National Insurance Contributions (Employer Pensions Contributions) Bill

Lord Londesborough Excerpts

Committee stage
Tuesday 24th February 2026 Grand Committee

[Lord Mackinlay of Richborough (Con)]

My Lords, let me make my declaration. I am a chartered accountant and chartered tax adviser, so such legislation is the thing I live for on a daily basis.

My noble friend Lady Neville-Rolfe has laid out the ambitions of pensions. Unfortunately, in the first 18 months of this new Government, pensions are seemingly no longer protected as something desirable—that is, something we wish on our population so that they can build for the future and have a good, well-funded retirement.

Let us consider what this new Government have already done. One of their first moves in their first Budget in 2024 was to lay out the framework for bringing private pensions into the net of inheritance tax. As an adviser, I have to say that, when my previous Government introduced a measure to take personal pensions out of IHT, it was a very generous measure, but it has, I think, proved its worth. I was somewhat sceptical— I am one of those people who likes a low tax regime—but having IHT-free pensions was always quite a generous measure. Over time, it has shown itself to be a very good measure, because people are contributing towards pension funds in a way they may not have been encouraged to do. That has to be to the good.

I am sure that I do not need to tell this Committee about a lot of the planning behind pensions and why people do it. The reason outlined by my noble friend Lady Neville-Rolfe for exempting lower rate taxpayers from this regime is a good one. I say this as a practitioner: if the thought is that this is some loophole that is massively exploited by the great body of UK taxpayers, that has never been my experience, I am afraid. I do not see levels of salary sacrifice that would be sufficient to have even put this on the radar in the first place, frankly.

Why do basic rate taxpayers pay into pensions? I am afraid that not enough do. Thankfully, the implementation of auto-enrolment under our last Government will, I think, bear fruit as one of the most positive footprints that we left. We will, in time, have hundreds of billions of pounds put aside in good funds. Nest has been a great success, offering a variety of funds that taxpayers can choose, from lower risk to higher risk, and there is even a sharia fund, which was news to me. No matter what, the whole spectrum of the UK taxpaying base in auto-enrolment will be building up a fund for the future. During our time in government, we thought pensions were a good; they will restrict the number of people who may be looking for or needing pension credit in the future, because they have built up a decent amount for themselves.

For the 40% taxpayer, of course, putting aside for a pension is almost a no-brainer, because the tax saving is a good in itself, even if one is putting into a slightly riskier equity-based fund. Because you protected it through a good amount of tax relief, the downside still makes taking a bit of a risk worth while. Again, over time, risk usually means a potentially higher return. For those stuck over that £100,000 to £125,140—whatever it is—threshold for the 60% rate, one does not really need to be a rocket scientist to know that using pension planning to try to get back below £100,000 is a good deal. Beyond that, at 45%, pension planning is a very good way to go. For the higher rate taxpayer, it is so obvious to do that type of pension planning. That follows some of my noble friend Lady Neville-Rolfe’s thinking that the higher rate taxpayer does not particularly need that additional help, even though I am never one to say that more taxes should be paid.

For the basic rate taxpayer, however, we need to encourage as much as we can. There is not much encouragement from the 20% relief; that is not very dynamic or exciting. Dare I say that if one stays a basic rate taxpayer, the risk of inheritance tax will potentially not fall on that type of family, given that you have two £325,000 thresholds and the relief for domestic property, potentially allowing £1 million for a couple? It is a broad-brush but perhaps reasonable guess that, if one stays a basic rate taxpayer throughout life, the £1 million threshold will probably be exempt from inheritance tax. It is exactly those people who need the help and support.

What we see with this legislation is not any grand plan for pension planning; there is a grand plan to take a little more money from a lot of taxpayers for the benefit of the Treasury. In so doing, I am afraid that this Government are in serious danger of destroying those really good foundations that we laid—with the support of the Labour Party at the time, broadly—in personal planning, particularly in auto-enrolment, and all that good work done over many years.

In support of my noble friend Lord Leigh of Hurley’s very clever observation, which had escaped me, about the recognition of income for the purpose of calculating income for the student loan, it may be that the Financial Secretary to the Treasury’s interpretation is that there is nothing to worry about and this is already covered and will never be pursued. If that is the case, a statement from the Floor today would be helpful in that regard. Even if there is some ambiguity, which I have no doubt that there is between this multitude of regulations —for national insurance, student loan and taxation purposes—I see no reason why the Government would not adopt this amendment as very sensible. I thank my noble friend for pointing out something that the drafters had perhaps not seen in the first place.

