Monday 18th March 2024

(3 months, 1 week ago)

Lords Chamber
Read Hansard Text Watch Debate
Moved by
Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton
- View Speech - Hansard - - - Excerpts

That this House takes note of the Spring Budget 2024.

Baroness Vere of Norbiton Portrait The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
- Hansard - - - Excerpts

My Lords, it is a pleasure to open this double-header in your Lordships’ House. It is an opportunity to discuss and debate the measures brought forth by the Chancellor in the Spring Budget and to consider the National Insurance Contributions (Reduction in Rates) (No. 2) Bill, or the NICs Bill.

I start by taking this opportunity to welcome my noble friend Lord Kempsell to your Lordships’ House. He brings much experience and expertise, and I very much look forward to hearing his maiden speech today. But, before I delve into the measures announced in the Spring Budget, I shall first touch on the wider economic context.

In recent times, the UK economy has felt the impacts of a financial crisis, a pandemic and an energy shock, caused by the war in Europe. Yet, despite the most challenging economic headwinds in modern history, since 2010, growth in the UK has been higher than in every other large European economy. Unemployment has halved, absolute poverty has gone down and there are 800 more people in jobs for every single day that this Government have been in office.

The Government remain steadfast in their support for the independent Monetary Policy Committee at the Bank of England in its action to bring down inflation. Supported by the MPC’s actions and the Government’s fiscal policy, inflation has fallen significantly from its peak and is forecast to return to the 2% target in the coming months. Because of the progress we have made—because we are delivering the Prime Minister’s economic priorities—we can now help families not only with temporary cost of living support but with permanent cuts in taxation. We do this because lower tax means higher growth, and higher growth means more opportunity, more prosperity and more funding for public services.

With the pandemic behind us, we must once again build up our resilience to future shocks. That means bringing down borrowing so that we can start to reduce our debt. The OBR has confirmed that, based on the measures announced at the Spring Budget, debt will fall in every year of the forecast to 94.3% of GDP by 2028-29. Underlying debt, which excludes Bank of England debt, will be at 91.7% of GDP in 2024-25, according to the OBR, rising slightly before falling to 92.9% in 2028-29. The Government will have final-year headroom of £8.9 billion against the fiscal rule to have debt falling in the fifth year of the forecast. Our underlying debt is therefore on track to fall as a share of GDP, meeting our fiscal rule. We also meet our second fiscal rule, for public sector borrowing to be below 3% of GDP, three years early.

This is a budget for long-term growth. The ONS reported last week that GDP rose by 0.2% in January, and the OBR expects the economy to grow by 0.8% this year and 1.9% next year. We have well and truly turned a corner. Since 2010, we have grown faster than Germany, France or Italy—the three largest European economies—and, according to the IMF, we will grow faster than all three of them cumulatively in the next five years. That means we must stick to our plan of more investment, more jobs, better public services and lower taxes.

I turn first to investment. At the Autumn Statement, the Chancellor announced that the Government would introduce permanent full expensing, a £10 billion tax cut for businesses that gives the UK the most attractive investment tax regime of any large European or G7 country. At Spring Budget, we went further by announcing that the Government will soon publish draft legislation for full expensing to apply to leased assets, a change that we will bring in as soon as it is affordable.

This Government are on the side of small businesses, the backbone of our economy. As well as the business rates support and work on prompt payments announced in the autumn, the Government will provide £200 million of funding to extend the recovery loan scheme as it transitions to the growth guarantee scheme, helping 11,000 SMEs to access the finance they need. The Government will also reduce the administrative and financial impact of VAT by increasing the VAT threshold from £85,000 to £90,000 from 1 April. This is the first increase in seven years. It will bring tens of thousands of businesses out of paying VAT altogether and encourage many more to invest and grow.

