Business Rates Avoidance Schemes

Lord Wilson of Sedgefield Excerpts

Wednesday 16th September 2026 Lords Chamber

[Lord Sikka]

To ask His Majesty’s Government what steps they plan to take to disable business rates avoidance schemes and the industry promoting them.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

Most businesses pay the rates that are due, but a minority abuse the system to reduce their bills or avoid paying altogether. This imposes an unfair burden on the majority and prevents funding reaching local services. This Government will not tolerate tax avoidance and are committed to taking the necessary action to address avoidance and evasion. Decisions on tax are set at fiscal events and I will not speculate on the upcoming Budget.

[Lord Sikka (Lab)]

My Lords, I thank the Minister for his reply. After claiming empty property relief, some businesses place empty boxes in premises to give the appearance of occupation, subsequently removing them to trigger an additional period of relief. One scheme operated by Principled Offsite Logistics Ltd has deprived councils of £500 million of business rates. Can the Minister ensure that business rates avoidance receives the same priority as tax avoidance and will the Government publish an annual estimate of the revenues lost, require registration of all business rates avoidance schemes and prosecute the enablers?

[Lord Wilson of Sedgefield (Lab)]

My noble friend raises an important point on tax avoidance with business rates. There has been coverage of some of the most egregious instances of business rate avoidance over recent years, including the use of snail farms and prayer rooms. A recent court case, which my noble friend referred to, has made it significantly more difficult for the most common avoidance schemes to be effective. This was a case brought by the City of London; the Court of Appeal ruled in favour of the City of London, and as a result the attempt to secure repeated periods of empty property relief using box shifting failed. The ruling has closed down this particular avoidance scheme, and as a result local authorities can withdraw empty property relief if they are satisfied that a scheme in their area falls within the ruling.

[Lord McCabe (Lab)]

My Lords, does the Minister agree that more needs to be done to tackle the antics of rogue rating agents who exploit small businesses by submitting false valuations, charging huge fees and often locking them into lengthy and expensive contracts of little or no value?

[Lord Wilson of Sedgefield (Lab)]

I thank my noble friend for his question. While they do not apply to business rates, additional criminal sanctions were introduced in the Finance Act 2026 that will enhance the deterrent against the promotion of tax avoidance and increase protection against harm caused to the Exchequer, the taxpayer and the tax system. The new measures, when combined with HMRC’s existing powers, mean that promoters of marketed tax avoidance will face large fines or criminal sanctions if they do not disclose their avoidance scheme, promote types of schemes that HMRC has set out as prohibited, do not comply with our information notices or do not stop promoting their schemes when issued with a legal notice requiring them to do so. There is a lot going on, but I accept the point that my noble friend makes.

[Baroness Kramer (LD)]

My Lords, despite the court ruling that made it illegal to practice box shifting, as described by the noble Lord, Lord Sikka, and some of these ridiculous things such as snail farming, many local authorities are finding it hard to enforce. They do not have the resources and get caught in fairly elongated court processes. Have the Government looked at giving them more direct and immediate powers to be able to crack down on this? These landlords go from one strategy to another, one form of cheating to another, and the close-down is vital.

[Lord Wilson of Sedgefield (Lab)]

I accept what the noble Baroness is saying. The Government are committed to consulting on a general anti-avoidance rule, covering all local authorities. There is something similar in Scotland and Wales, and the Government are seriously looking at it. I will leave the question of when it will happen to the Chancellor of the Exchequer in the Budget.

[Lord Kirkhope of Harrogate (Con)]

My Lords, although it is important for the Government to take action against those who break the rules and the law, high streets in this country are virtually crippled as a result of taxation, including the business rates that are applied to them. What will the Government do to lift these burdens and encourage small businesses to continue to trade on our high streets?

[Lord Wilson of Sedgefield (Lab)]

I kindly say to the noble Lord that, at the last Budget, the Valuation Office announced updated property values from the 2026 revaluation. In recognition of the impact of the revaluation on bills, the Government have introduced a support package worth £4.3 billion to protect against ratepayers seeing large overnight increases. As a result, over half of ratepayers will see no bill increases in 2026-27, including 23% whose bills will go down. This also means that most properties are seeing increases capped at 15% or less in 2026-27, or at £800 for the smallest.

[Lord Berkeley (Lab)]

Has my noble friend seen an increase in the use of disused buildings for snail farms? People who run snail farms can claim agricultural relief from some rates. Is he aware of this and, if not, can he look into it?

[Lord Wilson of Sedgefield (Lab)]

We are talking about snails, so I do not know how quickly we will act on this. I will look into this and write to my noble friend.

[Baroness Buscombe (Con)]

My Lords, is there not a problem with the two-tier system that we have on our high streets? Many thousands of shops are opening up all over our villages, towns and cities, most of which do not have to pay any taxes and are cash only. We know that they do not even require any customers because their focus is organised crime. Why should legal shops have to pay their taxes when they are right next door to others that are committing crime and no one is touching them?

[Lord Wilson of Sedgefield (Lab)]

I accept that point. We have just introduced something to look at the impact we could have on shops that do not have any social responsibility, such as vape shops, through additional rates, et cetera, so that we can invest in shops in those communities that do a really good job, especially in rural areas. Living in a village, I know very well how important the local shop is.

[Baroness Neville-Rolfe (Con)]

My Lords, I know from having had ministerial responsibilities for public sector fraud that there is much scope for reducing it in local authorities. Scams relating to empty business premises are a very good example of this. Do the Government have any wider plans to tackle fraud in local authorities, perhaps with the support of the Public Sector Fraud Authority, and to get at the problems that we have been hearing about?

[Lord Wilson of Sedgefield (Lab)]

As I mentioned in answer to my noble friend Lord McCabe, the Government are looking seriously at this. We laid out our plans in the Finance Act 2026 earlier this year. We realise that the issues raised by the noble Baroness need to be taken into consideration, so a lot more initiatives will take place to accommodate them.

[Baroness Bennett of Manor Castle (GP)]

My Lords, the noble Lord, Lord Sikka, referred to the role of enablers in supporting business tax avoidance schemes. We know that, in many areas of financial crime, estate agents, bankers, lawyers and accountants are corruptly aiding these avoidance schemes. How many such enablers have been prosecuted for business tax avoidance schemes in recent years?

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[Lord Wilson of Sedgefield (Lab)]

I do not know the figure off the top of my head, but I can look into it and write to the noble Baroness with the answer.

[Lord Sahota (Lab)]

My Lords, years ago, when I was a council leader, we had some instances where there were really large buildings lying empty, so the landlords would have to pay some form of business rent on them. What they did was put a desk and a chair inside for a charity, so that they did not have to pay any business rates. Because the landlords had to pay such a large amount in rates, they would pay something to the charity. Are the Government aware of that kind of scam?

[Lord Wilson of Sedgefield (Lab)]

We know that quite a few scams are going on. The industry—if I can call it that—has a very good way of evolving, changing and adapting, which is why we do not want to make any policy decisions prior to the Budget. They morph into other kinds of entity, and we want to stop that. We want to crack down on the wide range of scams going on. A general anti-avoidance rule may be the answer.

Public/Private Partnerships

Lord Wilson of Sedgefield Excerpts

Monday 7th September 2026 Lords Chamber

[Lord Brooke of Alverthorpe]

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, the 10-year infrastructure strategy sets out our approach to private finance and infrastructure through a range of approaches. Public/private partnerships are one model, and the strategy sets out the circumstances in which these are considered. The 2025 Budget considered that public/private partnerships would be available for neighbourhood health centres and projects decarbonising the public sector estate. The Government will carefully consider the most appropriate model for each project to ensure value for money. All this is to be overseen by the National Infrastructure and Service Transformation Authority, or NISTA.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am grateful to my noble friend the Minister for that reply. I am pleased to hear today that the Chancellor has mentioned the possibility of involving mayors in these investment programmes. Can my noble friend ensure that we do some further work to keep the momentum going and that we look at the possibility, on the private side, of starting to offer shares to the public to participate in PPPs? Secondly, in furtherance of that, can we involve the Opposition in this too, so that we have joint partnership in getting greater investment?

[Lord Wilson of Sedgefield (Lab)]

We committed to getting Britain investing again to support our wider economy. In April, we launched targeted support with a new regulatory regime to improve access to financial guidance, moved the long-term asset fund into the stocks and shares ISA and welcomed the industry-led Invest for the Future campaign and risk warnings review to promote the benefits of investing to the public. The Invest for the Future awareness campaign has pointed out that more and more people are willing to invest their money rather than keeping it in cash ISAs. I confirm to my noble friend that the Chancellor of the Exchequer announced this morning that regional mayors will be involved as strategic partners in the delivery of the National Wealth Fund.

[Lord Redwood (Con)]

My Lords, will the Government speed up the identification of suitable projects and the granting of the necessary permissions? There is plenty of private capital that could help the Government. Will they make sure that enough risk is transferred to protect taxpayers’ interests?

[Lord Wilson of Sedgefield (Lab)]

The noble Lord makes some very good points. I do not know whether the noble Lord heard the Chancellor’s speech earlier today, but that is one of the things he wants to do: he wants to break down all the regulation, look at ways of investing more money into infrastructure, et cetera, and make sure that investment is there from the private sector. The National Wealth Fund has £27.8 billion in it, but we want to ensure that it releases £100 billion of investment over five years.

[Baroness Kramer (LD)]

My Lords, so many PFIs and PPPs were inappropriate, poorly negotiated and cost the taxpayer a fortune. Frankly, they were motivated primarily to keep debt off the public books. Surely it is time to draw a line under those frameworks and update that approach with a much better record, such as joint ventures, concessions and targeted capital collaborations, as well as tackling the overall weakness in government procurement.

[Lord Wilson of Sedgefield (Lab)]

The noble Baroness has got the wrong end of the stick. We are not going to go back to the PFI contract system that we had in the past and which came to an end in about 2018. However, we are going to learn the lessons of what happened with PFI about flexibilities on contracts, investment and transparency, for example. It is also fair to say that where the PFI worked best, it gave us more schools, hospitals and doctors’ surgeries, and it helped us with Sure Start. It had some good points and we should not throw it all out just because there were some issues. We will learn from that and invest in a way that protects the public purse.

