King’s Speech

Lord Bridges of Headley Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Bridges of Headley (Con)]

My Lords, it is a very great pleasure to follow the noble Lord’s extremely powerful and searing critique of the Government. To help the Minister in his summing up, let me suggest some parts that he might like to cut. I know he likes always to refer in his speeches to the Liz Truss mini-Budget—I think he has mentioned it about 53 times. He can cut that out entirely. All of us on this side of the House would agree that it was a disaster.

We would agree that the last Government left office with taxes, spending and debt too high, largely—but not entirely—due to Covid and the energy shock. But, of course, the Minister’s Government now hold the record of long-term borrowing costs soaring to the highest level for 28 years, largely thanks to the Government’s self-inflicted chaos. Rather than talking about the previous Government’s faults, which I assume we on this side of the House all agree we are responsible for, I gently suggest that the Minister focuses on what he is responsible for, which is the current state of the economy and where we go from here.

That brings me to the gracious Speech. As a number of my noble friends have said, including my noble friend Lady Penn and, of course, the noble Lord, Lord Robertson, a recurrent theme is the Government’s wish to strengthen our security and resilience. It is an aim we can all agree on. However, the question as regards the economy is, how do we achieve it? The Chancellor has a special word for it: securonomics. In her view, state intervention, regulation and spending more on welfare and the NHS all build economic resilience, and with that resilience comes growth. But as a number of my noble friends have said, especially my noble friend Lady Finn in her excellent opening, evidence suggests that securonomics is delivering completely the reverse: lethargic growth, higher debt and an economy more vulnerable to shocks.

Just consider a few facts. Between 2024-25 and 2029-30, welfare spending will rise by £75 billion to £389 billion. Debt will rise, and with it debt interest spending: from £105 billion in 2024-25, it will hit £134 billion by 2029-30. As the Chancellor likes to remind us, £1 in every £10 the public sector now spends goes on debt interest. That is four times what we spend on nurses. As the noble Lord, Lord Robertson, just pointed out, at a time when war is raging in Europe and there is a stand-off in the Middle East, this makes it even more difficult to increase defence spending. The rise in welfare spending this year alone would be enough to pay for 15 Royal Navy frigates.

So what is securonomics doing? It is making us less secure, both in terms of our economy and our national security. I know the Minister will try to dispute all this when he sums up. He will, I am sure, point to the so-called regulating for growth Bill. I absolutely welcome any measures to ease regulatory burdens on business, and I particularly welcome the concept of strengthening the growth duty. We absolutely have to fundamentally rebalance our risk appetite in this country—we have to encourage more risk-taking, innovation and enterprise—but surely, if the Government were really on the side of businesses and helping get regulations off their back, they would not have implemented the Employment Rights Act, which will increase costs by £5 billion a year, not to mention hitting employers with national insurance. Maybe the Minister can square the circle when he sums up.

Then there is the so-called reset in relations with the EU, which the Chancellor views as

“a strategic imperative for deeper integration between the UK and the EU—in our shared need for greater economic resilience”.

This argument assumes that the EU economy is becoming more resilient and more competitive, and that closer alignment to the EU will, in turn, benefit Britain.

However, as my noble friend Lady Finn pointed out—I want to dwell on this—what is happening in Europe suggests otherwise. Some 18 months ago, in the landmark report that the noble Lord, Lord Liddle, referred to, Mario Draghi warned that Europe would need “to change radically” to meet the economic challenges it faces. But instead of radicalism, many in Europe are concerned that the EU is sinking ever deeper into the economic mire. Why? Its institutions, its culture and the very nature of being a rules-based system means that it is finding it very hard to find a regulatory reverse gear.

At the weekend, the CEO of one of the world’s biggest banks, UBS, pointed to the EU’s record of “no growth” and a “clear divergence” in productivity compared with rival economic powers. This is what he said:

“If it would be over-regulation only in banking, one could probably live with it. We have over-regulation across the board. That’s the real problem. The amount of bureaucracy, the lack of innovation that goes on is a fact”.


Now hear what the CEO of Germany’s BASF, the world’s largest chemical producer, said:

“Europe is losing industrial capacity at a speed we have never seen before. This is … a structural”


trend in “competitiveness”.

Noble Lords may think that this is big business whingeing, but hear this:

“We are on the brink of an existential crisis”.


That was the Prime Minister of Belgium speaking about European competitiveness in February. Then there is this:

“we lack appetite for risk … we are out of step with a shifting world … we are over-regulating”.

That is President Macron. Then there is this:

“The single market was once created to form the most competitive economic area in the world, but instead, we have become the world champion of over-regulation … we must now put a stick in the wheels of this machine in Brussels to put an end to this constant regulation from the European Union’s legislative machine”.


That was Chancellor Merz.

Despite the tough talk from Berlin and Paris, this has yet to yield any results in Brussels. Efforts to make Europe more competitive, productive and innovative are, to put it mildly, spluttering. Before we even get to the price the Government are willing to pay to forge closer relations with Europe, the Minister needs to answer this question: given that the EU’s leaders lament Europe’s lack of competitiveness and growth, and seem unable themselves to do anything about it, why would closer alignment of our economy with the EU benefit the UK, and why would it help build British economic resilience?

This gracious Speech is the latest scene in the tragedy of this Labour Government. When the Government came to office, the Economic Affairs Committee—which the noble Lord, Lord Burns, sat on and which I chaired at the time—warned that tough decisions needed to be taken in that Parliament to put the UK’s finances back on a sustainable path. The Government were given a massive majority to take those tough decisions. But they made the wrong tough decisions, because they believe that economic growth comes from regulation, the state and Whitehall. They are a Government who refuse to confront the brutal reality that we are spending and taxing too much. They believe that we can afford more welfare and less wealth creation. They think that more and more regulation will increase economic security, whereas it increases costs, crushes job creation and makes inflation stickier, which in turn keeps the cost of borrowing high. The Labour Party may change it leader, but it will not change any of these beliefs, so this tragedy will continue.

This gracious Speech will do little to stop our country becoming weaker, more vulnerable, less resilient and less secure—the very opposite of what the Government and all of us want.