King’s Speech (4th Day)

Lord Liddle Excerpts

Monday 22nd July 2024 Lords Chamber

[Lord Liddle (Lab)]

My Lords, it is a great privilege to follow the noble Lord, Lord Heseltine. He is the Opposition—Conservative—politician I most admire. There was much of what I agree with in his speech. If his type of Conservative Party had governed this country for the last 14 years, we would be in a hell of a lot better place than we are today.

I also welcome our Ministers to the Front Bench. I was sorry that the noble Lord, Lord Callanan, made an implied attack on the independence and integrity of the noble Lord, Lord Vallance, while he was a civil servant. He brings enormously valuable expertise in fields which are vital to Britain’s long-term future. It was a great appointment, and it was a great maiden speech in this House. Of course, to succeed, he has to have the backing of the Treasury. There is no better person than the noble Lord, Lord Livermore, to make sure that he has it.

I also congratulate the noble Lord, Lord Hendy, who is not speaking in this debate but answered Questions very well today. I can think of literally no one better than Peter to sort out the mess that our present railway system is in and provide us with the first-class transport infrastructure that has so often been promised but never delivered.

The Government are right to stress the awfulness of their inheritance. The self-congratulation of the party opposite about how good things are ignores the fact that we have a very serious long-term productivity problem and that our public finances are in a hell of a mess. We have a very big current deficit, and that is based on the previous Government’s projections for public spending, which are unrealistic and unattainable. Many looming challenges have not been accounted for—public sector pay, social care, financial strains on local councils, and the 2.5% defence target—and that is before one mentions the existential questions of demography that face our welfare and health systems. Labour is absolutely right to put growth at the centre of its programme.

There can be no return to sustained growth unless we raise considerably our levels of public and private investment to match those of our main competitors. Yet I am afraid that the plans that Labour inherits from the previous Government see a reduction in public investment from something like 2.5% of GDP to 1.9% over the course of this Parliament. There is something in the argument that we can fill that gap by attracting private sector investment pension funds, which my noble colleague spoke about, and the stability that we offer is obviously a key part of what may deliver a higher level of investment from the private sector. However, we also need a commitment to the national wealth fund and British national energy, because that will facilitate partnership between the public and private sectors to de-risk investment projects. I am all in favour of this, but I will make just a couple of points in conclusion.

The sums may sound big but compared to the scale of the challenges of reconfiguring the national grid, launching a nuclear energy programme, investing in our railway infrastructure, et cetera, they are not that big. The key is whether we can convince the markets that, by borrowing to invest in growth, we can get a bigger public investment to match private investment. Here, I am concerned about the present Treasury rules that the previous Government put in place. As I understand it, they insist that the total cost of public/private finance projects is counted as a public debt liability on the grounds that the risk is ultimately borne by the public sector. I think the potential benefits of that investment adding to economic growth should be taken into account, as of course it is growth that would reduce the ratio of debt to national income. The question of how we generate public investment to match private investment is one of the crucial questions that this Government have to face.