Baroness Vere of Norbiton
That this House takes note of the Chancellor’s Autumn Statement 2023.
The Parliamentary Secretary, HM Treasury (Baroness Vere of Norbiton) (Con)
My Lords, it is a pleasure to open this debate on the measures brought forth by the Chancellor in last week’s Autumn Statement. It was a Statement designed to drive growth across the country, creating jobs and giving more people more money through work. It included some big, headline-grabbing announcements—not least of which was a tax cut for 29 million working people—and over 100 other measures carefully crafted to build on the post-Covid economic recovery. Taken in combination, the measures that the Chancellor proposed could boost business investment in the UK by around £20 billion a year in a decade’s time.
I will start my remarks with some important context. The British economy has outperformed all expectations this year and has exceeded many of the forecasts. Yet in some ways we should not be surprised. When the Prime Minister took office, he set out five pledges to the British people, three of which were economic: to halve inflation, reduce debt and grow the economy—and he is a man of his word.
I turn first to inflation. At a high of 11.1% last year, it is now at 4.6%—a promise delivered. As the OBR noted, the measures in this year’s Autumn Statement are not inflationary, and inflation is forecast to continue to fall. I echo the Chancellor’s thanks to the independent Bank of England Monetary Policy Committee for its work in bringing down inflation. The Government will continue to support it to do whatever it takes until the job is done.
Secondly, I turn to debt. Before last year’s Autumn Statement, our debt was predicted to rise to almost 100% of GDP by the end of the forecast period. This is unacceptable. As the late Lord Lawson said, and as the Chancellor quoted in his speech,
“borrowing is just a deferred tax on future generations”.—[Official Report, Commons, 22/11/23; col. 328]
That is something we cannot justify.
Now, thanks to the decisions taken by the Chancellor, the OBR says that borrowing is lower this year and next, and, on average across the forecast, lower by £0.7 billion every year compared to the spring Budget forecasts. It falls from 4.5% of GDP in 2023-24 to 1.1% five years later. We meet our fiscal rule that public sector borrowing must be below 3% of GDP, not just by the final year but in almost every single year of the forecast. From a predicted rate of nearly 100%, headline debt is instead predicted to be 94%. The OBR forecasts that underlying debt will be 91.6% of GDP next year, rising to 93.2% in 2026-27, before declining in the final two years of the forecast to 92.8% in 2028-29. That is lower in every year compared to forecasts from last spring. So we meet our fiscal rule to have underlying debt falling as a percentage of GDP in the final year of the forecast, with double the headroom compared to the OBR’s March forecast. The UK continues to have the second-lowest government debt in the G7; that is lower than the United States, Canada, France, Italy or Japan—another promise delivered.
Finally, I turn to economic growth. There are one or two in your Lordships’ House who remember the economic recession that accompanied the Second World War. When this Government came to power in 2010, the UK was facing the worst recession since that era of terrible conflict. From 2010 until the pandemic, this Government presided over faster growth than many of our major competitors, including Spain, Italy, France, Germany and Japan. When the pandemic hit, followed in quick succession by an energy crisis, our economy, like so many around the world, faced a shock. As a result, last autumn, just a year ago, the OBR forecast a recession, in which the economy was expected to shrink by 1.4% in 2023. Instead, it grew. Revised numbers from the ONS now say the economy is 1.8% larger than pre-pandemic.
Looking ahead, the OBR expects the economy to be larger in every year of the forecast, compared to March. It is expected to grow by 0.6% this year and 0.7% next year. After that, growth rises to 1.4% in 2025, 2% in 2026, 2% in 2027 and 1.7% in 2028. This Government are delivering on growth. We have an economy that is bigger and stronger than people thought and, as I have already said, with double the headroom that the OBR predicted. This is where our leeway comes from, and a large part of the reason why we can introduce generous tax reforms, including cutting taxes for 29 million working people.
