response, but I want to press him a little. Stablecoins and their usage are growing across the world. At the beginning of this year, $200 billion-worth had been issued—by September this year, it was $280 billion—pushed by the emergence of the GENIUS Act in the US and MiCA in Europe. These regulatory frameworks have enabled corporates to take advantage of being able to move money with agility and confidence, and real-time liquidity. How are we looking to keep up with the pace of the rest of the world as the use of stablecoins looks to reach $1.9 trillion by 2030, providing a distinct competitive advantage to businesses and industry in other geographies?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. Before I answer him directly, perhaps I may also pay tribute to the Lord Speaker. He has been a friend to me since I first joined this House when he was an MP. I pay tribute to his outstanding service as Speaker of this House.

The noble Lord is correct to say that stablecoins have huge potential to play a significant role in both retail and wholesale payments. We are already seeing the benefits that stablecoin can provide in cross-border payments; for example, by reducing costs and improving efficiencies. He is absolutely right that it is important for the UK to harness these opportunities for the ongoing competitiveness of the UK financial services sector.

However, I do not think it is fair to say that the US is going any faster than the UK. Reading media coverage, we may conclude that, but the reality is that the US passed legislation for the regulation of stablecoin in the summer. US regulators will publish their regulatory rules in mid-2026, with a backstop date of January 2027 for the US regime to go live. In the UK, the Government published draft legislation in April, with final legislation due before the end of the year. Alongside this, the FCA is at an advanced stage in its consultation on the details of its regime, with a view to finalising its detailed rules and requirements in 2026. This will allow firms to be authorised and running in the UK regime by 2027.

[Baroness Kramer (LD)]

My Lords, let me join in paying tribute to the Lord Speaker. I do not know whether to congratulate him, or say it is with great regret that he is in a situation in which he needs to stand down. We have all appreciated his service so much. A great deal more will be said on future occasions.

Stablecoin is not just an issue of digital payments and the efficiency of the pipeline, although you might think that from listening to the conversation. The move towards a global rollout of dollar and renminbi stablecoins has huge implications for monetary sovereignty. A sterling stablecoin has implications for the gilt markets and, hence, the public finances. Does the Minister begin to understand my concern that neither the Government nor the regulators have a grip on this and are considering the issues only narrowly—frankly, at a snail’s pace; I am astonished at the comments that he made just now—which means that we risk acting too late to protect our own national interest?

[Lord Livermore (Lab)]

I do not accept what the noble Baroness says. There are, of course, financial stability and other considerations associated with stablecoin, but these need to be balanced against supporting innovation and ensuring the UK positions itself as a competitive global destination for digital assets. As I set out in my Answer to the original Question, I do not accept that the UK is in any way moving too slowly. The Government will bring forward final legislation to create a financial services regulatory regime for crypto assets this year, which will include issuing qualifying stablecoin in the UK. This will provide crypto asset firms the regulatory certainty needed to invest and help drive innovation in our financial services sector, and at the same time ensure that customers are protected from the worst harms when they make use of crypto asset services.

[Lord Cromwell (CB)]

My Lords, digital assets cover a multitude of products and being the first mover is not always the advantage that some claim. UK politicians and regulators seem to speak with very different levels of enthusiasm about digital assets as a whole, including stablecoins. Who is going to prevail?

[Lord Livermore (Lab)]

The UK Government recognise that facilitating stablecoin innovation is important for UK competitiveness. The Bank of England is the independent regulator for systemic stablecoin and can design its regime as necessary to manage the associated risks. However, it is a matter for the Government to decide whether to recognise firms as systemic and then bring them into the Bank’s regulation. The Treasury and Bank of England maintain a close and ongoing dialogue on the legal and regulatory treatment of stablecoins, in support of the Government’s objective to make the UK a global destination for digital assets.

[Lord Brennan of Canton (Lab)]

My Lords, in the interests of pushing back the frontiers of ignorance, can the Minister explain, in simple words for the benefit of the House, what stablecoin actually is and whether I can receive my old age pension in it—which I am due to start getting from today?

[Lord Livermore (Lab)]

I wish my noble friend a very happy birthday— his question allows me to give him a good present. It is fair to say that, right now, he cannot receive his state pension in stablecoin, but the fact that there is potential for that to evolve highlights the importance of the issues raised in this Question and of having exactly the right regulatory regime going forward.

[Baroness Neville-Rolfe (Con)]

My Lords, I also want to thank the Lord Speaker for all he has done for this House.

