Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of rising input costs, labour costs and taxes on small and medium-sized enterprises in the UK.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government set out its overall approach for supporting SMEs in the Small Business Strategy published in July 2025 and built on this with targeted reforms to support small businesses at the Budget in November 2025.

Through our changes to Employer National Insurance Contributions, the threshold at which business start paying Employer NICs has doubled to £10,500.

We are providing support for small businesses in a number of other areas. We are introducing the toughest late payment laws in the G7. We are changing the rules to fully fund SME apprenticeships training costs for eligible people under the age of 25, providing the skills that both workers and businesses need. Through the new Business Growth Service, small businesses will be able to access support with skills training, recruitment, or accessing Start Up Loans and Export Finance.

Question to the Department for Work and Pensions:

To ask His Majesty's Government what estimate they have made of the number of pensioners whose incomes will be below the minimum retirement living standard in 2040.

Answered by Baroness Sherlock - Minister of State (Department for Work and Pensions)

This Government is committed to delivering greater security in retirement for future retirees. The Pensions Scheme Bill will put in place bigger, better pension schemes that have the scale to deliver better returns, a strong Value for Money framework to ensure schemes are delivering these returns, and new Guided Retirements to support people to turn their savings into an income in retirement.

The Government has also revived the Pensions Commission, which is reviewing our pensions system as a whole and the retirement outcomes it delivers, with a focus on adequacy, fairness and sustainability.

DWP’s latest estimate, in July 2025, found around 13% of current working-age individuals were on track to have an income level in retirement below the Pensions UK Minimum Retirement Living Standard.

For those becoming a pensioner in the 2040s, it is estimated that 15% will fall below the Pensions UK Minimum Standard, the equivalent of around 1 million individuals.

For further detail please see:

Analysis of Future Pension Incomes 2025 - GOV.UK

analysis_of_future_pensions_incomes_data.xlsx – See table 4

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they will take to support job creation and infrastructure development in the AI Growth Zone in South Wales.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

The Government is establishing AI Growth Zones (AIGZs) to deliver the infrastructure needed for the UK to develop and deploy advanced AI at scale.

Following the announcement of the fourth AI Growth Zone in South Wales, we are working with national and regional government, businesses and local skills providers to address key barriers to investment in the area and accelerate benefits for communities across South Wales. Our AI Growth Zone policy package unlocks £5 million for each site to invest in local benefits and capitalise on the AI economy. This additional funding can support initiatives such as expanding data centre-focused skills pathways, creating more high-skilled, high-paying jobs and strengthening the local research environment.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of legacy IT infrastructure on the ability of UK banks to adopt new financial technology and AI systems.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government recognises that legacy IT infrastructure can present challenges for UK banks as they seek to adopt new financial technology and Artificial Intelligence (AI) systems.

However, the Government believes that safe adoption of AI by the financial services sector is a major strategic opportunity, with potential to power growth across the UK. The Government and regulators are taking a ‘pro-innovation’ approach to AI regulation across the economy and in financial services.

The Government is focused on ensuring that the UK’s policy and regulatory environment is fit for purpose to seize the opportunity of our dual strengths in financial services and AI, and positioning the UK as a world leader in the safe adoption of AI in financial services.

The Financial Services Growth and Competitiveness Strategy is an important part of that effort, with the appointment of an AI Champion intended to act as a catalyst for AI adoption and innovation in financial services.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what assessment they have made of the impact of employers adopting AI systems on the labour market, and what steps they are taking to ensure workers are equipped with the skills required by the labour market.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

The Get Britain Working White Paper sets out how we will address key labour market challenges and spread opportunity in order to fix the foundations of our economy so we can make the most of the opportunities AI presents. The Government is supporting workforce readiness for AI through a range of initiatives.

The new AI Skills Hub, developed by Innovate UK and PwC, provides streamlined access to digital training. This will support government priorities through tackling critical skills gaps and improving workforce readiness. We are also partnering with 11 major companies to train 7.5 million UK workers in essential AI skills by 2030 and expanding AI education in universities, by launching Pioneer Fellowships for cross-disciplinary upskilling.

Question to the Department for Science, Innovation & Technology:

To ask His Majesty's Government what steps they are taking to encourage professional services firms to adopt artificial intelligence productivity tools.

