King’s Speech

Lord Liddle Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Liddle (Lab)]

My Lords, never in the last 40 years has there existed a bigger gap between the grim realities of our present national economic situation and the fantasy world that the Government, from their pronouncements, appear to live in. The Prime Minister declares that inflation is down, the economy is growing and debt is set to fall. The Prime Minister may meet his target of halving inflation, but the fact is that it is stubbornly higher than in the United States, France and Germany; the cost of living for millions, now dependent on food banks, continues to rise; and interest rates are going to stay much higher for longer than the Government think. Economic growth is, at best, at a snail’s pace; the Bank of England thinks there is going to be no growth at all for the next two years. As for debt falling, that is based on projections of public spending and borrowing that the Institute for Fiscal Studies regards as completely unrealistic, given the demographic pressures on our public services and the clear breakdown that exists today—and those projections are going to get even worse if there are tax cuts in the forthcoming Budget.

The fact is that the cumulative hangover from the 2008 banking crisis, Brexit, Covid and Liz Truss has put into reverse the catch-up in living standards that this country enjoyed in the years of John Major’s and Tony Blair’s premierships. Last week, the ONS produced figures on total factor productivity, which is the main driver of living standards. Under Major and Blair, total factor productivity rose by no less than 27%, but since 2007 it has grown by 1.7%.

Future historians are going to regard these 13 years of government as wasted years of destructive populism, when successive Governments failed to build patiently and constructively on Britain’s great strengths: our universities, our scientific pre-eminence, our technological opportunities and our massive creative strengths. There has been no building on them. Business investment has flatlined since 2016—remember what happened then, by the way. Britain stagnates while we have a City of London in decline, a hospitality sector unable to recruit the European workers that it needs, retailers desertifying our town centres and a construction industry that is failing to build the homes that our families need. Just on housing, we will see 250,000 housing completions this year—not enough—and this is estimated to fall next year to 151,000. There were supposed to be 144,000 housing starts this year, but the figures for election year are 70,000. What a record of failure this is, and an incalculable cost to many families.

We need new policies for growth—a modern industrial policy—but this has to be applied with consistency and discipline. We need the comprehensive planning reform that Michael Gove had to abandon because of Conservative Back-Bench pressure. We need a government drive for more apprenticeships, which have gone down under the present Government. We need reformed further education colleges—a real vocational ladder of opportunity. And we need a much better trading deal with the European Union than the one that the noble Lord, Lord Frost, negotiated.

I have just rejoined our Front Bench as a transport spokesman, and I am grateful to the noble Baroness, Lady Smith, for this. It takes me back to the department where, 47 years ago, I first started as a special adviser. Transport is a vital part of the growth agenda, as the noble Lord, Lord Birt, explained. A principal reason for our poor economic performance in this country is the huge and growing gap between our city regions in the north and Midlands and in London and the south-east. It is far bigger than in other European countries, and the lack of transport investment plays a major role when it comes to connectivity with London and within and between the city regions. We must change course and do better than this, and I am confident that a Government led by Keir Starmer will.