Autumn Budget 2025

Lord Leigh of Hurley Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Hollick. Much of what he said, but not all, I agreed with. It is also a pleasure to congratulate the right reverend Prelate the Bishop of Portsmouth on his excellent maiden speech.

There is much to criticise in this Budget, which manages to increase tax rates, tax take and debt all at the same time, as my noble friend Lord Lamont so eloquently explained. However, let me try to bring out two positive areas in the Budget and look at how we may be able to improve them further.

The first relates to the EIS and VCTs, and I declare an interest as an investor. A small group of us met James Murray when he was Exchequer Secretary to the Treasury, and I am pleased to see that the Government have listened to concerns raised and have lifted some of the size restrictions on those investments. This is essential because there are real difficulties for UK companies trying to raise capital from UK investors right now. I hope that it is a subject on which we spend more time on another occasion.

I am sure the Minister will be the first to recognise and appreciate that these changes are possible only because of Brexit. We have left the EU and are no longer restricted by the EU state aid laws, other than, of course, in Northern Ireland. So, because there have been changes only to the rates but not to other restrictions, I urge the Minister to have a look at restrictions, such as the seven-year rule and the family restrictions on investing in companies to obtain EIS rates. This can now be done. As a result of the changes to the VCTs, one would hope that more people will go into the EIS directly; however, it is not clear that it will happen. A survey conducted by the Wealth Club on 1 December reveals that 85% of investors will invest less, and of that, 42% no longer invest in VCTs. Only 13% will go into the—admittedly riskier—EIS, which is, of course, what the Government wanted. So 85% of these investors believe that as a result of the move on VCTs—the restrictions—they will decrease their investment.

Another area I want to highlight are the changes to the low-value import customs duty relief, which the Minister will remember we debated in my Oral Question on 14 July 2025. Many congratulations to the Government on listening and acting. Unfortunately, it comes in only in March 2029. Why is that? I suspect the reason given by HMRC is that it is all too complicated and difficult, but that is not acceptable. I urge the Minister to get stuck in again and go back to HMRC to see whether we can bring this legislation forward, because this is having a damaging effect on small retailers up and down the country.

Finally—and not to disappoint the noble Lord, Lord Razzall—I add my name to the calls for the Chancellor to reflect on what she has done. She did mislead the public deliberately—these are not my words but those of Chris Mason of the BBC. This is not behaviour becoming of her or any public figure; as a result, it will be very difficult for her to be believed at any future press conference she gives. That is not a sustainable position for our country. I do not expect the Minister to agree with me publicly, but I hope that he will use his position of power and responsibility to deal with this unsustainable position.

OBR Forecasts

Lord Leigh of Hurley Excerpts

Monday 1st December 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

My Lords, this is the second fantasy black hole of this Government. The first did not actually matter because absolutely nobody believed it. No credible economist believed it; I challenge noble Lords to name one who did. However, the second fantasy black hole does matter, because we were all sucked into it to the point where people like me—and, indeed, including me—took financial actions and decisions based on that speech of 4 November. These were irreversible financial decisions based on the words of the British Chancellor. Frankly, like Chris Mason of the BBC, no less, we feel misled. The Chancellor knew that tax receipts were higher than the rest of us knew. This means that people can no longer trust this Chancellor. We cannot believe any of her future statements. If that is the case, does the Minister, who has our confidence and credibility, not agree with me that she surely cannot remain as Chancellor?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his kind words about me, and I am grateful that I have his full confidence. Do I agree with what he says about the Chancellor? It will not surprise him to hear that, no, I do not. The Chancellor has been completely honest and consistent with the public in everything she has said.

The noble Lord says that no one believed the £22 billion black hole. It may be living rent-free in his head, because he has mentioned it probably more times than anyone other than me in this House, so, on that measure alone, it has been extremely successful.

The noble Lord said that he feels misled. I am sorry about that, but the Chancellor said absolutely nothing misleading. As I say, she has been completely honest and consistent. She set out in advance what her priorities were, and she delivered on those priorities. She set out in advance that a productivity downgrade would mean lower tax receipts, and it did mean £16 billion lower tax receipts. She said that she intended to build more headroom, and she built more headroom—to £21.7 billion. She was clear in the summer that policy choices would need to be paid for, and the Budget shows that those policy choices cost £6.9 billion. She said that challenging decisions would be needed on tax and spending, and she froze thresholds for a further three years, among other taxation decisions. So, as I say, she was entirely consistent in what she said before and what she did in the Budget.