As I have said, this Autumn Statement is focused on economic growth, and the Government have set out a raft of measures to support long-term sustainable increases in economic output. For large businesses, full expensing has been a game changer. The likes of the CBI, Make UK, BT Openreach and Siemens, and indeed 200 other businesses and trade bodies, called for this measure to be made permanent. They all agreed that it would be the single most transformational thing we could do for business investment and growth. Full expensing means that, for every £1 million invested, a company will get £250,000 off their tax bill the very same year. That is cashflow that can be used to buy a vital new machine, expand premises, test a new product, or hire a new team to begin work on a new project.
For investment, growth and employment, that is game-changing. It means that we will soon have both the lowest headline corporation tax rate in the G7 and the most generous plant and machinery capital allowance anywhere. Once again, the OBR says that this measure will achieve our aims, and will make a huge contribution to our economy, increasing annual investment by £3 billion a year, totalling £14 billion in the forecast period.
Alongside this, the Government will provide £4.5 billion over five years to our strategic manufacturing sectors—those where we already have, or can have, a competitive advantage, and which have tremendous potential for growth in the years ahead. This will encourage the manufacturers of zero-emission vehicles, green energy solutions and aerospace and life science technologies to set up or expand in, and stay in, the UK—again, creating more jobs and more income.
As we move down the business scale, from the very largest to small and medium enterprises, we continue to provide support. The Government are extending the 75% business rate discount for retail, hospitality and leisure businesses for another year, and will freeze the small business multiplier, saving an average independent pub more than £12,800 next year.
Then we come to the smallest businesses of all—those consisting of self-employed people. The Chancellor illustrated the importance of these people in his speech last week, and it was an elegant description that I would like to repeat:
“These are the people who literally kept our country running during the pandemic: the plumbers who fixed our boilers in lockdowns, the delivery drivers who brought us our shopping and the farmers who kept food on our plates”.—[Official Report, Commons, 22/11/23; col. 333.]
Without these people, I simply cannot imagine how we could have got through the pandemic. They already give so much of their time and effort to their work that it has always seemed an unnecessary burden to ask them to fill in all sorts of tax forms, and then pay all sorts of different taxes, before they can enjoy the fruits of their labour.
So the Chancellor made two interventions: first, the abolition of class 2 national insurance, saving 2 million self-employed people an annual average of £192; then, the reduction of class 4 national insurance, down from 9 % to 8%, saving those 2 million people more again. From April next year, 2 million self-employed people will save an average of £350 a year.
Finally, the Chancellor offered one more major tax cut—a 2 percentage point reduction on national insurance for employees. That saves someone on an average salary over £450 a year, and that saving will start from January, once the legislation is passed.
I now turn to labour and welfare. The Government want to make work more available, more appealing, and more rewarding. That is why we are delivering on our commitment to end low hourly pay for full-time workers on the national living wage. Last week, the Chancellor announced the largest ever cash increase in the national living wage, increasing it by 9.8% to £11.44 an hour for workers aged 21 and over. This is worth up to £1,800 for a full-time worker. This follows a series of increases dating all the way back to 2010, when this Government first came to power. In 13 years, we have increased the national living wage by 30% in real terms.
As the Chancellor said in his speech last week, the best way to tackle poverty is through work. For tens of thousands of parents, the Chancellor’s spring announcement of 30 hours of free childcare for working parents of one and two year-olds will help them return to work without having to worry about their career prospects, or about being able to afford childcare while they are at work.
The focus of the Autumn Statement is on those with long-term health conditions and disability, and the long-term unemployed. Every year, 100,000 people are signed on to benefits, with no requirement to look for work, because of sickness or disability. Some of these people are unable to work and it is perfectly right that we support them with the uprated benefits that the Chancellor announced last week.
But for a large number of sick or disabled people, the issue is that they are not given a clear route back to work when they are ready for it. That means they are not even given a chance to reach their full potential. We should not be comfortable with that. Everyone should have the opportunity to make the most of themselves and to experience the benefits of work. So, over the next five years, the Government will commit £1.3 billion to help nearly 700,000 people with health conditions to find jobs. Over 180,000 more people will be helped through the universal support programme and nearly 500,000 more people will be offered treatment for mental health conditions, and employment support.
