Economy: The Growth Plan 2022

Baroness Walmsley Excerpts

Monday 10th October 2022 Lords Chamber

[Baroness Walmsley (LD)]

My Lords, the Chancellor’s special economic operation was not as tragic as Mr Putin’s appalling special military operation, but it was pretty tragic for the economic prospects of ordinary people. Since the Budget that was not a Budget, I have met a small business that has shelved its expansion plans, a person with two jobs who is now looking for a third, and a mother of four who got extra blankets from the charity shop to avoid putting the heating on.

Planning to cut taxes for top earners shows whose side the Conservatives are on, and I am glad that they have decided to reverse that idea. In their defence, they say that they will reduce the basic rate of income tax by 1p next April—that is if we all get through the winter. However, 5 million people earn too little to pay tax, and the freeze on the tax threshold means that the average family will be £290 worse off next year anyway, and the tax cut is worth only about one month’s mortgage payment increase for some people.

Then there are energy bills. The Government have intervened to cut bills but they are still double what they were a year ago. The Prime Minister and the Chancellor, with their bungled Budget that was not a Budget, caused a massive increase in mortgage rates, connected exactly to the timing of the Chancellor’s statement. They spooked the money markets so badly that the Bank of England had to intervene to prevent pension funds going bust. All this adds up to ordinary families struggling, and then the Chairman of the Conservative Party tells them to go out and get a better paid job—shades of “Get on your bike”.

The Prime Minister has invented a new fantasy enemy: the anti-growth coalition. She even said in her conference speech that green issues are anti-growth—no; it was Brexit that was anti-growth. We on these Benches are not against growth but we are in favour of growth that works; growth from the bottom up rather than from the top down. We are in favour of the growth of well-paid jobs in science and technology industries, particularly green technologies to reduce emissions. That is not anti-growth; that is a vision for saving the planet.

Telling companies that they can keep more of their profits rather than increasing corporation tax is telling them that they can spend it on whatever they like—perhaps increasing CEO salaries. They should instead be saying that companies can keep more of their profits but must spend it on innovation and research and development to increase productivity and increase the skills of their workers. This can be done by various measures, including more tax credits.

The Lords Science and Technology Committee, in its latest report, heard evidence that growth comes from investing in science and technology. We welcomed the new national Council for Science and Technology, chaired by the previous Prime Minister, and recommended that it should meet more often—but the first thing the current Prime Minister did was to abolish it. Now all government departments are being asked to make cuts. What cuts will be made to the Chancellor’s former department, BEIS, reducing its ability to fund innovation and R&D?

I recognise that the Government have provided a significant amount of money to subsidise energy bills, but I have heard nothing about how they plan to reduce energy demand, thus improving energy security and cutting the amount needed for the subsidy and the cost of borrowing money for the subsidy, as well as ordinary people’s bills. Where, in the noble Baroness’s opening speech, was an emergency programme to insulate houses? Where are the improvements to building regulations and, importantly, enforcement to ensure that all new buildings are energy efficient? It saves families money, saves the Government money and creates jobs. What is not to like?