Budget Statement

Baroness Moyo Excerpts

Thursday 16th March 2023 Lords Chamber

[Baroness Moyo (Con) (Maiden Speech)]

My Lords, I am deeply privileged to speak for the first time in your Lordships’ House. It is an honour to take my place on these distinguished Benches. I thank everyone in this august House for the warm welcome that I have received from all sides. I thank the officers and staff I have met for their support on all matters great and small. This includes Black Rod and her staff, the Clerk of the Parliaments’ Office, doorkeepers, police officers and attendants in the Library and dining areas. I also sincerely thank my supporters, the noble Baroness, Lady Baroness Manningham-Buller, and my noble friend Lord Reay.

In preparing for this occasion, I visited the archives of Hansard and read the maiden speeches of several noble Lords past and present with whom I share an interest in the economy: former Chancellors of the Exchequer my noble friends Lord Clarke of Nottingham and Lord Lawson, and the noble Lord, Lord Darling; former Bank of England Governor the noble Lord, Lord King of Lothbury; business leaders and economists my noble friend Lady Lea and the noble Baroness, Lady Fairhead, and the noble Lords, Lord O’Neill and Lord Skidelsky. Their words on the centrality of economic growth underline how much of what I wish to say today has echoed in this Chamber through the decades. Yet the theme of economic growth and its impact on all our lives is as important today as at any other point in living memory—perhaps more so.

I have been fortunate in my career to have worked through the vagaries of the world economy, including the challenges of the global financial crisis, Brexit and navigating the Covid pandemic. The perspective that I bring to this House is born of both public and private sector experiences over the past 30 years: in public policy, at the World Bank and as a non-executive director in His Majesty’s Department for Business and Trade; in finance, in the City of London, having spent nearly a decade at Goldman Sachs; and in business, on the boards of many large, global and complex organisations, including Barclays Bank and the investment committee of the Oxford University endowment.

In my career as an economist, I have long believed that the ability to create and sustain economic growth is the defining challenge of our time. I do not mean growth for growth’s sake or merely for the sake of record-keeping—for example, an economy increasing growth from 3% to 5%—but rather because economic growth is a prerequisite for vital public goods such as the quality of education, reliable healthcare, a clean environment and dependable infrastructure. Economic growth is also a precursor for innovation, improving how we communicate, travel, produce food at scale and solve seemingly intractable challenges such as the energy transition. Importantly, growth is necessary to maintain a healthy democracy. It ensures a wider share of prosperity and supports a stable, plural society. Taken together, with economic growth, we are able to put a dent in poverty and sustain human progress. Without it, lives become smaller and society atrophies.

Such is the mandate of your Lordships’ House, we must and do scrutinise the legislation of the land. Beyond this, the ultimate measure of how well we do our duty rests on how well we incorporate long-term growth consequences into the judgments that we make in our work here. In particular, in debates such as today’s on the Government’s Spring Budget, we are minded to consider the costs and consequences of our decisions on society’s long-term growth trajectory.

According to the OBR, growth projections for the UK peak at 2.5% before falling back below 2% over the next five years. Yet theory tells us that an economy needs to grow by at least 3% per year in order to double per-capita incomes in a generation, which is about 25 years, and, in so doing, make meaningful progress in living standards. From my reading of the Budget, we can see the beginnings of a credible growth plan, although it seems concerning that corporation tax in 2023-24 has been reaffirmed to rise from 19% to 25%. Surely, there is more work to be done to unburden companies from excessive regulation—after all, there is no credible path to strong, sustainable economic growth if the economy is subjected to both high tax and high regulation.

This House has an important role in reinvigorating the British economy and, relatedly, Britain’s standing in the world. Jump starting economic growth must mean multi-decade commitments and investments today in key areas, such as technology, the environment and the energy transition. To accomplish this, we need both public and private investment. In this Spring Budget, I am encouraged to see government pledges to drive investment, including corporation tax relief worth £25 billion to businesses over the next three years and investment in technology R&D worth £1.8 billion. In energy, I am pleased to see a commitment of up to £20 billion in carbon capture projects. Notably, I share the belief that investment in nuclear energy must be part of a green taxonomy; it is crucial to Britain’s energy security.

If the United Kingdom is to remain competitive in the intensifying contest for global private investment, the Government must also continue to telegraph time-consistent policies. These policies reduce economic uncertainty and offer investors confidence that, when they invest in Britain, they can reasonably expect to generate returns above the cost of capital. Crucially, policy-framing must not merely be obsessed with risk mitigation and setting rules for what we cannot and must not do; it must also point towards innovation and investments that catalyse economic growth, as we have seen in this Budget.

The world’s population has now surpassed 8 billion people, with estimates that nearly 90% of the world’s population lives in the developing world. Having been born in Zambia and having spent my formative years in Africa, I am acutely aware of how the rapid shifts and trends emerging from these developing regions—demographics, resource scarcity and geopolitics—are shaping the prospects for growth in Britain and the global economy in its entirety. The fact that I stand here today is a testament that, here too in this Chamber, there is a recognition that the perspectives from these emerging regions must continue to be represented in the important work that we do.