Economic and Taxation Policies: Jobs, Growth and Prosperity

Lord Swire Excerpts

Thursday 13th November 2025 Lords Chamber

[Lord Swire (Con)]

My Lords, I too join in the congratulations to my noble friend Lord Elliott of Mickle Fell on obtaining this debate just 13 days before the Budget. Incidentally, I expect, as we all can, this to be a highly political Budget. I rather fear that common sense will be sacrificed for short-term political gain. We can all expect, from what has been a well-trailed Budget, that the Chancellor’s red meat to the left—not necessarily enough for the noble Baroness, Lady O’Grady—will be to change the two-child benefit cap, which has the distinction of being both unaffordable and undesirable.

We will hear over the next few days and, no doubt, from the Minister today about the black hole—one of his favourite subjects. Of course, there will be no mention of the fact that within a matter of months, the Government have doubled that black hole. We will hear from the Chancellor the old, hackneyed phrase that those with the broadest shoulders must bear the brunt of the pain.

I do not know about anyone else, but my shoulders are pretty sloping at this moment. Let us just examine others whose shoulders have more right to slope. I am grateful to Fraser Nelson, who, with a freedom of information request, discovered that the top 0.1% of earners pay more in income tax than the entire bottom 50% put together. The top 4,000 taxpayers, at 0.01%, pay more than the entire bottom quarter, that is 8 million people, of taxpayers. The top 100 taxpayers pay almost as much money as is generated from North Sea oil revenues. As my noble friend Lord Elliott of Mickle Fell said, more ultrarich people are set to leave the United Kingdom than any other developed country. Those are not his words; they come from a study recently undertaken by UBS.

It was Denis Healey who said—to slightly misquote him—that he wanted to tax the rich until the pips squeak. Unfortunately, that squeaking is now an ever-increasingly distant noise, coming from Milan, Dubai, Lisbon and other places to which our wealth creators have already relocated. This may give a frisson of pleasure to the left, but it is the economics of the madhouse.

Like the Chancellor, I am no economist, but how can it make sense to drive away the wealth creators while rewarding the wealth consumers? It is a one-way ticket to an economic crisis. The introduction of an exit tax would achieve the twin, amazing achievements of not relocating people back to the country and, equally, others not coming for the first time to this country if they feel in some way that they cannot leave with the money they create here. When she has succeeded in doing all this, she will have to come after middle England—the doctors, the nurses and so forth—to fit and fill her fiscal hole.

I spent a good part of my ministerial career talking up the United Kingdom around the world and trying to attract inward investment, and it pains me to be so negative. But, like my noble friend Lord Petitgas, I think this is a matter of confidence and I would like to hear from the Government how we can instil some confidence in overseas investors to bring them here. ONS data shows that our jobless rate increased to 5% against a projection of 4.9%. Wage growth has slowed. The unemployment payroll has fallen by 180,000 since the Chancellor announced higher taxes on employers in last year’s Budget.

In conclusion, I understand the Government’s failure to tackle the welfare issue from their ideological point of view and from their political constraints, given where they are in the other place. But I think they need to rediscover moral fibre and a moral backbone to reform the welfare state, as it is not in the interests of those who are on it and trapped in it nor of those who have to pay for it.