Autumn Statement 2022

Baroness Noakes Excerpts

Tuesday 29th November 2022 Lords Chamber

[Baroness Noakes (Con)]

My Lords, my noble friend Lady Lea of Lymm was kind enough to reference my role as her mentor. I particularly commended the Companion to her as she absorbs the way in which we work in your Lordships’ House, so today I must live by its paragraph 4.52 and treat the excellent speech by the noble Baroness, Lady Fox of Buckley, as a welcoming of my noble friend and as congratulations on her maiden speech on behalf of the whole House.

I have not always been inspired by the various Budget Statements, Autumn Statements and Spring Statements since we came into government, although I have generally been able to content myself that they were undoubtedly better than anything that a Labour Government would have come up with. With this Autumn Statement, even that flimsy source of comfort has disappeared: it could have come from the pen of Gordon Brown. It is deeply, deeply depressing, and it is not a Conservative Budget.

I will start with growth—or, rather, the lack of focus on growth in the Statement. The Chancellor’s speech had a few references to growth, but there was no deep commitment to a growth economy. Mouthing platitudes like

“Being pro-education is being pro-growth”—[Official Report, Commons, 17/11/22; col. 849.]


is no substitute for an unerring focus on the drivers of growth. Whatever criticisms can be made of the ill-fated fiscal event in September, it was unambiguously focused on growth. I am sorry that, in the kerfuffle that followed in bond markets, amplified by complete regulatory failure in relation to concealed leverage in pension funds, we have lost sight of the imperative of growth.

Instead, this Autumn Statement has gone overboard on financial stability, which is certainly a good thing, but it is nothing like enough. Even worse, the Chancellor has taken financial stability as forecast by others, particularly the OBR and the Bank of England, whose forecasting records are nothing to brag about. More importantly, their forecasts are a largely static view of the economy and generally do not even try to incorporate the dynamic effects of pro-growth policies. The future is bleak if a Government cannot adopt positive pro-growth policies because they score negatively rather than positively in the spreadsheets of the independent forecasters. My noble friend Lady Lea gave us a master class on the issues around economic forecasting. We also need a conversation about the limitations of current approaches to economic forecasting. In my view, the Government should be going full throttle not only for growth itself but also for making the case for dynamic forecasting of the effects of that growth.

I am appalled by the tax burden rising to a post-war high of 37.5%. High taxes blunt incentives to work, invest and innovate. In short, high taxes are anti-growth. I deplore the return to a socialist narrative that singles out savings and investments, with a tax on capital gains and investment income—I never thought that I would see that from a Conservative Government. The high marginal rates of tax associated with the higher tax bands interacting with personal reliefs were already a stain on our tax system, and this has now been magnified by the reduced threshold for the higher rate of tax. We will likely not be forgiven by an electorate that will learn what fiscal drag really is in a time of inflation and what it does to household finances.

I am equally appalled at the lack of focus on controlling expenditure. If ever there were a right time to read the last rites of the expensive white elephant that is HS2, it is now. If ever there were a right time to stop shovelling money into an unreformed and under- performing NHS, it is now. Instead, we are pouring more taxpayers’ money into these black holes. There is no plan to rein in expenditure—all of that is left to another day. But the inconvenient truth is that, without a plan for growth, cuts to expenditure will last longer and be more severe.

This Statement has been clear about raising taxes, but that is all. The Chancellor concluded by saying that the Statement was:

“a balanced plan for stability, growth and public services.”—[Official Report, Commons, 17/11/22; col. 856.]

Throwing money at some public services while being silent about the consequences for others does not count as a plan for public services. There is nothing in the Statement that any reasonable person would count as a plan for growth. My noble friend Lord Bridges said that we are heading towards the stability of the graveyard, but it could be worse than that. Fiscal tightening, coupled with monetary tightening by the Bank as we move into recession, has the potential to wreck the economy.

I believe that we should strain every sinew to create a low-tax, high-growth and small-state economy, where the people of the UK can feel the benefits. This Autumn Statement delivers the exact opposite.