Debate on the Address

Debate between Geoffrey Clifton-Brown and Sorcha Eastwood

Wednesday 13th May 2026 Commons Chamber

[Sir Geoffrey Clifton-Brown (North Cotswolds) (Con)]

Madam Deputy Speaker, I am grateful to catch your eye in this important King’s Speech debate. I follow other colleagues in congratulating the hon. Members for Bradford West (Naz Shah) and for Harlow (Chris Vince) on their amusing and well-informed speeches.

One of the few things that this Government have got right in the King’s Speech is the expedited Bill to nationalise Scunthorpe steelworks in order to safeguard domestic steel production. The plant is costing the taxpayer £1 million a day, and therefore modernisation and future private and public investment under a Government-owned company need to be implemented.

However, our economy is in a very fragile state. It grew by only 1.3% in real terms in 2025, and the Office for Budget Responsibility forecasts that it will grow by only 1.4% in 2026—the lowest level of any G7 country. The United Kingdom is carrying one of the highest levels of borrowing in the western world. National debt is a staggering £2.9 trillion, which is equivalent to 93.8% of our entire GDP or £102,000 per household. Even more concerning is the fact that we are expected to spend—wait for it—£111 billion on debt interest alone to service that debt. If that were a Government Department, it would be the third largest.

We are heavily reliant on international markets, and our national balance sheet is highly leveraged. That leaves our economy dangerously exposed to external shocks, such as the war in Iran and the Ukraine conflict. As a result, our borrowing premium on that debt is one of the highest in the OECD; today, we are paying more in debt interest than Greece. A 1% rise in interest rates adds £1.3 billion in costs in the first year, and £12 billion by the end of the forecast period, as new, expensive debt replaces older, cheaper debt. Indeed, yesterday, 30-year gilts hit a 28-year high at 5.81%. That gives a clue as to what the international markets think of our economic standing.

On that note, I observe that one of the Labour leadership candidates does not have a clue how the bond market funding our enormous debt actually works. With inflation expected to rise again—some forecasters expect it to reach 6.7% next year—we face the very real risk of sliding into recession or a bond strike. If those very serious consequences were to occur, this country would be forced to take much more fundamental measures to cut our expenditure. A competent Government should already be doing so, to avoid any chance of this happening and to protect our reputation in the international markets.

I note that the Government have included a Bill to reform the welfare system. The fact that 1 million people could work but do not is causing unacceptable tax increases on the rest of the hard-working population’s earnings. On top of that, higher interest rates are leading to higher food prices, higher mortgage payments and higher business costs. No one in this country—especially poorer working people—will be protected.

Some of the issues we see today are avoidable. The current political instability is a major factor. It is not my job as an Opposition MP to tell Labour how to sort out its leadership problems, but whatever it does, it is important to convince the international community and the people of this country that there is a stable, well-thought-out economic policy and to give the markets confidence, in order to reduce the current borrowing premium. It is not the job of the Government to subsidise every business, but it is the duty of the Government to create conditions in which growth, prosperity, enterprise and investment can thrive.

The Government have included a Bill to target youth unemployment, which is welcome, but the fact that it has risen by 16% or by 100,000 compared with a year ago makes it very hard for youngsters now leaving university or further education to start their careers. Meanwhile, businesses—particularly in hospitality and retail—are being taxed into oblivion and are not hiring as many people. In my North Cotswolds constituency, we employ 3,700 people in hospitality, and the sector provides £220 million to the local economy. However, higher employer national insurance contributions, rising minimum wages, hugely increasing business rates and energy price increases, exacerbated by the Employment Rights Act 2025, are all making it harder to make profits and are stalling growth. Taxes are already at a post-war high and there are threats to hike them further. None of this environment is encouraging businesses to hire and take on more people and so reduce the high unemployment figures.

[Sorcha Eastwood (Lagan Valley) (Alliance)]

I agree entirely with the hon. Member. To me, we have one of the most business-hostile environments. You made comments about young people not getting work. Do you agree that that is made worse by the national insurance hikes that have seen almost a generation being unable to get employment? Do you agree with me in that contention?

[Madam Deputy Speaker (Ms Nusrat Ghani)]

Order. Let us start the Session as we mean to go on, with no “you” or “your”, because the hon. Member is not talking about me.