Middle East: Economic Update

Lord Eatwell Excerpts

Thursday 26th March 2026 Lords Chamber

[Lord Livermore (Lab)]

I agree with every word that the noble Lord said. We will ensure that North Sea oil and gas play an important role in our economy for years to come. Last week, the Chancellor met with North Sea industry leaders to discuss their role in jobs, investment, growth and energy supply. As the noble Lord and I have said, and I agree with him, we are investing in renewables at the same time. We are lifting the ban on onshore wind and streamlining grid connections. We ran the biggest ever floating offshore wind auction last year and have brought forward the next renewables auction to this July, and we are driving forward negotiations on the UK’s participation in the EU internal electricity market.

[Lord Eatwell (Lab)]

My Lords—

[Lord Bridges of Headley (Con)]

My Lords—

[Lord in Waiting/Government Whip (Lord Lemos) (Lab)]

We will take Labour next.

[Lord Eatwell (Lab)]

My Lords, could the Minister confirm the number in the OBR report which accompanied the Spring Statement that public sector real investment will increase by 12% this year? Could he explain to what degree that 12% is repairing the damage done by the previous Administration and increasing productivity for the future?

[Lord Livermore (Lab)]

I am grateful to my noble friend for bringing this to the House’s attention. I absolutely agree with what he said and am happy to confirm the figure that he set out. As he knows and we all know, investment was a particular failure of the previous Government over the last 14 years. When we won the election, private sector investment was the lowest in the G7. Public sector investment was no better and was set to fall again, from 2.5% to 1.7% of GDP. We have increased capital investment by £120 billion over this Parliament, ruling out a return to the austerity of the past. As my noble friend said, that is incredibly important for increasing growth and productivity in the economy.

The OBR has estimated that the eventual growth impact of this increase in capital investment will add 1.4% to GDP. Cutting this now and returning to austerity would be the worst thing that we could do for growth and the very definition of short-termism, yet that is precisely what previous Chancellors with previous fiscal rules have done. In the years following the financial crisis, austerity took demand out of the economy when it was most needed, undermining investment in critical infrastructure, weakening productivity and choking off growth. We will not repeat the mistakes of the past.