Backing Business to Create Economic Growth

Charlie Maynard Excerpts

Monday 18th May 2026 Commons Chamber

[Sir Mel Stride]

All these flashbacks to the 1980s are a slightly desperate attempt to get away from the 2020s, I think.

The other thing that socialists love to do is borrow, borrow, borrow, and spend, spend, spend until they have run out of other people’s money. That is precisely what this Government have done. The Secretary of State mentioned the fiscal rules, but of course he failed to mention that in the run-up to the election, the Chancellor said that she would abide by our fiscal rules, and then promptly changed them, so that she could borrow more, flipping the definition of “debt” from public sector net debt to public sector financial liabilities. That allowed her to take her foot off the brake and borrow and spend even more.

[Charlie Maynard (Witney) (LD)]

Flashing back to the 1980s, would the right hon. Member like to remind us when the Conservatives last balanced a budget?

[Sir Mel Stride]

The current account went into a slight surplus just around 2015-16. [Interruption.] It did, actually. That was on the back of our inheriting a £160 billion deficit in 2010, which was over 10% of GDP—another example of the disasters of a Labour Government.

The Secretary of State rightly spoke of artificial intelligence and the opportunities that it presents, but what we know of artificial intelligence is that it will have a profound and very uncertain effect on the labour market. We need a flexible skills offer to deal with that, and flexible labour markets, but through the Employment Rights Act, the Government are making the labour market more rigid, and that will hurt younger people in particular, who do not have a track record in employment, so do not be surprised if youth unemployment continues to hover around 16% or 17% as a consequence of the actions of this Government.

When it comes to leaning into these challenges, we know that there is no plan. This Government are not going to do anything. They are just involved in internecine introspection—a civil war, now—within the Labour party. They said that they would tread lightly on our lives; in fact, they are now stampeding all over them. The rivals to the Prime Minister will be looking to double-down on the ruinous policies that I have just set out.

We have seen the real effects of this in recent days. On Friday, after the former Member for Makerfield said that he would step down in order to ease the passage of Andy Burnham to this place, what happened to gilt yields? They spiked up 18 basis points. I have done a little bit of research, and I can tell the House that, if sustained through the forecast period, that would mean over £5 billion of additional debt servicing costs. That is about £300 for every working family in this country. That is the effect of Andy Burnham, and he has not even arrived here yet.

We are on the edge of a precipice economically, leaning into a very turbulent time. These are the policies of the madhouse, yet we are told not to worry. The hon. Member for Liverpool Wavertree (Paula Barker), who I believe is an outrider for Andy Burnham, said of the bond markets that they would just have to “fall into line”. Andy Burnham himself said in the New Statesman:

“We’ve got to go beyond this thing”—

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[Charlie Maynard (Witney) (LD)]

We all agree that we urgently need to get the economy growing again. However, the Bills in the King’s Speech do not represent the big, bold economic change that the country needs. I will talk today about just two things that would create economic growth: trade, and balancing tax and spending through our fiscal framework.

On trade, our country prospers when fair markets for goods, services, capital and labour operate effectively. Trade makes this country great. Raising barriers to trade makes it harder for the economy to grow and erodes the tax base on which our vital public services depend—and the cost of doing business skyrockets, whether for a small business person in my constituency or for a large financial institution here in London.

The evidence of the damage that Brexit has done is in plain view. America’s National Bureau of Economic Research, which produces non-partisan economic research, estimates that by 2025, the Brexit process had reduced UK GDP per capita by 6% to 8%, investment by 12% to 18%, employment by 3% to 4%, and productivity by 3% to 4%. That comes at enormous human cost.

The UK-EU reset has some good elements, but each element, which is being painfully negotiated, returns merely some of the benefits that we all used to have. Our young people may soon have the opportunity again to travel and work abroad. We may rejoin the EU’s energy market, cutting electricity costs and making both markets greener and more efficient. The Government have been working hard on an SPS agreement on food with the EU. That would hugely reduce costs and delays for our farmers, and the benefits would be felt in Oxfordshire and rural communities across the country. It would bring cheaper food to supermarket shelves, which is good news for all of us. But consider the logic: the Government are now fighting really hard to rejoin the EU’s single market in food products, while remaining resolutely against rejoining the single market for anything else. Where is the logic in that? Two things are painfully clear. We are expending enormous political capital to recover just a fraction of the benefits we once had, and even that goal is wholly insufficient, given the scale of the challenge that our economy faces. We need to be bolder and aim higher.

I turn to the UK’s fiscal framework. Let us have a think about how well it has worked over the last quarter of a century. In the last 25 years—a period spanning at least eight different fiscal frameworks—we have not had a single year in which tax receipts have exceeded spending. The 2024-25 deficit was £153 billion, which was 5.2% of GDP. The consequences of this are severe: our national debt has ballooned to £2.9 trillion, equivalent to 94% of GDP. When I look at our fiscal rules, the words that come to me are, “Lie to me.” The tradition works something like this. The Government of the day assure the country that all targets will be hit—not now, when it actually matters, but at a completely unknowable forecast date, five years hence. That five-year target rolls forward and is never reached. Spending is front-loaded in years one, two and three, and tax rises are backloaded in years four and five—ideally, the other side of a general election.

Traditionally, voters have been lied to because the alternative means politicians confronting and explaining a financial situation that nobody wants to face. Is this failure inevitable? No, it is not. Other countries have moved in the other direction and cut their debt-to-GDP ratios. Sweden had a financial crisis in the 1990s, with a debt to GDP ratio of above 80%. Its response was the 1996 Budget Act, one of the most rigorous fiscal frameworks in Europe, which fundamentally reshaped how taxation and parliamentary scrutiny interact. Most importantly for our situation today, the principles of this framework continue to command very strong cross-party support. That does not mean that there is agreement on specific spending or tax decisions—these remain contested—but the framework rules themselves are treated as largely above partisan dispute. That is precisely why the Swedish model is so frequently cited internationally. I am asking everyone in this Chamber and everyone listening to think seriously about whether we could do something similar here. After all, we are far better off addressing this very large problem now, before a financial crisis forces our hand later.