Government Record on Education, Employment and Welfare

Baroness O'Grady of Upper Holloway Excerpts

Thursday 16th July 2026 Lords Chamber

[Baroness O'Grady of Upper Holloway (Lab)]

My Lords, I thank the noble Baroness, Lady Evans, for introducing this debate. It is a pleasure to follow the noble Lord, Lord Baker, who always has important and interesting things to say about vocational training—and, it seems, about ministerial appointments.

I am very proud that this Government’s mission is to reindustrialise Britain, make work pay and lift living standards. There has been real progress. The UK is now the fastest-growing economy in the G7. Better job security and higher wages through stronger employment rights incentivise workers and reduce turnover costs for business. NHS waiting lists are falling, delivering a healthier workforce. That benefits business too. The Resolution Foundation reports that this year the lowest-income half of families in Britain will see a significant improvement in their standard of living. Let us remember that the single greatest contribution to social mobility in this country has been this Government scrapping the two-child benefit limit, lifting half a million children out of poverty. That is the kind of schooling that I am interested in, because it will transform not only their lives but the lives of their families and communities.

To generate fair growth, we must tackle Britain’s record of low investment and poor productivity. Government action to accelerate clean energy production shows what can be achieved. The CBI reports that the net-zero sector now supports over 1 million jobs and over 23,000 firms whose productivity is 48% above the national average. We need to see that success across sectors, to fund decent welfare and education and to deliver the good, skilled jobs that the British people demand.

That brings me to a new report by University College London for the ETUC which was published last month. For two decades, the debate about economic competitiveness has been framed around the diagnosis that labour costs are too high, which in turn requires pay restraint and deregulation. This new report draws on a 25-year firm-level analysis of Europe’s 300 largest publicly listed corporations and provides evidence that that diagnosis is wrong. What is holding back growth is not the cost of labour but the misdirection of capital. Profits have been increasingly diverted away from productive investment into shareholder payouts, debt-funded distributions and financial reserves.

The report recommends making government business support conditional not only on decent labour standards but on meeting reinvestment requirements. It also highlights the importance of corporate governance reform. This is vital to address the British sickness of short-termism, which puts shareholder returns above the long-term interests of the company. Does my noble friend the Minister agree with the diagnosis that Britain needs more value creation and more productive investment? Does she agree that we need more government action, including on procurement power and corporate governance rules, to drive it?