Turning now to the Chancellor’s growth industries, these sectors remain a key focus of the Spring Budget. For clean energy, we will allocate up to £120 million more to the green industries growth accelerator to build supply chains for new technology. For advanced manufacturing, we have announced over £270 million of joint government and industry investment into innovative new automotive and aerospace R&D projects. For artificial intelligence, we will invest up to £100 million over the next five years in the Turing Institute, our national institute for AI and data science. We recognise that the benefits of tomorrow’s technology rely on investing today.

For life sciences, we will support research by medical charities with an additional £45 million. This will go into a wide range of diseases, including dementia, cancer and epilepsy, and, because of the Government’s support in this sector, AstraZeneca has announced plans to invest £650 million in the UK. Finally, for creative industries, we are making permanent the 45% and 40% rates of tax relief for theatres, orchestras and museums and galleries, and will be introducing a tax credit for UK independent films.

Turning to public services, in 2010 schools in the UK were behind Germany, France and Sweden in the OECD’s PISA education rankings for reading and maths. Now, we are ahead of them. Burglaries and violent crime have halved over the last 14 years and we have invested in 20,000 more police officers. Our Armed Forces remain the most professional and best funded in Europe, with defence spending already more than 2% of GDP. Overall spending on public services has gone up since 2010 and, in the case of the NHS, by over a third in real terms. However, the best way to improve public services is not always more money or more people; we also need to run them more efficiently. That is why the Chancellor has announced a landmark public sector productivity plan that restarts public service reform and changes the Treasury’s traditional approach to public spending.

Ahead of the pandemic, between 2010 and 2019, productivity in the public sector was increasing by just under 1% a year. However, today, public sector productivity is estimated to be 5.9% below pre-pandemic levels. If we can return to pre-pandemic productivity levels, the OBR states that this could save the equivalent of £20 billion.

This Government can deliver these efficiency savings. The cornerstone of our public sector productivity programme is comprehensive investment in the NHS to transform its technology, upgrading it for the years ahead. That is why the Government are providing £6 billion of additional funding to the NHS, including funding to cover the productivity plan in full.

When it comes to taxes, the Government have consistently maintained that those with the broadest shoulders should contribute a little more. That is why the Government will abolish the current complicated tax system for non-doms, getting rid of the outdated concept of domicile and the remittance basis in the tax system, and replace it with a modern, simpler and fairer residence-based system. From April 2025, individuals who opt into the new residence regime will not pay UK tax on foreign income and gains for their first four years of UK tax residence. This is a simpler, more modern regime and is highly competitive with other similar residence regimes in Europe. But after four years, those who continue to live in the UK will pay the same tax as other UK residents.

To ensure that these changes are introduced in a careful and responsible way, we will put in place transitional arrangements for individuals who are affected by these changes. This will include a two-year temporary repatriation facility from April 2025, whereby individuals can bring their foreign income and gains that accrued while they were taxed on the remittance basis to the UK, at a 12% tax rate, so that it can be invested here. This transitional arrangement will attract an additional £15 billion of foreign funds to the UK and generate more than £1 billion of extra tax. Overall, abolishing non-dom status will raise £2.7 billion a year by the end of the forecast period.

Touching further on tax measures, to discourage non-smokers from taking up vaping, we will introduce an excise duty on vaping products from October 2026. To maintain the financial incentive to choose vaping over smoking, we will also make an additional one-off increase in tobacco duty alongside introducing the vaping products duty. We are also making a one-off adjustment to rates of air passenger duty on non-economy flights only, to account for high inflation in recent years. Perhaps most importantly, we are providing HMRC with the resources it needs to ensure that everyone pays the tax they owe; this will lead to an increase in revenue collected of over £4.5 billion across the forecast period.

The Government will use this increased revenue to help cut taxes on working families, including those who rely on child benefit. Child benefit helps with the additional costs associated with having children and, when it works, it is good for children, good for parents and good for the economy. However, the current system is confusing and unfair. That is why the Chancellor has announced a consultation on moving the high-income child benefit charge to a household-based system, to be introduced in April 2026. In the meantime, the Government will introduce two changes to make the current system fairer. First, from this April, the high-income child benefit charge threshold will be raised from £50,000 to £60,000. Secondly, we will raise the top of the taper at which it is withdrawn to £80,000. This means that no one earning under £60,000 will pay the charge, taking 170,000 families out of paying it altogether. According to the OBR, this change will see an increase in hours among those already working, equivalent to around 10,000 more people entering the workforce.

