Reducing Government Spending

Lord Watts Excerpts

Tuesday 24th March 2026 Lords Chamber

[Lord Livermore (Lab)]

As I said at the outset, of course UK markets are affected by global developments but it is a long-standing convention that the Government, as an issuer in gilt markets, do not comment on specific market moves. The noble Lord will be aware that the full economic impact of the conflict will depend on its severity and duration, but we enter this period of uncertainty with the fundamentals of our economy strong. The spring forecast showed that this year borrowing falls by almost 1 percentage point to its lowest level for six years, 4.3%. That is the largest fall in the deficit since 2016. Borrowing as a share of GDP will then fall in every year of the forecast, from 4.3% in 2025 to 1.6% in 2030. Borrowing will fall more than in any other G7 economy. This year, for the first time since 2004, we will be borrowing less than the rest of the G7 on average.

The noble Lord asked about welfare. It is right to point out that in the last five years of the previous Government, spending on welfare increased by £88 billion. No one believes that the system we inherited is working: it abandoned too many people to a life on benefits, it wrote off too many people as too sick to work and it condemned too many children to be too poor to eat. That is exactly why we are reforming the welfare system.

[Lord Watts (Lab)]

My Lords, I have a suggestion for saving money in the public sector. At the moment, billionaire farmers who do not pay any tax in the UK can claim farming subsidies. Is it right that we all pay them extra money at a time when they have not paid money into the system?

[Lord Livermore (Lab)]

I am sure my noble friend makes a very interesting point. It is notable, though, that the party opposite’s first instinct is to cut spending at a moment of instability such as this. That is precisely the stop-go pattern of investment that got us into the problems that our economy is now in. Cutting investment at this point and returning to austerity would be the very worst thing that we could do for growth—the very definition of short-termism—yet that is precisely what previous Chancellors with previous fiscal rules have done. In the years following the financial crisis, austerity took demand out of the economy when it was needed most, undermining investment in critical infrastructure, weakening productivity and choking off growth. Unlike today’s Conservative Party, we will not repeat the mistakes of the past.

Small Businesses: VAT Threshold

Lord Watts Excerpts

Thursday 5th March 2026 Lords Chamber

[Lord Livermore (Lab)]

I fully understand that, and I am grateful to the noble Lord for reminding me of it. Last year, the Government published their plan for small and medium-sized businesses, setting out support for smaller firms. We are partnering with industry to unlock productivity growth through the adoption of digital technologies. We are legislating to tackle late payments, which cost the UK economy £11 billion a year. We have launched a new Business Growth Service to make it easier to access advice and support. We are making SMEs a national priority in our new procurement policy system. We are expanding the UK Export Finance capacity by £20 billion and creating a small export builder insurance product. I assure the noble Lord that we are very aware of the points he raises.

[Lord Watts (Lab)]

My Lords, are the Government concerned about what seems to be the growth of cash-only businesses? They are not there for the customers’ benefit but, in some cases, for the business to avoid tax and other things.

[Lord Livermore (Lab)]

Yes, absolutely, the Government are very aware of the points that my noble friend raises. HMRC has recently engaged in increased enforcement activity around those exact points.

Business Rates

Lord Watts Excerpts

Thursday 29th January 2026 Lords Chamber

[Lord Watts (Lab)]

My Lords, is it not the case that the previous Government wrecked the economy and gave us Brexit, which reduced our ability to pay for public services? The Opposition now seem to be calling for greater public expenditure and tax cuts. It sounds as though they have found not just one money tree but an orchard. Can the Minister explain how someone can call for more expenditure and less tax?

[Lord Livermore (Lab)]

I very much agree with everything that my noble friend said. Among the long litany of the previous Government’s failures, their failure on growth was one of their most significant. We saw Brexit and the Liz Truss mini-Budget, and we know what business thought of that. We saw business investment across the whole economy fall to the lowest level in the entire G7. My noble friend is also absolutely correct to point out that, every time we debate the economy in the Chamber, the noble Baroness opposite supports every single piece of spending that we announce but opposes every single piece of revenue raising. It is quite clear that those two things do not add up.

On the Tory record more widely, we should note that 7,000 pubs have closed in the past 14 years, and that the previous Government’s plans were to scrap entirely the temporary Covid retail, hospitality and leisure relief in 2025. Their plans show that they would have ended it overnight. We have chosen a different path by extending that support with the help of £4.3 billion of additional support.

