Reducing Government Spending

Baroness Neville-Rolfe Excerpts

Tuesday 24th March 2026 Lords Chamber

[Lord Livermore (Lab)]

I absolutely agree with everything my noble friend says. The legacy of underinvestment from the previous Government still affects the economy today. When we won the election, private sector investment was the lowest in the whole G7. Public sector investment was no better and was set to fall again from 2.5% to 1.7% of GDP. We have invested £120 billion of additional capital investment. The OBR estimates the eventual growth impact of this increase in capital investment as adding 1.4% to GDP. As I have said before, cutting this and returning to austerity would be the very worst thing that we could do for growth. Unlike today’s Conservative Party, we will not repeat the mistakes of the past.

[Baroness Neville-Rolfe (Con)]

My Lords, the facts that were included in my noble friend’s Question show that we face a very troubling position on the public finances. I think the Chancellor’s Statement has done nothing to reassure the markets today. The Government’s economic policy is not fit for purpose, if it ever was. Do the Government recognise the seriousness of the position, and what do they propose to do about it?

[Lord Livermore (Lab)]

We do. As I said already, and as we know, the full economic impact of the conflict will depend on its severity and duration, but this year borrowing falls by almost one percentage point to its lowest level for six years, 4.3%. This is the largest fall in the deficit since 2016. For the first time since 2004, we will be borrowing less than the rest of the G7 on average, something the previous Government did not achieve in their 14 years in power. I should point out that these falls in borrowing are as a result of some tough decisions that we have taken on the public finances. The noble Baroness and the party opposite have opposed every single one of those decisions we have taken to get the public finances under control.