Lord Harper (Con)

My Lords, it is a great pleasure to speak in this debate. I congratulate my noble friend Lord Elliott on securing it—and it is genuinely a great pleasure to follow my noble friend Lord Young, with whose speech I wholeheartedly agreed. I start by congratulating the Minister on his personal contribution to productivity and the economy. For those noble Lords who do not know, as well as being the Financial Secretary to the Treasury and the Minister for Growth, he has also recently become Labour’s campaign co-ordinator. In such a way, he has taken another job that presumably comes with no pay, so he has increased the productivity of the economy at least a little bit—so I congratulate him. I also congratulate him on his courage because, given that the Chancellor seems to be leaning into the unpopularity of her forthcoming Budget, he must be contemplating the consequences for his other job next year as he tries to raise Labour’s fortunes in Wales, Scotland and across England. I wish him the very best of luck. I wish to set out for noble Lords the list of excuses that we have heard from the Minister and the Chancellor ahead of the Budget for why she is going to break her manifesto commitments, or so it sounds. She said that it was because the OBR had changed its view about productivity—not actual productivity, but its view, coming into line with, I think, most other forecasters. She has blamed Brexit, Donald Trump and the pandemic. We can look at what the public think and whether those excuses are going to wash—and I think probably not. In a recent poll taken by Ipsos MORI and published in the Sunday Times, only 10% of the public think that the productivity of British workers is the problem with the poor state of the economy. Only 29% think that it is Donald Trump’s fault. The outright winner, 59%, think that it is the fault of the Prime Minister and the Chancellor, so they have their work cut out for them in trying to land those arguments. With regard to the key economic statistics, several noble Lords have already mentioned today’s growth figures. We see growth slowing, and many economic forecasts see it getting slower still. At the time of the general election, inflation was at 2%, bang on the Bank of England’s target; it is now 3.8%, almost double. That has a real impact on family finances. Unemployment has risen from 4.4% at the time of the election to 5%, which is the highest since lockdown. That reminds us that every Labour Government has left office with unemployment higher than when they came in. That is a fact that I remember, when I was in the other place, Labour MPs hated being reminded of, and I suspect that Labour Peers do not like being reminded of it, but it none the less remains true. Why might that be? I think that it is because of taxes. At the previous Budget, Labour came up with the fiction—I say that it was a fiction because it was not stood up; the OBR refused to stand it up in interviews or in documents—of a £22 billion black hole. The Chancellor raised taxes by £40 billion but increased spending by £70 billion, so it is not really surprising that it is a problem. She then said that she was not going to raise taxes or borrowing for the rest of the Parliament. She was interviewed by Trevor Phillips and confirmed that for the rest of the Parliament she would keep income tax rates, national insurance rates and VAT rates unchanged. When he challenged her on this, she said that the responsibility for the economy was “on us”. I say to the Chancellor and to the Minister in closing that if he thinks that raising income tax in the Budget—particularly to raise welfare benefits, as the Chancellor indicated in her interview earlier this week—is going to be a winning formula, he will be sorely disappointed. It will be at the cost of the livelihoods and growth opportunities of everyone in the United Kingdom.