--- Later in debate ---

[Lord Watts (Lab)]

My Lords, has the Minister noticed that the Opposition say that the private sector does not like U-turns, they say they do not like U-turns, and then they call for more U-turns? What is their strategy for dealing with our current problems?

[Lord Livermore (Lab)]

I cannot answer for the strategy of the party opposite—I am sure we would all like to know—but what matters most is that we get to the right policy and I believe that we have done so in this case.

Business Rates: Retail, Hospitality and Leisure

Lord Watts Excerpts

Tuesday 20th January 2026 Lords Chamber

[Lord Livermore (Lab)]

The noble Baroness is absolutely right about the important role that those businesses play in giving young people their first jobs, and I agree with her. We are taking significant measures to help the UK hospitality sector, which employs more than 2 million people and is vital to high streets across the UK. Based on recommendations from the licensing taskforce, we published a new National Licensing Policy Framework for the hospitality sector at the time of the Budget. We are exploring planning reforms to help pubs and hospitality to expand, and the hospitality support fund has helped pubs in rural areas to diversify, ensuring that they can continue in their role as vital community hubs.

[Lord Watts (Lab)]

My Lords, on pub companies, there is no doubt that the tenants are facing major problems in the UK, but does the Minister agree with me that, although those pubs are struggling, brewers and pub companies are making record profits? Is it not time they passed that on to the pubs themselves?

[Lord Livermore (Lab)]

My noble friend is correct to say that pubs have been struggling in this economy for a long time. In the previous 14 years under the last Government, 7,000 pubs closed in the UK, so this is a long-standing issue. On his wider question, I am more than happy to look into that.

Agricultural Property Relief and Business Property Relief

Lord Watts Excerpts

Tuesday 6th January 2026 Lords Chamber

[Lord Livermore (Lab)]

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

[Lord Watts (Lab)]

My Lords, if there is now a shortfall in resources for the Government, can the Minister look at trust funds? These are the major weapon used by very rich people to avoid tax on inheritance.

[Lord Livermore (Lab)]

It is right that everybody pays their fair share towards the public services and that the tax system is based on fairness. I am confident that we have announced measures in the previous two Budgets to make sure that the tax system is fairer.

Budget: Press Briefings

Lord Watts Excerpts

Tuesday 18th November 2025 Lords Chamber

[Lord Livermore (Lab)]

The right reverend Prelate says that the Government are the source for this speculation when he has no such evidence for that. I am not going to comment on the ongoing Budget process, as I say, nor on the speculation that is perfectly usual ahead of a Budget.

[Lord Watts (Lab)]

My Lords, is the Minister surprised at the criticism that has come from the Opposition Benches about leaks when, in the past, leaks went as widely under any previous Government as under this Government? Is he surprised to hear criticism about the impact on the bond markets after we have had one of the worst times, financially, as mismanagement by the previous Government caused a crash in the market?

National Insurance: Partnerships

Lord Watts Excerpts

Monday 10th November 2025 Lords Chamber

[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?

GDP Per Capita

Lord Watts Excerpts

Monday 20th October 2025 Lords Chamber

[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.

School Fees: VAT

Lord Watts Excerpts

Monday 13th October 2025 Lords Chamber

[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.

Making Tax Digital

Lord Watts Excerpts

Wednesday 17th September 2025 Lords Chamber

[Lord Livermore (Lab)]

I reassure the noble Lord that I absolutely understand that. I recently answered a Written Question on this exact point, so I am more than happy to share with the noble Lord the Answer to that Question.

[Lord Watts (Lab)]

My Lords, does the Minister agree that everyone who pays PAYE has to pay their fair share of tax, but an awful lot of people do not pay their fair share of tax? Is not the use of technology one way in which we can make sure that they make their contribution?

[Lord Livermore (Lab)]

My noble friend makes an important point; the tax gap is a significant issue. Small businesses account for some 60% of that tax gap, much of which comes from unintended errors. One of the big advantages of Making Tax Digital is having more frequent reporting, and therefore there are far fewer errors. There is also the pre-population of end-of-year tax returns, which again reduces errors. If we can reduce some of those errors, we can reduce quite a significant part of the tax gap.