Spring Forecast Statement

Lord St John of Bletso Excerpts

Tuesday 17th March 2026 Lords Chamber

[Lord St John of Bletso (CB) (Valedictory Speech)]

My Lords, it is with a mix of sadness and excitement that I address your Lordships’ House this last time. The sadness is because I shall miss participating in debates, particularly on Africa, and especially participating in the Select Committee work of your Lordships’ House and the APPG work. It has been an enormous privilege. I shall also miss seeing noble Lords who have become great friends over so many years. I had hoped to make my valedictory speech on the Space Economy report by the Select Committee so ably chaired by the noble Baroness, Lady Ashton, but sadly we have run out of time on that score.

I am enormously grateful to the doorkeepers, the refreshment department and all the staff of the Palace for the incredible support that they have given me over so many years and continue to give to all of us. I am very grateful to my noble friend Lord Kinnoull for his able stewardship and leadership of the Cross Benches.

I have to say that I joined the House of Lords more out of curiosity than desire. I say that because I was just 21 when my father died. I joined your Lordships’ House six months before the Islamic Revolutionary Guard Corps took control in Iran and six months before Margaret Thatcher became our Prime Minister. I joined for one primary reason: namely, I wanted to speak about the opportunities and challenges facing South Africa and southern Africa, and to petition for the release of Nelson Mandela, known as Madiba to all of us. After my health challenges last year, I decided that time was up. I am excited now to be spending more time in Africa. That is enough about me.

I shall restrict my comments today to the Spring Statement and not the finance Bill. There are three points that I want to raise. Clearly, the Chancellor’s forecasts have been overtaken by geopolitical events in the Middle East, leaving more questions than answers. We are now exposed, once again, to the very conditions that we thought we had escaped: energy-driven inflation and stagnating growth. The Statement underestimates the scale of the structural challenges that we now face. Surely, against a backdrop of spiralling fuel costs, now is the time to reconsider the strategic role of our domestic energy resources—more specifically, the North Sea. Would it not be wiser, during a period of geopolitical instability, to support responsible domestic production while we continue the transition to cleaner energy sources? It is not a question of abandoning our commitment to net zero but of recognising that the transition must be managed in a way that preserves resilience.

My second point is that the public procurement of goods and services now accounts for between one-quarter and one-third of all government expenditure, amounting to in excess of £300 billion a year. Even modest inefficiencies within a system of that scale can translate into tens of billions of pounds of avoidable costs. At a time of constrained fiscal headroom, it is essential that we focus not only on what the Government spend but on how effectively they spend it. What steps are His Majesty’s Government taking to deploy artificial intelligence to improve efficiencies, reduce duplication and identify cost savings across the procurement ecosystem?

I was fortunate way back in 2017 to be a member of the sub-committee on artificial intelligence so ably chaired by the noble Lord, Lord Clement-Jones. None of us then had any preconception about the impact that AI would have on all our lives. We now need to confront the other side of the AI revolution: the impact it is likely to have on employment. Artificial intelligence will undoubtedly drive productivity as well as growth, but it will also displace roles, particularly in admin and in the professional and middle-income sectors. We are in effect entering a period where technological progress may coincide with structural labour market disruption, and this presents a fundamental policy challenge. I cannot assume that the labour market will adjust itself organically. We need to act deliberately.

Thirdly, the noble Lord, Lord Hunt of Wirral, has been constantly questioning what measures His Majesty’s Government are taking to reduce spiralling unemployment in the UK. Can the Minister elaborate on what is being done to invest in promoting large-scale reskilling programmes, incentivising businesses to retrain their workforces and forging closer partnerships between industry, government and education? If we fail to do so, we risk creating a two-speed economy where opportunity expands for some but contracts for many.

In conclusion, the Chancellor’s spring forecast reflected a world of gradual recovery and relative stability, but the world that we now face is far more volatile, more uncertain and more complex, and this demands a shift in thinking.

I close with the Xhosa words from South Africa: “Enkosi kakhulu, sala kakuhle”, which means “Thank you very much, goodbye”.

Economic and Taxation Policies: Jobs, Growth and Prosperity

Lord St John of Bletso Excerpts

Thursday 13th November 2025 Lords Chamber

[Lord St John of Bletso (CB)]

My Lords, I also thank the noble Lord, Lord Elliott, for moving this incredibly important and topical debate ahead of the forthcoming Budget. This is a time to take stock, and to scrutinise and challenge the direction of travel. As we have heard, the central paradox of the Government’s position has been to make growth the top priority, yet their actions, and the uncertainty they are generating, are in danger of throttling that very growth before it takes root.

In June, I welcomed the Government’s new industrial strategy, which aimed to provide the certainty and stability for long-term investment in eight particular sectors. But what certainty is there for a business today? What stability can it plan on? The reality is that the positive signal sent by the industrial strategy has been completely drowned out by the noise and speculation surrounding the upcoming Budget.

The prospect of looming tax rises has shattered business confidence, and business leaders have said that they are expecting the worst. That means shortening their planning horizons, cancelling hiring and putting investment on hold. The labour market is already showing signs of strain. As we all know, unemployment is at a four-year high of 4.8%. For young people, this is a deeply concerning dilemma. Prosperity is not built on a foundation of ever-increasing tax burdens; it is built on a dynamic economy where businesses are confident to invest and to create high-quality jobs.

Nowhere is the contradiction more starkly illustrated than in the Government’s treatment of the North Sea oil and gas industry. Here we have a sector that should be generating billions in tax revenue, supporting 200,000 jobs and strengthening our energy security. Instead, the Energy Secretary has imposed a ban on new licences and extended the so-called windfall tax until March 2030, even though oil prices have fallen and there is no windfall left to tax. The consequences are devastating: almost a thousand jobs are being lost every day, and Britain’s biggest oil producer has just announced that it is slashing its North Sea investment by half, citing the Government’s punitive tax measures. Industry experts tell us that ending the windfall tax sooner could unlock £40 billion of investment. That means jobs, tax revenue and energy security, all of which we desperately need.

The narrative that tax rises are the only solution to the UK fiscal challenge is a false assertion. It ignores the vast potential for savings—savings within the Government’s own spending—and it ignores the revenues that could be unlocked by sensible policy changes. Of the £1.2 trillion budget, £434 billion is spent on the procurement of goods and services. Properly implemented AI and automation could—not shall but could—reduce much of the procurement costs by anywhere between 10% and 20%. With a 10% reduction, we could theoretically be looking at savings in the range of £40 billion or more.

With government spending locked at 45% of GDP, we need a smaller state and lower taxes. There is no evidence that you can sustain debt reduction with ever-increasing taxes. The Government should demonstrate that they have exhausted every possible efficiency saving, starting with procurement, before they consider tax rises. They must show that the commitment to growth is not just a slogan.

UK-China Economic and Financial Dialogue

Lord St John of Bletso Excerpts

Tuesday 14th January 2025 Lords Chamber

[Lord St John of Bletso (CB)]

My Lords, in welcoming this Statement, can I ask the Minister to elaborate on what bilateral agreements are being discussed on the governance of AI, which is becoming such a critical development globally?

[Lord Livermore (Lab)]

It is a very good question; I am sorry that it is the first question that I do not have an answer to. I will write to the noble Lord on that point.