At the same time, there are many people in this country who have been unemployed for a long time—over a year—not because of any conditions that they have but rather because of the conditions that they find themselves in. Perhaps a surprising redundancy has left someone in their 50s, who has worked in the same role for 30 years, adrift in a modern job market for which they are not entirely equipped. Perhaps the kind of work someone in their 20s really wants to do requires qualifications which they just do not have the means to attain.
There are numerous reasons for long-term unemployment, but there is one basic truth: work lifts us up, so the Government will provide a further £1.3 billion of funding to offer extra help to the 300,000 people who have been unemployed for over a year. But if, after 18 months of intensive support, jobseekers have not found a job, the Government will require them to take part in a mandatory work placement, through a new work programme or other intensive activity, to increase their skills and improve their employability. In addition, if they choose not to engage with the work search process for six months, their case will be closed and their benefits stopped.
Other Benches may try to argue that this lacks compassion. I say that is wrong; that the inverse is true and that this is a fundamentally compassionate approach, because it prevents those who choose not to work siphoning off the finite resources that those who sincerely want to work, or those who genuinely cannot, desperately need. It protects our most vulnerable, and the people who most want and need our support, from those who would seek to exploit them by hiding among them—and the OBR says that this will work. Taken together with the labour supply measures the Chancellor announced in the spring, the OBR says that this Autumn Statement will increase the number of people in work by around 200,000 at the end of the forecast period, permanently increasing the size of the economy.
This is a wide-ranging Autumn Statement which includes bold measures to get our country growing: the largest business tax cut in modern British history over a five-year period; the largest ever cash increase to the national living wage, paired with the largest ever cut to employee and self-employed national insurance; the biggest set of welfare reforms in a decade; one of the largest ever increases to the state pension; and a focus on investment that could see business investment in the UK increase by £20 billion per year in a decade’s time.
I have outlined only some of the numerous measures announced by the Chancellor last week. There is much more to cover but, for now, I welcome this debate and look forward to hearing the views of your Lordships’ House.
Lord Frost (Con)
My Lords, I begin by welcoming my noble friend to her new role in the Treasury. I speak in this debate more because I feel obliged to than because I really want to. I am well aware that the Government have stopped listening to Conservatives with my opinions, but I will give them anyway. I had hoped last week that we would get a Statement and set of measures that acknowledged that Britain has been on the wrong track and that a radical change of direction is needed. I am afraid that instead we got some palliatives—obviously, these are welcome—some attempts to soften the direction of travel, which remains wrong. We got a Statement that, I am sorry to say, does all too little to persuade the British people that we, as the governing party, have solutions capable of solving the country’s problems, and that makes it far too easy for voters to believe the falsehood that there is no real difference between Conservative philosophy and those of the parties opposite.
If I am honest, I am tired of pretending that I think we are on the right track. I meet many Conservative members and voters—former voters, all too often, I am afraid—and even quite a few Ministers who do not think we are either. Even with the reduced tax increases that we saw in the Autumn Statement, we are still heading for the highest levels of tax and spend ever seen in this country outside wartime. Not surprisingly, economic growth is anaemic. Yes, as my noble friend the Minister said, we are outperforming the gloomiest predictions of the OBR, let alone the pre-Brexit Treasury prophecies of doom. However, as noble Lords will see if they look at the Angus Maddison database, which has been measuring this country’s growth for the last 700 years, we have had pre-modern growth rates since the financial crash, with a per capita growth rate roughly that of Britain during Queen Victoria’s reign.
Many, perhaps most, European countries are doing just as badly as us, if not worse, but we are one of the few that has the powers to solve the problems. Instead, what are we doing? We are spending more money than ever on the National Health Service—indeed, we are one of the top 10 spenders per head globally—and getting worse and worse results for it. We are paying huge sums on welfare and pensions, yet the only solutions we have are the very gentle carrots of encouraging people back into work, rather than a bit more of the effective stick of reducing welfare for people who choose not to work.