Budget: Small and Medium-sized Businesses

Lord Leigh of Hurley Excerpts

Thursday 27th November 2025 Lords Chamber

Asked by

[Lord Leigh of Hurley]

To ask His Majesty’s Government what assessment they have made of the effect of the Budget on small and medium-sized businesses.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, yesterday’s Budget rejects austerity, instead building a strong and secure economy—

[Lord Livermore (Lab)]

It does this by cutting the cost of living and reducing inflation, cutting NHS waiting lists and cutting government borrowing every year so interest rates keep falling. For small and medium-sized businesses, the Budget supports high streets with permanently lower tax rates for 750,000 retail and hospitality properties, backs entrepreneurs by doubling eligibility for tax breaks that make it easier for fast-growing start-ups to scale and stay in the UK, makes the training for under-25 apprenticeships completely free for SMEs and maintains the lowest rate of corporation tax in the G7.

[Lord Leigh of Hurley (Con)]

My Lords, yesterday was the benefits Budget. The Chancellor has broken her promise not to increase income taxes. As she said in her Budget, because no national insurance is charged on dividend income, she will increase the income tax on dividends. Does the Minister think that she understands that national insurance is on employed income, for which an employee is paid a risk-free salary, but SME dividends are the reward paid to people who take a risk and invest in their own business to help the business grow? For some reason—perhaps he can explain—she failed to put national insurance on the huge incomes of lawyers and others in LLPs. Does he share my concern, and that of many others in the UK, that she has no understanding whatever of basic economic principles such that she does not understand the difference between salary and dividends that SMEs get for return on capital?

[Lord Livermore (Lab)]

Unsurprisingly, no, I do not agree with the noble Lord. He will remember that, in the last five years of the previous Government, spending on welfare increased by £88 billion. The Government are taking action to ensure income from assets is taxed fairly, narrowing the gap between taxes paid on work and tax paid on income from assets. Those with dividend income pay considerably less tax than those whose income comes from employment or self-employment, as they do not pay national insurance contributions. It is not fair that the tax system treats different types of income so differently, so tax on dividend income will increase by two percentage points. Over 90% of UK taxpayers do not pay dividend tax.

Economic and Taxation Policies: Jobs, Growth and Prosperity

Lord Leigh of Hurley Excerpts

Thursday 13th November 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

It is a pleasure to follow my noble friend Lord Bridges, and I congratulate the noble Lord, Lord Elliott, on securing this important debate. I would like to start with a discussion about measuring productivity, which is, at the end of the day, crucial to growth, and which, despite the rose-tinted view of the country’s growth held by the noble Baroness, Lady O’Grady, is at a desperate level, mainly because of government decisions which have turned a fictitious £22 billion black hole into a hard £40 billion black hole.

However, I am going to be as helpful as I possibly can to the Government, which may come as a surprise to the Minister—we will see. Specifically, I have great concerns about the measurement of productivity used by the ONS. The ONS measures labour productivity primarily as output per unit of labour, which is usually measured by gross value added per hour worked. In this country, certainly in the private sector, we have a long-hours culture, unlike, say, France, so our output per hour is bound to be lower. Unusually, in the UK, we include public sector productivity in our calculations. This is extremely difficult to measure, and of course it is extremely hard to detect any improvement. Heroic assumptions have to be made about the output, which are probably wrong. In the private sector, the gross value added is the key determinator, and that, believe it or not, is determined by monthly or even annual business surveys. So let us bear in mind that the UK economy is now 80% services, not trade, and a large proportion of that is in digital and intangible services, which are one of the fastest-growing parts of the UK private sector and are extremely difficult to measure. Surveys are very unreliable. Hard stats, such as the data on unemployment—which, as the noble Lord, Lord Harper, has reminded us, is rocketing under Labour—are much more reliable but harder to find.

I will not say much more on this issue other than to remind the Minister that I have long argued that I do not think our productivity measures are reliable—I have argued it under the previous Governments—and we may be more productive than the ONS figures indicate. I hope he will confirm that the Cabinet Office is working to improve them.

