Autumn Budget 2025

Lord Harrington of Watford Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Harrington of Watford (Non-Afl)]

My Lords, I should mention my entry in the register of interests—I am chairman of Make UK. But that is more than an entry into a register, because it is really what my whole speech is about today.

Make UK represents 26,000 manufacturing companies in this country. People often forget that manufacturing is still very important to our economy; it is 2.6 million jobs; 42% of our exports are from manufacturing, and 48% of R&D spending is ours. The Minister is aware of this and very kindly hosted a reception for manufacturers earlier this year in No. 11. However, as anyone would know, manufacturing jobs depend on us being competitive, and all the evidence we have shows that there are many aspects where we are not competitive. I hope that in his response the Minister will comment on which part of the Budget was relevant to that and which was not.

First, on skills shortages, I congratulate the Chancellor on some improvements with the apprenticeship levy, making it easier for smaller businesses to take on apprentices, et cetera. Still, there are 50,000 skill vacancies. The Minister might be interested to know that among those vacancies are tool makers—perhaps when he is next at No. 10 Downing Street and discussing this issue with the First Lord of the Treasury, he could mention it. Why are there so many vacancies? Why has the number of apprenticeships in manufacturing gone down from 130,000 in 2016 to about one-third of that today? Something needs to be done about this, because the skills shortage is one of the things that is holding back the economy. While there was something in the Budget for it, as I have said, many things were not.

On energy prices, we had in June a huge announcement from Jonathan Reynolds, the Secretary of State, that we would have a British industrial competitiveness scheme for all manufacturers—and he thanked Make UK for lobbying very hard on behalf of them. That was 19 June, and today, six months later, it has only just gone out to consultation, with no detail as to which businesses will be affected and how it will be funded. Of course, from a business point of view, all our members want is the price of electricity and gas bills to come down. It was announced by the Secretary of State; they are not interested in consultations and mechanisms. I am afraid that the Budget, apart from announcing the consultation, showed no development in that regard.

I congratulate the Government on the increase in the money that is being spent on research and development. On access to capital, the manufacturing sector will benefit in future from the British Business Bank and the National Wealth Fund. The Government are to be applauded for that—but, in the end, this Budget was 1% of GDP extra taxation and 1% of GDP extra spending on benefits. I am afraid to say that many manufacturing businesses look at that and wonder what is in it for them. How can that really help growth? The last year has seen significant increases in energy prices and national insurance, as well as changes in minimum wage and thresholds, such that many of our members have seen a 40% increase in costs. How can that help growth?

I know that the Minister means very well, and he is always very responsive to us, but the Government have to understand that while business engagement is a good thing, it is listening and acting that are most important to most of the manufacturing sector in the UK.