Economy: The Growth Plan 2022

Lord Northbrook Excerpts

Monday 10th October 2022 Lords Chamber

[Lord Northbrook (Con)]

My Lords, the Chancellor said his recent fiscal Statement represented

“a new approach for a new era”.

He continued by saying:

“For too long in this country we have indulged in a fight over redistribution”,


adding that the Government would focus on growth built around several priorities, including reforming the supply side of the economy and cutting taxes to boost growth. He argued that the growth plan would

“unleash the power of the private sector”,

with the aim over the medium term of reaching

“a trend rate of growth of 2.5%”.

We await his supply-side reforms, due to be announced in his medium-term fiscal plan on 31 October. He said these would cover

“the planning system, business regulations, childcare, immigration, agricultural productivity and digital infrastructure.”

I welcome his decision to reverse the national insurance increase proposed by Rishi Sunak. I also very much approve, as other noble Lords have said, of the repeal of the IR35 off-payroll changes of 2017 and 2021, the cancellation of the proposed corporation tax increase, the advancement of the basic rate tax cut by a year, the changes to the stamp duty threshold and the cutting of the additional tax rate from 45% to 40%, believing that, within reason, lower tax rates yield higher revenues and make the UK more attractive to international business. The huge energy support package also had my support.

So how could this Financial Statement have had such a bad reception? The first problem was timing. There was a perfectly respectable argument for reducing the 45% rate—after all, that is what it was during Tony Blair’s term in office and after—but the Government had to prepare the ground first. It is not immediately obvious that it could pay for itself, but it could easily do so if more big earners decided to declare their income in the UK. That takes time and patience to explain, especially at a time of such hardship when people are struggling with electricity bills, mortgages and cost-of-living expenses. People are also worried about the increasing effects of inflation. There could have been shrewder ways of doing this—namely, by raising the threshold for the start of the 40% tax bracket, since it now encompasses millions of middle earners who were never meant to pay this rate.

Going back to the proposed supply-side reforms com, the planning system ideas to encourage growth look sensible on the face of it, but there will be resistance to these, especially from Back-Bench MPs in southern rural seats. Every Government propose to tackle business overregulation, but generally there seems to be little overall success in this area.

The Government also completely failed to anticipate the market’s reaction to the unfunded tax cuts. The decision not to have the Statement’s financial effect costed by the OBR was a serious mistake. It also vaguely mentioned further tax cuts, further undermining market confidence.

I welcome the proposed reforms to the universal credit regime earnings threshold, which will mean that 120,000 more claimants will be helped to increase their earnings. However, I cannot see how much additional welfare reform is going to succeed as there will be serious opposition, including from the Government’s own Back Benches.

I am happy with the Government’s plan to introduce legislation to ensure minimum service levels on transport services and to require unions to put pay offers to a membership vote.

I await with interest more details of the proposed investment zones to be established across the UK, which will benefit from tax incentives, planning liberalisation and wider support for the local economy. Hopefully, the loss in tax take can be made up for by the new businesses attracted there.

Overall, the Government had some great ideas in the Financial Statement, but they were let down by poor preparation of the ground and in getting the Back Benches onside. Hopefully, as a result of the reaction to it, the Government will be more careful in these areas in future.

Queen’s Speech

Lord Northbrook Excerpts

Monday 16th May 2022 Lords Chamber

[Lord Northbrook (Con)]

My Lords, Her Majesty’s gracious Speech is full of good intentions. The first paragraph states that

“Her Majesty’s Government’s priority is to grow and strengthen the economy and help ease the cost of living for families.”

The second paragraph states:

“This will be underpinned by a responsible approach to the public finances, reducing debt while reforming and cutting taxes. Her Majesty’s Ministers will support the Bank of England to return inflation to its target.”


So far, so good. However, the economic situation on the ground is far from satisfactory, with the cost of living crisis continuing to grow and inflation continuing to rise.

More immediate measures are required to tackle these crises. I am not normally in favour of a major tax rise, but, when you see companies such as BP using its surplus funds not to invest in new exploration but instead returning cash to shareholders, it seems right to me to make a one-off levy and use the proceeds to support those most affected by rising energy bills. I also like the idea advanced by the noble Baroness, Lady Kramer, of cutting VAT for a period. I deeply regret the national insurance rise and am nervous about the universal credit change.

Rising food prices are a much more difficult area to tackle. The Ukraine crisis has had a major effect on wheat prices, and the recent news that India is banning wheat exports will add to the problem. The Government’s policy of encouraging land to be taken out of food production seems perverse when we are going to need to be more self-reliant for our food supply. When I moved an amendment to the Agriculture Bill proposing that UK food production should be supported, it was opposed not only by my own party but by Labour. But if we produce more of our own food, we may have better control over some of our food prices.

The issue of inflation is much more complicated, but, like my noble friend Lord Forsyth, I believe that the Bank of England has been asleep at the wheel on it. In September last year, when inflation was already double the Bank’s target, I listened to the governor making an unimpressive speech to the Society of Professional Economists. He said:

“Our view is that the price pressures will be transient”.


On quantitative easing, he asked

“what impact do you get from continuing purchases in market financial conditions, and particularly at a time when inflation is rising as it is?”

He argued that QE should continue

“because we regard the current upturn in inflation as transient, our view on the continuing role of QE is conditioned by our forecast in August that had inflation returning to target within an acceptable period of time.”