[Baroness Wheatcroft (CB)]

My Lords, the Minister said that there are still some issues with PFI contracts, particularly with hospitals. Can he confirm the scale of the debt that hospitals are still burdened with because of PFI? What are the Government going to do to renegotiate those contracts and, if possible, renege on them?

[Lord Wilson of Sedgefield (Lab)]

There is no possibility that we are going to go back to PFI, as I said. We have learned the lessons from that. I am not quite sure about the figure of total expenditure that is out there—I think there were some 700-odd projects, of which 600 are still in progress. We are going to make sure, when we invest using public and private money, such as in neighbourhood health centres, that public money goes to the best rewards. For example, there are going to be 250 neighbourhood health centres, of which 120 are due to be completed by 2030 and all 250 will be completed by 2035. That is good news that should be celebrated.

[Lord Hunt of Kings Heath (Lab)]

My Lords, does my noble friend accept that where some PFI projects went wrong it was usually because the people negotiating the contract at the local level on behalf of the public sector did not have the expertise to do so effectively? However, as a result of public/private partnerships between 1997 and 2010 in the NHS, we built 100 new hospitals. I therefore ask my noble friend: can we expect to see, as a result of what the Chancellor has said today, a big expansion in capital expenditure with public/private partnerships?

[Lord Wilson of Sedgefield (Lab)]

We will deploy public/private partnerships where it is in the best interest of the Exchequer and of the public to do so, because we need to protect taxpayers’ money. My noble friend is absolutely right, however, that we benefitted under PFI, with those 100 new hospitals, new schools and new health centres. That has to be celebrated. Yes, you learn lessons, but I hope we will go on to see more public/private partnerships in future—but only if it is in the interest of the Exchequer to do so.

[Lord Howell of Guildford (Con)]

My Lords, the Minister mentioned the private finance initiative. As he will probably be aware, many countries now, in many jurisdictions, are adopting new risk allocation systems built on PFI. These include—I have a long list here—France, Germany, Norway, Sweden, Finland, Canada, Australia, South Korea and Japan. What are we doing about this, as we were the inventors of it? Can we make some more developments in this direction, which could even help calm the bond markets and lower our appalling debt interest?

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Lord for that question. The Government are learning from all these other jurisdictions. The 10-year infrastructure strategy set out the Government’s long-term plans for the economy and we are going to invest some £725 billion over that 10-year period—so some £72 billion a year. Obviously, if we are going to do that, some of it will end up being in public/private partnerships but, as I have said repeatedly, just like we would with any other scheme, we are only going to do what is in the best interest of the taxpayer and of the Exchequer.

[Lord Lee of Trafford (LD)]

My Lords, the Minister mentioned ISAs. Could he tell us why the Government give tax relief, via ISAs, to people who invest in overseas equities?

[Lord Wilson of Sedgefield (Lab)]

From next April, we are planning to reduce the allowance for investment in cash ISAs to £12,000 to encourage people to invest in stocks and shares ISAs. Figures for 2024-25 will be published later this month on how much more money is being invested in stocks and shares ISAs. We do not have the figures for the current year, but we will see from those figures the investment levels that are being transferred over to stocks and shares ISAs and how that money is going to be spent.

[Baroness Neville-Rolfe (Con)]

My Lords, will public/private partnerships form part of the Burnham Government’s new architecture for growth beyond the health sector, which the Minister has described, and decarbonisation? It is good to see the noble Lord, Lord Brooke, returning to the battle on this matter.

[Lord Wilson of Sedgefield (Lab)]

We will always look at public/private partnerships beyond health centres and beyond decarbonising the public sector, but, as I have continually said, we will do that only if it is in the best interest of the taxpayer and of the Exchequer. We are looking at how best to use public/private partnerships through the National Wealth Fund and we are bringing regional mayors into the system. That will broaden out what we can do with public/private partnerships beyond the two main initiatives that have been announced.

Preparing for an Ageing Society (Economic Affairs Committee Report)

Lord Wilson of Sedgefield Excerpts

Friday 4th September 2026 Lords Chamber

[Lord Liddle]

That this House takes note of the Report from the Economic Affairs Committee Preparing for an Ageing Society (2nd Report, HL Paper 236, Session 2024–26).

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, before we start, I want to make a short statement. As set out on Today’s Lists, speeches in all three debates should be limited to three minutes, with the exception of those of the movers, winders and Ministers. I know from experience that if everyone goes over by just a few seconds, those seconds mount up. I am sure I speak on behalf of Members across the House when I say that I would be grateful if Members could stick to the advisory speaking time to ensure that the Ministers have adequate time to respond to the points raised in each of the debates today.

[Lord Liddle (Lab)]

My Lords, it is a great privilege and pleasure to introduce this report on behalf of the Economic Affairs Select Committee of the House in place of our former chair, my noble friend Lord Wood of Anfield. He has, as the Salvationists would say in the 19th century on the death of one of their senior members, been promoted to glory, which in his case is ministerial office as one of Ed Miliband’s Foreign Office Ministers.

I have known Stewart for more than two decades. He demonstrated a very high level of intellect by his appointment as a fellow of Magdalen at a young age. When I was in No. 10, he was a member of Gordon Brown’s council of economic advisers. Although we did not agree on every aspect of government policy, we were both committed European social democrats and were fascinated by the lessons for Britain of post-war Germany. He has been a great chair of our Select Committee to work under, and we owe him a lot.

No report is ever produced without the contribution of the clerks, the expert advisers, our technical and administrative support, and our witnesses. This whole operation was brilliantly orchestrated by our committee clerk, Matthew Manning, to whom I also pay tribute.

We learned a lot from many excellent witnesses. To pick on one is unfair, but I will take the liberty of breaching that rule by paying tribute to Charles Goodhart, the former Bank of England economist. His brother William was a distinguished Member of this House, whose contribution at the age of 89 lost nothing in its clarity and pungency. He is a great exemplar of why we should not be pessimistic about the possibilities of an ageing society. I also pay tribute to other members of the committee, including those rotated off before this debate.

The UK is a rapidly ageing society. The numbers are striking. The Office for Budget Responsibility’s projections say that the old age dependency ratio—that is, the number of people above the state pension age relative to the number of working people—will rise from approximately 31% now to 38% in 2050 and 47% in 2074. Indeed, in the years of the Conservative Governments from 2010 to 2024, the population aged over 65 rose from something like 16.5% to 19%.

The decline in fertility rates is even more striking. In 1964, a peak fertility rate of 2.93 children per woman was achieved. This has fallen precipitously. In 2023, it had reached a new low of 1.44 in England and Wales and 1.25 in Scotland. The long-term replacement rate is 2.08, so we can see the basis of the demographic crisis.

We heard from our witnesses that the prospects for raising the fertility rate are dim and that policy attempts elsewhere to do this have failed. That was a great disappointment to me, because when I worked for the President of the European Commission two decades ago, we had confidence that the adoption of Nordic-style family-friendly policies—subsidised childcare, gender equality and more equally shared responsibility for bringing up children between men and women—would help sustain an adequate fertility rate. Sadly, that has not proved to be the case.

Immigration is likewise not the panacea that in some quarters it is made out to be. It might help if immigration were circular—that is, immigrants returning home as their countries become more prosperous, which to some extent has happened with eastern European immigration. The problem with the immigration from further afield that Britain has experienced since 2019 is that families are more likely to settle here permanently, adding in the short term to public spending costs but not adding to demographic sustainability in the longer term, as second-generation birth rates tend to adjust to UK norms.

Among our witnesses, people were optimistic that the change in profile of the population is manageable. However, the rate at which it is occurring could pose substantial challenges, though it is worth highlighting that some of that is the result of a great success story. Rising life expectancy is something to be celebrated—for girls born today, life expectancy is 90, while for boys it is 86.7—but there is a worrying gap between life expectancy and healthy life expectancy. Healthy life expectancy has actually fallen in the last couple of years. There is already a huge north-south gap emerging; for instance, the gap in healthy life expectancy between London and the north-east is seven years. These are very worrying trends.

The fiscal picture is also stark. In its Fiscal Risks and Sustainability 2025 report, the Office for Budget Responsibility—for which I have great regard, unlike some other people—says that by the early 2070s, on current policy settings, borrowing will be pushed up to a clearly unsustainable 20% a year, and debt will rise to over 270%, which again is clearly unsustainable.

We are not alone in facing this challenge, but that is no source of comfort. The fact that others will be grappling with the same issues could increase competition between nations over a dwindling workforce, at the same time as our economy will be struggling.

This is about more than just the current elderly. The current young population will become the older generation of the future; indeed, thanks to the increases in life expectancy, they will be older for longer.

Yet demography is not destiny. One key conclusion we reached is that the Government need to focus on the older economically inactive who are below state pension age, and I think these facts are not particularly well known. Discussion of raising the state pension age to deal with this problem is, in our view, misplaced. Those still working at the point of state pension age are entitled to claim it but are in fact highly likely to continue working beyond it. The focus has to be on those who exit the workforce before reaching the state pension age.

This is the scale of the problem: at the age of 50, 80% of the age group are still in work, but at the age of 65 the participation rate has fallen to 25% to 30%. That catastrophic fall in the participation rate is the public policy challenge that we feel needs to be addressed. Simply to raise the state pension age would plunge a significant number of people in that late-60s bracket into poverty, as happened when the pension age was raised from 65.

The Government are beginning to think hard about how to promote workforce participation at the other end of the age spectrum, among young people, with the brilliant Milburn review, which is greatly to be welcomed as an outstanding contribution to public policy. However, we hear nothing, or very little, about the scale of what is required to prepare an ageing workforce for those in their mid-50s to mid-60s. The Government’s response is their mid-life MOT programme and targeted jobcentre support for older job seekers. All that is welcome but it hardly seems an ambitious enough response to this crisis, and that is a crucial conclusion of our report.

