Autumn Budget 2025

Lord Moynihan of Chelsea Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Moynihan of Chelsea (Con)]

My Lords, we all know the economy is in a fix. We are spending far more than we can afford, taxing at dysfunctionally high levels so that businesses and people—this was laid out very clearly by my noble friend Lord Elliott—are fleeing the country, and regulating the economy to death. The future is a downward spiral of recession, inflation and economic crisis.

As we all know, the solution is economic growth, as many noble Lords have said. The Government say it is their top priority. But do our Government have any theory at all as to what produces growth? Growth does not come, as so many Lords on the opposite Benches seem to believe, from spending more money. It comes from a smaller state—the evidence is irrefutable—lower taxes and less regulation.

Please let us stop the economic illiteracy of claiming that, had we stayed in the EU, we would have grown up to 8% more. We have heard 8%, 7% and 6%. I am sure the Minister will want to up his game from the traditional 4% that he likes to trot out on all occasions when he is summing up. We hear that we would have grown 8% more than Germany, France and Italy, which we have grown at the same rate as since Brexit, had we stayed in the EU. Noble Lords may not understand—and appear not to understand—that the papers on which they rely, so-called “doppelganger papers”, say that we would have grown that much faster if we had grown at the same rate as the United States. Do they understand that or do they just read the headlines?

It is correct: had we grown at the same rate as the United States, had we adopted its economic framework, yes, we would have grown that much faster because the United States did. Therefore, we needed a deeper—not a so-called softer—Brexit if we wanted to grow faster. Our poor productivity record, which all in this House agree, it seems to me, has caused low growth, is almost entirely in the public sector. The private sector has grown its productivity by 30%. Are noble Lords asserting that, had we stayed in the EU, our civil servants would have forsworn their four-day weeks, their working from home, their gold-plated pensions, or their higher and higher salaries? I do not think they are. Are they saying that that is what would have caused us to grow faster—that, had we stayed in the EU, the public sector would have become more productive? I beseech noble Lords to think a little bit harder about the basis of their assertions.

Being kind is not going to get us out of this jam. Just to get back to Tony Blair levels requires some £300 billion less of expenditure. There are many opportunities to spend less. Our cost of electricity is the highest in the world, four times that of the US. We should stop pretending and get rid of net zero. We would be £220 billion better off had we done so.

An out-of-work family gets to be some £18,000 a year better off than a working family. That is unconscionable and unjustifiable. Work must pay more than unemployment. Benefits, therefore, must be cut by large amounts.

On regulation, we should stop thinking that we know best. Nuclear power stations in South Korea cost a quarter to one-sixth the amount that it costs to build nuclear here. Had we done that, we would never have gone with solar and wind. The construction industry has collapsed because of regulation.

To conclude, there is no money. Until we are spending at some two-thirds of the current rate, the economy will get worse. It is a failure of leadership not to acknowledge that. We have to tell the electorate. We have to settle on how much we can afford to spend, what cuts are needed to achieve that, which taxes should then be reduced and which regulations abolished. Until we have a programme that addresses those questions, this Government are only playing at governing.