I will be speaking, no doubt, at regular points during the day, but these are my initial observations. The Government should be very careful: they are destroying a very good bedrock, which we created, of pensions that were to benefit many millions of people across this country. This is a small tax-raiser too far, which will bear dreadful fruit into the future.

[Lord Londesborough (CB)]

My Lords, I support all the amendments in the first group but will restrict my comments to Amendment 1 in the name of the noble Baroness, Lady Neville-Rolfe. This concerns the £2,000 cap in Clause 1, which unfortunately hits a crucial cohort of workers: those going through the gears, where their earnings are moving up from around £25,000 per annum to £50,000. There is a disproportionate impact on the younger end of the workforce—those getting promotions and taking on added responsibilities —whom we as a nation need to encourage to increase their pension contributions, given our rapidly ageing population. This cohort’s life expectancy may be nearer 90, if current trends continue.

There is also a disproportionate impact on our SMEs, which I will address in more detail later. Given the high preponderance of basic rate taxpayers in their workforces, the Bill will, as it stands, make growth, recruitment and retention of staff that much harder, at a time when they are still absorbing the £25 billion hike in employers’ national insurance contributions.

My final point at this stage is on bonus payments, specifically bonus sacrifice arrangements, which are a particular target of the Bill. This really is not smart economic policy, given our need for a performance-driven workforce, where bonuses on merit play a critical role in improving productivity, especially in the private sector. Frankly, they should also feature more, not less, in the public sector.

[Lord Ashcombe (Con)]

My Lords, clearly there remains a tension within government between the Department for Work and Pensions and the Treasury. As we heard at Second Reading, the DWP is focused on encouraging people to save more for their retirement, yet the Treasury continues to pursue measures to fill its coffers, while increasing the burden on both employees and employers yet again.

The Minister spoke of protecting ordinary workers yet, in many cases, the Bill does the opposite. It penalises individuals who are trying to act responsibly, and prepare for a secure and dignified retirement, by removing the very tool—national insurance relief—that was put in place to assist saving for a pension. With the average salary, as we have heard, being around £37,500, anyone on that income who sacrifices more than £2,000 into their pension will face an additional national insurance charge of 8% above that £2,000. That will be a penalty and the reality for all basic taxpayers.

It is difficult to imagine that the DWP can view this outcome with enthusiasm. Once again, the Treasury appears to be prioritising short-term revenue over long-term stability, leaving future Governments to address the financial consequences created today. It is precisely these workers—those on modest incomes who are doing the right thing by saving—who need the most support in building their pensions, rather than being pushed towards greater reliance on the state in the future.

For that reason, I strongly support, and I believe the DWP would agree—I have not spoken to the department —Amendments 1 and 14 in the names of my noble friends Lady Neville-Rolfe and Lord Altrincham, and the noble Baroness, Lady Altmann. Briefly, I also support my noble friends in their Amendments 2 and 15, having heard the arguments this afternoon concerning the definition of higher earners. It is simplicity to me that transparency is essential, as opposed to opacity, which can lead only to confusion. Therefore, I believe that this issue should be tied down.

Finally, I would also like to offer my support to Amendments 3 and 16 in the names of my noble friend Lord Leigh of Hurley and the noble Baroness, Lady Altmann. Many graduates, including my two sons, already shoulder a significant and in many cases unnecessary burden in repaying their student loans at interest rates that feel wholly disproportionate. It is not until they are paid about £66,000 that they start to pay down the interest. There are few graduates—probably even fewer in the current hiring climate—who reach this sort of pay quickly. I suspect it takes at least five years —that is the case for one of my sons on the fast track in the Civil Service—and much longer for the majority.

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[Lord Londesborough (CB)]

My Lords, I will speak to Amendment 6, tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, which I have signed, and to Amendments 7, 11, 20 and 23, tabled by the noble Baronesses, Lady Kramer and Lady Altmann, to which I have also added my name. I am broadly supportive of all the amendments in group 3, including the very practical suggestions that we have just heard from my noble friend Lord de Clifford.

I will start with the very reasonable proposal in Amendment 6 to uprate the £2,000 cap by the percentage change in the CPI. I will not get involved in CPI versus RPI, which has just been very well covered by the noble Baroness, Lady Kramer. Without one of these mechanisms, we are allowing inflation and fiscal drag, as the noble Lord, Lord Altrincham, pointed out, to diminish the real contribution value of what will be for many significantly reduced salary sacrifice. These amendments address that and I believe they are hardly controversial.

