Autumn Statement 2023

Lord Horam Excerpts

Wednesday 29th November 2023 Lords Chamber

[Lord Horam (Con)]

My Lords, viewed from the position of strict Treasury orthodoxy, this was a highly intelligent Autumn Statement. Indeed, the noble Lord, Lord Macpherson of Earl’s Court, who spoke earlier, said that it was above average, which I think is high praise in mandarin-speak. It was well thought out. I very much doubt whether it will fall apart, as some have in the past, and expectations in particular were well managed.

The main point, as is surely right, was help for business. The Chancellor said he was actioning 110 different ways to help business. Personally, I think that was about 100 too many, but none the less the thought was clearly right. In particular there was making investment fully expensed against corporation taxation. I know from my business career how important it was, when we came to that part of the year when we made investment decisions, to have the feeling that those investments were fully set against corporation tax. That would be a huge relief and a big incentive.

I also support the initiative the Government have taken in asking my noble friend Lord Harrington to produce a special report on foreign direct investment. He has come up with some interesting ideas, such as a concierge service for such investment. He is not in his seat at the moment, but he might be amused that the film “Barbie”, which is the epitome of sunny California, was actually made in his former constituency of Watford. What we can do in this country is quite remarkable. I even saw some distinctly British scenarios lurking in the background of the film “Napoleon”, which was rather interesting. Our creative industries are clearly in great shape. So we are supporting our innovative industries.

Looking at all of this, it seems that we are getting towards what I would describe as an industrial strategy: if it walks like an industrial strategy and talks like an industrial strategy, it probably is an industrial strategy, and I am delighted that we have got there.

I was also pleased with the support for the lower paid. I am always in favour of increasing the minimum wage. I also appreciate the 2% cut in employees’ national insurance. I agree that that is more debatable in view of the pressures on public spending, but people need a little bit of cheer at the moment and it does help growth. However, I suspect that the noble Lord, Lord Macpherson, is right that we will soon be back to talking about higher taxation, in view of all the inevitable demands there will be on public services.

That is the short term. In the longer term, I am afraid to say that we have been running the economy since what I call the Blair-Brown days in a very sub-optimal way, because it has relied on high and increasing levels of immigration. Some people think that mass immigration is good for the economy; it is not. It increases the size of the economy but GDP per head, which is what matters, is not necessarily increased. Indeed, large-scale immigration may decrease productivity. Putting it in the simplest terms, a worker needs capital to become productive. An immigrant does not bring capital with him. Therefore, the country has to develop capital to make him productive, on top of the capital it needs to develop for the existing population. Frankly, we are not very good at that—or we have not been recently. As we know, immigration also has very big downsides, which I will not go on to in this speech.

It need not be like this. When Margaret Thatcher and John Major were Prime Ministers, net immigration was usually around 50,000 per annum and the annual rate of GDP growth was greater than it has been in the last 20 years. I do not believe for a minute that Margaret Thatcher would ever have agreed to allow immigration to get to the level of 745,000, which it was last year. I do not believe for one minute that she would have authorised that.

We can also look abroad. We have recently had a visit from the President of South Korea. That country had a ruinous civil war that ended only in 1953, but its gross domestic product per capita, measured on purchasing power parity, is now virtually the same as ours—and it has almost no immigration. The same can be said for Taiwan and Singapore, which have no immigration to speak of and are as rich or richer than we are—so it can be done.

I suggest that the Government at the centre, in Downing Street or the Cabinet Office, take a long-term, holistic view of the demographic, environmental, societal and economic trends in the country and start to adjust the economic model that we have been pursuing over the last 20 or 30 years. Otherwise, I fear that the quality of life in Britain will continue to deteriorate and other countries that take a more rational or long- term view will continue to overtake us.