There are a number of reasons for people to leave the workforce at older ages, which present policy does little to address. Some are benign. People want to stop working if they have the financial resources to do so. Unfortunately for the Treasury, these are often those who contribute the most in taxes, and the Government need to find ways of incentivising these people to remain in or return to work. However, we also heard about those who want to work but are unable to do so because of caring responsibilities, either to ageing parents or to dependants. We recognise that this is a priority for the Government and we are looking forward to the recommendations of the commission that the noble Baroness, Lady Casey of Blackstock, is working on. But you cannot help noting that a number of these grand reviews have been held in the past, with very little action taken. Let us profoundly hope that the Casey review will be the last before concrete policies are announced and enacted.

There has obviously been some focus in discussion on reforming the triple lock. This has proved an expensive driver of real-terms increases in the state pension, due to the recurring volatility of both inflation and earnings, which have led to real-terms increases. Linking pensions to earnings—that is, to the living standards of the working population—is estimated to save some £15.5 billion. That is a significant sum of money. It would take the defence budget up by over 0.5% of GDP. But in our report, rather than focus on that, we have chosen to focus on the much longer-term issue of raising labour force participation among those over 50. The continued yearly focus on the Budget, and the Government’s fiscal headroom and all that, means that there is a danger that we lose sight of the far more serious long-term issues. I am afraid that nothing in what the Government had to say reassured us in this regard.

The Cameron Government, to their credit, made the ageing population one of the subjects of their foresight studies, but this was lost in the aftermath— I would say “chaos”—of Brexit. The present Government, in response to our recommendation that they publish an overarching strategy statement setting out how they plan to address the challenges of an ageing society in a cohesive way, said that an “integrated approach” was

“preferable to a single standalone strategy”.

I do not know quite what that means. They went on to say that they were taking

“a strategic and cross-cutting approach to issues relating to an ageing society”.

Well, without some clear statement of what the strategy that underpins the purported integrated approach is, I find this answer devoid of significant and substantial content.

The lack of any published strategy on ageing is a worrying indication that the Government would prefer not to face up to these challenges as an immediate question, and that the UK is therefore woefully unprepared for the future. This is a harsh conclusion, but the point of having Select Committees is to point out difficult conclusions that our politics is failing to address. On that basis, and with that reason, I beg to move.

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[Lord Reid of Cardowan (Lab)]

My Lords, the report we are discussing was completed before I joined the Economic Affairs Committee. Therefore, I need feel no embarrassment in congratulating the committee on its work. It is prescient, timely and, to put it bluntly, a stark warning to this and future Governments that they will ignore at their peril. The noble Lord, Lord Liddle, summarised it very well. The UK is ageing rapidly—a sign of success. Longer life expectancy is a success, but falling birth rates mean that older people will form a larger share of the population. This will cause critical problems. This is on top of the problems of exponential growth of public expenditure and welfare that we already have.

The noble Lords, Lord Liddle and Lord Lamont, pointed to a crucial paragraph. I will not repeat the statistics, but it illustrated just how far we will have to go to meet the challenges by 2074—roughly the next 50 years. If we do not meet those challenges, we will be in a crisis long before that. I believe this is a challenge, laid out in this report, that no responsible Government can refuse to recognise.

There is another warning. As the noble Lord, Lord Liddle, said, simply increasing the state pension age will not cut the mustard; it will not provide the means to address the challenge the committee outlined. A greater priority should be helping people in their 50s and 60s remain in or return to employment, but this in turn requires better health and social care, flexible working, reduced age discrimination—something to bear in mind next week when we discuss the report from the Retirement and Participation Committee—and opportunities for lifelong learning and retraining. All these are outlined in this report, and I urge the Government to take them most seriously.

If I have one disappointment, it is that the report did not more forthrightly consider and challenge the triple lock. I believe that is essential. Absent that analysis in the report, we have to rely on the good services of the noble Lord, Lord O’Neill, who has been forthright on it. I agree entirely with him. That issue would undoubtedly have to be part of the deliberations of the recommended Cabinet sub-committee and overarching strategy.

Overall, the message is simple: the UK needs to prepare now. It is already later than it should be to start preparations. We need to treat longer lives as an opportunity rather than a burden. In the months and years to come, the Government cannot say that they were not warned.

[Lord Wilson of Sedgefield (Lab)]

My Lords, before we move on to the next speaker, I again insist that we keep to the three minutes, because every second is extending the time of the debate. We need to keep within the three minutes.

Electricity Bills: VAT Removal

Lord Wilson of Sedgefield Excerpts

Thursday 23rd July 2026 Lords Chamber

[Lord Leigh of Hurley]

To ask His Majesty’s Government how they intend to fund the proposed removal of VAT from electricity bills.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, before I respond to the noble Lord’s Question, I just put on record my appreciation for the work that my noble friend Lord Livermore has done for both the Government and the Treasury in this House. I know that he will be missed at the Dispatch Box. I am sure that noble Lords also want to thank my noble friend Lord Stockwood, whom I have had the pleasure of supporting on the Financial Services and Markets Bill. I wish them both well for the future.

In response to the noble Lord’s Question, on Tuesday the Government announced immediate action to cut VAT on electricity bills to give millions of households breathing space on the cost of living. This measure is estimated to cost about £850 million in 2026-27, which will be funded by the cancellation of the digital ID programme, which was expected to cost £1.8 billion over three years. The effect of this change will ensure that we help those people who are most in need.

[Lord Leigh of Hurley (Con)]

My Lords, if I may add to those comments, I too will miss the noble Lord, Lord Livermore, on the Front Bench. We did not agree on everything, but he certainly knew his facts and had passion and commitment when he spoke. However, the Starmer Government’s pessimism fabricated a black hole; this Government’s hubristic approach is creating a black hole. We have no real details of how these giveaways will be funded. There is talk of a grant being turned into a loan. We do not know the covenant of that loan, or the interest on it and when it will be payable. Can the Minister assure us that during the summer there will not be any further unfunded giveaways but, rather, that these types of announcements will take place properly, in the Budget, as they are supposed to do, to allow for proper scrutiny by both Houses and, equally importantly, by the OBR?

[Lord Wilson of Sedgefield (Lab)]

The priority of this Government is the cost of living. We want to bring the cost of living down to give people breathing space over the coming years. The OBR stated that we were due to spend £1.8 billion over the next three years on digital ID, funded from within existing settlements through reprioritisation. We are still going to find that money from within existing budgets through reprioritisation, but we will now use it for other things. The amount of money is relatively small when you consider that the last Government, as my noble friend Lord Livermore would say, left this Government with a £22 billion black hole.

[Earl Russell (LD)]

My Lords, may I take a moment to welcome the noble Baroness, Lady Curran, and thank the outgoing noble Lord, Lord Whitehead? We look forward to his continuing contributions. We support this measure. As a day-one action, it is welcome—it will save about £40 off a typical fuel bill for about six months—but as a policy lever of government, it is costly and ineffective. What further action will the new Administration take to remove policy costs from electricity bills to help support further energy market reforms? They are the real policy levers we need so that we can make progress on reducing bills and continuing the energy transition.

[Lord Wilson of Sedgefield (Lab)]

I echo the noble Earl’s comments about my noble friends Lady Curran and Lord Whitehead. I worked closely with them both. The issue of future help for the energy market et cetera is something we will have to wait for until we do the Budget next year. In the meantime, we will continue to help people with the cost of living. I want to point out the measures we have taken that will help people in the short term: we have frozen rail fares, cut energy bills by £150, cut VAT on electricity bills to zero and we are cutting business rates for 32,000 small venues, pubs and clubs. Obviously, that is not a silver bullet, but the intent is there to do everything we can to help people who are suffering.

[Lord Boateng (Lab)]

My Lords, the last Conservative Government, in their dying days, made a number of high-profile announcements on carbon capture, usage and storage, nuclear financing and hydrogen production. However, when the Treasury carried out its initial spending audit, it found from the capital allocation maps that it did not possess the cash required to hit the legal and infrastructural targets and rollout timetables necessary to fulfil those commitments. Does the Minister agree with me that a little more self-reflection and humility on that side would not go amiss?

[Lord Wilson of Sedgefield (Lab)]

I remind my noble friend that they left us with a black hole of £22 billion. Among other matters, there was £2.6 billion of new unfunded policy announcements, £6.4 billion for asylum and illegal migration, which was not funded, and £9.4 billion for pay awards, which was not funded. We need to find a few hundred million pounds to help the people most in need. I think that they should reflect on what they did in government.

[Lord Weir of Ballyholme (DUP)]

My Lords—

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[Lord Weir of Ballyholme (DUP)]

My Lords, any easing of the cost of living is to be welcomed. However, the Minister will be aware that the VAT reduction cannot be directly applied to Northern Ireland because of the rules of the Windsor Framework and the arrangements with the European Union. At best, we will have a situation in which a convoluted alternative route will have to be found, which clearly will lead at least to delays for consumers in Northern Ireland receiving any level of help. As this points to the need for a much deeper and longer-term solution, what action are the Government taking in the short term at least to get a derogation from the EU, so that Northern Ireland consumers can enjoy the same benefits as those in the rest of the United Kingdom?

[Lord Wilson of Sedgefield (Lab)]

We know the issues around VAT in Northern Ireland, for example on electricity bills. The Northern Ireland Executive will receive comparable funding to enable them to support NI households with the cost of living. We have taken into consideration all the issues around the Windsor Framework, and we will continue to help the people most in need who live in Northern Ireland.

[Baroness Neville-Rolfe (Con)]

My Lords, I, too, send my best wishes to the noble Lords, Lord Livermore and Lord Stockwood. I welcome the appointment of the noble Lord, Lord Pitt-Watson, and look forward to the more constructive approach favoured by the new Prime Minister. With 10-year yields above 5%, political and international instability is already increasing borrowing costs and placing the sustainability of the public finances under serious strain. Does the Minister recognise that unfunded spending commitments cannot simply be floated in the press or on podcasts without consequences? Markets react, investment and growth are discouraged, and working people ultimately pay the price, with increases in the cost of living.