We are sucking in huge numbers of immigrants to try to fill the gap—or rather not, because we still have a million job vacancies. We are building nowhere near enough houses. We have heard from many noble Lords already many wishes, many calls—very well justified, I am sure—for more public spending on favourite causes, but the truth is that we are trying to provide public services as if the economy were growing by 3% a year when the real figure is 1%. That just cannot be done and we are now feeling the pain.
It is not as if any of this is a secret. Outside this building, people talk about these real-world problems all the time. They do not talk about smoking bans or A-level reform. The party I am a member of has been in power for 13 years and, I am afraid to say, bears much responsibility for problems I have just outlined. I spent the best part of three years working to get this country out of the EU in a way that gave us full optionality about the future, and I believe we largely succeeded in that. But we have not fully used those powers and often seem frightened to. The Windsor Framework—trumpeted as an achievement but actually doing significant political and economic harm to the unity of this country—makes it even harder to do anything differently.
But it is more than that. I worry we have all been captured by the socialist belief that government regulation and spending is the way to solve our economic problems, that vast taxpayer subsidies to all kinds of politically favoured industries—productive, or more often not—such as semiconductors, windmills, batteries, the hydrogen boondoggle, electric cars, zero-carbon steel or aviation are going to solve our economic problems, despite all the evidence that government direction of the economy never works out well. I would like to see policymakers paying less attention to the many snake-oil proponents of the so-called active state and spend a bit more time reminding themselves of Hayek’s essay “The Use of Knowledge in Society”.
The truth is that we need to get on to a different path if we are to boost economic growth, which is overwhelmingly what we need to do. The first duty we owe to the people of this country is honesty about the nature of our problems and how we can solve them. The only way we can get growth and incomes up again is to release the forces of the private sector—removing the crushing tax and regulatory burdens, dramatically reforming planning and building many more houses, slowing or halting the collectivist delusion of net zero, ending the war on SMEs and the self-employed, beginning to cut public spending by cutting the functions of government and by properly reforming the great public sector entities. At the same time, we must show that the Government have a grip and can perform their core functions, most obviously on immigration where we must be ready to shake ourselves free from the many constraints that seem to leave us frozen in immobility.
The Autumn Statement dips a toe in all these waters, notably with the national insurance cuts and full expensing—these are to be welcomed, as they are a signal that there is understanding of what is going wrong—but it does all too little to challenge, let alone hold back, the tide of statism, miserabilism and nannyism that risks overwhelming this country. We can still change that, so I ask my noble friend the Minister and beg my Government to show that they are listening to our voters and the country, to stop being swept along by the collectivist current and to change course—to act before the election, before it is too late.
Baroness Vere of Norbiton (Con)
My Lords, I am enormously grateful to all noble Lords for their very valuable and interesting contributions to today’s debate and for their kind words in welcoming me to my new role. I have to be honest that there were some very undignified ministerial tears leaving Transport after four and a half years, but of course I am absolutely delighted to be at the Treasury—it seems like such an easy job.
I am very grateful to all noble Lords who, wholly or partially, welcomed the Autumn Statement for what it is: a well-thought-through plan to grow our economy, thereby improving prosperity and well-being across the country.
Baroness Vere of Norbiton (Con)
Is that genuinely funny or is it just performative?
It will not surprise noble Lords to learn that I did not agree with all the points raised, but there have been others that have truly piqued my interest and I will take them away for further consideration.
I will first set out the context, which was noted by my noble friend Lady Goldie in her very spirited speech for an “old bird”. It is very important to think about the context of where we are and where we have come from. There were some notable exceptions, because many noble Lords just glossed the past few years and said, “Oh, it’s all the Government’s fault”. I note that my noble friend Lady Lea gave an excellent speech, with a very authoritative analysis of where we are.
