Government Record on Education, Employment and Welfare

Lord Frost Excerpts

Thursday 16th July 2026 Lords Chamber

[Lord Frost (Non-Afl)]

My Lords, I congratulate the noble Baroness, Lady Evans, for securing this debate and for her excellent opening speech. Britain’s economic problems did not begin with this Government. That would be an unjust accusation. I am afraid Governments of all parties have laboured diligently over many years to produce today’s situation.

The fundamentals can be summarised in one simple set of figures. Since 2008, productivity growth has consistently fallen back. The ONS tells us that, before the financial crisis, multi-factor productivity grew at nearly 2% annually. It is now growing at about 0.5% or less and has recently stagnated. In 2025, per capita GDP was lower than in 2022.

No party in government over this period can regard this record with satisfaction. All three—that includes the Liberal Democrats, of course—to varying degrees regulated, taxed, subsidised and drove energy costs up and industry out. Then came Covid, Ukraine and inflation; each inflicted genuine damage but also provided Whitehall with that most renewable of resources: a convenient explanation to hide bad policy.

Now, there is perhaps a glimmer of something better. Maybe artificial intelligence will finally raise output per worker. Indeed, the ONS’s experimental measure on productivity suggests that it has risen by 4.2% since 2019, rather than 2.3% under the old measure. So, perhaps something is going on.

But at precisely this delicate moment, the Government have chosen to test whether a green shoot can survive being repeatedly struck with a Treasury shovel. The tax burden is forecast to rise to 38.5% by the end of this decade—the highest since records began. The Government are planning to spend nearly half of all the money in the country. The reforms to education brought in by the noble Lord, Lord Gove, have been reversed, and we know from Wales and Scotland what the result of that is likely to be. As we have heard, the Employment Rights Act has undone one of this country’s few remaining strengths—our flexible labour market. Unemployment is at its highest level for a decade. Youth unemployment is even worse.

Net zero is compounding the problem, zeroing one industry after another. Denby Pottery, in my own home region of Derbyshire, survived the Napoleonic Wars, two World Wars, the early 1980s recession and the pandemic but could not survive Ed Miliband.

Of the terrors yet in prospect under Andy Burnham, we are currently left to guess, since he refuses to face any parliamentary scrutiny until September. We know, though, because he told that pillar of our constitution, Gary Lineker, a day or two ago, that he is going to

“ask for a little more”.

It may be a wealth tax or maybe a land value tax. Certainly, we will get municipal corporatism on a grand scale.

I am at a loss to know what question to ask the Minister today. After all, she comes to your Lordships’ Chamber without, I suspect, knowing what is going to come next, so that she can tell us anything about it. Yet she has to defend, as a programme for growth, an economic record of higher taxes, higher spending, riskier and more expensive jobs, a return to union-dominated schools and among the most expensive energy in the OECD.

We know that Ministers want prosperity—of course they do—but the problem is they do not know how to get it. Maybe they have got lucky. After nearly 20 years of stagnation, maybe they just might have been handed the first genuine prospect of a positive productivity shock in a generation. But the problem is that their instinct, faced with something that might at last grow of its own accord, is to reach for weedkiller and try to convince us that it is really fertiliser—a persuasive effort that I suggest is most accurately described as a different kind of fertiliser altogether.