King’s Speech

Lord Fox Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, nearly two years ago, the general election resulted in a brief outbreak of euphoria on the Benches opposite, and then, during the long parliamentary Session that followed, reality bit. During that campaign, as we heard, growth was declared as the number one priority of that Government, and yet, during that first Session of Parliament, many of the Government’s actions pushed in the opposite direction. The truly disastrous increase in employers’ NIC was a striking example, but it was by no means unique. It meant that the country exited the last legislative Session with greatly increased operational costs for businesses. This sent messages that discouraged investment and pushed thousands of high street businesses and hospitality businesses into oblivion. It was indeed the opposite of a growth-centred strategy, and the hangover from that Session will see yet more non-growth legislation that has yet to arrive.

Now we have a new set of Bills, and, as we have just heard, the prism through which we should look at them is: how does it affect the Government’s mission on growth? Let us look at some of those Bills. On the small business protections (late payments) Bill, yes, it is important that we deal with the scourge of late payments, but we will be looking to see how the legislative back-up will be delivered to support the small business strategy the noble Baroness, Lady Anderson, just spoke about.

Then we have the enhancing financial services Bill. We welcome reforms that may support growth, but we do not want to put pressure on people’s savings and undermine consumer protection, so we will be looking very hard at the details there.

The competition reform Bill seems like an attempt to water down the work of the Competition and Markets Authority in the way that each digital unit has been curtailed, so we will be looking very closely at that plans on that Bill.

The regulating for growth Bill looks like just the sort of technical Bill that your Lordships would like to get your teeth into—I look forward to many hours of that.

All four of these Bills make important points, and I am sure there will be lots of debate in your Lordships’ House, but it is hard to discern a pattern and to see the strategic drive for growth within them. There are no bold moves. In addition, although AI is set to affect every aspect of our economy, there is no AI Bill in this Session. How can that be sensible?

I will use my final minutes to talk about two other Bills—the ones the current Prime Minister chose to pre-announce in one of his fight-back speeches earlier this week—on steel and Europe. Perhaps summoning the ghosts of Clement Attlee and Harold Wilson, Labour proposes nationalising—or should I say renationalising—the steel industry for the third time with the Steel Industry (Nationalisation) Bill. I do not underestimate the importance of this measure to those working in the industry, and to the country’s manufacturing and defence sectors and its industrial strategy. However, the Government have of course effectively been funding this plant since the summer, and this move was one that I think most of us expected to be brought to your Lordships’ House sooner or later. We want to see the details, including the plans to help find private co-investors who can help modernise the sites and put money in to help create more jobs. We need to see a proper long-term plan for the future, with an emphasis on national security, and we need to know the costs.

By choosing to pre-announce this measure, the Prime Minister was clearly aiming to stir the blood of those to the left of his party, and it also followed the surprise appointment of Gordon Brown as some sort of global emissary. I assume that the PM was searching for reflected glory from the halcyon days of the Brown premiership. Perhaps the Minister can throw some light on what Gordon Brown will actually be up to. If he is the Prime Minister’s man, how will he relate to the Chancellor and the Treasury, and how will his activities be accountable to Parliament? Will he be summonable by Select Committees, for example?

Of course, steel nationalisation in sum will not meaningfully increase our GDP or move the needle on national productivity, nor will it address the cost of living. However, the second topic that Starmer pre-announced could indeed materially affect the fortunes of British people. We welcome all talk of moving closer to Europe—of course we do—but the European partnership Bill seems to be just the latest example of a total lack of ambition when it comes to rebuilding trade links with the EU. It offers very little that is new. What the PM announced in that speech seemed to be only a restatement of where we already are, with the UK at least six months into negotiating a reset in its relations with the EU.

Here I note that, at the same time as these negotiations are going on, the EU “Made in Europe” regime proposals pose an existential risk to the EU-UK automotive trading relationship, which is worth around €80 billion a year. The UK is the EU’s number one trading partner in automotive trade. Can the Minister tell your Lordships’ House what negotiations are under way? This is a really important issue, and we have to know that His Majesty’s Government are going all out to reach an agreement. That is vital for our automotive industry.

To return to the proposed legislation, clearly, as we have heard from the noble Baroness, Lady Anderson, some alignment is planned, and we of course look forward to the long discussions that will no doubt ensue when we interrogate the depth of that alignment. However, Prime Minister Starmer has equivocally ruled out crossing the red lines he cautiously drew during the general election. So, assuming that the EU reset is successful, agreement on border arrangements for food and animals would be positive, not least for our beleaguered farmers. Easier EU travel for bands, orchestras and theatrical productions—if we get it—would be really welcome, as would anything else of the like that the noble Baroness, Lady Anderson, set out.

However, so much more is possible. If the Government are bolder, there are huge wins. Business could trade with our largest market so much more easily, making jobs secure, and increasing pay and delivering growth; holidaymakers could use EU e-gates instead of queuing for hours in the “rest of the world” line; and our border police could once again properly use EU data to help them more easily identify and stop the evil people traffickers. Those are just three examples of what could be delivered. These and many more are possible, but they will not happen if the Prime Minister sticks to his red lines. The Government need to go further and faster to strengthen our relationship with the EU if they want to turn around our very low-performing economy and begin repairing the £90 billion Brexit black hole that the Conservatives’ botched deal delivered.

I understand that these red lines were in Labour’s manifesto, but since then the world has changed rather. Our close relationship with the USA has been under pressure, and Trump has indicated to all Britons where our real economic future lies. This hostility from the US President, added to the war in Gaza and the Arabian Gulf, an energy crisis and Putin’s continued pummelling of Ukraine, should set the scene for a revised world view.

In general, people out there also recognise that the whole balance of the world has changed. An awful lot has changed in the two years since that election and that manifesto. To robotically stick to an out-of-date manifesto as if it is a holy writ is a dereliction of leadership. Whoever turns out to be the Prime Minister should be bold and ambitious for our country, and they should work hard to take the country with them, hitting the road to explain why there is a need for a different approach, how people should benefit and what needs to change. That is leadership.

This is not one-sided: our European neighbours are feeling the need to move closer too. For example, last month I was in Berlin for a joint UK-German business meeting as part of the Kensington treaty. The Secretary of State Peter Kyle MP was there, as was his German counterpart, plus the key business organisations for both countries and about 300 businesses. The energy of that meeting demonstrated that we have enormous mutual opportunities, but with each day that passes, it feels as if the work gets harder and business morale gets lower.

This Government have already wasted two years. The country, our economy and our people cannot afford more years of timidity. We need a Government who are bold and who move decisively. The Liberal Democrats are clear that, as a start, Ministers must straight away prioritise negotiations for a new customs union with the EU. This would turbocharge our economy and unleash British business. That would be the start of a real growth policy.