We have faced a global pandemic and global economic headwinds generated by Putin’s illegal war in Ukraine. As a result of those things, we have made decisions. Other countries did not make exactly the same decisions as us; therefore, they had a different experience. The decisions we took included the Covid support of over £350 billion, and the cost of living support to dampen the impact of rising bills has exceeded £100 billion. I invite noble Lords to recall these interventions, because I do not, in my years on the Front Bench in this House, recall any time when the Opposition Benches, in particular, argued against them. In fact, in nearly all cases, I seem to recall many saying that it was just not enough and that more needed to be done during Covid and the recent cost of living challenge.
Therefore, when noble Lords turn around and complain about various elements of the state of our economy, I say that we have not lived in usual times. That is why this Autumn Statement is a blueprint to get our debt down, to get business investment up, to get inflation controlled, output boosted and taxes cut; and this is an Autumn Statement plan for growth. I reassure my noble friend Lord Dobbs that economic growth is and will be at the heart of this Government’s plans, and that the Government will do more on tax cuts when the circumstances allow. I understand that my noble friend Lady Noakes will probably never be happy with what the Government propose and their speed for the interventions that she would like, but I hope that she appreciates that we are making steps in the right direction.
On a minority sport, I also welcome the support of the noble Lord, Lord O’Neill, for the devolution deals: they do not get enough love and, combined with good local scrutiny, can make huge differences to parts of the country. One has only to look at the West Midlands and the great mayor we have there.
Turning to a few of the issues raised and trying to deal with them, I turn to my noble friend Lord Dobbs and his comment about experts and forecasters. When I was quite young, I was an investment banker for many years. I am well aware that forecasts are rarely 100% right. They are forecasts; we know that. However, it is important that we have a framework for decision-making, so I agree with him that forecasts are not gospel. It might have been my noble friend Lady Lea who said that they can be both an art and a science, and of course they get slightly less certain the further out you get. However, we need a framework to make our decisions, and that is why it is really important that we forecast where we think the economy is going to be and that we have the OBR to check our thinking. It is an educated view—a snapshot in time—but one that I believe is useful.
My noble friend Lady Lawlor made some very good points about inflation and its contributing factors. She talked about the role of the Bank of England and mentioned the report on that. I have to confess that I have not yet read that report, but I intend to very soon. I have already brought it to the attention of my officials, and I look forward to debating the report in due course.
My noble friend Lord Northbrook asked why we did not stop QE sooner. Of course, decisions on the size of the APF, which means something that escapes me now—oh, I believe that it is the asset purchase fund—and the pace of purchases and sales are those of the independent Monetary Policy Committee, and the Government do not comment on MPC actions.
My noble friend Lord Howell talked about the impact of high interest rates on government debt payments, and my noble friend Lord Sherbourne of Didsbury also mentioned debt, the size of interest payments and the consequences of those high levels. That is why this Government are absolutely committed to getting debt down, so that the actual cash cost of the debt comes down too. I cannot speculate on bank rates, of course, but we feel that by 2028-29 underlying debt will be 92.8% of GDP.
The noble Lord, Lord Livermore, whom I have not yet congratulated on his new role as shadow Exchequer Secretary—so that is all good news—talked a lot about the tax burden, and I hope I was able to demonstrate in my opening remarks why the tax burden is necessarily high, because we must pay off the debt that we had to accumulate, given the economic circumstances that we were in. He said that he did not think this was a tax-cutting budget, but the OBR has confirmed that decisions made by the Chancellor in this Autumn Statement reduce the tax by 0.7% of GDP—which is a tax cut. I am confused, but I am sure we will sort all that out.
Lord Eatwell (Lab)
The Minister just made a mistake. What the OBR argued is that the cut in national insurance means that taxes have risen less rapidly than they would have done otherwise, but that they have risen none the less.
Baroness Vere of Norbiton (Con)
The noble Lord is exactly right. But the counterfactual is what happened before the Autumn Statement. People are, in general, paying less than they would have done previously. Yes? Okay. We got there in the end.
