Autumn Budget 2026

Lord Liddle Excerpts

Thursday 12th November 2026 Lords Chamber

[Lord Liddle (Lab)]

My Lords, it is a great pleasure and privilege to follow my noble friend and congratulate her on her excellent maiden speech. She has done many things in her career, but I first met her when she took a job as special adviser to Patricia Hewitt when in the Government of the Blair era. At the time, we shared a passion for closer European ties as the best long-term strategy for Britain, and I look forward to working with her in this House, as I feel that enthusiasm is coming back in a big way.

Kitty is no idealogue. As she explained, she worked for a long time for the Institute of Directors. She is not a sort of fancy economic theorist, and she would never describe herself, as my good friend Ed Balls once did, as a believer in post-neoclassical endogenous growth theory—she is not that type of person at all. She is pragmatic, and her experience covers an enormous range of practical public policy issues. More than that, and she brought this out very well in her speech, having been an MP for Burnley, she understands the social and economic legacy of once-proud industrial towns that had their economic backbone ripped out of them in the 1970s and 80s, which is one of the great social and economic problems we still face in this country. I feel very confident that she is going to make a distinguished contribution to this House.

There is a long speakers’ list today, so I will make one personal comment, if I may. There is a name that is absent; someone I knew for 50 years, who sat on the Opposition Benches. That was John Horam, Lord Horam, who always had something interesting to say on economic questions. We miss him enormously.

There is not much point my talking much longer, because I agreed with virtually every word of the speech by the noble Lord, Lord O’Neill. John Healey was right to be cautious and sensible at this period of huge international uncertainty. If Donald Trump draws the right lessons from his battering in the mid-term elections—what joy the election of a Black senator from Mississippi brings to the heart—then it could have a dramatic effect on the economic outlook for the UK. There is a real prospect that, if we can bring an end to the Gulf crisis, interest rates and inflation will fall and we will face a much brighter future.

We have big problems of financial sustainability. I do not think there is anything socialist or social democratic in being in favour of lots of borrowing. I rather agree, as someone with great sympathy for Keynes, that you have to save in the good times if you are going to borrow in the bad times. We still face very big problems of fiscal sustainability, and the next spending review will be a huge challenge for the Government, with the need for more defence spending, the rising welfare bill and the Prime Minister’s ambitions for social care. It is going to be a great challenge.

We need to pursue an economic approach that is not just about cutting spending. That is all Conservatives can talk about, and they do not present any analysis of the social damage that their proposed cuts in welfare spending would bring about, which surely they have to do. How much would homelessness rise because of what they propose on housing benefit, for one thing? Similarly, what will be the result of cutting welfare for young people with mental health difficulties? I believe that you should have tough welfare reform which offers help, and if you do not get the help then you should not get the benefits, but I cannot understand how the Conservatives believe they can make these huge savings without hugely damaging social effects, which they do not talk about.

The policies we need should concentrate on a few areas. I am a great believer that we need to throw everything at growth. For me, that means getting much closer to Europe and rejoining the European single market. Secondly, we need radical tax reform; the problem with Britain is that the tax system has become so complicated that you cannot raise taxes without causing further disincentives for people. Thirdly, we need a sharp focus on public sector efficiency and productivity. It is a painful subject for the Labour Party, but we need to build a close partnership with the public sector trade unions so that people recognise that the only sustainable route to higher wages in real terms is through efficiency and manpower reduction.

There are going to be tough decisions ahead, but I have great confidence in our Prime Minister and Chancellor and I am willing to back the tough decisions that have to be made.