Even without the Ukraine crisis, this was a complacent view, and I believe that, even without the benefit of hindsight, QE should have been discontinued before now. As I said in a debate on the Spring Statement, we should have paid more attention to the out-of-control money supply situation.

Moving to Bills proposed, I support the Levelling-up and Regeneration Bill and the reform of the planning system to give residents more involvement in local development—as long as this does not produce a deadlock in any sensible local business planning projects. I also support the establishment of the UK Infrastructure Bank in legislation. This is with the proviso that it does not emulate the British Business Bank’s handling of the disastrous Covid loan scheme. I support the Procurement Bill and agree with the inclusion of measures to simplify public sector procurement to provide new opportunities for small business.

I note with interest the financial services and markets Bill, which the Speech states will

“strengthen the United Kingdom’s financial services industry”.

But how will it ensure that it

“continues to act in the interest of all people and communities”?

I welcome the genetic technology Bill seeking to encourage agricultural and scientific innovation at home. Declaring my interests in the register, I also support its intention to unlock the potential of new technologies to promote sustainable and efficient farming and food production.

Finally, I wish to register my strong objection to the possibility of scrapping the Northern Ireland protocol. Does the Minister not believe that this could lead to a very damaging trade war with the EU, which would be very bad for our economy at such a difficult time?

Are the Government in control of the situation? Like my noble friend Lord Bridges of Headley, I have my concerns. Economic growth is slow, and plans to increase it are vague. A huge burden of debt interest still exists, with a danger of stagflation and wage-price inflation, including the costs of infrastructure projects such as HS2 being out of control. Overall, the Chancellor must urgently take steps to tackle the cost of living crisis.

Nuclear Safeguards Bill

Lord Northbrook Excerpts

Committee: 1st sitting (Hansard): House of Lords
Thursday 22nd February 2018 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, these amendments propose an associate membership of Euratom. In effect, they propose a deferment of our severance from Euratom and possibly even an indefinite deferment.

There is a marked contrast between the bland assurances we have received from the Government that everything regarding nuclear safeguards will be in place by March 2019 and the anxieties expressed by other parties, including, in a professionally restrained manner, the ONR, which is due to assume the duties of nuclear safeguarding. It has indicated that it is struggling to meet the deadline. The regime that it might have in place by March will be decidedly understaffed, and surely the danger that the deadline will be missed fully justifies the provisions of these amendments.

There are also anxieties regarding the ability to establish the necessary nuclear co-operation agreements with third parties in a timely manner. Such agreements depend on the existence of a nuclear safeguarding regime that is compliant with the requirements of the International Atomic Energy Agency, and it will take some time to achieve this. We are fearful that the requirement that a nuclear co-operation agreement with the USA be ratified by the Senate will give rise to a lengthy hiatus during which our nuclear industry may be deprived of some essential supplies.

There is also the matter of medical isotopes, which it is appropriate to raise at this juncture. The Minister has told us that the Government take their continued availability most seriously and assures us that this issue is quite distinct from nuclear safeguarding. Well, it is not a matter that is separate from our membership of Euratom. Euratom appears to have played a significant role in ensuring their continued and timely availability when they have been extremely scarce. By leaving Euratom prematurely we shall be prejudicing the security of our supplies, and this is a good reason for deferring our departure.

[Lord Northbrook (Con)]

My Lords, I apologise to the House for not being able to take part at Second Reading. I have some sympathy with the intent behind these amendments. I will not go over the very interesting responses last night to the amendment of the noble Lord, Lord Hunt of Kings Heath; I would just like to make a few brief comments.

A report from the Business, Energy and Industrial Strategy Committee in other place states:

“We conclude the Government should seek to retain as close as possible a relationship with Euratom, and that this should include accepting its delivery of existing safeguards requirements in the UK”.


The MPs on the committee warned that the impacts of leaving Euratom would be “profound”, putting the UK in,

“a much weaker position to drive regulatory standards”,

at an EU level.

Last week, the EDF corporate policy and regulation director said:

“The UK still lacks the replacement rules needed to fuel its nuclear reactors after”,


the country quits the EU. EDF also told the House of Lords EU Energy and Environment Sub-Committee:

“The Euratom Treaty is currently vital to the functioning of nuclear energy generation in the UK. Failure to replace its provisions by the point of withdrawal could result in the UK being unable to import nuclear materials, and have severe consequences for the UK’s energy security”.


The UK’s Nuclear Industry Association, as mentioned by the noble Lord, Lord Hutton, said that,

“the Bill does not provide enough certainty for the industry and the government should be pushing for a transitional agreement”.

Finally, according to City A.M., Vote Leave campaign director Dominic Cummings, in rather colourful language, lambasted government plans to leave the European nuclear agency as “near-retarded”.

[Lord Rooker (Lab)]

My Lords, I have a couple of questions for the Minister before he replies. First, will he answer the question that the noble Lord, Lord Warner, asked about the recently published—on 29 January—report of the EU committee of this House? It is hot off the press, full of information and all the substantial written evidence is available to noble Lords. Although we were covering energy security, we spent considerable time on Euratom, and there was evidence from the industry and from the ONR. Did the Minister look at any of the evidence and the report before he wrote his letter to noble Lords following Second Reading, which contradicts the evidence provided to the Select Committee?