Although popular with some young people and tech entrepreneurs, most of us have little idea of what cryptocurrencies entail, their benefits or disadvantages—despite this week’s speech by Sarah Breeden, the Bank of England Deputy Governor. To return to my recent theme of financial education, will the Government take steps—perhaps by issuing a discussion paper—to ensure that all of us, from schoolchildren to pensioners such as the noble Lord, Lord Brennan, are better informed about them?

[Lord Livermore (Lab)]

There is definitely something worth considering in that. I have learnt a lot in preparation for this Question. I know very little about the subject, but much more than I did when I started. The noble Baroness raises an important question, in terms not only of financial education—obviously we should look at what she proposes—but of keeping consumers safe. The FCA financial promotion rules require promotions to be clear, fair and not misleading, with risk warnings displayed prominently, especially for high-risk investments. Firms must ensure promotions accurately reflect benefits and risks and consider the target audience, to help consumers make well-informed decisions. The FCA has also been cracking down on unlawful financial promotions by influencers as part of the regulatory regime being developed. The Treasury is working closely with the FCA to set conduct standards for firms.

[Lord Livingston of Parkhead (Non-Afl)]

My Lords, first, I thank the Lord Speaker for all his service—a good fellow Scotsman and football fan. I also ask the House to note my interest as chairman of S&P Global. Does the Minister agree that stablecoin is like most other financial instruments: it depends on what is backing it and what is behind it? The important thing is not pace but the right regulation that creates the right environment for the UK to succeed and that ensures that people are protected by making sure that the assets that back stablecoin are there, available, and understood by consumers and businesses that use it.

--- Later in debate ---

[Lord Livermore (Lab)]

I agree with every word that the noble Lord said. Absolutely, getting the regulatory regime right for this is important. As I said, we will bring forward that legislation by the end of the year.

[Lord Vaizey of Didcot (Con)]

My Lords, I declare my interest as co-chair of the All-Party Parliamentary Group on Crypto and Digital Assets. Does not the Bank of England’s announcement that it plans to regulate how much stablecoin an individual can hold—I say for the benefit of the noble Lord, Lord Brennan, that a stablecoin is simply a digital currency linked to a fiat currency—send a terrible signal to people who want to base their crypto businesses in the UK? Will he ask the Bank of England to publish its modelling? Its reasoning is based on the idea that unlimited holdings of stablecoins might lead to a run on bank deposits.

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. I am sure that, as chair of that group, he could help educate very many of us in this House. As I have said, the Government recognise that facilitating stablecoin innovation is important for UK competitiveness, but it is a matter for the Bank of England, as the independent regulator for systemic stablecoin, to design the regime it sees as necessary to manage the associated risks. As I understand it, in November 2023, the Bank published a discussion paper on its proposed regulatory regime for systemic payment systems using stablecoin, seeking industry feedback. Following further informal engagement, the Bank will formally consult on its systemic stablecoin regime in the coming months.

School Fees: VAT

Lord Livermore Excerpts

Monday 13th October 2025 Lords Chamber

[Lord Lexden (Con)]

My Lords, in begging leave to ask the Question standing in my name on the Order Paper, I declare my interest as a former general secretary of the Independent Schools Council and the current president of one of its constituent bodies.

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

My Lords, at the Budget last year, the Government set out that ending the VAT exemption for private schools would raise £460 million in 2024-25 and £1.7 billion per year by 2029-30. The Government remain confident in these costings, which are certified by the independent Office for Budget Responsibility. The OBR will recertify these costings at the forthcoming Budget in November. The money raised by this measure is helping to raise standards for the 94% of pupils who attend state schools.

[Lord Lexden (Con)]

My Lords, have the Government noted a recent detailed survey by the Independent Schools Council which shows that their appalling education tax is producing an exodus from independent schools eight times larger than Ministers predicted? Does it not follow that the Government will have to fund many extra places in the state sector for pupils driven from independent schools, while simultaneously the proceeds from their tax raid on those schools plummet? Is it not the case that the Government stand no chance of extracting the £1.8 billion that they hoped to receive from independent schools to fund an enormous range of improvements, including, most surprisingly, the largest investment in affordable housing in a generation, according to the Prime Minister in June?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question—I think the short answer is no. We estimated that the introduction of VAT was likely to lead to around 35,000 more pupils in the state sector over the course of this Parliament. This is fewer than 0.5% of all pupils currently in the state sector and will take place gradually over this Parliament. This assessment was certified by the OBR at the time, and we remain extremely confident in it. Pupil movements so far are absolutely in line with this estimate and are in line with trends over the past 20 years. They represent, as I say, a very small proportion of the private school population. It should be noted that not all pupil movements are the result of this policy; they can happen for a large variety of reasons and will reflect wider demographic trends.