This is not the only support the Government are providing to families. At the Budget, the Chancellor announced a six-month extension to the household support fund, meaning that vulnerable households will benefit from its support until September 2024. In addition, alcohol duty will remain frozen until February 2025. The Chancellor will also maintain the 5p cut in fuel duty and freeze it for a further 12 months, saving the average car driver £50 next year and bringing total savings since the 5p cut was introduced to around £250.

Because of the progress we have made in bringing down inflation, because of the additional investment that is now flowing into the economy, because we have a plan for better and more efficient public services, and because we have asked those with the broadest shoulders to pay a bit more, this Government are once again able to reduce taxes. From 6 April, the main rate of employee national insurance will be cut by another 2p, from 10% to 8%, and the main rate of self-employed national insurance will be cut from 8% to 6%.

That brings me to the NICs Bill before your Lordships’ House today. It has two measures. The first is the reduction of the main rate of employee class 1 NICs, announced by the Chancellor at the Spring Budget. This cut builds on the changes to NICs made at Autumn Statement, and we will once again support working people by reducing the main rate of employee class 1 NICs by 2 percentage points, to 8%, on earnings between £12,570 and £50,270, from 6 April 2024. This will cut taxes for over 27 million employees.

Secondly, the NICs Bill contains a further reduction in the main rate of class 4 NICs for the self-employed. The Chancellor announced at the Autumn Statement that the main rate of class 4 would be reduced from 9% to 8% from 6 April. With the introduction of this Bill, we are cutting the class 4 main rate further, by 2 percentage points, from 8% to 6%, from April 2024. As a result of the cuts to class 4 NICs at the Spring Budget, an average self-employed person on £28,000 will see a total saving of £310 in 2024-25. Combined with the cuts from the Autumn Statement, including abolishing the requirement to pay class 2 NICs, this will save an average self-employed person £650 a year. Together with the Autumn Statement cuts, this is an overall tax cut worth over £20 billion per year—the largest ever cut to employee and self-employed national insurance.

The Government are committed to tax cuts that reward and incentivise work, and which will grow the economy in a sustainable way while ensuring that inflation remains under control. These measures will not only benefit those already in work. According to the OBR, the NICs cuts announced at the Spring Budget will increase total hours worked by the equivalent of almost 100,000 full-time workers by 2028-29.

The Government are supporting not just working people. This April, pensioners will benefit from an 8.5% increase in the state pension, on top of the 10.1% increase from last year. The full yearly amount of the basic state pension is £3,700 higher, in cash terms, than it was in 2010. I am sure that all noble Lords across the House will welcome these measures.

I have outlined only some of the measures announced by the Chancellor in his Spring Budget and have touched briefly on the details of the NICs Bill, but there is certainly much more to cover. During the debate on the Autumn Statement, I listened very carefully to many noble Lords as they encouraged the Government to spend more or to make other costly changes. I noted in my closing remarks that few noble Lords set out how they planned to pay for their proposed changes. This Spring Budget is carefully balanced to focus on growth, and it is prudent, given the economic headwinds we have faced, and which have impacted our growth and level of debt. But we have now turned a corner.

As the noble Lord, Lord Macpherson, said this weekend:

“It’s very easy to get depressed about the British economy but the plain fact is that it generally grows … There is more money in people’s pockets, the worst of the energy crisis is behind us. If anything I would expect the economy to outperform expectations for the rest of this year”.

I would, too. I beg to move.

