Economic and Taxation Policies: Jobs, Growth and Prosperity

Lord Liddle Excerpts

Thursday 13th November 2025 Lords Chamber

[Lord Liddle (Lab)]

I open by congratulating the noble Lord, Lord Elliott, on an extremely well-argued speech—even politically balanced, at times. It was a complete contrast to the barrage of criticism that we have had from the Opposition Benches throughout this debate. It was not quite clear to me who the barrage of criticism was directed against. Is it against the 17 months of Labour Government or against, in the 17 years since the financial crisis, the 14 years in which all these people here were in power and had the opportunity to do something about the problems that they now complain about?

We know where we ended up in 2024, with public debt that had soared, a share of investment in the economy at one of the lowest in the OECD, a broken state—just look at the health service and the criminal justice system—and a social problem of huge magnitude. Some 7.1 million families were going without essentials, 5.3 million skipping meals and 4.1 million going hungry. I believe in welfare reform, as many people on the other side have argued for, but it has to be coupled with a policy of tackling child poverty. The two things went together in the Governments I worked for in the Brown and Blair years. We need welfare reform and labour market action to get more people back into work. That is what the Mayfield review is about and what the Alan Milburn review on NEETs is about.

We should provide in this Budget incentives, such as a national insurance holiday for people who take on unemployed people on welfare. We also have to look—although this is something that a lot of people on my own side will worry about—at minimum wages for young people, and whether they are not too high. I think we should get the Low Pay Commission to look at that. I support the Employment Rights Bill, but day-one rights have to be coupled with a genuine probationary period in which employers are not discouraged from taking on people with a problematic work record.

I believe that the Government’s economic strategy is on the whole right: borrowing to invest and making sure that the public investment happens, which it did not under the previous Government, but also balancing the books on current spending. If we have a deficit, which we have, in my view the best way to tackle that is through broad-based taxes, a rise in income tax and reform of property taxation, which will help economic efficiency. The truth is that income tax in this country is low by international comparisons, and tax is the price we pay for a civilised society—we must always remember that. At the same time, we must have much stronger incentives for entrepreneurship and research and development, and an ability to translate our intellectual excellence into commercial success in companies that are growing greatly.

To conclude, I commend to your Lordships the recent report of the Lords Science and Technology Committee, which has looked at the reasons why we are failing in this regard. But I am an optimist, and I am looking forward to the Budget.