[Baroness Ramsey of Wall Heath (Lab)]

My Lords, given that the money raised from this will be spent on increasing teacher numbers in state schools and that 93%—although as my noble friend the Minister mentioned 94%, I will go with his statistic—in England attend state schools, does my noble friend agree that this is an excellent example of the Labour Government’s commitment to benefiting the many, not just the few?

[Lord Livermore (Lab)]

I absolutely agree with my noble friend on that point. This is a necessary decision that will generate additional funding to help improve public services, including the Government’s commitments relating to education and young people. This Government are committed to breaking down barriers to opportunity and are determined to drive up standards in those schools serving the overwhelming majority of children in this country so that they may receive the opportunities they deserve.

[Baroness Kramer (LD)]

My Lords, one of our greatest concerns is that SEN pupils without an EHCP are forced from private schools that have the capacity to support them to state schools without the resources to do the same. Have the Government been tracking how many of those SEN pupils without an EHCP have moved, and are they looking at the impact on both children and schools, including school finances?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I know that this is an issue that she cares deeply about; we have had discussions on this point in the past. We recognise that the current SEN system is not delivering the outcomes that pupils and parents rightly expect and is placing unsustainable burdens upon schools, local authorities and taxpayers. The Government will set out the detail of our reform plans in the context of the wider schools strategy later this year. In terms of specific pupil movements, as I say, those movements are in line with the estimates that we set out at the time of the last Budget. Those estimates were assessed by the OBR and we remain confident in them. It is worth noting that so far this year 49 private schools have closed but 70 private schools have opened, and of those 70 private schools, 59 are special educational schools.

[Lord Gove (Con)]

My Lords, the Government pledged at the last election that this tax increase would pay for 6,500 new teachers in state schools. Over the past year, this Government have seen the number of teachers in state schools drop by more than 400. How can minus 400 be an addition, even in the crazy mathematics of His Majesty’s Treasury?

[Lord Livermore (Lab)]

The noble Lord mentions crazy mathematics—I think he was one of the leading proponents of Brexit, so he would know all about crazy mathematics. This measure raises £1.7 billion to spend on state schools. He will have seen in the previous SR settlement for schools that, to raise school standards for every child and break down barriers to opportunity, the Government are increasing the core schools budget by £4.7 billion per year by 2028-29. This is a real-terms increase of 1.1% on average each year, on a per-pupil basis, taking per-pupil funding to a new record high.

[Baroness Watkins of Tavistock (CB)]

Will the Minister comment on data that seems to suggest that schools are using some of this additional money to fund free school meals—because there is insufficient funding for the level of the cost of those meals—rather than employing more teachers?

[Lord Livermore (Lab)]

I do not know about specific decisions that each individual school is making. Obviously, how individual schools fund a specific policy is a matter for them, but I am very confident that our free school meals policy is fully funded.

[Lord Watts (Lab)]

My Lords, has the Minister noticed that when this was announced the Opposition claimed that it would shut schools, yet it has not? They are switching their arguments on a daily basis. Does he also agree with me that this is hard to take from a party which cut state school spending virtually every year that it was in power?

[Lord Livermore (Lab)]

I am grateful to my noble friend for the points that he makes, and I agree very much with what he is saying. As he knows, we are increasing per-pupil funding to record amounts. It is absolutely correct that we have heard many scare stories about this policy—that schools would close. Since VAT was applied on 1 January, private schools have continued to open and close in line with historic trends. As I have said already, 49 private schools have closed but 70 private schools have so far opened.

[Baroness Neville-Rolfe (Con)]

I start by echoing the tributes to Lord Campbell. It seems only yesterday that he was with us. I believe that taxing education is a shabby policy, and we have seen some 50 schools close since the VAT on private schools was introduced. This is another example of Labour attacking the sectors of Britain that are most successful: in this case, our private schools. They are very well regarded internationally and key to our country’s academic successes. Has the Minister learned anything from this regrettable episode about how and where we tax?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. What I have learned from this episode is not to listen to scare stories from the party opposite. She talks about school closures; I am sorry that she did not listen to the figures that I gave. Yes, 49 private schools have closed but 70 private schools have opened, so obviously there is a net increase in the number of private schools in our country. There has historically been a significant turnover in this sector, with around 75 private schools in the UK opening and closing each year and the overall number of private schools remaining broadly stable.

[Baroness Coussins (CB)]

My Lords, will His Majesty’s Government consider using some of the money that they expect to get from this policy to reverse their recent decision to remove funding from state schools for the international baccalaureate?