--- Later in debate ---
Baroness Vere of Norbiton Portrait Baroness Vere of Norbiton (Con)
- View Speech - Hansard - - - Excerpts

My Lords, it is a pleasure to close today’s debate on the Spring Budget and the Second Reading of the NICs Bill. As anticipated, it has been a spirited debate with very thoughtful contributions from all Benches. I am particularly grateful for the support of noble Lords on the Benches behind me—or some of them, anyway.

In particular, I welcomed the contribution from my noble friend Lord Kempsell. His maiden speech was excellent, and I appreciate his nerdy focus on the evaluation of public spending; there cannot be enough nerds in your Lordships’ House. The Evaluation Task Force of which he spoke has already proved very useful in thinking about the evaluation evidence we use at the heart of all government decisions. It was used during the spring 2021 spending review, and I am sure it will continue to be key in future decision-making.

I was very much hoping that the noble Lord, Lord Livermore, would respond to the challenge from the noble Baroness, Lady Bennett, and set out how the Labour plan—I call it a plan but that might be stretching it—is different from the well thought-through plans of this Conservative Government. Once again, sadly, it was not forthcoming.

The noble Lord, Lord Livermore, bemoaned the fact that mortgages are high—I am not sure he understands why interest rates are high; it is to bring down inflation—and he was concerned about prices going up in the shops. I am sure he recognises that wholesale prices going down in the shops across the board is actually a very bad thing, but I will leave that there. I will say that when the Chancellor delivered this Spring Budget the markets were stable, there were warm words all round, and I think it was the sort of Budget that we needed.

It is worth reflecting on growth, which many noble Lords have talked about. Many noble Lords have reflected that the performance recently demonstrates that the economy has turned a corner, and that reflects the decisions that this Government have taken. I think the doldrums narrative and some of the words being used by the Opposition are not landing any more because they do not quite reflect what is going on in reality. My advice would be to find some slightly different wording there.

We know that our economy suffered, like other economies. My noble friend Lord Tugendhat talked about the similar internal factors and wider externalities that impacted many other economies. We also know that the combined impact of the Autumn Statement and the Spring Budget will provide a permanent 0.7% increase in the level of potential output by the end of the forecast.

There are many factors that go into GDP per capita. This Government are going to focus on how we can improve our GDP per capita, and I will come on to that in due course, but it is important that we look at wider factors as well. For example, real incomes have been growing stronger than expected this year. Real wages are now higher than pre-pandemic levels and have risen for the past seven months. The OBR now expects living standards, as measured by real household disposable income per person, to grow by 0.8% in 2023-24 and to continue to grow in all financial years over the forecast horizon. I hope the noble Lord, Lord Sikka, will at least welcome that, if almost nothing else that I have to say today.

My noble friend Lady Lawlor noted the impact of migration, as did a number of noble Lords. We are clear that migration must always benefit the UK. The UK has experienced unprecedented levels of migration since the Covid pandemic, which is why we have introduced our five-point plan. We need to think about the extent to which we support our important public services such as health, social care and education but to balance that by ensuring that we attract the best and the brightest. Highly skilled migrants contribute highly to the UK’s tech sector: 49% of the UK’s fastest- growing businesses and nine of the UK’s 14 unicorns have at least one foreign-born co-founder.

To come back to the issue of increasing the number of people contributing to the GDP of our nation, the question of getting the inactive back to work was raised by my noble friends Lord Lamont and Lord Tugendhat and the noble Lord, Lord Skidelsky. It is really important that we encourage these people back to work. That is why in the 2023 Autumn Statement the Government announced a new back to work plan, worth more than £2.5 billion, to expand employment support for the long-term sick and disabled—that includes people who have poor mental health—as well as support for the long-term unemployed. This built on a £7 billion employment package previously announced in the 2023 Spring Budget. We recognise that there is a problem that needs to be fixed. I recognise that there is probably not one silver bullet but, my word, if we can make some inroads into getting those people back into meaningful employment, that really will be a game-changer.