Lord Eatwell (Lab)
People are paying more. In other words, the Minister is arguing a case for cuts in taxation. This is not a cut in taxation; it is a reduction in the rate at which taxes are increasing, but they are increasing none the less.
Baroness Vere of Norbiton (Con)
We are both correct.
The noble Lord, Lord Macpherson, asked whether it was the Government’s policy now to favour national insurance reductions over income tax reductions. I think I can say yes. It certainly was true for the Autumn Statement—so, for this moment in time, I think I am covered.
A couple of noble Lords mentioned inheritance tax: my noble friends Lord Northbrook and Lord Balfe. I can assure noble Lords that more than 93% of estates are forecast to have no liability in each year up to and including 2028-29. Those that do are very important in contributing to public finances and in helping to fund vital public services. However, as all noble Lords know, the Government keep all taxes under review, including inheritance tax. That also goes for the stamp duty suggestions mentioned by my noble friend Lord Willetts and the fuel duty suggestions from the noble Baroness, Lady Bennett.
I turn now to public spending. Many noble Lords called for increased public spending during this debate. I would read out the names, but it is actually nearly all noble Lords, apart from notable exceptions on the Benches behind me. Those who called for more public spending included the noble Baronesses, Lady Pinnock, Lady Featherstone, Lady Bennett and Lady Meacher; the noble Lords, Lord Howarth, Lord Macpherson and Lord Thomas; the noble Viscount, Lord Hanworth, and the right reverend Prelate the Bishop of Manchester. The list is extraordinary. However, on the list of noble Lords who came up with a plan for how to pay for those spending increases—a medal goes to the noble Baroness, Lady Bennett. She did come up with a medal.
Baroness Vere of Norbiton (Con)
A medal? I am going to come up with a medal. She is going to get it, because she came up with a plan. Of course, her plan was more taxes—but we knew that was going to happen, so that is okay. There was one other person who came up with a plan for how to pay for this increased public spending, and that was the noble Viscount, Lord Hanworth. He said to ditch the tax cuts. So there were two people. Everybody else just wanted to increase spending, and therein lies the problem.
Looking in more detail at some of the public spending that noble Lords were concerned about—and obviously I can reflect some of these concerns as well—the noble Baroness, Lady Pinnock, called for additional funding for councils so that essential services could continue. The Government stand behind councils up and down the country. The 2023-24 local government finance settlement provides councils with a 9% increase in core spending power in total, making available almost £5 billion in additional resources. It should be noted that local councils can also raise funds from local taxpayers for local services.
Personally, I live in Kingston-upon-Thames, which all noble Lords well know has a Liberal Democrat council—and my word, my council tax is eye-watering. I think it is one of the highest in the country. What makes me slightly laugh about this is that, despite having some of the highest council tax in the country, the Liberal Democrats have closed the swimming pool. The noble Baroness, Lady Pinnock, is very concerned about swimming pools. I suggest that she go to Kingston-upon-Thames and get them to open it again. There is not a lot of happiness around that.
Public spending also needs to be efficient and not greedy, as noted by my noble friend Lord Howell. It is really important that we set public spending on sustainable trajectories, delivering high-quality public services effectively and efficiently. This is why my honourable friend the Chief Secretary is leading an ambitious public sector productivity review. I hope that my noble friend Lord Sherbourne will share his thoughts with her, because we need to reimagine the way that government delivers public services. So often we fall into the trap where the amount of money put into something equates directly to its outputs. That would never happen in the private sector. It just does not happen. Outputs can be independent of the money that one puts in, and it is very important that, within the public sector, we get that and we try to do that.
I take on board the comments made by the noble Lord, Lord Lee of Trafford, about the 60,000 civil staff in defence. My former Secretary of State is now the Defence Secretary; I know him well, and I am fairly sure that he will already have looked at this in great detail, but I will nudge him in case he has not.
