Spring Forecast Statement

Lord Elliott of Mickle Fell Excerpts

Tuesday 17th March 2026 Lords Chamber

[Lord Elliott of Mickle Fell (Con)]

My Lords, I shall focus on the choice we face as a country between investing in economic inactivity versus investing in work, a theme my noble friend Lord Northbrook spoke about. The Work and Pensions Secretary announced yesterday a £1 billion investment to incentivise employers to hire young people from long-term unemployment. That is welcome news, given that almost 1 million people are not in education, employment or training. Each of those NEETs faces losing out on £1 million in lifetime earnings, with a further £1 million cost to the state—that is, to all of us as taxpayers—in welfare payments and lost tax revenue.

What struck me is that this £1 billion incentive to employers is far less than the £8 billion increase for non-pension-related welfare payments announced in the Spring Statement. The Government have therefore made an active choice—the wrong choice, in my view—to spend eight times more on paying people to stay out of work than on getting people into work. To put that in context, with £8 billion, the Government could fund almost 900,000 apprenticeships, give a tax break of £10,000 to 800,000 businesses to employ someone out of long-term unemployment, or immediately increase our defence spending to 3%. According to table 5 of the appendix to the OBR’s report, the Treasury will collect £331 billion in income tax in the current financial year, but according to table 4.6 we will spend £333 billion on welfare—a sum that is almost as big as the combined GDP of Scotland, Wales and Northern Ireland. In other words, we are now spending more to facilitate people not working through a rise in income tax from people working.

This comes at a cost—a cost that falls on us through taxation but also on the next generation through increased national debt. In 2000, the national debt per person was, in today’s money, £11,500. Today the share of the national debt for every child born is more than £41,000. This is their inheritance, and the trajectory is not improving. According to page 70 of the OBR’s report, total welfare spending will rise this year by £18 billion, further contributing to the national debt. This £18 billion increase is the equivalent of the entire annual budget of NASA, an organisation that is literally sending people around the Moon this year. Thanks to the work of NASA, we have GPS navigation, satellite weather forecasting, camera phone sensors, infrared thermometers, cordless power tools and even memory foam—technologies that have improved the lives of billions of people and underpin trillions of dollars of economic activity.

This is where the choice between investment in jobs and so-called investment in welfare comes in. The Chancellor opened her 2024 Budget by declaring:

“The only way to drive economic growth is to invest, invest, invest”.—[Official Report, Commons, 30/10/24; cols. 811-12.]


I agree. The question is, invest in what? After her 2025 Budget, she went so far as to describe welfare spending as investment. If additional welfare spending is investment, it is investment in keeping people out of work rather than giving them the joy of a job and the Exchequer a windfall. President John F Kennedy once said:

“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard”.


I urge the Government to make the hard choice to put any additional money they have into getting people into work rather than increasing welfare spending. As the Chancellor once said:

“We are not the party of people on benefits. We don’t want to be seen, and we’re not, the party to represent those who are out of work … Labour are a party of working people, formed for and by working people”.


The spending choices in the Spring Statement speak louder than words: £8 billion is a bigger figure than £1 billion. I urge the Government to make getting people into work a higher priority than keeping them out of work, to put more focus on making the country NEET zero rather than net zero, and to go back to being, in the words of the Chancellor, the party of the worker rather than the party of people who are out of work.