King’s Speech

Lord Horam Excerpts

Thursday 14th May 2026 Lords Chamber

[Lord Horam (Con)]

My Lords, before I contribute to this extremely interesting debate, I will pay a small tribute to those who are connoisseurs of these debates, and recognise the late Lord Skidelsky, who died unexpectedly and sadly last month. I felt particularly close to him because, although he was born in Harbin, Manchuria, and I in Preston, Lancashire—rather a long way away—we were both born in the same month in 1939. We both went to Cambridge University in the same period, he to read history and me, economics. Of course, he is most famous—apart from his contribution to this House—for his three-volume history of the life of John Maynard Keynes, the greatest economist in history in my humble, perhaps Cambridge-oriented opinion. I see a certain dissent on this side, but we can disagree about that. But, of course, the noble Lord gained perhaps most joy from his final book on the subject, written with his usual impish humour after the financial problems of 2008, The Return of the Master. He made his last speech from the Cross Benches in our last economic debate, and he enjoined all economists to use less jargon and to speak more directly and simply to the people, so they could understand what this important subject was all about. He will be greatly missed.

On the subject of today’s debate, I think all parties agree that the Government’s fundamental view that economic growth is central, which is what they hoped to achieve when they came in and which all parties hope they will achieve, is absolutely right. The problem is that if you state that then all political common sense and political history clearly indicate that you have to pursue it with single-minded determination. That is the essence of it.

I see the noble Lord, Lord Burns, sitting on the opposite Benches. He was at the very centre of the Treasury when Margaret Thatcher was Prime Minister, and he will recognise that it was not entirely a smooth process. There were many critics of monetarism at the time—the noble Lord, Lord Moynihan, is shaking his head behind me again—but the central fact is that she persisted. There were no U-turns: “The lady’s not for turning”. She carried on despite all the difficulties—I think the noble Lord, Lord Redwood, would agree with me on this—and emerged triumphant to set the basis for 20 or 30 years of sensible economic growth, ending Britain being the disaster of Europe. That is what it requires.

Just to prove my essential British fairness, take the Blair Government. They came in, were handed a much better hand by the Major Government and in all respects realised that they had to assert their own economic competence. What they did, very sensibly, was not to rush in with particular socialist or semi-socialist Bills and so forth but to accept the Conservative spending programme, which they did for two years, and only in the third year did Gordon Brown think that it was sensible to increase national insurance contributions to pay for a big increase in National Health Service funding. That was an entirely sensible and professional political point of view.

This time, on the other hand, the Government rushed in immediately with increases in the National Health Service, workers’ rights pledges, an inheritance tax raise and a gamut of Labour proposals which, in their own terms and on their own grounds, made some sort of sense, but they are all anti-growth and anti-business. Therefore, they could not in any way be reconciled with the Government’s central objective of going for economic growth.

To bring things up to an international level and up to date, look abroad. The social democratic Governments of the world can do things properly by economic growth. Anthony Albanese, the Prime Minister of Australia, sensibly accepted the Liberals’—that is, conservatives’—proposals on immigration, which solved their problems in a way we tried to do over Rwanda but which was ditched by the incoming Labour Government. Building on that, he has cut taxes for middle-class people in Australia on the grounds that this improves incentives, and they really need to get their economy growing. Not only that, he has doubled down on the expansion of oil and gas and fossil fuels in Australia, of which Australia is a big supplier. It is quite clear that a Labour Government somewhere in the world is capable of doing sensible things.

Equally, in Canada, Mark Carney, who leads a Liberal Government, has in fact resiled from a previous proposal to increase capital gains tax in order to improve entrepreneurial skills and encourage entrepreneurship in the Canadian economy and improve its business prospects. He too has doubled down on the exploration of oil and gas in Alberta and elsewhere in Canada.

That is just a sensible thing done by a left-of-centre Government. The sad thing is that we appear to have a left-of-centre Government here who are totally incapable of getting a group of people together—we do not know whether it is the present group or some alternative group—who can do the sensible things that even a social democratic Government could do.

So there we are. The things we need to do are not rocket science. We need to do something about energy pricing. Energy pricing is destroying not only the old industries but the new industries, such as databanks. We need to reduce welfare and link it to work. We need to reduce the size of the Civil Service and look at Civil Service pensions. As the noble Lord, Lord Blunkett, said in an article in the Guardian—I do read the Guardian occasionally, in the Library—we need a massive programme to get employers to take on apprentices at scale, not with the puny, ridiculous scheme that we have had for the last few years under Labour and Conservative. This needs a big improvement.

This country has real potential. Unfortunately, we have a Government who are unable to see that the fundamental thing, to refer to Lord Keynes again, is to release the animal spirits of business. Then we might make some progress.