King’s Speech

Lord Fuller Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Fuller (Con)]

My Lords, since July 2024 the wheel has fallen off our economy. Tax revenues and growth have fallen, and as a result of choices that Labour has made. The consequences have blighted lives and made us more vulnerable to external shocks. Living standards have stopped improving, while we are less secure at home. While government spokesmen line up to blame Donald Trump, Brexit, the Tories, climate change, farmers, bankers, billionaires—everybody—last week the public pinned the tail on the donkey. They know who is to blame, and Labour must now grasp that it is nobody else’s fault but its own. Blaming everybody else for the way in which our neighbours are faring less worse than ourselves is not a strategy; it is a delusion.

The gracious Speech spoke about the cost of living, but renters’ rights have hiked rents to new highs and reduced supply so that the few with impaired credit or difficult circumstances will not get a roof over their head. The Government signal their intention to stop the scourge of a whole generation sitting idle, but the truth is that their Employment Rights Act prevents youngsters getting their first Saturday job or employers taking a chance on a graduate making a start on their career.

Everybody wants to do more for the high street, but Labour’s business rates reforms have driven high street clubs and restaurants to oblivion, and now new tourism taxes will reduce demand for hospitality for an industry that is already on its knees. No, Donald Trump or Brexit has not done this; at every step, well-meaning, honest intentions have made things worse. That is because, for all the worthy measures announced yesterday, Labour’s basic ignorance of economics is the golden thread that stitches together one policy disaster with another.

Working people who pay their taxes become disproportionately poorer. Unemployment is at a five-year high. Inflation is showing all the signs of running out of control. Gilts are at 20-year highs. Labour’s choices have caused this. Labour told us it would tread more lightly on our lives in pursuance of the economic growth that would make us richer. Now we look forward to more state intervention, market distortions and counterproductive interferences that chill investment, raise uncertainty and make Britain less attractive to do the business that pays for the state.

The Government should be supported in their desire to help people upskill but, like the worst sort of apprentice, Labour is not learning on the job. There is continued denialism around the Laffer curve and tax yields. Some 0.1% of taxpayers pay 10% of all the tax raised, while 10% of taxpayers contribute nearly a third of state revenues. It would be rational to tempt more of them to set up here so that working people bear less of the taxation burden. Instead, they are chased away. It is just crazy.

Worse, Labour has chosen a casual disregard for the deindustrialisation that flows from the highest energy taxes, a cost borne by our factories and chemical industries, all of which makes us more reliant on strangers and makes the promise of AI investment a pipe dream. We have seen a class war on private schools that costs more than it saves, attacks on the farmers who feed us, attacks on country sports followers who keep those country pubs going in the winter, and the cancellation of drivers of twin-cab trucks who get up in the morning to work for us all. Labour has not got the message on the cost of living, with new fertiliser taxes that will increase the prices of bread, beer, biscuits and the weekly shop, unleashing an inflation disaster, just at the moment the EU is stepping back from these fertiliser taxes.

All these simplistic ideas have been introduced without concerns for the second-order consequences of economic reality or fiscal responsibility. Everything in the gracious Speech is grounded in ignorance of how business and trade generate wealth for us. Now we get to the hub of the matter. Honestly held views do not trump economic realities. Wishful thinking is admirable. It is not a crime, but it is no substitute for proper economic understanding. The trouble is that the Labour Benches do not know the difference between the profit and loss and the balance sheet, between income and capital or between assets and revenue. To them, “It’s just money, and we’ll have that”. This financial ignorance—especially in the other place—and the economic illiteracy of the Front Bench are tragic.

Quite simply, they do not understand the economics. They may not like it, but not believing in the bond market that channels the kindness of strangers to our shores and enables us to pay for our pensions, defence and education—denial of that simple truth—is ignorance. I only wish that His Majesty had announced a measure that would enforce mandatory economic lessons for the Front-Benchers. I live in hope. Then we would not see ourselves being hog-tied to the EU, which wants to erect a high tariff wall to keep everybody else out, one in which we do not even have a say ourselves. Protectionism will not make us richer or grow our economy in a month of Sundays.

Who knew that if you made it more expensive to hire youngsters, youth unemployment would rise? Who knew that if you taxed family businesses that employ millions and whose assets have been grown in trust for the next generation, fresh investment will collapse? What about the effect of new, unadvertised changes to charitable legacies? They will decimate gifts in wills to good causes—a direct harm to those who Labour professes to represent.

I turn to the gracious Speech. The idea of shaping markets sounds attractive to the untrained ear, but the state has a poor record of picking winners. An active state sounds like introducing more risks and distortions that harm investment and damage growth. When the Government talk to business about partnerships, it is time to reach for your pocketbook. Governing is much more than the pursuit of petty grievances, pet projects and sixth-form obsessions. At some point, the penny needs to drop that the people who pay their taxes are tired of being milked. Creating 300 Civil Service jobs at the GB Energy quango in Aberdeen is less important than protecting the 1,000 jobs a month in the granite city that are disappearing. Placing a carpet of solar panels on our best and most versatile land makes our grid structurally unstable and damages our food security. The callous hounding of former soldiers in their twilight years harms our defences. All the breakfast clubs in the world are not going to repair the problems that Labour has created for itself.

The gracious Speech was an opportunity to weave an economic golden thread through a Government in a hurry, to provide the right incentives for those who just want to work hard and improve their lot while rolling out the red carpet for those around the world who will co-invest in our future and contribute their taxes along the way. In so doing they would provide the fiscal headroom to pay for some of the initiatives in that speech—reducing humanitarian need, building social housing, revisiting Hillsborough, fighting extremism and imposing ID cards. Those are their choices. But without a complete understanding of what makes the economy tick, without appreciating the power of incentives, without understanding that unleashing the creativity, innovation and optimism of the British people will make us richer in every sense of the word, the Government are doomed to fail.

We get to the dénouement. With the resignation of the Health Secretary and media reports of the Cabinet marching on Downing Street, I ask the Minister whether the Labour Party would be better off spending the next six months going on mandatory economics training rather than fighting each other in a way that makes our nation poorer while making the gracious Speech and this debate irrelevant.