Autumn Statement 2023

Viscount Hanworth Excerpts

Wednesday 29th November 2023 Lords Chamber

[Viscount Hanworth (Lab)]

My Lords, I was deeply perplexed when I listened to the monarch’s speech at the opening of Parliament and, equally, to the budgetary speech of the Chancellor of the Exchequer. The question I ask is: to what extent do these speeches represent an attempt at bamboozling the public, and to what extent do they represent acts of self-deception on the part of the Government? I have not reached any firm conclusion.

The Chancellor’s recent Autumn Statement is full of doubtful claims about the success of the economy. We hear, for example, that under the Conservatives our technology sector has grown to become the third-largest in the world—that is, double the size of the German sector and three times that of France. This seems to be patently untrue, and one may wonder what statistics are being misused to support such a claim. The truth is that our manufacturing sector has sunk to a proportionate level that is way below the corresponding levels of those other economies. What, then, is the technology sector to which the Chancellor refers?

In appraising the Autumn Statement, it is clear that many of its provisions, which include significant reductions in taxes, are intended to enhance the electoral prospects of the Conservatives. However, given how dim these prospects seem to be, one wonders about the extent to which the provisions are intended to embarrass a succeeding Labour Government.

The Autumn Statement has the intention of reducing public expenditure in the early years of the succeeding Government. It severely restricts the financial leeway available to them unless they are prepared to increase taxes. A Labour Government would be intent on repairing the damage that Conservative Administrations have inflicted on public services. Damage has been done to the health service, care for the aged and the finances of local government. Our schools are in a state of physical disrepair, as are our prisons, which are severely overcrowded. Much else needs to be repaired, and public sector wages need to be restored in some measure. However, if the trajectory that has been defined in the Autumn Statement were followed, none of these repairs would be possible. There is also an urgent need to repair the physical infrastructure of the economy, which includes the transport and energy infrastructure. Our water supply and sewerage system also require urgent attention.

Beyond these needs, there are huge and looming costs associated with the transition to a green economy and the fulfilment of the programme to achieve net-zero carbon emissions. Government support is required both to sustain technological innovation and to assist in establishing the facilities that are available to a net-zero economy. So far, little has been forthcoming. An example of the shortfall has been in the failure to satisfy the requirements of the automobile industry in converting to the manufacture of electrically powered vehicles. A precondition for a successful transition is the existence of an adjacent industry for manufacturing lithium-ion batteries. The Government failed to avert the collapse of the Britishvolt project to establish a mega-factory for manufacturing batteries. The project faltered for want of sufficient investment from the private sector—this is at a time when foreign Governments are investing heavily to establish those facilities.

The derelictions of the Government can be attributed, in large measure, to the prevalence of a political philosophy that limits state interventions and proposes that our industrial infrastructure can be sustained by private capital and the initiatives of free enterprise. State interventions are necessary to achieve the transition of our energy sector. The programme to restore our nuclear power faltered because the Government failed to recognise that it could not be achieved by the private sector alone.

Their response has been to imagine that instead we can rely on so-called renewable sources of energy. But here, the intermittence of these resources necessitates a means of storing the energy. In order to accommodate lengthy and unpredictable periods when the sun is masked and the wind does not blow, there is a need for a large amount of long-term storage. It is doubtful whether effective incentives can be devised to encourage the private sector to make the necessary provisions, yet the Government and the Civil Service blithely assume that they can devise a commercial model which will allow them to avoid any direct participation in providing the energy storage.

I earnestly hope that an incoming Labour Government will not suffer from the same delusions. They must take an active role in repairing the damage and in fostering the technological transformation of our economy.