Economy: The Growth Plan 2022

Lord Frost Excerpts

Monday 10th October 2022 Lords Chamber

[Lord Frost (Con)]

My Lords, it is a pleasure to take part in this debate and to follow the noble Baroness, Lady Fox, who is a voice of clarity and forthright speaking in this Chamber. I congratulate my noble friend Lady Neville-Rolfe on her appointment once again to the Front Bench, in the Cabinet Office.

This country faces serious underlying problems, which my noble friend Lord Bridges and others have set out, and in my view this Government are beginning to tackle them. This will create turbulence but there is really no choice.

My noble friend Lord Lilley referred to the achievements of the Thatcher Government in the 1980s. One of her close advisers, John Hoskyns, said:

“It is not enough to settle for policies which cannot save us, on the grounds that they are the only ones which are politically possible or administratively convenient.”


Unfortunately, too many of those who have opposed the Government’s growth plan seem to want to do just that, thinking that the right way forward is just more of the same: more super-zero interest rates, more public spending and more clever policies, and the whole thing run by clever officials and institutions who are very invested in how things are now. The task before us is different. It is to make politically possible what is necessary for the country to begin to recover, and I believe that this is what the Government are setting out in the growth plan. I welcome that. I have spent a lot of the last year, within and outside government, urging the Government to get more serious about low taxes, reform and change. I am very happy that they have begun to do so.

The situation that we face as a country is difficult but it is not as bad as that which many others face. It is not as bad as for those trapped in the eurozone, who have no control over monetary policy or much else of the normal role of a Government. The report a week or so ago from Deutsche Bank researchers attracted a lot of attention in the hysteria of the last couple of weeks, pointing out that our economy might shrink slightly, by 0.5% in 2023. What attracted less attention was it saying that Germany’s economy would shrink by 3% or 4%. We must keep these things in proportion.

We have had a productivity and growth problem since 2008—which I note in passing is the period of the deepest integration of this country in the single market and of the highest inward migration. Re-joining the single market and reversing those trends will not help our growth performance at all; it did not help then and it will not help now.

The right way forward is set out in the growth plan: the gradual normalisation of monetary policy, which is essential if we are to solve the productivity problem. Zero interest rates harm the motor of a free market economy. The only way forward is medium-term fiscal discipline while letting fiscal policy take the strain in the short run, and supply side structural reform.

When the economy does not grow, you get competition for static resources, which is why we have what my right honourable friend the Prime Minister called the anti-growth coalition. The fact that so many people do not like the term shows that it has captured something real about attitudes. These people’s vision of the country seems to be to keep everything as it is. They do not want change. They are happy to see our country as a shabby-genteel aristocratic family, trying to keep up appearances but not ready to go out to work.

This will not be easy. Politicians must explain what needs to be done. However, I take inspiration again from the words of Margaret Thatcher, who said:

“First you win the argument, then you win the election.”


If the Government stick to their guns, I am confident that they will do both those things.