The noble Lord, Lord Macpherson, asked to what extent the Autumn Statement was informed by the OBR’s report on fiscal risks and sustainability. That report did inform the Autumn Statement, as I am sure the noble Lord thought I would say. The Government’s agreement to respond at a subsequent fiscal event establishes this feedback loop, which demonstrates the Government’s commitment to thoroughly assessing and actively mitigating fiscal risks.
The noble Lord, Lord Sikka, asked a question I was a little surprised by; I thought he may have known this, but perhaps it is not well known. He asked about the inclusion of QE in public debt. The UK’s fiscal rules target public sector net debt. This metric excludes the Bank of England and all its subsidiaries, including the asset purchase facility. This changed in 2021 as it was felt that excluding the Bank of England’s contributions to public sector net debt through the valuation effects associated with its quantitative easing programme and term funding schemes better reflected the impact of government decisions.
I will write to noble Lords on MoJ funding and the maintenance of schools. I want to talk about the cost of living because the amount of support that the Government have given, and will continue to give, is not fully recognised. There has been some good feedback about the local housing allowance rates going up, and not enough noble Lords welcomed where we are on the national living wage.
Lord Sikka (Lab)
Can the Minister tell the House how much of QE is included in the public debt now? Why is it the case that, when the left hand of government transacts with the right, the Treasury with the central bank, it somehow creates debt?
Baroness Vere of Norbiton (Con)
I will probably write to the noble Lord with clarity on that, because I would like to make a little progress.
A number of noble Lords tried to pull out one element of the Autumn Statement and made the point that it will benefit rich people more than poor. One cannot look at one measure in isolation. The Government have conducted extensive assessment of the policies announced both in this Autumn Statement and in previous years. It shows that, across all government decisions dating back to the 2019 spending round, the combined impact of tax, welfare and public services spending measures has benefited the lowest-income households the most.
I will touch briefly on welfare reforms. I am grateful to my noble friend Lord Jackson for his support for these reforms. We want to see people who can work be able to work; we are absolutely willing to provide support for them.
The right reverend Prelate the Bishop of Manchester mentioned mental health. I agree with him that we must confront this issue in our country. It remains a priority for the Government. Alongside other recent mental health interventions, the back to work plan includes nearly £800 million over five years to expand talking therapies for those with mild or moderate conditions, as well as individual placements and support to be delivered within community mental health schemes for those with more serious conditions.
I will write to noble Lords on a couple of other things. I come back to growth because it is undeniable that growth in many developed nations has been difficult. Since 2010, when this Government first came to power, the UK has grown faster than many of its competitors, including France, Germany, Italy, Spain and Japan. Would I like to see us grow even faster than we currently are? Absolutely—indeed, the growth trajectory is on an upward trend after the first two years. The noble Lord, Lord Livermore, did not quite get to those numbers but they are higher, peaking at 2% a year. This Autumn Statement is focused on creating sustainable growth without adding to inflation or overall borrowing. It is sensible supply-side interventions that boost business investment.
This is in stark contrast to the plans set out by the party opposite, such as they are. It is not clear to me which parts of the Autumn Statement the Labour Party actively oppose or would do substantially differently, and the noble Lord, Lord Livermore, has not enlightened me. So not only do we have a cut-and-paste shadow Chancellor; it seems we have a cut-and-paste shadow Exchequer Secretary too. It is worth reflecting on the much-vaunted flagship Labour spending policy of £28 billion. For clarity, that is £28 billion per year. In the absence of significant tax rises or substantial cuts to public spending—and only the former is in the traditional Labour playbook—this £28 billion per year will just add to our national debt, piling pressure on future generations and busting through fiscal rules. As I said, this Conservative Autumn Statement is about sensible supply-side reforms to support British businesses and boost productivity.
The noble Lord, Lord Howarth, asked whether full expensing represents value for money. The Government have prioritised the business tax cut as a targeted way to support businesses which invest. It does this by reducing the cost of capital for UK companies. This policy will drive 0.1% GDP growth in the next five years, increasing to slightly below 0.2% in the long run. Whereas the benefits of the policy will grow over time, the costs will reduce. Full expensing brings forward relief that would otherwise be claimed over decades, meaning that the costs are highest in the policy’s introduction.