Answered by Baroness Lloyd of Effra - Baroness in Waiting (HM Household) (Whip)

The Government is committed to driving AI adoption across the economy, including professional services. Through the AI Opportunities Action Plan, we are tackling barriers such as lack of awareness, trust, and technical capability. This includes expanding the BridgeAI programme (which supports organisation adopt AI with funding and hands-on support), announcing an AI champion for professional business services, and training 7.5 million workers across the economy in essential AI skills by 2030. We are also investing £11 million to grow the UK’s AI assurance market, ensuring firms can adopt tools confidently and responsibly. These measures will help businesses harness AI to boost productivity and maintain the UK’s global competitiveness.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of extending the income tax threshold freeze on the number of people paying income tax, in particular the number of higher rate and additional rate taxpayers.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government assesses every measure in the Budget and has published a tax information and impact note (TIIN) outlining our assessment of the policy. This is available here: https://www.gov.uk/government/publications/maintaining-income-tax-and-equivalent-national-insurance-contributions-thresholds-until-5-april-2031/income-tax-maintaining-the-personal-allowance-and-the-basic-rate-limit-for-income-tax-and-equivalent-national-insurance-contributions-thresholds-unt.

The number of people forecast to pay tax by marginal rate can also be found in Table 3.19 in the OBR’s November 2025 Economic and Fiscal Outlook, which is available here: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of the £2,000 cap on national insurance-free salary sacrifice pension contributions on costs for (1) employees, and (2) employers.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

A Tax Information and Impact Note (TIIN) was published alongside the introduction of the Bill containing the changes to pensions salary sacrifice. The TIIN sets out the impact on employees and employers and is available here: https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029/salary-sacrifice-reform-for-pension-contributions

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the Organisation for Economic Co-operation and Development Economic Outlook for the United Kingdom, published on 2 December.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Organisation for Economic Co-operation and Development (OECD) is an independent international organisation. The OECD’s forecast following the Budget has upgraded UK growth and reduced inflation for 2026. This follows stronger than expected growth this year, though there is much more to do.

The Budget is boosting economic growth and delivers on the country’s priorities of cutting the cost of living, reducing NHS waiting lists, and driving down our borrowing and debt.

Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government what assessment they have made of the use of AI to generate planning objections to energy infrastructure proposals, and the implications for the operation of the planning system.

Answered by Baroness Taylor of Stevenage - Baroness in Waiting (HM Household) (Whip)

Representations on major infrastructure projects, such as Nationally Significant Infrastructure Projects are designed to support the Examining Authority to identify and understand relevant matters in an application. Providing a representation is received within the allotted timeframe, is from a real person, includes a reason or reasons for that person's position and is not vexatious, it will be accepted. Once accepted, the topic(s) raised will be factored into the examination preparation and design. Submissions which simply repeat generic elements add less value and repetitive submissions, however produced, could be disregarded under the legal rules.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of changes to retail, hospitality and leisure relief announced in the Budget on small businesses.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The amount of business rates paid on each property is based on the rateable value of the property, assessed by the Valuation Office Agency (VOA), and the multiplier values, which are set by the Government. Rateable values are re-assessed every three years. Revaluations ensure that the rateable values (i.e. the tax base) of properties remain in line with market changes, and that the tax rates adjust to reflect changes in the tax base.

At the Budget, the VOA announced updated property values from the 2026 revaluation. This revaluation is the first since Covid, which has led to significant increases in rateable values for some properties. To support with bill increases, at the Budget in November 2025, the Government introduced a support package worth £4.3 billion over the next three years to protect ratepayers seeing their bills increase because of the revaluation. As a result, over half of ratepayers will see no bill increases, including 23% seeing their bills go down. This means most properties seeing increases will see them capped at 15% or less next year, or £800 for the smallest.

This support package includes capping bill increases for the smallest businesses losing some or all of their small business rates relief or rural rate relief worth over £500 million. The Government has gone further by expanding this to ratepayers losing retail, hospitality and leisure (RHL) relief to offer further support worth an additional £1.3 billion as they transition to permanently lower tax rates.

Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to define 'cash-like investments' in relation to stocks and shares Individual Savings Accounts, and how charges on cash holdings in those accounts will be applied.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

At the Budget in November 2025, the government announced that from 6 April 2027, the annual Cash ISA limit will be set at £12,000 within the overall ISA limit of £20,000. This is part of our wider strategy aimed at supporting people to get into investing, including Targeted Support, which will be available from April 2026.

Rules will be introduced to avoid circumvention of the lower limit for cash ISAs where an individual is under the age of 65. The ISA industry will be consulted on the draft legislation, which will be made by amendments to the ISA Regulations, and laid before Parliament well ahead of April 2027.

Question to the HM Treasury:

To ask His Majesty's Government whether they have made an assessment of the impact of the introduction of the high level council tax surcharge on the number of valuation challenges to the Valuations Office Agency.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The Government recognise the importance of the right to appeal, and will consult on the details of this in the new year.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the forecast by the Office for Budget Responsibility that business investment may decline in 2026.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

HM Treasury does not prepare forecasts for the UK economy. These forecasts, including assessments of the impact of policy decisions, are the responsibility of the independent Office for Budget Responsibility (OBR). The OBR publishes its forecast in the Economic and Fiscal Outlook (EFO). The OBR’s latest EFO is available here: https://obr.uk/efo/economic-and-fiscal-outlook-november-2025/

Our economic strategy to deliver growth is investment across the public and private sectors, and in every part of the country. Our modern Industrial Strategy is making a difference. We have taken bold action by tearing up red tape with plans to reduce business regulatory costs, delivering the biggest planning reforms in a generation and reducing electricity bills for over 7000 businesses.

