UK Infrastructure: 10-year Strategy
Debate between Lord Livermore and Lord Macpherson of Earl's Court(1 week ago)
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Lord Livermore (Lab)
Well, the noble Baroness might not expect me to agree with her on that; I think the more Treasury, the better, from my point of view. So, no, I disagree with her, but of course NISTA is there to work for the whole Government and not just the Treasury. It has to be based somewhere and it makes sense for it to be based in the Treasury, given the Treasury’s responsibility for the 10-year infrastructure strategy, which it will be overseeing. Of course, NISTA’s expertise will be available to Ministers right across government.
Lord Macpherson of Earl’s Court (CB)
My Lords, I congratulate the Treasury on this plan, which is well thought through. If the economy is going to grow, we have to ensure that public investment grows faster than public consumption. That is reflected in the Government’s plans. But, like my noble friend Lord Birt, I worked for Governments of both main parties who announced investment plans with great fanfares and good intentions, only to jettison them the first time they got into difficulty. That happened in 1976, 1992, 2008 and 2016. The Minister mentioned that fiscal rules this time will see us right but, as he knows, fiscal rules come and go. Can he assure the House, especially the sceptics among us, that, should the Government get into financial difficulties, they will protect investment, even if that means bearing down on public consumption?
Lord Livermore (Lab)
I am grateful to the noble Lord—I was going to say “my noble friend”—for his question. The fiscal rules are non-negotiable, as he will know. We have put them in place for exactly the reasons he described. Too often in the past, public investment has been cut to patch up holes in day-to-day spending. The reason we are setting out this 10-year plan now is to give certainty and stability to the investment horizon, and we will protect that investment going forward.
Winter Fuel Payment
Debate between Lord Livermore and Lord Macpherson of Earl's Court(2 weeks, 5 days ago)
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Lord Macpherson of Earl’s Court (CB)
My Lords, as the Minister knows, I did not welcome this decision. Turning to principles, does he agree that cliff edges in the tax and benefits system are undesirable? Can he explain whether, when a pensioner’s income moves from £34,999 to £35,000, support will be tapered away, or whether £1 in extra income will result in a £300 loss of winter fuel allowance?
Lord Livermore (Lab)
I am grateful to the noble Lord for his question. He knows much more about the tax and benefits system than I do, I suspect, having spent many more years working on it than me. The answer to his question is that it is the latter: it is up to and including £35,000, so it will be at £35,001 where that happens. At that point, they will lose the winter fuel payment in its entirety.
Winter Fuel Payment
Debate between Lord Livermore and Lord Macpherson of Earl's Court(3 weeks ago)
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Lord Livermore (Lab)
That may be one option, but it is not the option we have chosen.
Lord Macpherson of Earl’s Court (CB)
My Lords, as one of the few supporters of the original measure—like my friend, the noble Lord, Lord Clarke—I feel the Minister’s pain. But when the Treasury has to retreat, it is best to concede more rather than less; in that respect only, I congratulate the Minister on the proposal. Can he provide an assurance that, as and when the Government have the resources to consider further tax and benefit changes, they will prioritise working-age families rather than the elderly, who have benefited from considerable government largesse, not least through the triple lock?
Lord Livermore (Lab)
I am grateful to the noble Lord for his qualified support for the policy. The Government absolutely know that their number one concern and mission is to increase the living standards of working people and to do so through increasing growth in the economy, and that absolutely will be the focus of our policies going forward.
Regional Growth
Debate between Lord Livermore and Lord Macpherson of Earl's Court(3 weeks, 5 days ago)
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Lord Livermore (Lab)
No, that is not the case at all. The noble Lord refers to promises made by the previous Government, which the noble Baroness, Lady Neville-Rolfe, also referred to. Promises were made. Let us be clear: not a single penny was allocated by the previous Government to a single promise that they made. The noble Lord can compare what this Government are doing with what the previous Government did, but this Government are putting money towards those announcements.
The noble Lord then said that announcements were—in his bizarre phrase—“rushed out”. Making announcements is not rushing anything out. It is setting out very clearly what our policy is for the connectivity of the city regions. We will publish the review of the Green Book next week. That will make sure that, in future, additional investment is not biased towards any one region but that the entirety of the country is considered when it comes to those announcements. That makes perfect sense. I do not recognise the analysis that the noble Lord is putting forward.
Lord Macpherson of Earl’s Court (CB)
My Lords, I welcome the Government’s announcements in relation to regional growth. As the sometime author of the Green Book, I welcome the direction of travel in terms of investment appraisal. However, inevitably, resources are finite. Can the Financial Secretary confirm that the Government are prioritising those projects with the greatest economic return? Does he agree that the private sector also has a critical role in delivering regional growth? Can he reaffirm the Government’s commitment to sound public finances, the better to bear down on the cost of borrowing?
Lord Livermore (Lab)
I agree with the noble Lord’s points. He asks about the Green Book. He has much more experience in this matter than I do. We have set out—and I hope that he agrees—that for too long the guidance in the Green Book has been biased against certain parts of the country. We want to address that. On whether we will prioritise the spending on where it has the greatest return, yes, this is key to the methodology that the Green Book sets out. The Green Book reinforced investment in areas that were already successful. It did not necessarily enable investment in areas where there was a high degree of potential. That is what we want to do. By investing in areas of high potential, there will be huge returns. We have already set this out. There could be a potential increase of about 3% of GVA if we can get the city regions up to the average productivity of the country, as the noble Baroness, Lady Neville-Rolfe, said. That is the intention and why we are doing what we are doing.