Amendment 7 in the name of the noble Baroness, Lady Kramer, is more material in terms of the numbers, changing the contribution limit from £2,000 to £5,000, but, again, it has my support. My overarching concern about this £2,000 cap is that it will compound the existential problem of inadequate pension provision in this country. I encourage the Minister, if he has not already done so, to read carefully the latest report from the Economic Affairs Committee, Preparing for an Ageing Society. On that committee, I sit with the noble Lord, Lord Davies of Brixton, although we are both about to be rotated off, and one of us possibly removed entirely from this place—but that is a separate issue.

During the inquiry, expert witnesses warned us that, despite the success of automatic enrolment, we are in a situation where we have created an awful lot of small pension pots that are hard to find, hard to keep track of and, crucially, do not add up to enough, including those pension plans deemed to be in the upper quartile. UK people currently outlive their pension savings by about eight and a half years and, of course, the gap is even greater for women. As life expectancy increases, this problem will only grow worse.

[Lord Ashcombe (Con)]

My Lords, the amendments in this group either increase the level of pension contributions exempt from national insurance or seek to prevent fiscal drag. Both aims are very welcome. In many respects, the higher the exempt amount, the better; on the face of it, Amendment 9, in the name of the noble Baroness, Lady Altmann, is the most attractive in that regard. Although it does not provide protection against fiscal drag, she did explain why. That said, assuming inflation remains under control, it would take many years for average contributions to reach the equivalent of £10,000, one hopes, just as it would take a fair amount of time—half, obviously—to reach the £5,000 level proposed in Amendment 7 by the noble Baroness, Lady Kramer, and others. Both would, however, offer meaningful support to average earners who receive a windfall. My noble friend Lord Leigh of Hurley addressed the issue of bonuses earlier. Those earners may wish to act prudently by making a significant one-off pension contribution, without being caught by this punitive tax charge.

The amendment in the name of the noble Lord, Lord de Clifford, offers a simple and workable approach, which he explained, yet this modest uplift would not be free of any fiscal drag, as we already know the basic tax rate on which the salary sacrifice threshold will be based. However, the amount would move if the tax bands increased—if only. I fear that, in the long term, this would work against the very employees the noble Lord seeks to protect, but it is better than the £2,000 mentioned in the Bill.

Finally, I turn to the amendments designed to counter fiscal drag, a mechanism that, as we all know, is one of the least transparent ways in which Governments of all colours raise revenue. Who does it fall upon most heavily? Once again, it is the middle and lower earners of this country: the teachers, nurses, engineers and shop owners—the list goes on—the people on whom the nation depends. Yet the Bill risks penalising them for doing exactly what we encourage: saving responsibly for a decent pension in retirement. The amendments in the names of my noble friends Lady Neville-Rolfe and Lord Altrincham anchor the thresholds to the consumer prices index, while those in the names of the noble Baroness, Lady Kramer, and the noble Lord, Lord Londesborough, use the retail prices index, and we have just heard why.

However, taken together, this group of amendments is of real importance and I support them all, to a greater or lesser extent. We have to try to move this absurdly low number. Each of them, in different ways, seeks to protect the middle and low earners who are trying to do the right thing and save for their futures.

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[Lord Londesborough (CB)]

My Lords, I will speak to Amendments 12 and 26, tabled by the noble Baroness, Lady Neville-Rolfe, and the noble Lord, Lord Altrincham, to which I have added my name. I am also supportive of Amendment 27 in the name of the noble Baroness, Lady Kramer, to which I should have added my name; I apologise for not doing so.

I spoke in the previous group about pension inadequacy. This is especially true for employees in our start-ups, scale-ups and SMEs in general. So the exemptions proposed in Amendment 12 get my full support. I should declare my interests as a chairman, investor and adviser to a range of start-ups and scale-ups.

There is an element of Groundhog Day here: some noble Lords will remember that I tabled a similar exemption on behalf of SMEs in last year’s NICs Bill. With the invaluable support of the noble Baronesses, Lady Neville-Rolfe and Lady Kramer, we achieved a majority of about 100 on Report. At that point, we issued some fairly blunt warnings in relation to jobs; I am afraid that those warnings have been borne out by the employment figures, especially at entry level and in part-time roles among SMEs. These same employers, who are struggling both to create new jobs—look at the vacancy numbers—and to sustain existing ones, face yet more complications and costs in the area of national insurance contributions. Increased burdens at a time when we desperately need to generate per capita economic growth are not well timed.