[Lord Wilson of Sedgefield (Lab)]

I echo the noble Baroness’s comments about my noble friend Lord Pitt-Watson, who will be the new Minister, taking over imminently—after this Question, I hope. The Government are well aware of the international situation we have in the Middle East and Ukraine; we know about the issues that we face. I do not believe the announcements being made are unfunded; we are finding the money to face up to the problems that ordinary people around the country are facing. I repeat the facts again: £9.4 billion of unfunded pay awards and £2.6 billion of new unfunded policy announcements by the last Government. What we are doing pales into insignificance compared to the debt they left the country in.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, is it not a fact that we may raise any funds we need by having further work done on VAT? Does the Minister welcome the review announced on 23 June to extend online marketplace VAT liability examinations? Perhaps we might also explore the growing amount of money being made by social media companies that are moving away from social media into auctioning and businesses such as that, where there is potential for tax to be raised. Perhaps we might have a debate in this House where we can invite all to participate, come up with ideas and examine those areas that need examining, so that we have some fairness in the tax system.

[Lord Wilson of Sedgefield (Lab)]

I thank my noble friend for that question. The future of VAT is a pressing issue, as is what we intend to do with those online entities that may be exempt from it. This is continuously under review, but I think we will need to wait for the Budget to see what changes we will have.

National Savings (Remediation Scheme) Regulations 2026

Lord Wilson of Sedgefield Excerpts

Wednesday 22nd July 2026 Lords Chamber

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, I thank the noble Baronesses for their comments on what is a very important issue. To put it in some context, in March, the Minister for Pensions announced that National Savings & Investments had identified serious failings in its bereavement claims process, affecting thousands of estates. NS&I has rightly apologised to the families of the bereaved who were impacted and the Government have acted swiftly to ensure that those estates are reunited with the money they are owed.

As the Minister for Pensions and NS&I set out in May, NS&I will reunite affected estates with the funds owed to them by mid-2027 and ensure that those estates receive compensation where it is appropriate to do so. The process of issuing letters, repayments and compensation to affected estates is now under way and Parliament has passed the necessary legislation to ensure that NS&I has the powers to undertake its remediation scheme.

I turn to the details of the regulations referenced in the regret Motion. These regulations enable NS&I to pay compensation to affected estates above the de minimis. Specifically, they give NS&I the power to pay interest to estates for the entire period that their funds were wrongly disconnected from them. The funds will be adjusted upwards to include the higher of either the interest accrued since the error occurred or the Bank of England base rate plus one percentage point, in line with Financial Ombudsman Service principles. The regulations also give NS&I the power to make additional payments for other financial losses—for example, legal fees incurred because estates needed further administration as a direct result of NS&I’s error.

The regret Motion tabled by the noble Baroness, Lady Neville-Rolfe, covers two areas: the process for establishing the remediation scheme to repay claimants and, separately, the cost of that scheme. I will address each in turn, starting with the process for establishing the scheme. After the Treasury was notified about the serious failings in the bereavement claims process at NS&I in mid-December last year, officials worked at pace with NS&I to identify and address the root cause of the issue, to establish which customers were affected and to develop plans to reunite estates with the money. This was a substantial task, and NS&I, the Treasury and external advisers have worked closely to design and implement a remediation scheme which is effective, fair and meets regulatory standards. The parameters of this scheme were set out in May and the necessary regulations were then made on 10 June.

NS&I, supported by independent external advisers and expertise from across government, reviewed over 34 million customer accounts. Up to 34,000 estates have been affected, with a total value of approximately £367 million. These figures are likely to reduce and NS&I will provide an update in its quarterly progress report.

As for the root cause of the problem, as the Minister for Pensions set out in March, NS&I tracing processes failed to comprehensively trace accounts for some customers who passed away. The result of this failure is that not all savings were identified and paid to estates. NS&I has received written assurances from its customer-facing supplier and its previous supplier, Atos, that the cause of this underlying issue in their tracing of customer accounts has been addressed and will not affect customers going forward.

Several questions were asked, and I hope I can cover them all. I was asked when the remediation scheme will be delivered and how long it will take. NS&I aims to return holdings to their rightful owners as swiftly as possible and expects to complete its remediation programme in the first half of 2027. I was asked about the Treasury’s assessment of the overall cost of this programme. As NS&I is in the early stages of delivering the scheme, the expected costs to taxpayers are uncertain at this stage. Further information on expected costs will be included in NS&I’s annual report and accounts in the autumn. NS&I will be able to develop a clearer estimate as the programme progresses and more data becomes available on the average volumes and amounts of additional payments. The overall cost will also depend on the feasibility of recovering public money. NS&I will publish an update on progress, including payment of outstanding holdings, against its delivery plans on a quarterly basis.

The point of introducing the statutory instrument is to provide a clear, fair and consistent framework for customers to be reunited with the funds as quickly as possible. Without a scheme in place, the costs of handling potentially thousands of individual complaints and legal cases could significantly increase the operational burden, costs and legal fees for NS&I, and put pressure on the public finances. The Minister for Pensions said there will not be a cost to taxpayers as a result of the remediation scheme. In his Statement to the Commons, he challenged inaccurate reporting in the press that implied that the cost from returning money owed to estates would impact the taxpayer. This money is owed to these estates and will be repaid using funds provided through the National Loans Fund in the same way that funds would be transferred to a customer of NS&I wishing to make a withdrawal. These repayments are simply the return of customers’ funds and do not create any additional liability for the taxpayer.

I was asked about the existing budgets. As NS&I is in the early phase of delivering this scheme, the expected costs for taxpayers are uncertain at this stage, with further information to be provided in the NS&I annual report and accounts in the autumn. The Treasury and NS&I will together assess the feasibility of recovery costs associated with the scheme, but this is an extensive process and it will take time to make this assessment. There will also be operational costs of running the scheme and costs of compensation to affected estates where appropriate. This will be paid from NS&I budgets in the first instance and NS&I is expected to manage pressures within its budgets set at the spending review last year.

I end by reiterating the Government’s commitment to deliver redress for all those impacted by the serious failings in the NS&I bereavement claims process. The Government and NS&I have taken action to address these failings, to develop a plan to reunite customers with their money and to ensure that these failings can never happen again. The process of issuing letters, repayments and compensation to affected estates is now under way and the Government will continue to ensure that those impacted receive the support that they deserve. We take this very seriously and we want to see the money given back to those estates and the individuals who have been affected. This is an important issue and one that we want to solve as soon as possible.

Financial Services and Markets Bill [HL]

Lord Wilson of Sedgefield Excerpts

Committee stage
Wednesday 8th July 2026 Grand Committee

[Baroness Bennett of Manor Castle (GP)]

My Lords, I thank the Minister for his response and everyone who has taken part in this interesting and informative debate. We have engaged with some interesting and broad issues. I particularly commend the noble Lord, Lord Pitt-Watson, who gave us some interesting suggestions and proposals that I am certainly going to go away and think about. I do not think that continuing with the history is necessarily the right thing to do, but that does not mean we cannot learn from history. The idea of the City of London having responsibility for its tradespeople has an interesting comparison, which makes me wonder: had we held the City responsible for the financial crash of 2007-08, and if the City had paid some of the large expenses that were instead, by austerity, put on the shoulders of the poor, the disabled and the young around the country, how different things might have been.

I note that the noble Lord also said that the City should be responsible for seeing that these services should deliver benefit to the world. That is an interesting proposal that I will take away. In responding to what the Minister and the noble Baroness, Lady Dacres, said, questioning what influence the City has over the FCA and the PRA, I will refer to the contribution from the noble Baroness, Lady Bi—

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

The noble Baroness was not here at the start of this sitting, which started earlier this afternoon, almost five hours ago. I point out that, as far as the Companion is concerned, when noble Lords are withdrawing amendments, they must be short and not rehash the whole argument or make responses to all the points made during the debate. If the noble Baroness would move towards withdrawing the amendment, that would be good.

[Baroness Bennett of Manor Castle (GP)]

I thank the noble Lord, the Whip. I am not rehashing; I am engaging with the contributions.

[Lord Wilson of Sedgefield (Lab)]

No. Paragraph 8.82 of the Companion says that when withdrawing amendments, noble Lords should be short in doing so and should not engage, because they will have done that during the debate.

[Baroness Bennett of Manor Castle (GP)]

I was speaking for about a minute and a half before the noble Lord interrupted me. I think three minutes might count as short, and I have two short points to make. The first, as I was saying before I was interrupted, is that the noble Baroness, Lady Bi, said that the City—

Declining Birth Rates

Lord Wilson of Sedgefield Excerpts

Thursday 4th June 2026 Lords Chamber

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

I thank my noble friend Lady Nargund for introducing this debate, which is very important to the long-term future of the country. The contributions we have heard show that it is a very complicated issue which is determined not just by one factor. A lot of factors are involved, and as the noble Baroness, Lady Neville-Rolfe, has just said, this is happening globally as well.

On the global aspect, birth rates are declining in Japan, Korea, across Europe and in every other advanced country. A declining birth rate in an ageing population represents one of the most significant challenges we face. The trends will shape the future size and composition of the workforce, increase pressure on public services, and have important implications for economic growth and the sustainability of public finances, not just in this country but in all the countries affected. As I have said, and as my noble friend Lord Davies made clear, the issues we face are very complicated, ranging from the impact of low birth rates on the workforce to the cost of pensions for the elderly. Even social media has an important impact on trends and demography.

These pressures reinforce the importance of maintaining a strong and productive economy. Economic growth and rising productivity will be essential in ensuring that the United Kingdom can continue to fund high-quality public services while supporting long-term fiscal sustainability.

Several noble Lords rightly highlighted the implication for the labour market. I just point out one statistic, which I find interesting: there were only two peacetime years in the past 150 years when average annual employment was higher than in 2025. The UK employment rate is in the top half of OECD economies and is above the G7 average.