The noble Lord talked about the importance of fiscal responsibility. He will know that this Government inherited a £22 billion black hole in the public finances. Restoring fiscal responsibility is the central driving purpose of the stability pillar of our growth mission. We have set out very clear fiscal rules that require no borrowing for day-to-day spending, unlike the previous Government, who had that £22 billion black hole in their day-to-day spending. We have repaired that. At the first opportunity, when the fiscal rules were tested at the Spring Statement, we repaired the headroom against the fiscal rules in full to what it was before. We have set out very clear fiscal rules. We will stick to them, and everything that we set out in the spending review next week will be shown to be fully funded and fully in line with the fiscal rules.
Capital Investment and Share Ownership
Debate between Lord Livermore and Lord Macpherson of Earl's Court(3 months, 2 weeks ago)
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Lord Livermore (Lab)
I am very interested in what the noble Baroness says, and I will look at that further. As I say, the 10-year infrastructure strategy will be the point at which we set out the Government’s approach to private investment in infrastructure. I cannot say more than that at this point.
Lord Macpherson of Earl’s Court (CB)
My Lords, does the Financial Secretary agree that, generally, the quality of PFI projects has improved over time, with an increasing number transferring risk successfully to the private sector and the projects being delivered on budget and on time? Given that the ONS now classifies pretty much all PFI projects as being on balance sheet, can he encourage the Treasury to provide sufficient expenditure cover in the spending review to support innovative public/private partnership proposals?
Growing the UK Economy
Debate between Lord Livermore and Lord Macpherson of Earl's Court(4 months, 4 weeks ago)
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Lord Macpherson of Earl’s Court (CB)
My Lords, the history of direct support for industrial investment is not a happy one, with much money wasted and few jobs created. Can the Financial Secretary confirm that the Treasury will continue to take a rigorous approach to assessing support for inward investment, based on the best value for money principles?
Lord Livermore (Lab)
Yes, I can, and I am happy to say that I cut my teeth in the Treasury when the noble Lord was Permanent Secretary to the Treasury, and I learnt a lot from him. I very much agree with his view of the Treasury’s role within Whitehall.
Agricultural and Business Property Reliefs: OBR Costing
Debate between Lord Livermore and Lord Macpherson of Earl's Court(5 months ago)
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Lord Livermore (Lab)
I certainly agree with my noble friend on the specific point that farmers’ incomes are under pressure, and we must do everything we can, as a Government, to support farmers in that respect. It is worth adding that we will continue to work in partnership with the large supermarket chains. We are determined to work with businesses right across the country to drive economic growth.
Lord Macpherson of Earl’s Court (CB)
My Lords, does the Minister agree that the OBR note confirms that farmers and businesspeople have a large number of options for reducing their inheritance tax liability? Does he agree that, in so far as the measure encourages farmers to pass on their farms to younger, more dynamic successors, it is as likely to increase productivity as to reduce it?
Lord Livermore (Lab)
I absolutely agree with everything that the noble Lord said. Last week’s publication from the OBR does not contain any new information about its view on the fiscal impact of this policy; it remains the same as it set out in its Economic and Fiscal Outlook for the 2024 Budget. The noble Lord’s question relates to that of the noble Baroness, Lady McIntosh of Pickering. The OBR described this as “highly uncertain” because such a wide range of tax planning options are available to respond to this policy change, including being able to pass on up to £3 million tax-free. The noble Lord was also correct to say that the current system, particularly the extent to which it drives up land prices, has locked out young farmers from being able to own property—and them being able to do so is undoubtedly a good thing.
Fiscal Rules
Debate between Lord Livermore and Lord Macpherson of Earl's Court(8 months ago)
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Lord Livermore (Lab)
The noble Lord is far more experienced in these matters than me, and I have the greatest respect for him. He mentioned three types of activity. The first one he mentioned was the manifesto commitments we gave: he mentioned the major taxes and he is absolutely right. In our manifesto, we committed to not increasing taxes on working people, which is why we will not increase the basic, higher or additional rates of income tax, national insurance or VAT. I think it is perfectly right that we do that and specify that in our manifesto. He also mentioned speculation. There has been huge speculation ahead of this Budget around specific taxes which at this Dispatch Box, on multiple occasions, I have been unable to comment on, and I think he will understand why. As for announcements being made ahead of a Budget, that is a perfectly routine thing to do, and it is right that Parliament then has the opportunity to scrutinise those at the appropriate moment.
Lord Macpherson of Earl’s Court (CB)
My Lords, I broadly welcome the Government’s Statement, but we have to recognise that so many fiscal rules have come and gone in recent years that the credibility of the macroeconomic framework has been severely dented. Can the Financial Secretary confirm that the investment rule will apply to a specific year and not take the form of a discredited five-year rolling period where fiscal virtue is for ever deferred? Does he agree that what matters more than any rule is whether the Government have a credible plan for promoting growth and for stabilising and ultimately reducing the country’s debt in relation to national income?
Lord Livermore (Lab)
Once again, I address a noble Lord who has far more experience in these matters than I do. I agree with a huge amount of what he says. I think that stability in fiscal rules is incredibly important and that they should not change particularly frequently—perhaps at the point when Governments change. I am tempted to agree with a lot of what he said, but unfortunately the Chancellor will set out the Government’s full fiscal plan, including the precise details about fiscal rules that he asks for, in tomorrow’s Budget, alongside an economic and fiscal forecast produced by the OBR.