Some noble Lords will have read the recent letter a couple of weeks ago from the FSB—the Federation of Small Businesses—to the Chancellor of Exchequer. It made for particularly grim reading. More than a third—I emphasise that—of employers among SMEs plan either to shut down their companies or to reduce output due to higher employment costs, increased business rates and increased energy costs. If we want to protect our vital SME ecosystem, we need to stop punishing them—I say “punishing” because it is appropriate, as these are punitive measures—and complicating their business of employment.

In the light of what I have just said, there is a clear need for a review of the impact of the Bill on SMEs, as is outlined in Amendment 26, which also gets my full support.

[Lord Ashcombe (Con)]

My Lords, I support the amendments in this group in the names of my noble friend Lady Neville-Rolfe, the noble Baroness, Lady Kramer, and others—in fact, quite frankly, most of the noble Lords currently in Committee.

These amendments speak directly to the reality facing SMEs and charities, which are organisations that form the backbone of our economy and social fabric. These employers have already endured a succession of rising costs—I have a few to add, so I will go through them again—such as higher national insurance, changes to inheritance tax, increases in the minimum wage, new obligations under the Employment Rights Act, business rate adjustments and the continuing shock of energy prices. A handful of sectors have received modest relief but, for most, these pressures fall straight to the bottom line. The cumulative effect is profound.

Charities are no better placed. They are all under extraordinary strain, yet they provide services that the state itself cannot easily replace. How do these organisations continue to operate if further costs are piled on them? My noble friend mentioned the outrageously appalling numbers.

There is even more concern when donors are typically being more hesitant, due to the overall sentiment in the country to donate. This is not merely short-sighted; it risks creating far greater financial and social pressures for future Governments. The Bill adds yet another cost: it raises employment expenses at a time when many organisations are already stretched to breaking point. It undermines their ability to offer competitive pension packages, often one of the few tools available to attract and retain skilled staff. There is a high chance that these businesses will simply withdraw salary sacrifice schemes and may simply withdraw themselves from the market.

Implementation is scheduled for 2029, which gives these operations time to review the situation, which is, as we have heard, very complex. Many SMEs do not have HR teams to manage new thresholds, payroll changes or contract revisions. They will be forced to pay for external support that they can scarcely afford in the current climate. This is not a policy that encourages growth; it is one that diverts time, money and energy away from the very activities that drive economic vitality. This is on the basis of companies that employ on an annual basis, but what happens if they take on shift and seasonal workers who may have more than one occupation, which we have already heard quite a lot about? The complexity merely increases ever more, as does the expense, if the company is prepared to continue with salary sacrifice schemes at all.

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[Lord de Clifford (CB)]

I have the pleasure of supporting the amendment from the noble Baroness, Lady Kramer. At Second Reading, I raised behavioural change and the OBR’s forecast about the drop in income is essential. Employers will look to find the most tax efficient way to make pension payments, and therefore we need the OBR to make sure that it accounts for these payments. As an employer, although it will increase administration, if there is a saving to be made, we will look for opportunities to pay pension payments in alternative ways. We covered that earlier, and the Minister gave a little reassurance that employer pension contributions may be acceptable and will not be counted as a salary sacrifice. As an employer, that would be welcome.

[Lord Londesborough (CB)]

I will very briefly add one question about the OBR forecast. I think that the noble Baroness, Lady Kramer, said at Second Reading that she found the timing “weird”. I certainly find it extraordinary that we have a five-year forecast of which the first three years are irrelevant—they are zero—and then we have a 48% fall in the second year. This begs the question: where are the forecasts for years three, four and five? If we are following this trend, we have a fireworks display. As the noble Lord, Lord Altrinchan, said, the Government should not be indulging in short-term fiscal levers. Where are the forecasts for those years? These measures do not actually come into effect until the financial year 2030.

[Lord Livermore (Lab)]

My Lords, I will first address Amendment 31, tabled by the noble Baronesses, Lady Neville-Rolfe and Lady Altmann, and the noble Lord, Lord Altrincham. I agree on the importance of transparency on the impact of this policy, including on employers. However, an additional publication is not necessary to achieve that objective. A number of documents have already been published in line with the usual practice for national insurance contribution changes, which comprehensively set out the impacts of this measure, including on employers.

