King’s Speech

Lord Sikka Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Sikka (Lab)]

My Lords, it will take a long time to undo the damage done by 14 years of Conservative rule. However, that task has been made difficult, as the Government’s ambition on so many fronts is not matched by actions. I welcome the attempts to build a closer relationship with the European Union, though that will not fully undo the damage inflicted by Brexit.

The energy resilience proposed by the energy independence Bill and the increase and extension of the windfall tax on electricity generators from 45% to 55% promised by the electricity generator levy Bill are most welcome. Can the Minister explain why there is no comprehensive plan to curb profiteering by energy companies? Since 2020, their UK operations have made profits of over £125 billion. More than 120,000 people in this country die in fuel poverty every year. Surely that deserves some kind of government response.

I have misgivings about the highways financing Bill, which will promote the dreaded private finance initiative, albeit under another name. Previous PFI schemes resulted in a £6 repayment for every £1 of private investment in infrastructure. The Government can fund projects at lower costs through borrowing, or issue public bonds, but such alternatives are ignored. The 129 pages of background notes miss out the word “manufacturing” altogether, even though every £1 of manufacturing activity supports a further £1.80 through multiplier effects. Can the Minister explain the Government’s plans for self-sufficiency in semiconductors, rare earth minerals, bricks, cement, auto, medicines and other essential items, to increase economic resilience?

The regulatory consolidation offered by the enhancing financial services Bill is welcome, although I am concerned that the reforms are framed around words and phrases such as “competitiveness” and “regulatory simplification”, which are buzzwords for deregulation. So far, they have facilitated the abolition of the post-2008 crash constraints and weakened consumer protection. The Government’s briefing notes make no mention of the social costs of deregulation. Can the Minister explain why there is no attempt to regulate private equity, which is devouring hospitals, care homes, veterinary services, supermarkets, and water, energy, retail and other businesses?

The so-called industry-friendly reforms of the Financial Ombudsman will weaken consumer protection, and there is complete silence on how UK institutions cover up fraud and financial abuse. We are still waiting for an investigation into the 1991 closure of the fraud-ridden Bank of Credit and Commerce International. I have asked questions in this House about the failure to tackle HSBC after it was fined $1.9 billion in the US in 2012 for facilitating money laundering. The then Chancellor, George Osborne, and the regulator secretly urged the US authorities to go easy on the bank. The response to my questions has been ministerial silence. On numerous occasions, I have referred to the HBOS frauds, which date back to between 2002 and 2007. Regulatory inertia and ministerial indifference have denied compensation to victims even after the courts established criminality. What good is an ombudsman system when Ministers and regulators sweep financial crimes under the carpet?

There are mixed messages from the Government about nationalisation. I welcome nationalisation of British Steel, but why are other steel producers not to be nationalised? Tata Steel also receives a subsidy. The Government, in return, have not taken an equity stake or a seat on the board. Why is this free money being given to companies for distribution to their shareholders?

I welcome the railways and passenger benefits Bill to establish Great British Railways and unite track and train management under a single body. However, why is no attempt made to bring lucrative freight and rolling stock companies into public ownership? These rolling stock companies have a profit margin of 41.6%. There is absolutely no justification for that. People are being told that the nationalisation of rail passenger services and British steel is in the public interest, but so is the nationalisation of water, energy, mail, social care and other essential services. Why are those things off the political agenda altogether?

Sustained economic growth, which is the Government’s aim, cannot be achieved unless people have good purchasing power, but 25.3 million people live in households below the minimum income standard. A major cause of this is the erosion of the workers’ share of gross value added, or GVA. In 1975, workers’ share of GVA was 71.9%. By 2025, despite economic growth in the intervening years, it had declined to 59.7%. There is a huge transfer of wealth from labour to capital, and it has coincided with lower rates of corporation tax. The headline corporation tax rate in 1974 was 52%, compared with 25% now.

The massive increase in capital’s share of the economy has not resulted in higher investment in productive assets. In 2025, the UK invested 18.9% of GDP in productive assets, the lowest figure among G7 nations. For the last 30 years, the UK has been at or near the bottom of the OECD league of investment. Inevitably, productivity and economic growth is low. Can the Minister explain how the Government will boost workers’ share of GVA and why there is no reform of corporate governance and short-termism in the City of London?

People’s purchasing power could be boosted by progressive taxation, but that is not on the agenda. The poorest 20% pay a higher proportion of income in direct and indirect taxes compared with the richest 20%. At the same time, capital gains and dividends are taxed at lower marginal rates than wages. How do you expect people to buy things? Problems are compounded by the freeze on income tax personal allowance. In April 2021, the Conservative Government froze the annual personal allowance at £12,570. The Labour Government continued with it. If the personal allowance had increased in line with inflation, it would today be £16,048. Due to the freeze, someone earning £20,000 will pay an additional £696 in income tax in this tax year alone. Adherence to regressive Conservative policies by this Government cannot deliver resilient households.

Overall, the Government have some good policies, but in the absence of transformative policies it will be difficult to declare sustained economic growth and resilient households. I urge the Government to change course.