Economic and Taxation Policies: Jobs, Growth and Prosperity

Lord Horam Excerpts

Thursday 13th November 2025 Lords Chamber

[Lord Horam (Con)]

My Lords, we recently celebrated the centenary of the birth of Margaret Thatcher. I think we all realise that we could do—as many people say today—with another Margaret Thatcher to deal with the mess confronting us. We certainly need her ability to centre on the economic problems of the country and follow that up with a single-minded determination that is all too often lacking in the present Government.

My good friends, the noble Lords, Lord Goodman and Lord Frost, have just emphasised the centrality in her thinking of controlling public spending. They may not realise it, but during the Labour Government period when she became the leader of the Conservative Party, public spending became 47% of GDP, the highest proportion in post-war economic history. The result, as noble Lords may remember, was a trip to the IMF to bail out the then Labour Government. Margaret Thatcher then became Prime Minister of this country and in 11 years brought down that 47% to 35% in 1988-89. As a consequence, we had a cumulative 21% growth over five years—the best five years of post-war economic growth. Today, public spending is 44% of GDP and it is certainly a central task to bring that down rather than mask the problem by raising taxation to 44% or thereabouts.

Recently, we have all been instructed, quite rightly, to read my noble friend Lord Elliott’s book and also read the recent pamphlet from Policy Exchange, which lists at least 10 of the things we need to do, including, in addition and importantly, welfare reform. The noble Lord opposite quoted Chris Giles in the Financial Times, but could I recommend to him a much more thorough analysis by Sir Charlie Mayfield, the former head of John Lewis, of the real, fundamental difficulties and dangers of having welfare reform of the kind we have at the moment?

So will the Labour Government do something of the kind we need on public spending? No, because it is not in their DNA. It is asking them to do the opposite of what they came into politics to do, which was to put up public spending. They are the party of the public sector, for the public sector, by the public sector. As the noble Lord, Lord Risby, pointed out, no Member of the Cabinet has extensive private sector experience. It is a tragedy of our country at the moment that we have a Government who are peculiarly unable to tackle the real problems. It will therefore fall to a Conservative Government to do that: to bring down public spending with proper control and release the animal spirits of the private sector. I hope we will be able to do that in reasonable time and, when we do it, we will do it with the determination and practical skill that Margaret Thatcher showed all those years ago.