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.

UK Infrastructure: 10-year Strategy

Lord Harrington of Watford Excerpts

Tuesday 24th June 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful for what my noble friend said. I share his enthusiasm for what we are doing in the innovation landscape, such as putting a record high of £22.6 billion into R&D as part of the spending review. It is exciting that yesterday the industrial strategy talked about allocating £2 billion for AI and £2.8 billion for advanced manufacturing. This is all incredibly important.

What my noble friend said is absolutely part of what the National Wealth Fund is for. My noble friend talked about start-ups and scale-ups. The British Business Bank now has a total financial capacity of £25.6 billion, which will result in a two-thirds increase in support for innovative UK businesses compared with 2025-26, crowding in tens of billions of pounds more in private capital The National Wealth Fund will play that role, but so too will the British Business Bank. That was one of the key announcements in yesterday’s industrial strategy.

[Lord Harrington of Watford (Non-Afl)]

My Lords, I shall do my best to comply with the spirit of cross-party consensus day. I should first declare from the register that I am chairman of Make UK, which has more than 20,000 member companies in manufacturing and infrastructure. I commend the Government on this 10-year infrastructure plan and yesterday’s industrial strategy because I did a review for the previous Government on foreign direct investment. Lack of consistency of policy was the number one item, and the others were connection to the grid, planning and other delays.

I want to ask the Minister about monitoring implementation. For the main industrial strategy, the Government have quite correctly set up an industrial strategy council where each sector—life sciences, advanced manufacturing, et cetera—has groups to monitor the implementation of the industrial strategy. The infrastructure plan is very complex; it includes skills, access to finance and, of course, energy and very large things. What mechanism will be used to independently monitor its implementation?

[Lord Livermore (Lab)]

I am grateful to the noble Lord for the positive things that he said. I pay tribute to him and to Make UK for the work that they do. Clearly, the skills conversation that we just had is vital in that sector. Make UK always makes the point to me about the vital importance of engineering skills, so I hope that that is welcome.

The noble Lord did indeed do his review into foreign direct investment. I hope he does not think that it was just for the previous Government; we still talk about it now in this Government. A lot of the recommendations that he made in that review are things that we have been trying to take forward in this Government. That is a good example of the cross-party working that we have been discussing today.

The noble Lord is right that the industrial strategy will be taken forward by the industrial strategy council; that will be put on a permanent footing, which I think is important. His question is about the equivalent for this strategy. That is the National Infrastructure and Service Transformation Authority—NISTA—which I was talking about. It will monitor the strategy and help the Government to implement it. It will do two-year refreshes of this strategy to make sure that it is up to date and doing what it needs to do. Crucially, it will provide real-terms advice to Ministers when it comes to individual projects to make sure that we have the expertise that we need at our fingertips to be able to implement them.