King’s Speech

Lord Livermore Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Livermore (Lab)]

My Lords, the King’s Speech promised to “strengthen our economy” and

“put the country on a better path”.

Such measures would indeed be welcome. The country is ready for change. Britain desperately needs national renewal, with a serious plan for growth. Yet, in reality, the King’s Speech delivered nothing of the kind. Just as with today’s reshuffle, it merely brought back more of the same.

Just as today’s reshuffle has seen the return of a man the Prime Minister himself described as part of a “record of failure”, the King’s Speech saw a continuation of a failed approach that has led to 13 years of national decline; no change from an economic model that has failed over 13 years to give working people the security and opportunity they deserve; 13 years of failure that began with the Cameron-era austerity that missed all its targets, then gave us a Brexit that broke all its promises—followed, inevitably, by a mini-Budget that gambled with people’s livelihoods, undermined our financial institutions, sent government bonds plunging and pushed the pension market to the brink of collapse; 13 years of chaos and instability that have left Britain weaker, and working people paying the price.

The Resolution Foundation has calculated that never in living memory have Britain’s families got so much poorer over the course of one Parliament, with typical working-age household incomes set to be 4% lower in 2024 than at the start of this Parliament in 2019.

Many of those families are home owners, who worked hard, saved for a deposit and have taken pride in having somewhere to call their own. But the security that that should bring, has, for many, turned to dread, as they receive letters from their lender telling them their bills are going up by hundreds of pounds a month. Interest rates have now risen 14 times to a 15-year high of 5.25%, while the average two-year fixed-rate mortgage rose from 2.6% to 6%. As a result, average mortgage holders have paid £2,900 more this year—8.3% of their disposable income. Some 1.4 million people will lose a staggering 20% of their disposable income.

The Government may well this week meet their own self-imposed target to halve inflation from the levels they allowed it to rise to. But, as for the actual inflation target, the Bank of England now expects inflation to stay above target throughout next year, with interest rates remaining at their current levels for—I quote—“an extended period”.

We have falling incomes, persistently high inflation, higher food and energy bills, rising mortgages and, if that were not bad enough, the highest tax burden for 70 years. There have been 25 tax rises since this Government came to power in 2010. Taxes are now £120 billion higher every year, equivalent to £4,000 more in tax every year for every household. Why is tax so high? Because growth is so low. UK GDP is still 5.2% short of its pre-pandemic trend, a far worse performance than either the United States or the euro area. At the start of this year, the Prime Minister promised to get the economy growing again, but we are now going backwards—from low growth to no growth. The latest GDP figures show that there was no growth at all in the third quarter of this year. The Bank of England’s latest forecast now shows no growth at all in any of the next three years—no growth this year, next year or in 2025. As a result, growth next year is now set to be the lowest in the entire G7.

After 13 years, the Government’s economic approach simply is not working, but where is their plan to fix it? So much of this King’s Speech is either insubstantial or trivial, when what we needed was a credible plan for growth. We needed a modern industrial strategy to show that we are serious about securing the jobs of the future. We needed an employment Bill, time and again promised but which once again failed to materialise. We needed a planning Bill to cut red tape and get Britain building. We needed a Bill to give British business the skilled workforce to succeed. What we got was a transport agenda 85% of whose projects were re-announcements, and an oil and gas Bill that everyone in the energy sector knows is a political gimmick. Despite Britain being the worst-hit country in western Europe during the energy crisis, even the Energy Secretary admits that the Bill will not take a single penny off anyone’s energy bills.

Increasing growth is clearly the biggest economic challenge our country faces. In government, and in our first King’s Speech, Labour’s defining economic mission will be to restore growth to Britain, with good jobs and productivity growth in every part of our country. Our plan to deliver that mission is built on three pillars. First, we will rebuild our economy on the rock of stability and fiscal responsibility, so that we can withstand shocks in an insecure world and families and businesses have the certainty to plan ahead. That means we need strong, robust and respected economic institutions. The last Labour Government gave operational independence to the Bank of England, and we will protect that independence. The next Labour Government will strengthen the Office for Budget Responsibility. We will guarantee in law that any Government making significant, permanent tax and spending changes will be subject to an independent forecast by the OBR, and we will provide greater certainty by committing to holding a single annual Budget by the end of each November, giving businesses and families four months to plan for the new tax year.

Together, these changes will be put to Parliament as a new charter of Budget responsibility, introducing a new fiscal lock on Britain’s economic institutions, strengthening our stability and our security. We will also introduce new fiscal rules. We will not borrow to fund day-to-day spending and we will reduce national debt as a share of GDP. Again, these rules will be put to Parliament to agree. With a Labour Government, fiscal responsibility will be embedded in the Budget process. Never again will a Prime Minister or Chancellor be allowed to repeat the mistakes of the Liz Truss Budget. Never again can we allow a repeat of the devastation that Budget brought to family finances, or allow a plan to be pushed through that is uncosted, unscrutinised and wholly detached from economic reality.

The second pillar of our plan for growth is to unlock billions of pounds of private sector investment into British industries. Investment is the lifeblood of a growing economy. It is investment that allows businesses to expand, create jobs and compete internationally so that new plants, factories and research can come to Britain. Yet today, business investment in the UK is at rock bottom. Among 30 OECD countries, Britain is currently 27th for private sector investment as a share of GDP. In government, we will seek to restore investment, as a share of the economy, to its level under the last Labour Government, bringing us back in line with our international peers.

The Government simply stepping back, looking only to business, is not the route to success. As our competitors understand, there is a role for the Government in energising and derisking investment into new and growing industries, so we will provide catalytic investment through a new national wealth fund to unlock billions of pounds more in private sector investment, delivering new gigafactories, clean steel plants and renewable-ready ports across Britain.

This new wealth fund will be set a target so that, for every pound of investment the Government put in, we will leverage in three times as much investment from the private sector. To further spur investment, a Labour King’s Speech will get Britain building the homes and infrastructure of the future, with a reformed planning system to remove the barriers to investing in new industries. We will introduce a modern industrial strategy to accelerate the building of critical infrastructure in energy, roads, rail and housing, and our energy independence Bill will create “GB Energy”, harnessing homegrown renewable power, so that we can cut energy bills, create jobs, tackle the climate crisis and give Britain back its energy security.

Our final pillar to restore growth is to give working people the skills and opportunities they need to succeed. To make work pay, we will introduce a genuine living wage. To ensure that the workforce can meet local skills needs, we will transform the further education system, with specialist technical colleges delivering tailored courses designed with local businesses, and we will turn the failed apprenticeship levy into a new growth and skills levy to give businesses the flexibility they are asking for to train their workforce and deliver growth.

Measures to restore stability, to boost investment, to get Britain building, to cut energy bills and to secure for Britain the industries of the future: this is a positive Labour agenda offering a decade of national renewal in place of 13 years of national decline. What a contrast this is to a King’s Speech from a Government who are out of ideas and out of time, and who have given up on governing; a King’s Speech that shows that a very clear choice now faces the British people—a continuation of 13 years of chaos and insecurity, or a changed Labour Party now ready to change Britain.