Direction of Government

Baroness Wheatcroft Excerpts

Wednesday 2nd September 2026 Lords Chamber

[Lord Kennedy of Southwark (Lab Co-op)]

We will hear next from the Cross Benches, then the Labour Benches and then the Conservative Benches.

[Baroness Wheatcroft (CB)]

My Lords, the Government have cut VAT, cut business rates and reinstated the £2 bus fare. Simultaneously, the cost of their borrowing continues to rise to increasingly frightening levels. The Prime Minister tells us that he is funding this through reprioritising spending within government, so can the Minister tell us what has been deprioritised?

[Baroness Smith of Basildon (Lab)]

The Prime Minister has looked at a number of issues and said, “Where can we do things better and do things differently?” It has been about deprioritising some issues and reprioritising others. I have not got a complete list; I will get some more information for when I come to the Dispatch Box next time on this. He has wanted to give a breathing space because, for most people at the moment, it is really hard just day to day and looking at price increases. We need to have a breathing space for people. We need to support the kind of fiscal discipline that can bring the cost of borrowing down. As we do that and say more will be available in the Budget, we need to find a way through so we take the pressure off families.

It is worth noting that, in the first half of this year, this country was the fastest-growing economy in the G7 and wages have increased more in the first two years of this Government than they did under a decade under the previous Government. One of the issues we have to contend with is the international situation, which is very volatile. No one could have predicted that the Strait of Hormuz would have been such a political and economic issue at this time. The Government are looking at all ways. Noble Lords will have heard the Prime Minister say that one of the reasons he appointed the former Defence Secretary to be Chancellor of the Exchequer is because he understands the competing pressures that we have to meet. As the Budget comes forward—and work is going on apace on that at the moment—it is a way to get money working better for the country and just give a breathing space to families and individuals who are trying to make ends meet at what is quite a difficult time for them.