The tax information and impact note was published alongside the introduction of the Bill. This sets out the number of employers expected to be impacted by this measure, the one-off costs—including familiarisation with the change, the training of staff and updating of software—and the expected continuing costs, including performing more calculations, and recording and providing additional information to HMRC, where salary sacrifice schemes continue to be used. This equates to a one-off £75 and an ongoing £99 per business per year. The Government also published a policy costing note, which includes detail on the costing of the measures, including the tax base, static costing and a summary of the behavioural responses expected by individuals and employers.

The Office for Budget Responsibility published its economic and fiscal outlook, which provides the OBR’s independent scrutiny of the Government’s policy costing. The OBR also published a supplementary forecast note, which provided additional information that it received in last year’s Budget to further increase the transparency of this measure. Taken together, these publications already provide an appropriate and comprehensive assessment of employer impacts.

On Amendment 32, the OBR’s economic and fiscal outlook and its supplementary forecast—

National Insurance Contributions (Employer Pensions Contributions) Bill

Lord Londesborough Excerpts

2nd reading
Wednesday 4th February 2026 Lords Chamber

[Lord Londesborough (CB)]

My Lords, I accept that this Government, like their predecessor, have little room for manoeuvre if they are to keep within their fiscal rules at a time of sluggish growth, so I am not surprised to see them bearing down on the tax efficiencies of employer pension contributions, which the Treasury believes would generate almost £7.5 billion in tax revenue over the two financial years 2029-30 and 2030-31. Unlike with last year’s NICs Bill, with its growth-sapping and job-depressing £25-billion hike in employers’ NICs, I currently have no plans to table any amendments to this Bill—but I do have two questions for the Minister about Clause 1.

Before asking those questions, let me say that I am concerned that the Bill penalises the responsible working person who is doing the right thing, putting some money aside to fund their retirement and old age, as a pension funding crisis looms on the horizon. For greater insight into that, and the disturbing economics of our ageing society, perhaps I may recommend the latest report, Preparing for an Ageing Society, from the Economic Affairs Committee, on which I sit, as does the noble Lord, Lord Davies of Brixton. It is a sobering read because, quite simply, we are not prepared.

The first area I would like to probe concerns the forecasts for £40 million to £75 million annual losses in tax revenue in the next three years, before the Bill comes into force. I understand that those losses factor in the expected behavioural change that the noble Baroness, Lady Neville-Rolfe, correctly highlighted, but they strike me as undercooked based on what I am seeing and hearing at the coalface. I should declare that I am an adviser to, and invest in, a range of start-ups and scale-ups, a number of which, understandably, have drawn up plans for their staff to increase and front-load levels of salary sacrifice while the three-year window allows, so that both employer and employees reduce their exposure to NICs.

Of course, I accept that that is anecdotal evidence, but it strikes me that the behavioural change triggered by Clause 1 of the Bill may result in nine-figure annual reductions of tax revenues: that is, hundreds of millions, not tens of millions, as suggested by the very brief tax information and impact note. Could the Minister explain how these figures have been calculated? What are the assumptions? The Minister may be interested to hear the advice coming from a leading HR and tax consultant, whose advice to CFOs and CPOs reads as follows:

“There are still more than three years to take advantage of salary sacrifice available and, with another General Election due in 2029, the legislative landscape could change again”.


My second question concerns the rationale for setting the contributions limit at £2,000 per tax year, which, as we have just heard, will hit middle earners the hardest. As we have heard, due to the way that employee NICs work, the deductions will be 2% of the contribution over the cap for higher earners but up to 8% on the excess for people earning below £50,000. Why are we hitting this group, which includes nurses, therapists, teachers, data scientists, young professionals and entrepreneurs, so disproportionately hard? Could the Minister please explain? This has some echoes of last year, when the increases to employers’ NICs disproportionately penalised SMEs with more than three staff, employers in the lower-paid sectors and, especially, part-time workers in areas such as hospitality and retail—and look how that has worked out for job creation and employment prospects in those sectors since.

I finish with a more general point about our tax system. This Bill and last year’s Act highlight why we need to radically overhaul—that is, simplify—our horrendously complicated tax code, which is an accumulation of chopping and changing by Governments on both sides over the last 50 years or so. However, I acknowledge that that is a big subject for another day, and time is short.