I also want to comment on the terrible damage to the economy being inflicted by the current Government in a particular area. I have many concerns—national insurance and so on—but particularly the dire effect of the Employment Rights Bill, which is going to hinder both productivity and growth. The suggestion that the Government make that, as a result of the ERB, we will have happier workers who will be more productive is frankly worthy of derision, and the refusal to exempt SMEs is going to do great damage.

The Minister will assume my remarks are politically driven, so for the benefit of him and the noble Baroness, Lady O’Grady, I shall quote from an unsolicited letter I received from a Mr Jerry Dunham. He says:

“We are a third-generation, family-run manufacturer based in Norfolk since 1968. Our factory in Neatishead employs many local people, most of whom live within our community. The Bill in its current form would impose unsustainable costs and compliance measures that SMEs cannot absorb. It would reduce flexibility, make day-to-day operations harder, and force us to reconsider employment numbers and future job creation. For businesses like ours, which operate in the education sector, which is of course very seasonal, these proposals will make it harder to manage staffing and maintain employment during quieter periods … These changes will discourage hiring, particularly for young people and those without prior experience”.


That is from the coalface. I attended a GREAT GB seminar organised by the Cabinet Office this morning about inward investment into the UK. People representing American investors came to me and said that American investors are very nervous about investing in the UK because of the potential effects of the ERB, so I urge the Minister to assure Mr Dunham and all SME owners that this Bill will be put on hold.

National Insurance: Partnerships

Lord Leigh of Hurley Excerpts

Monday 10th November 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Baroness for her question. I am not quite sure how many more ways I can say this: she is inviting me to comment on tax speculation, and I think I have made it clear that I am not going to do that.

[Lord Leigh of Hurley (Con)]

My Lords, going back to the last election after Labour were previously in power, Labour had to leave a note saying that there was no money left. The next time, it will have to leave a note saying that there is no money left and no entrepreneurs left. Has the Minister read the Walker report, which shows that the HMRC assessment of non-doms leaving the country was underestimated by 50% because it looked at people only on a remittance basis and had not taken into account wealthy investors who are not under PAYE, and who are leaving the country in droves?

[Lord Livermore (Lab)]

If the noble Lord wants to talk about the amount of money that is left, I am very happy to point him to the £22 billion black hole in the public finances that we inherited and that his Government sought to hide from the Office for Budget Responsibility. The same OBR has certified that the non-dom reforms the Government have implemented will raise £33.8 billion in total revenue over the five-year forecast period. This figure accounts for some non-doms who are ineligible for the new regime, choosing to leave the UK in response to these reforms. The Government will continue to work with stakeholders to ensure that the new regime is internationally competitive and focus on attracting the best talent and investment into the UK.

Public and Private Sector Productivity Trends

Lord Leigh of Hurley Excerpts

Thursday 30th October 2025 Lords Chamber

[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.

[Lord Leigh of Hurley (Con)]

My Lords, on the point from the noble Lord, Lord Londesborough, would the Minister consider looking at how the figures are compiled? Personally, I think that the contribution from the services sector is underplayed and undervalued in the calculation of productivity. Would the Minister also recognise the contribution from the 13 leading business representative bodies—indeed, pretty much every business in the UK—that the Employment Rights Bill will reduce productivity and growth?

[Lord Livermore (Lab)]

On the noble Lord’s first point, I am very aware of some issues around the data, and I believe the ONS has been reviewing it along the lines he suggests. On the Employment Rights Bill, he will know that labour supply is also a fundamental component of driving productivity, and that a more motivated and more secure workforce is a more productive workforce. I hope he will take that into account.

GDP Per Capita

Lord Leigh of Hurley Excerpts

Monday 20th October 2025 Lords Chamber

Asked by

[Lord Leigh of Hurley]

To ask His Majesty’s Government what assessment they have made of the latest estimates of the current GDP per capita, and of the factors contributing to it.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, the latest data from the ONS shows that GDP per capita has risen by 0.9% over the past year, in line with the OBR’s forecast, and this is the second fastest in the G7. This compares with a fall of 0.1% during the previous Parliament. The increase in GDP per capita in the past year is due mainly to the strong rebound in both private consumption and investment. Of course, we want to go further, which is why economic growth is the Government’s number one priority.