The noble Lord, Lord Londesborough, talked about a productivity council. The Government take a range of advice on matters of growth and productivity from all sorts of organisations, including public sector organisations such as the National Infrastructure Commission and the Competition and Markets Authority, but also from academics, think tanks and businesses. While I respect his idea, at the moment we will probably not take it forward.
There was some interesting comment around the pension reforms. The noble Lord, Lord Davies, welcomed the proposals. He asked for the timing of implementation of changes to retired benefit schemes. This will become clearer when the consultation period has completed. I will write on the second question about pensions, because I am conscious that I will imminently run out of time.
My noble friend Lord Northbrook and the noble Lord, Lord Lee of Trafford, asked why the Government are not bringing back the VAT retail export scheme. The Government continue to accept representations from industry regarding the tourist tax and are considering all returns carefully. It is about providing very robust evidence on this. At the moment, we feel that it is a little lacking.
The noble Baroness, Lady Featherstone, talked about the creative industries. There is a large number of specific asks for a very specific sector, so I will certainly write.
It is also worth noting some of the more general discussions that noble Lords had today, and I hope will continue to have in the future. There were considerations around the size and shape of the state, the amount of contributions that should come from taxpayers, and, from the noble Lord, Lord O’Neill, public versus private sector investment. My noble friend Lord Willetts talked about the shape of the state. These are things to mull on, definitely. They will not change government policy today or in the near future but are really important issues that should be debated.
I second what my noble friend Lady Noakes said about regulation. We need to look at regulation as our economy develops. It is most helpful for the Government when noble Lords can go into specifics. I am always very happy to hear about specific regulations that we feel are not fit for purpose and which need to be improved.
Also, to my noble friend Lady Noakes, on the 100-plus measures, I say that the details can be found in the “Policy Decisions” chapter of the Autumn Statement document.
Baroness Noakes (Con)
My request was quite simple. I did say that there were 200 paragraphs in Chapter 5 and a number of policy costings, but none of them actually shows what amounts to the 110, which was one of the leading statements made by my right honourable friend the Chancellor in his Autumn Statement. I am simply asking: which are the 110? Does my noble friend undertake to let me have that information if she cannot provide it now?
Baroness Vere of Norbiton (Con)
I will go away and see what we can do. I said over 100 because it is now much more than 110. There are a lot of measures, and I will see what I can do to get together some sort of list.
Lord Eatwell (Lab)
Can I support the noble Baroness, Lady Noakes, in her request? It would be enormously helpful if the Minister would commit herself to provide an annotated list of the 110 measures and place it in the Library.
Baroness Vere of Norbiton (Con)
As I said to my noble friend Lady Noakes, I will do my best.
It is worth spending some time on my noble friend Lord Harrington’s review. I am enormously grateful for his work. This is an area in which he has great interest and, indeed, great expertise. His speech today added colour to his thinking set out in the report; I know that all noble Lords will be keen to see it, and I hope will be able to speak to him about his conclusions. The Government have accepted all the headline recommendations and, as a result, are establishing a new ministerial investment group and backing it with additional resources for the Office for Investment. I have worked with the Office for Investment; it is very good and works across government, pulling together all the bits of government one needs to make a successful strategic investment. I have some minority-sport questions on EIS and VCT on which I will have to write, important though they are.
I believe I should conclude. The measures in the Autumn Statement are important and bold, and rightly so. As a country we find ourselves in a moment when inflation is reducing, borrowing is reducing, and growth is improving. The measures announced by the Chancellor last week will support efforts to boost business investment in the UK, and they will help businesses of all sizes to spend more of their money on the things that bring them success: premises, people, ideas and products. Our measures will get thousands of people working and reward them with better pay. By delivering for the British people, we will see economic growth leading to increased prosperity and well-being for all.