Public Sector Productivity

Lord Londesborough Excerpts

Wednesday 7th January 2026 Lords Chamber

[Lord Livermore (Lab)]

No. As the noble Lord says, public sector productivity has dropped significantly since 2019. This Government inherited a situation in which public sector productivity was 5.6% below pre-pandemic levels. That is clearly unacceptable and there are far greater issues going on than those that the noble Lord raises. I hope, as I have said before, that he will acknowledge some of the things this Government are doing to drive greater productivity in the public sector. We are working with the Office for Value for Money to identify £14 billion of efficiencies. We have gone further than that and identified a further £2.8 billion of efficiencies. We are investing in digital and AI transformation, workforce reform, rationalising the Government estate and improving procurement processes.

[Lord Londesborough (CB)]

My Lords, there is growing support for a social media ban for all those under the age of 16. In the interests of public sector productivity, would the Minister consider a similar ban during working hours for all government officials and civil servants under the age of 60?

[Lord Livermore (Lab)]

I do not think I would. I suspect social media, when used correctly, can help enhance productivity.

Agricultural Property Relief and Business Property Relief

Lord Londesborough Excerpts

Tuesday 6th January 2026 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to my noble friend for the support that he sets out for the measures that we have announced. He is right about the importance of the farming sector to our economy and our society. The Government have allocated a record £11.8 billion to sustainable farming and food production over the course of this Parliament. That includes the largest financial investment in nature-friendly farming that has ever been seen. My noble friend is also right to point to the importance of the EU reset to the farming sector. I was very pleased to see the commitment to an SPS agreement as part of that EU reset. I assure him that the UK Government are ready to move very quickly to secure that agreement and that the negotiations are ongoing.

[Lord Londesborough (CB)]

My Lords, I commend the Government on adjusting the threshold to £2.5 million, which I and other Cross-Benchers advocated a year ago in this place and which strikes the right balance. However, how many agricultural, forestry and fishing businesses closed in the 12 months since the 20% IHT measure was announced? How does that compare with the year before? I believe that the ONS has released this data. What redress, if any, will be offered to those businesses that have closed?

[Lord Livermore (Lab)]

I do not have that data to hand, but I am more than happy to write to the noble Lord.

OBR: Resignation of Chair

Lord Londesborough Excerpts

Monday 8th December 2025 Lords Chamber

[Lord Livermore (Lab)]

I am not aware of any academic studies into what my noble friend asks about. I had the privilege of working in the Treasury for 10 years before the OBR came into existence, and I have now worked on two Budgets since the OBR came into existence. It is worth repeating that the Government are committed to the independence of the Office for Budget Responsibility. There is academic evidence that suggests that stability has a significant advantage in terms of the performance of the economy, economic growth et cetera. The OBR should and does remain at the heart of economic and fiscal policy-making, and the strength of that institution is a vital pillar in the Government’s commitment to economic stability.

[Lord Londesborough (CB)]

My Lords, I have two brief points for the Minister. First, given the importance of the OBR, why is it so lightly resourced? Those of us who run businesses or organisations of 50 staff will know that IT and security systems will essentially be back office and unsophisticated, as indeed is the case with the OBR. What are the lessons going forward on resourcing the OBR?

Secondly, this leak appears to be a technical systemic error—a serious one, yes, and naive, certainly, but not deliberate. If that is a resignation matter for the chairman, what does this mean for personnel in the Treasury and No. 11 who have been involved in deliberate and extensive pre-Budget briefings and operations?

[Lord Livermore (Lab)]

On the first question, the noble Lord is quite right to identify back-office systems as one of the issues identified by the report. He talks about systemic risk. We will look at wider questions of the systemic risk that this incident has uncovered, including the report’s conclusion that the OBR’s information security arrangements should have been regularly re-examined and assured by the management of the OBR.

His second question he expresses as fact. It is, of course, just an assertion. We take the Budget process very seriously and we put the utmost weight on Budget secrecy. As I have said, a leak inquiry is now under way with the full support of the Chancellor and the whole Treasury team. The Permanent Secretary to the Treasury will also conduct a review of the Treasury security processes to inform future fiscal events.

Public and Private Sector Productivity Trends

Lord Londesborough Excerpts

Thursday 30th October 2025 Lords Chamber

Asked by

[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.

GDP Per Capita

Lord Londesborough Excerpts

Monday 20th October 2025 Lords Chamber

[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.