We are providing support for those who wish to remain in or return to work, including parents, older workers and those currently economically inactive. The Government also recognise the importance of life-long learning, workforce flexibility and ensuring that people contribute to society throughout their lives.

Noble Lords spoke about the wider pressures facing younger generations. Decisions about having children are deeply personal. However, the Government recognise that factors such as housing affordability, childcare costs, job security and broader economic confidence can all shape those decisions. That is why supporting families and improving economic opportunity remains important, not only for individuals and households but for the long-term resilience of the economy.

The debate underlined that there is no single policy solution to demographic change. I will spend the rest of my time answering the questions raised by noble Lords in this short debate. I will try to answer them all, but we will write to the noble Lords in question on the ones I do not get round to.

The noble Baroness, Lady Nargund, and the right reverend Prelate said that equal and fair access to fertility treatment should be recognised as an economic priority. Fair access is a priority for the Government, and we recognise that access to NHS-funded fertility services currently varies across England. Commissioning decisions are made by integrated care boards based on local clinical need and are informed by national guidance. The Government are committed to improving fair and equitable access to fertility services, recognising the significant emotional and health impacts of infertility.

On social care, which was mentioned by the noble Baronesses, Lady Nargund, Lady Hamwee and Lady Thornton, and others, following the 2025 spending review there will be an addition £4.6 billion of funding available for adult social care in 2028-29 compared to 2025-26. This will enable an increase in the NHS’s minimum contribution to adult social care via the better care fund, in line with the DHSC’s spending review settlement, and some £500 million to begin implementing the fair pay agreement in 2028-29.

The noble Lord, Lord Hobby, and the noble Baronesses, Lady Nargund and Lady Neville-Rolfe, asked how importantly the Government regard this and whether there will be a cross-government, cross-departmental approach. The Government are committed to ensuring that the right structures are in place for co-ordinating their response to the challenges posed by an ageing society. Boosting economic growth is central to this response, and the Prime Minister recently announced a number of changes to the Cabinet committee structure, including establishing a Growth and Living Standards Committee, which provides terms of reference to consider many of the issues raised in the debate.

The noble Lord, Lord Hobby, raised the issue of rising unemployment. The Government inherited a level of young people not in education, employment or training that was far too high—12.6% in the second quarter of 2024. In March, the Government announced £1 billion more to unlock 200,000 new jobs and apprenticeships for the next generation, as part of a new deal for young people.

The noble Lord, Lord Hobby, also mentioned the Milburn review, the final report of which will be published this autumn. We take very seriously the issues raised in that review, and I know we will concentrate on that once the final report has been issued, some time in September or October.

The noble Lord, Lord Hobby, again, mentioned the Milburn review, which we all agree is very important going forward. The noble Baroness, Lady Finlay, mentioned commitments by the Government to kinship care. I will pass on her comments to the DWP and the relevant departments, but I can tell her that the Government are committed to tackling child poverty and improving outcomes for low-income families. Scrapping the two-child limit is just one way in which the Government are tackling the root causes of child poverty, and the child poverty strategy was published in December last year.

The noble Baroness, Lady Thornton, raised issues around social care. The autumn 2025 Budget confirmed that millions in England will see the cost of their prescriptions frozen to 2026-27. The Budget also confirmed that the NHS neighbourhood rebuild programme will deliver 250 new neighbourhood health centres. The Government’s 10-year health plan is committed to shift care from hospitals to community by establishing a neighbourhood health service that will bring care closer to home. Of course, the Casey review into all of this is very important.

The noble Baroness, Lady Nargund, raised housing and affordability. Noble Lords highlighted the relationship between housing and declining birth rates; the Government recognise that economic security includes access to stable and affordable housing, which can influence long-term family-planning decisions. The amount of money announced in the Budget for social housing is significant. I have got a minute to go.

[A noble Lord]

You do not have to use it.

[Lord Wilson of Sedgefield (Lab)]

I will do my best. The right reverend Prelate commented that family hubs will draw on what we know works from Sure Start, and the Best Start in Life programme will provide essential support for parents and families. The Government are committed to providing funds for all local authorities to deliver Best Start family hubs to a total amount of £500 million.

In response to the comments of my noble friend Lady O’Grady, it is difficult to make meaningful comparisons between different countries where state pension schemes are concerned. The UK has one of the most generous approaches globally to uplifting pensions, because no other country has the triple lock. The noble Baroness, Lady Hamwee, spoke about the UK’s immigration system; it is geared towards supporting businesses and accessing high-skilled overseas workers who boost the supply of skills and talent in the UK.

One of the big issues that the noble Baroness, Lady Neville-Rolfe, mentioned was the pension situation. The Government are legally required to review the state pension age every six years to ensure that it is fair and sustainable. We announced the launch of the third review of the state pension age in July 2025, alongside the Pensions Commission, so I think it is fair to say that we are doing a lot in this regard. There is obviously more to do. It is a very complicated issue but I hope that, in future, we will be able to have another debate on this in this Chamber. It is something that is very important and complicated, and there are no easy answers.

Money Laundering and Terrorist Financing (Amendment) Regulations 2026

Lord Wilson of Sedgefield Excerpts

Monday 18th May 2026 Grand Committee

Moved by

[Lord Wilson of Sedgefield]

That the Grand Committee do consider the Money Laundering and Terrorist Financing (Amendment) Regulations 2026.

Relevant document: 57th Report from the Secondary Legislation Scrutiny Committee, Session 2024-26

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

I beg to move that the Committee considers this package of changes to the money laundering regulations. They are aimed at improving the effectiveness of the UK’s anti-money laundering and counter-terrorist financing regime.

The money laundering regulations sit at the heart of the UK’s preventive, risk-based approach to tackling illicit finance. They ensure that the UK’s modern and open economy cannot be exploited by criminals seeking to hide the proceeds of their crimes. By requiring banks and other regulated businesses to take reasonable, proportionate steps to detect and prevent money laundering and terrorist financing, the regulations protect the integrity of the UK’s financial system.

However, as new technologies emerge and criminals find new ways in which to launder illicit funds, the regulations must evolve with them. The changes before the Committee represent a significant update to the regime. They ensure that the regulations are focused on the highest-risk activities and threats to the UK system, while closing loopholes and making the regime clearer and easier to use.

This SI reflects the Government’s determination to ensure that regulations strike the right balance between managing risk and enabling growth, as set out in the modern industrial strategy and the regulation action plan published last year. These changes are part of a broader push under the economic crime plan 2023 to 2026 to build a more effective system that turns the tide on dirty money, including major changes that the Government are making to improve our anti-money laundering supervision regime.

Progress is already being made. In the year ending December 2025, there were 8,486 prosecutions for money laundering as a principal or non-principal offence, a 19% increase compared with the previous year. In the year ending March 2025, £285 million of criminal assets were recovered, a 15% rise compared with the previous year, with £47 million in compensation paid to victims out of confiscation order receipts—a six-year high.

I am aware that the Secondary Legislation Scrutiny Committee raised concerns about the timeliness of this legislation in its 57th report. I am grateful to the committee for its input. However, it is important to recognise the complex nature of some of the measures in the SI. Following the public consultation, further technical discussions with industry and anti-money laundering supervisors were necessary on a number of measures, including in relation to bank insolvency, pooled client accounts and crypto assets. I know the Committee will appreciate the importance of getting the drafting right first time to avoid unintended consequences.

This SI consists of measures on four core themes: making customer due diligence more proportionate and effective; strengthening system co-ordination; closing gaps in coverage; and reforming registration requirements for the trust registration service. There are also additional minor and technical changes that serve to improve consistency and ensure the UK complies with the standards set by the Financial Action Task Force, the global standard setter on anti-money laundering.

I turn first to the measures on customer due diligence. These aim to ensure the checks required on customers are proportionate to the risks. This includes the removal of the requirement for regulated businesses to apply enhanced due diligence checks on countries listed by the Financial Action Task Force as jurisdictions under increased monitoring. These are countries found by the FATF to have strategic deficiencies in their regimes. The FATF does not require these checks, and permitting more flexibility here recognises that being linked to a listed jurisdiction does not automatically make a customer high risk. The Government estimate that this change alone will generate savings of £178 million per year for regulated firms, which can then be reinvested in higher-value compliance activity that identifies genuinely suspicious activity. Other changes on customer due diligence include important measures to increase the availability of pooled client accounts for businesses with a legitimate need, and to facilitate continued access to banking services for customers in the event of a banking insolvency.

I turn to the system co-ordination. The SI makes changes to strengthen co-operation and information-sharing between anti-money laundering supervisors and other public bodies such as Companies House, which plays an increasingly integral role in the UK’s defences against illicit finance. To close gaps in coverage, the SI brings the activity of selling off-the-shelf firms within the scope of regulated activities. The SI also makes changes to ensure owners of crypto asset firms do not escape fit and proper checks by the Financial Conduct Authority.

I turn finally to the trust registration service. The SI makes a number of changes to close loopholes that could be leveraged to obscure asset ownership, improve transparency of beneficial ownership of trusts with significant UK connections and refine registration requirements for other types of trust.

The implementation of these measures will be swift, with the majority of measures coming into force 21 days after the SI is made. There are limited exceptions to this, such as for the measures on crypto assets, where a longer implementation period is necessary to give regulated businesses sufficient time both to adjust their systems and processes and to align with the introduction of the new financial services regulatory regime for crypto assets, which will come into force in October 2027. Safeguards have been built into the SI to mitigate risks in the interim period.

In conclusion, these regulations strengthen the UK’s defences against illicit finance by better targeting high-risk activity and closing loopholes in the regime. I beg to move.