[Lord Livermore (Lab)]

I do not know about the specific policy that the noble Baroness is talking about but, as I say, we significantly increased per-pupil funding in the previous spending review to a new record high within our state schools.

[Lord Leigh of Hurley (Con)]

Would the Minister like to confirm that, without Brexit, his Government would not be able to put VAT on private schools?

[Lord Livermore (Lab)]

Without Brexit, GDP would be 4% higher, so we would not need to.

[Lord Naseby (Con)]

As the Minister knows, there is very little boarding availability in the state sector. Against that background, will His Majesty’s Government look at understanding that all the families who need boarding are probably heavily involved in exporting and helping our nation? Will he consider removing VAT on the boarding element when there really is no other choice than to go to the private sector?

[Lord Livermore (Lab)]

The answer to that is no. VAT applies to private boarding fees as well as private tuition fees. At private schools, boarding is very often included as part of a single overall tuition fee. Not applying VAT to private boarding fees would open up significant risks of value-shifting from school fees to boarding fees in order to avoid VAT.

Road Pricing

Lord Livermore Excerpts

Thursday 18th September 2025 Lords Chamber

[Lord Young of Cookham]

To ask His Majesty’s Government what plans they have to introduce road pricing.

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

My Lords, the Government have no plans to introduce road pricing.

[Lord Young of Cookham (Con)]

That short reply will allow lots of time for questions. Three years ago, the Transport Select Committee in another place produced a unanimous report on road pricing. The committee’s chair said:

“It’s time for an honest conversation on motoring taxes”,


and the committee called on the Government to “act now” to avoid a £35 billion “fiscal black hole”—something we know the Minister disapproves of. As electric vehicles become the norm, fuel duty revenue will fall away. That can be made good by road pricing based on the distance a motorist travels, the time and the place. Modern technology makes that possible. It would reduce congestion and make better use of our railways. By the way, the Minister’s Treasury colleague, Torsten Bell, has written a publication strongly supporting road pricing, so might he have a conversation with him?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. As I said, the Government have no plans to introduce road pricing. As he will know, we need to balance several objectives: we must always ensure fiscal stability and sustainability, as he indicates; motoring must remain affordable for consumers; and we must support the decarbonisation of the transport sector. Achieving these objectives means that we need to take a balanced approach. As the noble Lord may know, electric vehicles are now in scope of vehicle excise duty, raising an additional £1.6 billion every year by the end of this Parliament. We have set the rates for company car tax to gradually normalise the taxation of electric vehicles. At the same time, in the last Budget we extended the temporary 5p fuel duty cut and cancelled the planned increase in line with inflation. Meanwhile, we are maintaining incentives for people to buy new electric vehicles, including investing £650 million in the electric car grant and £400 million to roll out charging infrastructure.

[Lord Birt (CB)]

My Lords, when I worked at No. 10, I led a team, which had Treasury representation, that looked at road-user charging alongside other transport issues. Does the Minister accept that a flexible system of road-user charging could bring many benefits, such as an allocation of free mileage for the less well-off, rates set to incentivise decarbonisation and dynamic pricing to reduce peak-time congestion?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. I absolutely recognise the considerable expertise and experience that he has in this matter—experience and expertise that is probably found right across this House. I do not have specific thoughts on the specific points he raises because, as I say, we have no plans to introduce road pricing.

[Lord Spellar (Lab)]

My Lords, the last question identifies some of the key problems with road pricing. Mention was made of peak-time charging. That may be fine for civil servants and those living in London and the Home Counties, who have a high propensity to travel to work by rail, but the great majority of the rest of the country go to work by car. Those who live in rural areas have to travel long distances for facilities and for work. Those who work in industrial areas, again, quite often because of the location of the work, have to travel by car. There are huge socioeconomic issues here. Quite frankly, it needs to be taken out of the rarefied atmosphere of discussions between think tanks in Whitehall and instead have some common-sense examination involving car drivers.

[Lord Livermore (Lab)]

I am grateful to my noble friend for his question. I agree with a great deal of what he said. As I said at the outset, one of the objectives we must keep in mind is that motoring must remain affordable for consumers. As I say, that is why in the last Budget we extended the temporary 5p fuel cut and cancelled the planned increase in line with inflation, which saved drivers around £3 billion this year. It is why we are introducing a new fuel finder to increase competition between fuel stations and to help drive down prices. As my noble friend rightly says, a well-developed road network cuts transport costs, connects businesses to markets, and unlocks jobs and investment right across regions. That is why at the spending review the Chancellor announced £24 billion of capital funding over this Parliament to maintain and improve both motorways and local roads.