Unpaid Tax

Lord Londesborough Excerpts

Monday 7th July 2025 Lords Chamber

[Lord Londesborough (CB)]

My Lords, back in February the Public Accounts Committee accused HMRC of not being

“sufficiently curious about the true scale of tax evasion”

in this country, suggesting that the tax authority’s estimate of £5.5 billion a year may be a significant underestimate. Does the Minister share the committee’s concern?

[Lord Livermore (Lab)]

After the measures we took in the Budget and the Spring Statement, no one could possibly say that we are not sufficiently resourcing the fight against the tax gap. As I said in my original Answer to my noble friend, the National Audit Office recognises in its report that this Government are scaling up compliance activity to tackle serious offshore non-compliance and have committed further funding to do so. It also recognises many of the measures we are taking, including, as I said earlier, significant additional investment in compliance officers by the end of the Parliament. The noble Lord will recognise that this is the most ambitious package to close the tax gap ever; we have committed an additional £660 million each year for measures to do so and by the end of the Parliament we will raise an additional £7.5 billion a year.

Economic Growth

Lord Londesborough Excerpts

Wednesday 11th June 2025 Lords Chamber

[Lord Livermore (Lab)]

I very much agree with my noble friend on every word that he said. The spending review that we saw this afternoon from the Chancellor set out capital spending that increases growth by 1.4% in the long term. Every single penny of that capital spending has been opposed by the party opposite. The spending review set out a housing settlement—the biggest investment in a generation. It set out record levels of R&D spending, the biggest ever transport settlement, and a record commitment to skills investment. Every single penny of that spending was opposed by the party opposite. It can talk down Britain, but it opposes every single measure this Government are taking to increase growth in the economy.

[Lord Londesborough (CB)]

My Lords, perhaps I might offer some Cross-Bench objectivity. Here it comes. The 0.7% growth rate in Q1 was encouraging, but the growth rate over the last three quarters, which covers this Government’s tenure, is just 0.8%. That is less than in both the eurozone and the US. Does the Minister agree that it is growth per capita that matters—not the forecast but the track record here and now? And how concerned is he that our economic growth rate continues to lag our population growth?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his question. He did indeed show his characteristic objectivity. I will simply say that, where GDP per capita fell in the last Parliament, GDP per capita is forecast to rise by 5.6% over the course of this Parliament.

Mansion House Accord

Lord Londesborough Excerpts

Wednesday 14th May 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I know that she has a great deal of expertise in this matter, and I enjoyed the meeting that she and I had with my honourable friend the Pensions Minister on this exact topic—he mentioned her in his remarks in answer to this UQ yesterday in the other place, so she has clearly had a big impact on his thinking. I am pleased, and I welcome the fact, that she welcomes these reforms. She has often called for greater investment by pension funds in productive assets, which I think is exactly what is being delivered. She has called for greater investment by pension funds in UK assets, which is again what is being delivered. Of course, there is always more that can be done; I hear what she says about the campaign that she has led for many months now, and I am sure that my honourable friend will look further at that issue.

[Lord Londesborough (CB)]

My Lords, a number of pension providers have warned that progress will be dependent on

“a steady supply of high-quality UK investment opportunities”.

That is a big pipeline challenge, because our record of financial returns on infrastructure projects is, as we know, suboptimal. Investing in fast-growing start-ups and scale-ups, whether here in the UK or overseas, carries far greater risk. In many sectors such as tech, the failure rate of such start-ups is over 90%. Can the Minister therefore explain how these sorts of investment opportunities sit with the pension funds’ fiduciary and consumer duties to act in their clients’ interests in terms of maximising returns for pensioners without taking excessive risk?

[Lord Livermore (Lab)]

The noble Lord is absolutely right about the importance of the pipeline that he speaks about. The Government are playing our part in that, with £100 billion of additional public investment over the course of this Parliament. Our job as the Government is also to support the pipeline of investable projects, which is why we are getting the country building through our planning reforms; why we have ended the ban on the development of onshore wind; why we have set up the National Wealth Fund; and crucially, why we will be publishing, at the time of the spending review, the 10-year infrastructure strategy and modern industrial strategy.

The noble Lord is also right when he talks about the long-standing problem in the UK economy of the ability for growing firms to get hold of scale-up finance, which this accord will help to address. The accord will provide investment for infrastructure but also provide growth capital to a much wider range of firms. These are often smaller-ticket items, and pension funds will need them to be aggregated to a higher level, which is exactly the work of the British Business Bank.