[Lord Leigh of Hurley (Con)]

Indeed so, but the Minister will be aware that the ONS’s latest figures show that in the most recent quarter, economic growth per capita grew by only 0.2%—less than half than in the previous quarter. Will he accept that this is entirely due to the Government’s policies on the national insurance increase, the lack of business confidence because of the Employment Rights Bill, and the wholly unnecessary delay in the Budget? Would he like to clarify his previous remarks about the effect of Brexit being 4% on growth and productivity, when he knows very well that the OBR said that that would be over 15 years? This means that on a per annum basis, the effect is teeny and within the margin of error.

[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.

School Fees: VAT

Lord Leigh of Hurley Excerpts

Monday 13th October 2025 Lords Chamber

[Lord Leigh of Hurley (Con)]

Would the Minister like to confirm that, without Brexit, his Government would not be able to put VAT on private schools?

[Lord Livermore (Lab)]

Without Brexit, GDP would be 4% higher, so we would not need to.

Economic Growth

Lord Leigh of Hurley Excerpts

Tuesday 16th September 2025 Lords Chamber

Asked by

[Lord Leigh of Hurley]

To ask His Majesty’s Government what assessment they have made of the growth figures for July 2025.

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, UK GDP grew by 0.2% in the three months to July 2025, following an increase of 0.3% in the three months to June. Overall, the economy grew by 1% in the first half of this year, well above the OBR forecast of 0.6%. This means the UK was the fastest-growing economy in the G7 over this period. Of course, we want to go further, which is why economic growth remains the Government’s number one priority.

[Lord Leigh of Hurley (Con)]

Indeed it is, but the ONS said that there is zero growth in GDP. Of course, that means that GDP per capita will be negative, partly because productive people are leaving and less productive people are arriving. The markets have made their view of our economy clear, as our borrowing rates are higher than in any other country in the G7. Will the Minister agree to meet the Growth Commission, which has some excellent ideas on growth? As Treasury Minister, will he persuade his new colleagues of what every employer is saying, that the Employment Rights Bill will severely curtail growth? Now is the time to amend it.

[Lord Livermore (Lab)]

I am very grateful to the noble Lord for his question and for his thoughts on growing the economy. After his success in advocating for a Brexit deal that reduced GDP by 4%, it is always very helpful to get his advice on economic growth.

The noble Lord mentioned the monthly growth figures. I do not know whether he is an avid reader of the Office for National Statistics blog posts, but he may have seen that the ONS announced this week that it will be reverting to leading with the three-monthly growth figures, which are less volatile and provide a clearer picture of underlying economic momentum. He may therefore have seen that UK GDP increased in the three months to July. In that data released, we can see that the Government’s action to turn around the legacy of underinvestment from his Government, opposed now by the party opposite, is having an effect, and construction output increased by 0.6%, driven by 2.1% growth in new infrastructure work.

The noble Lord may also have seen that exports to the US increased in July. He may have seen that the UK economy grew by 1% in the first half of this year, and that as a result, the UK is the fastest-growing economy in the G7. He may have seen Lloyds Bank’s latest business barometer, which shows that business confidence rose for the fourth consecutive month to its highest level in 10 years.

Pension Funds: Use of UK-listed Investment Companies

Lord Leigh of Hurley Excerpts

Tuesday 9th September 2025 Lords Chamber

[Lord Livermore (Lab)]

I am afraid I do not know the specific answer to the noble Lord’s question. I will happily write to him to clarify.

[Lord Leigh of Hurley (Con)]

If the Government are serious about growth, they need to encourage investment in private assets. When applying what many of us regard as retrospective inheritance tax to private defined contribution pension funds, HMRC has specifically excluded the opportunity to apply business property relief to assets. Given the exclusion of investment trusts in the pension Bill, which is regrettable, how are HM Government going to actively encourage and facilitate people to invest in private companies?

[Lord Livermore (Lab)]

Our entire agenda is built around encouraging exactly what the noble Lord states. He mentioned inheritance tax. I want to clarify that pensions, and the considerable tax reliefs on them, are designed to provide income for retirement, rather than acting as a tax-planning vehicle for transferring wealth free of inheritance tax. That is an important principle to maintain. Equally, he asks how we are going to encourage investment in private assets. That is exactly what these reforms are designed to do.