King’s Speech

Lord Tyrie Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Tyrie (Non-Afl)]

I was hoping I could agree with something there, but I am not sure I can, so I have decided to say only that I very much hope that the noble Lord will at least find something in my speech he can agree with.

I want to address the fact that we are becoming a poor relation among advanced countries, and I will say something about how we can improve Britain’s economic performance. But, rather than make a lot of detailed suggestions, I will make only one substantive point: we have been here before several times, and we got out of the mess. We were here, in a way, in 1945, and we were certainly here in the late 1970s—actually with worse problems—and we found answers: Britain’s economic performance improved dramatically in the 1980s and 1990s.

In order to find the answers for the 2020s, a number of conditions need to be met. First, the penny needs to drop among the political and bureaucratic establishment, and among the wider public, that the UK is in very serious difficulties. Secondly, we need a workable recovery plan, and considerable intellectual energy needs to be deployed by politicians to find some plausible answers to the problems. That will occur only once the penny has dropped. Thirdly, politicians will need to have enough courage to implement some pretty radical policies and to secure at least acquiescence to them from the public. None of those conditions is currently being met.

Such evidence as can be found comparing the mood of the 1970s with now suggests that, although the public are depressed about the desultory economic performance of the UK and are worried about the cost of living crisis, none of that is at 1970s proportions at the moment. The recent reversals of welfare reform by the Government tell us something about the lack of courage at the top—points being made openly now by other parts of the Labour leadership.

Labour’s manifesto scarcely amounted to a bold recovery plan. I note that Wes Streeting recently told Lord Mandelson in a WhatsApp message, which has been leaked, that the Labour Party had

“no growth strategy at all”.

I do not know whether that will become more relevant in the weeks ahead. On that last point, if people think I am making a party-political point, I say that this Administration is only as short of intellectual capital as those of the catastrophically short-termist Administrations of the Cameron and Johnson years. They have a lot to answer for.

But the rot set in earlier. Successive Governments—Conservative, coalition and Labour—have all been managing the legacy of the Brown inheritance, and far more than is generally appreciated. What do I mean by that? I mean that policy was built, or became built, around the notion that growth could be stimulated by technocratic redirection of both public and private investment by the Government and by government incentives, with the benefit of independently administered regulation of very large parts of the economy. This was, and I think it still is, believed by many to leave plenty of scope for politicians to focus on redistributive objectives. All that should take place within a relatively permissive public expenditure framework, and while tolerating the complexity that comes with deploying and extending a tax system deeper and deeper into fulfilling redistributive goals. The Cameron-led Government brought public expenditure back under control, but for the most part it failed to challenge most of the rest of that consensus.

So what might signal a break with the consensus? The main challenges are coming from the Greens and Reform. They are right to rail against the new economic establishment that now clusters around that consensus, but the solutions that they are coming forward with, such as they are, are incoherent and inchoate, and the numbers do not add up. On current evidence, the concern must be that, if they were elected, they would represent an escape from reality and a postponement of the reckoning.

I have been theorising up to now. How could what I am saying be reflected in practical policies? As a country, we have been struggling towards something of a consensus on a few of them, such as the need for a radical reform of planning, although it has been too little and too slow, and the need to rejoin the single market or something similar. There has been some dispute about that today, but it is worth pointing out that a large proportion of those who voted for Brexit thought that we were going to retain very close links. There is some agreement on the need to deploy tough regulatory tools to stimulate competition. But I do not think enough has been done there.

Several essential policies are still considered unacceptably radical. We need tax cuts, accompanied by deep simplification of the tax system, and it will have to be paid for by reductions in welfare—few dare talk about that. A number of policies would be considered political suicide—for example, the need to encourage immigration in parts of the care and health system, and to facilitate the retention of large numbers of very high-quality foreign graduates who are currently leaving once they get their degrees. Trump is busy pushing them out; surely we should have a better policy for trying to persuade them to come here. Many people also quietly agree that an unacceptable price is being paid for the crash programme of fossil fuel reduction, but there is no consensus on the policy implications of reversing it or reconsidering it.

I have named four things there: tax simplification, EU renegotiation, tolerance and acceptance of fossil fuels for the foreseeable future, and targeted accommodation of immigration. None of these is a magic bullet, but they will all make a contribution. There is very little appreciation in the political establishment of the need for a radical shift towards them, nor of the need to jolt expectations among a wider public. Plain speaking is in scarce supply. AI’s jolt to the economy and public expectations will be much bigger than anything that we are seeing delivered by the Government, who seem, extraordinarily, immobilised by their own very large majority.

Having said all that, we can see that Kemi Badenoch is doing some plain speaking—and plain speaking is not just coming from the right. Here is an extract from a recent publication of the Labour Growth Group, I think out this week or last week:

“The planning system rations land. The energy system rations power … Regulation protects incumbents while crushing challengers”.


I think both Kemi and I would agree with all that, even if we would not agree with all the solutions in that document.

I will end where I began, but I will put it differently. The UK’s problems derive from politics, and so do the solutions. It is possible, fundamentally, to improve Britain’s economic performance. We are not prisoners of the global growth rate, as has been implied on one or two occasions in this debate. It has been done before and it can be done again. What is required is a full appreciation of the problem and the guts to implement radical supply-side solutions. We are a long way from that and, until we get there, the UK will continue to struggle on in the slow lane of middle powers.