--- Later in debate ---

I close by returning to the central point. These regulations are welcome in so far as they reduce unnecessary compliance burdens and make targeted improvements to the existing framework, but they do not answer the wider question. The fight against money laundering and terrorist financing is vital but, if the system designed to prevent financial crime ends up driving out of our banking system charities, lawful individuals and small businesses—I know people running small businesses who are certainly not engaged in financial crime but have run into trouble in setting up accounts—it is not working as well as it should. I hope that the changes will ameliorate matters but I urge the Government not only to proceed with the sensible elements of the regulations before us but to look again at the wider regime, including its costs, its complexity, its unintended consequences, its enforcement and its impact on ordinary customers and businesses.

[Lord Wilson of Sedgefield (Lab)]

My Lords, I thank the noble Baronesses for their questions. They were many in number so we will scour Hansard and, if there are any that I do not answer, we will of course respond with letters.

I turn first to the points made by the noble Baroness, Lady Bennett; I hope to cover them all, though not necessarily in the order in which she made them. She mentioned enhanced due diligence as far as high-risk jurisdictions, especially the likes of Russia and China, are concerned. The money laundering regulations contain specific provisions requiring enhanced due diligence in relation to geographic risk, which are unchanged by this SI. Firms must still assess and manage geographic risk as part of their overall risk-based approach and apply EDD wherever high risk is identified, in line with the requirements set out in the regulations. Firms will be expected to consult government guidance, such as the National Risk Assessment of Money Laundering and Terrorist Financing 2025, which provides a more UK-focused, nuanced and sector-specific view of the risks. Jurisdictions that present a risk in the UK but are not currently listed by the Financial Action Task Force, such as Russia, China and the UAE, are referred to in the national risk assessment for the UK.

On the changes to the due diligence requirements, some countries on the FATF’s increased monitoring list are recognised as presenting more of a regional risk than an international one, perhaps due to the lack of specialised and international-facing financial sector or strict currency controls. The Financial Action Task Force recommends enhanced due diligence to be mandatory only for countries on the separate “call for action” list, which will continue to be the case following this change.

The noble Baroness asked a question on asset recovery. The 2026-29 ECP will set out the Government’s next whole-system approach to tackling economic crime. It will consolidate key strategies, including the fraud and anti-corruption strategies and the forthcoming anti-money laundering and asset recovery strategy, into a single coherent framework for delivery. The plan will focus on strengthening cross-system prioritisation and deliver grip and the long-term funding and capabilities needed to respond to evolving economic crime threats.

On reforms to the trust registration service, the Government are making targeted changes to particular categories of trusts to ensure that requirements to register remain proportionate to the risk. Recognising that registration must be proportionate to risk, certain types of trusts are excluded from the requirement to register on the grounds that they either pose an inherently low risk of money laundering or are already regulated elsewhere.

On the database for trust registration, trusts are frequently established for legitimate and highly personal reasons, such as to hold assets for children or vulnerable adults. The Government believe that placing the information held on the trust register into the public domain would infringe the privacy rights of individual beneficial owners, the vast majority of whom are not involved in any money laundering activities. The information held on the register is available on request to law enforcement agencies and other relevant parties to assist with anti-money laundering investigations. The Government believe that this approach strikes the right balance between the conflicting demands of transparency and privacy.

The noble Baroness, Lady Bennett, made a point about stamp duty reserve tax. In taking a risk-based approach, the Government consider that the role of stamp duty reserve tax in enabling and detecting money laundering or terrorist financing is not proportionate to the administration placed on trusts by this requirement. The current regulatory framework focuses on those entities with significant links to the UK. The Government consider that a liability to stamp duty reserve tax is not, in isolation, indicative of a significant link to the UK. Entities with significant links to the UK are more likely to be those with significant property assets or liabilities for income, capital gains and inheritance tax. The collection of stamp duty reserve tax is already administered by the Government, and the sale of shares already sits within a broader regulatory environment.

I welcome the approval of the general thrust of the SI from the noble Baroness, Lady Neville-Rolfe. She raised several issues that I hope I can answer. The money laundering regulations form a core part of the UK’s defence against economic crime. They aim to ensure that attempts to launder money through banks and other regulatory businesses are prevented or detected and flagged to law enforcement. The SI is part of a wider suite of government action on money laundering and economic crime in general. This includes the publication of the National Risk Assessment of Money Laundering and Terrorist Financing 2025 in July 2025, the delivery of two economic crime plans—2019-22 and 2023-26—with a further economic crime plan in the pipeline, the new anti-corruption strategy in December 2025, the new fraud strategy in March 2026 and anti-money laundering supervision reform.

At Budget 2025, the economic crime levy, which is paid by businesses regulated under the money laundering regulations, was raised to generate an additional £110 million for initiatives to tackle economic crime. In my opening speech, I mentioned some of the benefits from what we have achieved and are going on to achieve. The Government have committed to recruit 475 new roles by September 2026 to help clamp down on money laundering; £284.5 million of criminal assets were recovered in the year to March 2025; and there have been nearly 8,500 prosecutions and 3,892 convictions for money laundering as a principal and non-principal offence. This is a big increase, of nearly 20%, from before.

On refusal to open bank accounts, the FCA requires banks to treat customers and prospective customers fairly, to take proportionate and non-discriminatory account opening decisions and to apply the consumer duty across the full onboarding journey. Where someone is dissatisfied with how a decision has been handled, they can complain to the firm and escalate the matter to the Financial Ombudsman Service, which can assess whether the firm has acted fairly. In addition, where an individual is denied access to a standard current account, the UK’s nine largest personal current account providers are legally required to offer basic bank accounts.

I turn to derisking and bank account closure. Economic crime, including money laundering, poses a rapidly growing and increasingly complex threat to the UK’s national security and prosperity. It fuels the serious organised crime that damages the fabric of society. In the face of this threat, the Government believe that due diligence checks, applied proportionately, are an essential tool to protect firms and their customers from fraud and other financial crime, as well as assisting law enforcement in investigating criminal activity.

On the SRA and sanctions, the original consultation received hundreds of responses. The legal sector, as the noble Baroness pointed out, expressed some concerns, but changes made following the technical consultation are expected to address most of those. Financial services and most other sectors have welcomed the shift away from tick-box compliance, particularly the reforms to increase flexibility around enhanced due diligence. Civil society and anti-corruption organisations supported the measures to close loopholes and improve system co-ordination, while expressing measured concern about EDD changes. A recent blog by Spotlight on Corruption stated that most of the measures in the SI were “unambiguously positive”.

On debanking, banking services fulfil a vital role for millions of people. The Government have legislated to ensure customer protection in cases where their bank account is terminated by the provider. Payment service providers are required to give customers at least 90 days’ notice before closing their account under new rules which came into force in April 2026. Providers will also need to provide a clear explanation to customers in writing so that they are able to challenge decisions, such as through the Financial Ombudsman Service.

I turn to the difficulties facing SMEs in accessing a bank account. Access to banking services is obviously vital and the Government have introduced new rules to require banks to give customers 90 days’ notice. These new rules will ensure more transparent and predictable access to banking, and the Government will continue to monitor wider access to bank account provision.

On the difficulties facing charities in accessing a bank account, charities and community groups make a valuable contribution to society. UK Finance, banks and charity representative groups have worked together to provide the voluntary organisation banking guide, aimed at supporting charities and community groups to access banking services. We will continue to monitor wider access to bank account provision while recognising that it is largely a commercial matter.

The noble Baroness mentioned defence companies and their access to bank accounts. Access to finance is a significant issue for defence firms, particularly SMEs. No company should ever be denied access to financial services solely on the basis of its work in the defence sector. The banking sector should never take a blanket approach to any one sector. The Government are actively engaging with banks to ensure that they understand the importance of the defence sector. The FCA has worked to understand why banks might close or reject accounts. Where it has found areas where firms need to improve customer outcomes, the Government expect firms to consider its findings.

--- Later in debate ---

[Baroness Bennett of Manor Castle (GP)]

I have just been musing on something that the noble Lord said that I think I wrote down correctly: namely, that stamp duty reserve tax liability does not indicate a significant link to the UK. We need to consider that statement in the context of how much UK infrastructure and its essential services have been privatised. I am thinking of water companies and infrastructure construction: indeed, large-scale defence companies in foreign ownership. I will understand if the Minister wants to write to me. I am not necessarily asking for a direct answer now, but what provisions do the Government have to make sure that this weakening of the regulation does not open up the ownership of some of those things that in the current geopolitical climate are of grave concern from a security aspect?

[Lord Wilson of Sedgefield (Lab)]

First, this is not a weakening of the regulation but a balanced approach that we take in this whole area. I will set out the arguments in greater form for the noble Baroness and write to her with the specifics.

[Baroness Neville-Rolfe (Con)]

I come back to the issue of debanking. The Minister said some very useful things. This is debanking. We talked about defence companies and I look forward to hearing the results of that active engagement. I have talked in the APPG to individual defence companies that have had difficulties in this respect and we need to be supporting our defence companies, especially the innovative ones, given the change in the nature of weapons and so on at this difficult time.

The banks are required to offer basic banking and give 90 days’ notice if they want to close an account. When you are given notice of the closing of an account, you then have to go to another bank and go through the whole system of being approved by it. I have tried to set up a new bank account at Metro to complement my account with one of the major four banks. Frankly, I gave up. Once you are in the system, it is absolutely fine. My bank knows about me: I have been banking there for years. But, if you try to go to a new bank, it is quite complicated: a lot of questions are asked and you give up.

This all links to what the Minister is trying to do, which is to make it easier for citizens who do not necessarily have a good credit record to have a bank account, because it is important for them to be able to operate an account, save, have a card and so on. I wanted to emphasise that point and say that the Government’s work is important. If more progress is made in that area, I should be very interested to hear about it.

[Lord Wilson of Sedgefield (Lab)]

In response to the noble Baroness, there is the 90 days’ notice and the access to basic bank accounts, et cetera. There is ongoing work in this area. I can write to her and let her know exactly where we are up to in all of this, so she will have some awareness of where the Government intend to go.

Motion agreed.