[Baroness Pidgeon (LD)]

My Lords, while I hear clearly the Minister say that there will not be any national scheme, what support is being provided to metro mayors across the country who may consider road pricing as a tool to reduce traffic in city centres and help improve public transport?

[Lord Livermore (Lab)]

I am grateful to the noble Baroness, who I know has a great deal of expertise in this matter. The local schemes that she describes, such as clean air zones of the ULEZ type and so on, are the responsibility of local authorities, and it is right that the responsibility for those lies with local authorities.

[Baroness Neville-Rolfe (Con)]

My Lords, much revenue is raised from motorists through vehicle licensing, fuel duty and indeed congestion charges. If there was a move towards raising more from road pricing, can the Minister confirm that it would be coherent and reasonable and not just a policy of soaking the motorist? I have in mind the Government’s decision to scrap our planned Conservative restrictions on low-traffic neighbourhoods, which create congestion and encourage overzealous enforcement, and the overuse of 20 mph limits that hit working people—who are rightly a concern of the noble Lord, Lord Spellar—across the country.

[Lord Livermore (Lab)]

The noble Baroness asks a hypothetical question that I have already dealt with. The Government have no plans to introduce road pricing. She mentions low-traffic neighbourhoods. We want to support local authorities to deliver streets that work for all road users and enable integrated journeys. Decisions on which neighbourhoods should be low traffic lie with local authorities.

[Baroness Hayman (CB)]

My Lords, I urge the Minister to be not quite so adamant in his rejection of road pricing. My first job in government was as Minister for Roads. A year in, I was due to visit South Korea to look at road pricing and the opportunities that might occur in this country, but I was moved the day before I went. It was to be my first and only trip abroad as Minister for Roads, and I do not believe that anyone went after me. The arguments that have been made by the noble Lords, Lord Young of Cookham and Lord Birt, have become only more pressing in the years that have gone by, but the opportunities for making the system fairer have also increased because of the increase in technologies. I therefore urge the Minister to think a little more broadly on this issue.

[Lord Livermore (Lab)]

As I say, there is a great deal of expertise across the House on this matter, and the noble Baroness is no exception. She knows a great deal about the topic. I think I have said what I was going to say on this matter: we have no plans to introduce road pricing.

[Earl Attlee (Con)]

My Lords, why is it sensible to tax a motorist who drives 5 miles in the middle of Lincolnshire at 6 am exactly the same as a motorist who drives 5 miles on the M25 at 8.30 am?

[Lord Livermore (Lab)]

It may or may not be sensible but, as I say, we have no plans to introduce road pricing.

[The Earl of Erroll (CB)]

Does the Minister agree that there is in fact a huge privacy issue here? If, maybe in a marriage, someone can see where their other half has been going when they are not around, it could well cause a major rise in the divorce rate and other things.

[Lord Livermore (Lab)]

That is an interesting question, but it is one that I have no view on since we have no plans to introduce road pricing.

[Lord Harper (Con)]

My Lords, this is one of those occasions on which I hope the Minister will welcome the fact that I strongly agree with him. I am very pleased that he has adopted the policy that we set out in our manifesto at the election to rule out road pricing. As the noble Lord opposite said, most people in this country go to work in a car and depend on their cars. If the cost of motoring becomes cheaper as people get more electric vehicles, protecting the environment, we should welcome that it has become cheaper, not look for opportunities to make it more expensive. I urge the Minister to maintain the policy of no road pricing, however seductively I suspect Treasury officials will try to suggest that he change it.

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his support of the policy that we have set out. I have been clear that, on many of the issues that he raised in his question, we as a Government are having to balance several objectives. We must always ensure fiscal stability and sustainability, motoring must remain affordable for consumers and we must support the decarbonisation of the transport sector. We will continue to balance those objectives.

[Lord Hannan of Kingsclere (Con)]

My Lords, returning briefly to my noble friend Lord Young’s question, I noticed that the Minister has unwontedly not mentioned the £22 billion black hole. Can he tell us what the current shortfall is?

[Lord Livermore (Lab)]

I will not speculate now or give a running commentary on the next fiscal forecast. The OBR will produce a new forecast in the autumn for the annual Budget in the usual way, and the Chancellor will take decisions based on that forecast.

Financial Services (Overseas Recognition Regime Designations) Regulations 2025

Lord Livermore Excerpts

Thursday 18th September 2025 Lords Chamber

Moved by

[Lord Livermore]

That the draft Regulations laid before the House on 15 July be approved.

Considered in Grand Committee on 17 September.