Question to the HM Treasury:

To ask His Majesty's Government, with regard to the report by the Office for Budget Responsibility, Economic and fiscal outlook, published on 26 November, what assessment they have made of the risks of elevated global equity valuations driven in part by AI technology stocks to the economy.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

The government does not comment on individual market moves.

The Office for Budget Responsibility (OBR) is the government's official forecaster responsible for assessing the UK economic and fiscal outlook, including the macroeconomic impacts of policy and the risks to the UK outlook. In its November 2025 Economic and Fiscal Outlook, the OBR assessed the potential impacts of a shock to global equity prices. The OBR presented two scenarios with a potential peak impact on UK real GDP of 0.5%-0.6% relative to its central forecast.

HM Treasury maintains a comprehensive framework for assessing and managing risks to the economic and fiscal outlook. This includes systematic monitoring through internal risk processes and risk governance forums, and collaboration with other government departments. HM Treasury also works closely with the UK financial regulators to assess risks relating to financial markets.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of expanding the Treasury bill market on refinancing risk exposure.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

Treasury bills represent a core component of the government’s stock of marketable debt, alongside gilts.

The government will be launching a consultation in January 2026 on the potential expansion and deepening of the UK Treasury bill market, including how this might be facilitated by HM Treasury and the UK Debt Management Office.

As well as reflecting feedback from the public, including market participants, and the most recent market and demand conditions, any changes following the consultation will reflect an assessment of cost and risk in accordance with the government’s debt management and cash management objectives. This includes implications for the government’s refinancing risk exposure.

Question to the Home Office:

To ask His Majesty's Government what consideration they are giving to exemptions to the proposed ban on ransomware payments for operators of critical national infrastructure.

Answered by Lord Hanson of Flint - Minister of State (Home Office)

Protecting the UK from cyber threats is a top priority for this Government. Ransomware measures are being considered as part of a wider all-of-Government approach to reduce cyber threats, alongside the Cyber Security and Resilience Bill by DSIT.

It is long-standing Government advice, and that of the National Cyber Security Centre, to not pay ransoms as there is no guarantee of a return to business-as-usual provision. .

We have consulted on this, and as published in the Government response to ransomware legislative proposals: reducing payments to cyber criminals and increasing incident reporting (accessible) - GOV.UK, there was split feedback regarding whether a targeted ban should have an exceptions(/exemptions) process. 43% of respondents agreed, 40% disagreed, 17% didn’t know. Qualitative responses cited national security and public safety as reasons for the need.

As with all feedback provided in the consultation response, the Government is considering the most appropriate and proportionate course of action and developing the policy in collaboration with industry and the relevant Government departments. No final decision has yet been made, and the Government is looking very carefully at all options.

Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the impact of increasing taxes on (1) dividend income, (2) savings income, and (3) salary sacrifice pension contributions on (a) tax receipts, and (b) the number of taxpayers in each tax band.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

In 2029-30 changes to taxation of dividend income are expected to raise £1.3bn, and changes to taxation of savings income are expected to raise £0.5bn. In 2029-30 changes to salary sacrifice pension contributions are expected to raise £4.8bn.

The exchequer impact of the tax changes outlined can be found in Table 4.1, rows 50 to 52, of the Budget 2025 document available here:
https://www.gov.uk/government/publications/budget-2025-document

Impacts on taxpayers can be found in the corresponding Tax Information and Impacts Note available at the following links:

https://www.gov.uk/government/publications/income-tax-changes-to-tax-rates-for-property-savings-and-dividend-income/income-tax-changes-to-tax-rates-for-property-savings-and-dividend-income

https://www.gov.uk/government/publications/salary-sacrifice-reform-for-pension-contributions-effective-from-6-april-2029

Question to the HM Treasury:

To ask His Majesty's Government what estimate they have made of the level of (1) welfare spending, (2) tax receipt growth, and (3) day-to-day public services spending, in 2029–30.

Answered by Lord Livermore - Financial Secretary (HM Treasury)

According to the latest forecasts produced by the Office for Budget Responsibility (OBR), as part of the Economic and Fiscal Outlook (EFO) - Table A.7 and A.9:

(1) Welfare expenditure is forecast to be £389.4 billion in 2029-30.

(2) Tax receipts are forecast to be £1,483 billion in 2029-30.

(3) Day-to-day public services spending (PSCE in RDEL) is forecast to be £589.1 billion in 2029-30.