Reducing Government Spending

Baroness Curran Excerpts

Tuesday 24th March 2026 Lords Chamber

[Lord Livermore (Lab)]

Of course, I agree with everything the Chancellor says. Since coming to office, this Government have implemented an economic plan to bring stability to the public finances and to strengthen Britain’s economy for the long term. The forecast from the Office for Budget Responsibility, published last month, showed that our plan is working and that we enter this period of global uncertainty with the fundamentals of our economy strong. We have cut inflation, which is standing now at 3%, a lower base than at the outset of Russia’s illegal invasion of Ukraine. We have prioritised growth to drive up living standards and have stabilised the public finances, having already reduced the deficit by £20 billion this year, from 5.2% to 4.3% of GDP.

[Baroness Curran (Lab)]

My Lords, can my noble friend spell out to the House the benefits of increased public expenditure on health and how this actually contributes to economic growth? Can he spell out the benefits of increased public expenditure on defence, which contributes to the safety of the United Kingdom? Does he agree with me that the years of Tory austerity directly damaged the defence standing of this country?

[Lord Livermore (Lab)]

I absolutely agree with everything my noble friend says. The legacy of underinvestment from the previous Government still affects the economy today. When we won the election, private sector investment was the lowest in the whole G7. Public sector investment was no better and was set to fall again from 2.5% to 1.7% of GDP. We have invested £120 billion of additional capital investment. The OBR estimates the eventual growth impact of this increase in capital investment as adding 1.4% to GDP. As I have said before, cutting this and returning to austerity would be the very worst thing that we could do for growth. Unlike today’s Conservative Party, we will not repeat the mistakes of the past.