Autumn Budget 2025

Lord Barber of Ainsdale Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Barber of Ainsdale (Lab)]

My Lords, there is no disguising the scale of the economic challenges facing our country, and the Budget had commendable clarity in its central objectives: tackling the high cost of living, which has hit so many families so hard; maintaining the investment in our economy and our public services, which is crucial to delivering growth; and cutting debt and borrowing to create a more prudent level of headroom.

The evidence for the previous Government’s economic mismanagement was all around us when Labour took office: bulging NHS waiting lists, crumbling school buildings, the prison service on the point of collapse, the courts system in disarray, and wages stagnant right across the economy. I could go on. However, this gave the Government a choice: to accept the public realm descending further into chaos, or to commit to the sustained investment alongside key reforms that could begin to restore the vital public services that most of us rely on. They have made the right choice.

Sustained investment is being delivered too in our infrastructure, transport system, energy security and housing, with the £120 billion of capital investment set out in the June spending review fully maintained. These will be key factors in driving future growth. In the past, we have seen Governments turn off vital capital investment at the first sign of economic strain, but the consequences were predictable: damaged confidence, and any previous economic momentum hitting the buffers hard. This Government are rightly clear that they will not go down that blind alley. These decisions meant that, in some areas, taxes have been increased and of course nobody likes that. In a fantasy world, difficult choices can always be sidestepped, but that is not the world this Government choose to inhabit.

One critical factor that influenced the OBR’s judgment was the relatively poor productivity performance of the UK economy. Of course, a number of factors are crucial to that. How well do the capital markets work at allocating resources where the growth potential is most significant? Investment in skills is vital too. I therefore welcome the reforms to apprenticeships, and the increased support to SMEs that is now to be provided alongside the youth guarantees.

Improving productivity will require innovation in so many areas. AI will be a major driver of change and, as we meet those challenges, I hope that we do not forget about the people we need to carry with us to deliver the changes we need. Workers and their unions want to be partners in shaping lasting economic success, and the Employment Rights Bill will provide positive change in that area.

We should acknowledge that a corner is being turned, with the forecast for growth now upgraded from 1% to 1.5%. We are on course to be the second-fastest growing economy in the G7 group. New deals with important trading partners, long-sought and now at last achieved, will play their part in driving growth. Critically, real wages have seen increases after a lost decade and more under the previous Government. Falling interest rates will give an additional boost to household incomes.

Let us therefore focus on the substance of the Budget and not the confected outrage about the communications around it, accompanied by an unhealthy dose of misogyny in the cynical, over-the-top personal attacks on the Chancellor. There is of course more to do, but this Budget has not been about flash-in-the-pan gimmicks but serious and sustained reforms. It deserves our support.