On inflation, I think all noble Lords will agree about the work of the Monetary Policy Committee at the Bank of England in keeping interest rates high in order to reduce inflation, which sadly has a knock-on impact on mortgage rates. We welcome the OBR’s forecast for where we think inflation is going to be. I listened with interest to the contribution from my noble friend Lady Lawlor. I will read with interest the recommendations of the economic committee that she mentioned, and the Treasury will respond as appropriate.

On the point raised by the noble Lord, Lord Skidelsky, the impact of the disruption in the Red Sea is included in the OBR forecast, which shows an increase in inflation of about 0.2% in the central case.

I will briefly go back to the issue of government debt and why we are in the situation we are in. Sometimes I refer to the unprecedented challenges of the Covid pandemic and the energy crisis spawned out of the war in Ukraine. Let us go back to the pandemic. I was a Minister throughout the whole of the pandemic, and I saw vast quantities of money propping up our economy, our society and our health system. We often talk about the furlough scheme that protected nearly 12 million jobs. That was enormous, but we do not always think about the £2 billion culture recovery fund that we put in place. Public transport systems were my old patch, and I think I managed to spend part of the £12.8 billion that we put into that. The health service got an extra £81 billion of ring-fenced Covid funding, while £5 billion went towards academic recovery.

That all needs to be remembered when noble Lords turn around and criticise what has had to happen in the forecasts for our tax rates. It has to be repaid. Next time I am closing one of these debates, because it might be quite interesting, I might go through Hansard so that my speech can literally just quote all the times when various noble Lords on the Opposition Benches wanted us to spend even more or shut things down for even longer. In those two circumstances, we would be in a much worse situation than we are now.

We emerged from the pandemic quicker than many other similar nations, but I accept that it has meant we have had to make some difficult choices on tax. We have made those choices, and now we are able to make other choices that improve the situation on tax. Let us be absolutely clear, to quote the noble Lord, Lord Livermore: the cumulative impact of the tax changes over the last four fiscal events reduces the tax burden by 0.6% from what it would otherwise have been. I think that is completely clear—super clear. I absolutely accept that the tax burden is too high, that it is going up and that there are massive underlying reasons why the tax burden is as it is. I also know that many noble Lords opposite would have had us in an even worse position had we listened to them.

We have had to take a fair approach to repairing the public finances. It is the case that we have asked everyone to contribute a little more through keeping tax thresholds fixed. It is also the case that if one enters a new tax threshold, one is earning more money; one does not get there by accident. As we know, wages are going up faster than inflation, and therefore in real terms you would be earning more money.

We have now decided that the best way to grow the economy, while ensuring that inflation is kept under control, is to reward those in work. When I first heard about taxing people twice on work, it took me a little while to get it but then I thought, “Oh my goodness, that’s absolutely true”. I have been in this game for quite a long time but I had not thought about the fact that if you are a worker, you get charged tax twice. It is right that we make the tax system fairer and simpler and reward hard work in the UK. I welcome the comments from the noble Lord, Lord Macpherson, and my noble friend Lord Lamont that we are right to focus on NICS versus income tax. I tried to follow the noble Lord, Lord Davies, but I think he was calling for a large income tax rise for unearned income so I did not go down that route.

Many noble Lords have said, “This is terrible, it is an unfunded tax cut”. I am sorry. Political parties, Governments and all sorts of people state their ambition, their vision, all the time. That is simply what the Government are doing. We want to end the unfairness whereby if you get your income from a job, you pay two types of tax—NICs and income tax—but if you get it from another source, you pay only one. Therefore, it is perfectly reasonable for us to set out a long-term ambition to abolish employee and self-employed NICs entirely and end this unfairness that sits within the tax system. It is also perfectly reasonable for us to say that we will not do this overnight; it can be done only in a fiscally responsible way and when it can be achieved without compromising high-quality public services. I do not understand why that is difficult to grasp.

