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Autumn Budget 2025

My Lord, any competent economist alive or dead recognises that a crucial part of a Government’s economic performance, particularly one which is predicated on getting more growth, is to control public spending. Margaret Thatcher, although she was not an economist but a chemist, recognised that. When she took over, public spending was 45% of GDP. After 11 years, it was 36%. As a consequence—it was obviously not the only factor—growth in the five years at the end of Margaret Thatcher’s period of office averaged 4% a year, a percentage this Government can only dream of. So, the question the Government face today—when again, public spending is 45% of

GDP—is, are they willing to take the decisions about public spending and relief, and getting the private sector going, that Margaret Thatcher did?

It is obviously not easy. It is not painless. I remember that when I was a Cabinet Office Minister under John Major and my noble friend Lord Heseltine, we had a similar problem. There were five quangos—public sector bodies which collectively were losing millions of pounds. We decided to privatise them. One of them was Her Majesty’s Stationery Office. As soon as this got around, I received a call from Betty Boothroyd, who was the Speaker at the time. She had me in and said, “Minister, HMSO also prints Hansard. I will not have it”. Recognising that taking on Betty Boothroyd in full flow was rather like encountering the Brigade of Guards, I said, “Betty, what if we leave Hansard in the public sector and privatise the rest?” I got a beatific smile, and the deal was done. Today Hansard is still published by the public sector, and we saved the taxpayer £30 million by privatising the rest, as an excellent company called Banner.

That shows what can be done. It is not difficult. It is not impossible. Did this Government do that? No: instead of controlling and ameliorating the public sector and the problems of welfare and pensions which they inherited, they instead increased taxation by £26 billion. The verdict is in. The OECD yesterday published the economic growth forecast for the next few years: 1.4% this year, 1.2% next year and 1.3% in 2027. Professor David Miles, giving evidence to MPs from the OBR point of view, said that this, combined with inflation, would mean only a 0.2% average increase in living standards during the next four years. It is a complete standstill. There is no progress. None of the change that the public were entitled to expect from a Government who were elected on change has happened. It is more of the same. It is politics for decline, politics for defeatism. It simply is not good enough.

4.08 pm