Fiscal Rules

Lord Waldegrave of North Hill Excerpts

Tuesday 29th October 2024 Lords Chamber

[Lord Livermore (Lab)]

I am extremely grateful to my noble friend for that point and for his support for what we have set out. He is absolutely right to draw attention to the record we inherited. As he says, the UK lags behind every other G7 country on business investment as a share of our economy, and the plans we inherited from the previous Government would have seen public sector investment decline to the lowest level in over 10 years. Nothing we have heard so far today suggests that they think there is anything wrong with that.

My noble friend also drew attention to the importance of partnership with the private sector. To rebuild our country, it is vital that we increase investment in partnership with the private sector. As he says, we must first create the conditions for the private sector to invest by stabilising our economy and introducing reforms to things such as planning and skills. The Government must invest alongside business, through expert bodies such as the new national wealth fund, to catalyse more private sector money. As we have been discussing today, there is also a significant role for public investment to play.

[Lord Waldegrave of North Hill (Con)]

My Lords, when I was Chief Secretary, working with the former Chancellor, the noble Lord, Lord Clarke, every single spending department that presented its plans to me described them as “investment”. There is often a very good case for saying that spending more on nurses or teachers is going to help productivity more than building new hospitals or schools is. Does the Minister agree with me, and indeed with the noble Lord opposite, that without a really tough definition of what investment means, this will turn out to be just an increase in public spending?

[Lord Livermore (Lab)]

It may surprise the noble Lord but, yes, I absolutely agree with what he says. That will be a vital part of the guard-rails we set out in the Budget tomorrow.