On the comments of the noble Baroness, Lady Lister, I recognise that some people may be concerned that this will have an impact on state pensions or contributory benefits, and would like to reassure her that it does not. We believe in the contributive principle; cutting NICs does not affect anyone’s entitlement to the state pension or contributory benefits, nor does it impact decisions on funding for the NHS. The fact that the money still goes into the national insurance fund is a bit of smoke and mirrors; as all noble Lords know, the Treasury retains the ability to top up the fund. It is not a requirement that the two go hand in hand; reducing employees’ national insurance does not mean that contributory benefits change. That is the way it is.

I appreciated the comments by the noble Lord, Lord Sikka, on the taxes on nuts. I agree that sometimes it can be a little confusing but, having been in the VAT game as a finance director, I know that systems can cope with these sorts of things. VAT has been designed as a broad-based tax on consumption; where there are exceptions to the standard case, they are strictly limited to legal and fiscal considerations. It is widely viewed as quite an economically efficient and non-distortive way of raising revenue.

I very much welcomed the insights from my noble friend Lord Leigh on VAT and VAT evasion. I will take his comments back to the Treasury and HMRC, and as I think he suspects, I will be writing.

The noble Baroness, Lady Lister, spoke of the high-income child benefit charge. I understand where she is coming from and that she would like to abolish it completely. I suspect that that will probably not be on the table at this time. I also recognise the challenge that she raised. Changing from a principle to ensure that we remove an unfairness can sometimes be okay. That is why we are consulting on how that removal will take place, and I think it will be a very interesting consultation.

To continue on the tax theme, my noble friend Lord Northbrook asked about tax-free shopping. The Government’s latest estimate for the cost of a new worldwide scheme based on 2022 costings is around £2.5 billion a year. The Government are grateful to the OBR for its review of the original costing of removing tax-free shopping. We are considering the OBR’s findings, alongside industry representations and broader data, so I encourage industry to bring forward as many data points as it can and we will consider them alongside the OBR’s findings.

My noble friend Lord Northbrook also talked about inheritance tax. The Budget was very much focused on reducing taxes on work, so we were not able to make changes to inheritance tax at this time.

I listened to my noble friend Lord Young on multiple dwellings relief, and we will engage very closely with stakeholders to make sure that it does not have any unforeseen impacts. I will raise the issue with the department and ensure that we will do what we can.

I welcomed the welcome of my noble friend Lord Leigh for the changes to non-doms. I agree that these changes are pragmatic and achieve the right balance between ensuring that those who are resident in the UK pay tax in the UK and encouraging those with high wealth to come to the UK and invest their funds. That was the balance that we were keen to achieve; we believe that introducing a new residence-based regime brings the UK into line with other countries with similar schemes, such as France, Spain and Italy, and makes us more competitive than places such as Germany and the US that do not have those schemes. The detail of the operation of the scheme will become clear in due course after consultation. I recognise that there is uncertainty around the costing: the OBR has certified the costing as reasonable and central, but as with any of these costings, some will include more uncertainty than others. My noble friend Lord Northbrook questioned its attractiveness, but as I said previously, I think we have got the level of attractiveness right versus other places.

On public spending, I shall not repeat the oft-quoted government lines about where we are. Of course, we recognise the need for good public services; we have committed to grow departmental spending 1% on average in real terms beyond 2024-25. The noble Baroness, Lady Kramer, asked for a plan. As she knows, the plan will be set out in due course, and I will write further if I can. We believe that productivity must be part of the plan. It is an unfortunate feature of modern politics that the extent to which one is perceived to care about one public service or another is measured by how many millions, hundreds of millions or billions one is seen to be spending on them. In the private sector, that would be regarded as completely and utterly nonsensical. Nobody in the private sector would increase inputs and expect outputs to come flooding out. It does not guarantee the right outcomes. We need to take stock of this. It is vital that we change our attitude by becoming relentlessly focused on outcomes and not only inputs, because it is only by providing better public services that we can provide better value for money for the taxpayer.

Many noble Lords mentioned the NHS productivity plan. I commit that we will hold the NHS leadership’s feet to the fire on this—it will be accountable for delivering the plan and its savings. There is a further £800 million going into other public services, including special free schools, police technology, children’s homes, the justice system and the DWP. The leadership will be accountable for delivering the savings that it says it can get.