Secondary International Competitiveness and Growth Objective (FSR Committee Report)

Lord Wilson of Sedgefield Excerpts

Wednesday 11th March 2026 Grand Committee

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

My Lords, I am grateful to the noble Baroness, Lady Noakes, for introducing this report and to the noble Lord, Lord Forsyth, the outgoing chair and now the Lord Speaker. Having been on the receiving end of some of his incisive questions in the Chamber, I can just imagine what he was like as the chair of the committee when it was taking evidence. I also thank all noble Lords for their comments and contributions, which were thorough, thoughtful, instructive and thoroughly knowledgeable.

I reiterate the strong alignment between this committee’s conclusions in the report and the Government’s perspective and actions. The Government are committed to ensuring that the secondary growth and competitiveness objectives are comprehensively embedded in both the PRA and the FCA, and we strongly welcome the thorough and incisive scrutiny of the committee, holding both the Government and the regulators to account.

As the Economic Secretary to the Treasury said in a letter to the committee of 2 September:

“There is strong alignment between your recommendations and the wide-ranging package of reforms announced by the Chancellor”.


The noble Lord, Lord Pitt-Watson, is right that we are on a journey on this—this is not our final destination. Things are going to develop and evolve, and it will be great to continue this dialogue.

A considerable amount of ground has been covered today. I will try to address specific points raised by noble Lords in the time remaining. Before I do, I will speak about the financial services growth and competitiveness strategy and the actions that the Government are taking forward to facilitate the growth of the sector and to ensure that it is supporting growth in the wider economy. I will do my best to answer all the questions but, if I cannot or if there are some that I have not answered, I will write to noble Lords.

Since the launch of the strategy in July 2025, the Government have worked with the regulators to deliver key milestones, including: launching the Office for Investment: Financial Services, a dedicated concierge service for international financial services firms seeking to establish or grow their presence within the UK, which several noble Lords mentioned; launching the joint FCA and PRA scale-up unit, which will make it simpler for scaling firms to get timely responses and expert support; commissioning the Financial Services Skills Commission to produce a report on skills needs; and the FCA approving both the London Stock Exchange and JP Jenkins to operate PISCES platforms. I believe the first trading event will take place by the end of this month.

In addition, the Treasury and financial regulators are working hard to support delivery of the Government’s regulation action plan, where the Government have committed to cut the administrative burden of regulation by 25% by the end of this Parliament. The Treasury is continuing to hold the regulators to account, including through biannual ministerial reviews of the regulators’ performance.

Noble Lords have pressed the Government on the evidence linking growth in financial services to growth in the wider economy. The Government agree on the importance of having a substantial evidence base. That is why, in developing the financial services strategy, the Government took steps to build this evidence base, setting out their analysis and methodology in the strategy’s technical annex.

The Government remain committed to building this evidence base and continue to work with industry, academics and other public authorities to do so, including through regulator-led research projects and competitions. It remains a high priority for the Treasury’s Areas of Research Interest, its published list of the main research questions facing the department.

The committee has highlighted specialist lenders and their importance in providing lending to SMEs. The Government share the committee’s ambition regarding the role of the finance sector in funding the real economy. Specialist lending plays a role in supporting competition, resilience and choice. The Government have taken steps to ensure that the regulatory framework supports this, working closely with the Bank to explore further reforms to the ring-fencing regime to make lending to innovative SMEs more commercially viable. Through the Basel III.1 reforms, the Government have also worked closely with the PRA to ensure that overall capital requirements for SME lending do not increase so that the sector can continue to support UK SMEs and help them to grow and be successful.

The Government have a strong relationship with the financial service regulators, and they are working together closely so that the Government can hold them to account for delivering the shared growth mission. Remit letters and ongoing engagement at all levels allow the Government to ensure that the regulators have appropriate regard to the Government’s economic policy, particularly the growth mission. There is a very strong level of engagement and a shared ambition between the Government and the regulators to support growth, and we will continue to work closely together to deliver on this shared ambition.

The Government agree with the committee that it is important to have metrics to monitor the regulators’ impact on growth. The regulators have now published two years’ worth of data against the growth metrics. It is vital that the regulators are held to sufficiently challenging targets for determining authorisation applications while also maintaining robust processes. That is why the Government have proposed new authorisation deadlines and will legislate for them when parliamentary time allows. I am pleased to see that the regulators are already starting to report against these new deadlines, with the FCA doing so in February and the PRA doing so very soon. The UK regulators’ reporting framework is among the most comprehensive in the world. I assure the committee that the Government will continue to scrutinise their performance and how it is changing over time, and I invite Parliament and other stakeholders to do likewise.

I turn to some of the questions that were asked. I will do my best to cover them all, and if I do not, we will write to the relevant noble Lords. The noble Baroness, Lady Noakes, raised the question of productivity and finance. The Government recognise the need to increase the amount of productive lending from the financial services sector to the real economy. Earlier, the noble Baroness cited the Bank of England’s December Financial Stability Report, in which the Financial Policy Committee of the Bank of England provides useful insights in this area. This also notes several actions the Government and regulators have taken to improve the supply of finance for productive purposes, including expansion of the British Business Bank’s financial capacity and reforms to the bank ring-fencing regime. However, I take the broader question around data in this area. I look forward to digesting the report by Positive Money and will write to the committee with further reflections subsequent to this debate.

On SME lending, the Government have increased the British Business Bank’s total financial capacity to £25.6 billion, a two-thirds uplift compared to previous years, and are reducing limitations on this funding, giving the bank more flexibility to address regional and sectoral gaps in SME finance. I think I have already mentioned the concierge service, which everybody in the committee today seems to welcome.

I move on to encouraging informed risk-taking. The UK will always uphold high standards, but a system has been created which at times has sought to eliminate risk-taking completely rather than managing it effectively, and this can hold back economic growth. We can grow only if we enable the UK’s financial services and markets to continue to serve a wide variety of people and firms. At Mansion House in 2024, the Chancellor set out that regulatory changes to eliminate risk after the financial crisis had gone too far and led to unintended consequences.

Metrics was another issue that was raised during the debate. The Government are committed to effective monitoring and evaluation of the strategy. In line with other sector plans that form part of the industrial strategy, the strategy sets out clear indicators focused on how growing the sector will support growth and investment across the UK, delivering security for working people and world-leading financial services to UK businesses and consumers. Because of the time lag in publishing data, the majority of metrics largely cover the period before the last election. However, since then, the Government have delivered a huge package of pensions reform to make sure that people have savings for their retirement and are investing in Britain, with the Pension Schemes Bill now making its way through Parliament.

The Government set out their vision for regulatory reform through their Regulation Action Plan, announced in March 2025. The RAP commits the Government to cutting the administrative burden of regulation by 25% by the end of the Parliament. The Department for Business and Trade has identified the administrative burden of regulation on businesses to be £22.4 billion each year, which means that the 25% target represents a £5.6 billion annual reduction in the administrative burden.

The relationship between the Government and the regulators was also raised. The Government and the regulators have a strong relationship and are working together to facilitate growth in line with the Government’s economic policy. The remit letters that I mentioned earlier are a key mechanism for the Government to issue strategic steers to the regulators to support the Government’s economic policy and promote competitiveness and growth. The Treasury makes recommendations to the regulators through the remit letters. The letters set out the Government’s economic policy, to which the FCA and the PRA must have regard. The letters must be sent by the Chancellor at least once a Parliament, and the regulators are required to respond to the Chancellor annually.

There was a question on pensions. I will do my best, but I know that we will be debating them on Monday. Why do the Government think that pension funds are so reluctant to invest in UK assets? It seems that the lack of focus on value in the pensions market means that schemes invest only in low-cost asset classes. Cost is an important factor but, ultimately, net returns matter most. Therefore, the Pension Schemes Bill is addressing this by enabling scale in the pension market and through the value-for-money framework, as bigger schemes are able to invest more productively, as we see in Australia and Canada, for example, focusing on asset classes with higher potential long-run returns to investment and growth, such as infrastructure and venture. The noble Lord will probably pick that up in the debate on Monday.

The noble Lord, Lord Eatwell, asked what the Government think about fintech struggling to raise money. The UK has the third-largest VC ecosystem in the world, which raised £23.6 billion in 2025, according to HSBC. We are third behind the USA and China. Although the UK has deep capital pools for start-ups, underpinned by generous tax reliefs, we recognise that there is further to go to support UK companies, including fintechs, to raise domestic scale-up capital. That is why, at the spending review, we increased the total financial capacity of the British Business Bank to £25.6 billion.

As mentioned in the EST’s letter to the noble Lord, Lord Forsyth, in December, the FCA has undertaken several projects to improve the evidence base on how the financial sector regulations can support growth. In particular, it is consulting academics on how the financial sector hubs across the UK can support regional innovation.

There was a point raised about AI and inward investment. The Government are committed to realising the investment opportunities from AI. In January last year, the Government announced that investment in UK data centres infrastructure has reached £39 billion. Since then, the Government have designated five AI growth zones across Great Britain, including two in Wales and one in Scotland, generating £28.2 billion in investment. In 2025 alone, UK AI firms have raised £4.8 billion.

On the regulation of cryptocurrency, which was raised by my noble friend Lord Eatwell, the Government recognise the transformative potential of digital assets. In February, we introduced an SI underpinning the regime that we want to see; the consultation on the rules and requirements laid out in the SI is at an advanced stage. The SI defines which crypto assets will be part of regulation—the qualifying crypto assets—and the new regulated activities. It also creates a definition for qualifying stablecoin as a subcategory of qualifying crypto assets.

I have mentioned the regulatory metrics before, but there were other issues raised. Now that the regulators have published two years’ worth of data against their secondary objectives, the Government, industry and Parliament can begin to meaningfully scrutinise the regulators’ performance and how it is changing over time, as well as assess the appropriateness of the metrics themselves. As part of the 2025-30 strategy, the FCA is revising what growth metrics it will publish with more granular metrics, if appropriate. The PRA noted in its second report into the competitiveness and growth objective in 2025 that it would keep its metrics up to date and ensure that they remain “world leading”.

This leads us to international comparisons. The Government agree with the committee that there is a benefit to making international comparisons where possible. The Government’s aim is to ensure that the UK is a competitive jurisdiction for international financial services business. The regulatory environment plays an important part in that. We accept that there is more to do on this, and the Government remain committed to reducing the complexity and burden of regulation on business, including reducing the admin burden by 25%.

Another question from my noble friend Lord Eatwell was on what the Government think about the inadequacies of macroprudential regulations to address systemic crises. The Bank of England Financial Policy Committee is the UK’s dedicated macroprudential authority responsible for the health of the financial system as a whole. The International Monetary Fund has described the FPC as world class. It is equipped with an extensive set of macroprudential tools—for example, loan-to-income ratio controls in mortgage lending.

I agree with the points that have been raised on financial inclusion and education. The Government are putting more focus on helping young people to build strong financial skills and prepare for key money decisions in life. As part of the financial inclusion strategy, the Government committed to making financial education compulsory in primary schools in England through a new statutory requirement to teach citizenship. Alongside this, the Department for Education and the Treasury have committed to working closely together to improve the quality and reach of financial education in England. There will be a public consultation on the updated curriculum in 2026, with the changes in place for the first teaching in 2028.

The consumer duty was, I think, first mentioned by the noble Lord, Lord Johnson. The FCA wrote to the Chancellor in September with the results of its review into the application of the consumer duty, and it is updating its approach. The Chancellor asked the FCA to report back to her on how it plans to address concerns about the application of the consumer duty for firms primarily engaged in wholesale activity. The FCA has already committed to taking a number of actions, including refreshing some of the supervisory expectations and consulting on changes to the rules that help firms to distinguish between retail and professional clients.

I may not have covered all the questions, but I will write to noble Lords if I have not. I conclude by saying, in the time I have left—about 20 seconds—that we need to be optimistic as well. We have to bear in mind, and it is worth repeating, that the UK remains a top global financial centre and our regulators have an excellent reputation. The UK is the largest global net exporter of financial services, totalling £102.2 billion in 2025, which represents half of the UK’s services export surplus. The Global Financial Centres Index of 2025 ranks London in second place in terms of financial centre competitiveness, with Edinburgh and Glasgow also inside the top 40. The Government are committed to building on those strengths.

To conclude, I express the Government’s and my appreciation for the committee’s ongoing engagement. The Government will provide a further update in the summer of 2026, and we are committed to continuing this dialogue.

Crown Estate: Wales

Lord Wilson of Sedgefield Excerpts

Monday 9th March 2026 Lords Chamber

[Baroness Humphreys]

To ask His Majesty’s Government what assessment they have made of the impact of the activities of the Crown Estate on (1) the Welsh economy, and (2) household budgets in Wales.

[Lord in Waiting/Government Whip (Lord Wilson of Sedgefield) (Lab)]

The recently passed Crown Estate Act ensured that the Crown Estate can continue working in the best interests of Wales and the wider United Kingdom. The Crown Estate is key to the £1.4 billion of economic growth and more than 5,000 jobs that the Government want to secure from floating offshore wind in the Celtic Sea. It works closely with the Welsh Government to ensure that the offshore potential of this emerging sector benefits Welsh communities onshore.

[Baroness Humphreys (LD)]

I thank the Minister for that reply. However, the Crown Estate has removed the cap for offshore wind leases and is running uncapped auctions that force wind farm developers to pay extremely high fees simply to access the seabed. Can the Minister confirm that the fourth offshore wind leasing round generated more profit for the Crown Estate than all the previous rounds combined and that this system has inflated the cost of building offshore wind farms, with a consequent increase in electricity prices for household budgets in Wales? Is it not time for political oversight of the activities of the Crown Estate in Wales?

[Lord Wilson of Sedgefield (Lab)]

I thank the noble Baroness for that question, but on the point about oversight, a Crown Estate commissioner with special responsibility for Wales will be appointed in due course. As far as offshore wind is concerned, for Wales a priority is to deliver certainty. Retaining the current model avoids fragmenting a cross-border Celtic Sea market and preserves investor confidence at a sensitive point for floating offshore wind. Further devolution would risk fragmenting the energy market, undermining international investor confidence and disrupting activity elsewhere in the Crown Estate.

[Lord Wigley (PC)]

Is the Minister not aware of the reply given by a Minister in the other place to the MP for Anglesey, Llinos Medi, when the Government confirmed that they had no assessment of how many jobs would come to Wales from the new offshore wind projects in the Celtic Sea and the Irish Sea? Is the Minister aware of the very real concern in Wales that these projects will be bypassing Wales’s supply chains, losing economic potential? Is it not necessary for power and authority over the Crown Estate to be transferred to the Welsh Government so that they get the priority that they deserve?

[Lord Wilson of Sedgefield (Lab)]

Offshore will create up to 5,000 jobs—on top of the 3,000 jobs that will be created by the building of small modular reactors on Anglesey. It will provide energy for 1.5 million households. We are aiming in the right direction. As far as the supply chain is concerned, we will be investing £50 million for a supply chain accelerator and up to £350 million for enabling port and supply chain infrastructure to come forward.

[Baroness Jones of Moulsecoomb (GP)]

Have His Majesty’s Government asked the Crown Estate exactly how it helps to deliver their promise for a more environmentally conscious and greener Wales when it carries on handing out licences to marine aggregate dredgers to dredge in marine protected areas off Wales? Dirty seas deter tourists.

[Lord Wilson of Sedgefield (Lab)]

We have a very good relationship with the Crown Estate and work very closely with the Welsh Government. We will be appointing a commissioner to the Crown Estate to ensure that we have someone there who is prepared to look consciously at all the issues that affect Wales. We want to see a Welsh economy that is growing. One way of doing that is through investing in green industries, which I would have thought the noble Baroness would welcome.

[Baroness Kramer (LD)]

My Lords, to pick up the point made by the noble Lord, Lord Wigley, is the Minister aware that people in Wales are convinced, following conversations with the Crown Estate, that the overwhelming majority of new skilled jobs created by offshore in the Celtic Sea will go to outsiders, not to people in Wales, and that the supply chain will use a few Welsh companies but primarily suppliers from outside Wales? Therefore, can he talk to us about what the Government are doing to build the supply chain and the skills in Wales and to make sure that Welsh companies have a definite percentage of the new business and opportunities that are on offer?

[Lord Wilson of Sedgefield (Lab)]

The Crown Estate and the Government are particularly concerned about ensuring that we have investment in local supply chains, and we are going along with that in whatever we are doing. For example, as I have said, this £50 million is going to be invested in the supply chain accelerator. We are going to ensure that some of the money that will be generated from offshore wind goes into local communities. We are well aware of the issues, but we need to focus on the fact that we are heading in the right direction as far as green energy development is concerned.

[Lord Swire (Con)]

My Lords, when the Crown Estate had this windfall from its offshore wind bonanza, it was reputed to have said that it wanted a lot of the money to go towards good causes. Given that this will mean an explosion of overhead power lines in Wales and elsewhere in the United Kingdom, what discussions have the Government had with the Crown Estate about spending some of that bonanza on, where possible, burying these power lines?

[Lord Wilson of Sedgefield (Lab)]

The Government’s approach to burying these cables underground is well known, really, because, essentially, where we can do it, we will, in order to protect the local area. It is cheaper to put them overhead, but even if you bury them, there is still a lot of disruption to the local area with the kind of access you need to the cables themselves. It is not actually the answer to all our concerns. We know that we need to think about how we develop these pylons and whether we should lay the cables under the ground, but to do that is not the answer in all cases.

[Lord Hunt of Kings Heath (Lab)]

My Lords, does my noble friend agree that the events in the Middle East and the renewed shock to oil and gas prices show why we should be self-sufficient, which is why we should enormously welcome the development of offshore wind off the coast of Wales?

[Lord Wilson of Sedgefield (Lab)]

My noble friend is absolutely right that we need to think about energy security. One thing that is coming out of what is happening, tragically, in the Middle East at the moment is that, because oil and gas prices are set internationally, this impacts on every country’s economy. That is why we need to invest in the green economy, in nuclear, in wind turbines and in solar—so that we become independent. When issues such as this happen and when there are shocks to the international energy markets, we do our best to ensure that we are insulated from them.

[Baroness Neville-Rolfe (Con)]

My Lords, in my ministerial experience, the Crown Estate arrangements, in fact, worked pretty well. The Minister will be glad to hear that. But the more important question for the Minister today is: would Welsh households not have been helped by lower bills if Labour had not gone down the dangerous road of banning North Sea oil and gas? That looks even more irresponsible, with oil prices spiking because of the war in the Middle East.

[Lord Wilson of Sedgefield (Lab)]

Just to repeat my response to the previous question, we have to make sure that we are independent of these problems that we are facing. Rather than relying on fossil fuel, the prices of which are set internationally, we need to have home-grown green energy to ensure that we can resist these problems. I just want to point out one or two things about how we are helping people in Wales. We are cutting household energy bills, saving the average household £150. We have helped over 160,000 people with the minimum wage. We have increased pensions by 4.8%, and we have increased benefits for people out of work by 3.8%. The 700,000 pensioners in Wales are going to be better off because of this Government.

[Lord Griffiths of Burry Port (Lab)]

My Lords, when we had the misfortune of leaving the European Union, Wales lost a significant amount of money from its structural programmes. The then Government promised that that shortfall would be more than made up for; indeed, the phrase was “not a penny less”. We have been promised that that gap will be bridged from the prosperity fund, but the Welsh Government remain rather sceptical about that. Does the Minister recognise that there is a shortfall and are the Government prepared to do anything about it?

[Lord Wilson of Sedgefield (Lab)]

The best way to answer this question is to look at what we have actually done, with the spending review in 2025 and the spring forecast in 2026. The outcome of that points to additional funding, on top of the Barnett formula, et cetera, of something in the order of £1 billion to be invested in Wales. That is good for its economy and good for the people of Wales. If they want to see this continue, the best thing they can do is to vote Labour in May.