My noble friends Lady Goldie and Lord Tugendhat and the noble Lords, Lord Macpherson and Lord Lee, all mentioned defence spending, and as the daughter of an Army officer, I too have a lot of interest in it. I appreciate all the comments on our Armed Forces and defence spending more broadly. We recognise that we need our forces to be ready and resilient. We remain committed to increasing defence spending to 2.5% of GDP as soon as conditions allow. The Prime Minister has been clear that the target and the path for getting to that 2.5% will be set out at the next spending review. I will write to the right reverend Prelate on official development assistance.

On the household support fund, I shall take back the comments of the noble Baroness, Lady Lister. I note too the comments of my noble friend Lord Young but will say that the household support fund is just one of the many interventions that we can make to protect the most vulnerable.

I will write to various noble Lords on local government funding. There have been pressures and the Government have stepped up to try to relieve them. There has also been some pretty poor decision-making in some local government areas, and the consequences of those sometimes come through the system.

I will write to the noble Lord, Lord Bird, on social housing and to the noble Lord, Lord Sikka, on reducing poverty because I want to spend a couple of minutes on infrastructure investment, which was mentioned by my noble friend Lord Howell. Infrastructure was also mentioned by my noble friend Lady Moyo, who focused on effective public and private infrastructure.

We absolutely recognise that high-quality infrastructure is crucial for delivering economic growth, productivity and competitiveness. I welcome the comments from my noble friend Lord Horam on investment across the UK. What we potentially do not talk enough about, because it is not a new thing, is that we are spending £600 billion on public sector investment over the next five years. That is enormous but we do not talk about it because there is a plan and it is all just going ahead, but it is possibly worth reminding noble Lords that this money continues to be spent. That is exactly where we are putting our money. We are also speeding up the planning system for significant infrastructure projects and looking at grid reforms, which will be critical, particularly for the green economy.

The UK has attracted the third-highest amount of greenfield foreign direct investment since 2010. It is about £500 billion, behind only China and the US. Indeed, in that time we have attracted more greenfield FDI than Germany and France combined. We can attract FDI and my noble friend Lord Harrington’s review identifies how the Government can go further. We are taking that review very seriously.

Allied to that, we have to think about how we are going to not only unlock the money in our pensions but improve the functioning of our capital markets. My noble friend Lady Moyo asked for specific plans and I will write to her with those, because a number of esteemed experts within the City of London have written good reports for us. These build on the Edinburgh reforms and the Mansion House reforms, which the Chancellor has already announced.

I will write to the noble Baroness, Lady Bowles, on investment companies. I do not have much of an update yet, but I promise her that I am pushing it as much as I can.

The noble Lord, Lord Lee, mentioned the NatWest shares for schools. It is right that financial literacy is supported at a young age. The Chancellor set out in his recent letter that there would be really significant delivery challenges with gifting NatWest shares. I am not entirely sure it is the right solution to a problem that the noble Lord probably recognises is there, but the Government are very committed to ensuring that financial literacy is absolutely key.

I will write to the noble Lord, Lord Macpherson, about the NatWest retail sale; I apologise for not getting to that. I will also write to the noble Baroness, Lady Sheehan, on the green economy because I have quite a lot to say on that, particularly on the green finance strategy and how to align the financial system to investment in the green economy, which is critical.

I say to my noble friend Lord Young that the Chancellor made it clear at his TSC appearance last week that there were some unintentional leaks in the lead-up to the Budget. It is disappointing that, for not only this fiscal event but the last few fiscal events, it has been very difficult to keep a lid on measures.

I have absolutely overrun and I will send a letter but, to conclude: this Spring Budget is one more step in the Chancellor’s clear plan to put us on a path to economic growth. The NICs Bill, also the subject of the debate in your Lordships’ House this evening, ensures that working people can feel the benefit of a tax cut as soon as possible.

Motion agreed.