Budget Statement

Coming to the Budget itself, the most notable thing about yesterday’s Budget and indeed the surrounding context in which it was delivered was how many sources and authorities have been so spectacularly wrong about the inflation rate, its real causes and the course it is taking. There is the good old Bank of England: hopelessly wrong initially about how and when it would rise—they got it a year out of date—giving a wild underestimate of the pace at which it would accelerate, and wrong, I suspect, about the pace at which it now comes down. Then there were Goldman Sachs economists going on last August about 18% to 22% inflation in 2023—miles out and really quite silly. Then there were the eager monetarist theorists, determined to prove that it was all domestically caused, ignoring the real causes from the energy side. They said it was mostly caused by quantitative easing, which I agree may have played a part, but not the main part, and all demanded higher interest rates to defeat it. And there were armies of both commentators and high officials telling us that high inflation was here to stay, that recession was inevitable and was the only answer. Now, of course, they are all busily revising their inflation figures for the second half of this year.

One can laugh a little, but the damage has been done. These inaccuracies were not harmless. On the contrary, they caused great harm in two respects. First, they led to wrong remedies being applied then, because the real sources of inflation were not understood or were ignored. It was a very different kind of inflation from that which we have dealt with in the past. Secondly, because they sounded unnecessary alarm bells, they gave militant union leaders great opportunities to set their members marching and revive outdated class war rhetoric—an opportunity which Mick Lynch and his like have eagerly seized—and frightened millions of people about even bigger real wage cuts than they are facing already. No one seemed willing to face the obvious: that the sources were overwhelmingly external and lay in soaring gas and oil prices, both long before and during the Ukraine invasion and Russian obduracy. No one seemed to concentrate on the obvious central solution, which was, and still is, short-term world production of more gas and oil.

I admit that it is always difficult for Governments and officials to say that they have been blown off course by foreign factors. Jim Callaghan, who in my view was one of our best Prime Ministers, tried that, and I agree that we on the Tory side gave him no mercy and allowed no excuses. However, being predictably blamed by the Opposition—that is their role and they will always do it—was and is no excuse for not appreciating and tackling the real root causes of our problems, or for failing to realise that in oil and gas markets, and indeed in energy markets worldwide, what goes up always comes down quickly, whatever the circumstances, and always has, in past oil shocks and in this one too. I remind the House that I was very involved in some of the oil shocks of the last century.

The adjustment to the Russian cut-off and the nastiness since its lawless invasion was bound to be initially painful but has more or less been corrected with full storage tanks—for those who have storage—throughout Europe, plenty of shale gas in America, careful conservation and now the prospect of much more production from all sorts of places around the world. Indeed, the OPEC leaders, after initially being thoroughly unhelpful to consumer nations in the West, are now planning to expand future oil and gas investment unchecked.

The background of global energy transition is of course in the wings all the time, with a steady but very gradual long-term decline in world fossil-fuel demand. However, only fools imagine that we can take undertake the greatest shift in the pattern of world industry of all time in just a few years when it is bound to take decades, and when getting supply out of sync with world demand—incidentally, fossil fuels are still 82% of all energy needs, not just power—guarantees massive volatility, major suffering and political upheaval and reaction, as we have now in this country and in many others.

The missing piece in our national recovery strategy, in both the inflation fight and in our budgetary calculations all along, has been, first, the external side—the role of foreign policy and not enough clever diplomacy in diffusing these vast external measures—and, secondly, the absolute failure to convey into the public mind and debate the acute and continuing seriousness of the situation that we and all like-minded countries now face. Instead of trying to fight every individual grievance and demand, what has been missing overall is a sober and informed reminder of the fact that everyone, for the moment, will have to face hardship. It is the timing of all these widespread demands for real wage repair that is so miserable and unfortunate. Speech after speech, including, I am afraid, from some in this Chamber, demand more for this and more for that, yet this is a time when we have to prepare for more resource to go on what we have already.

If that sounds gloomy, it is, because it is the reality. It is not quite 1940 and we are certainly not under direct attack, but we are, equally certainly, on the edge of a major war, with a mad—actually perhaps he is not mad, but certainly threatening—Putin in Moscow talking about nuclear use against us, and with us still in the recovery ward after the largest pandemic in world history, which it was by far in population terms, and from the impact of the Ukraine horror itself, including a substantial rundown of our entire armoury to help the gallant Ukrainians. There is no end in sight for that, and an invasion of Taiwan is likely just ahead on the horizon. In essence, we are on a war footing, as the noble Lord, Lord Skidelsky, has repeatedly warned this House.

In these circumstances, the message should simply have been that, while inflation is coming down as fast as it went up, there has to be a timeframe for recovery. It should have been clearly and repeatedly explained that, in due course, much better pay for nurses is entirely desirable and the same goes for doctors, junior and senior, ambulance teams and the rest. There is even no objection to train drivers being enriched—although I personally think that bus drivers do a much tougher job—nor young barristers, physiotherapists nor anyone else, nor to ensuring really good and safe pensions for all of them.

However, and this is the core of it, those better conditions that we all want to see must wait for the duration—“the duration” is a phrase that was used during the Second World War. We will and can recover and find the resources to make good for all who deserve it, just as Beveridge in the last, darkest days of the Second World War said we could do, but not yet.

One-off payments for one-year awards, which are being talked about, may be justified in some cases, but only just. We may even come to our senses in all parties that may form a Government and make sure that modern capitalism works for all, and that millions of earners become owners en masse, with the dignity and security of capital to support every family. Meanwhile, for the duration, as in the darker times of war in the past, there are going to be difficulties and problems all around. I would have liked to have seen much more emphasis on that central message in the Budget—indeed, in all the statements by Ministers and opposition leaders as well—than I can detect, because that is the honest truth.

As for more investment, which is of course the key to our future strength and living standards, and to our fully generous support for the weakest in our society, I obviously hope that the Budget measures will enable more growth, investment and innovation. Perhaps the capital allowances will help. One sort of investment we could do without but which, regrettably, the Government seem poised to make is for another large-scale nuclear reactor at Sizewell in Suffolk, based on a replica design called EPR which has an utterly miserable provenance and a dud history. The official estimate for Sizewell is £20 billion, with readiness in about 2035; it is much more likely to be £30 billion and several years after that. Smaller, new-technology reactor sets, which were mentioned in the Budget, could be in place much sooner and with private instead of public money. That is the nuclear way forward, as my noble friend Lady Moyo mentioned in her maiden speech.

That colossal new expenditure, almost secretly sliding through, should be for future debate—very soon and, I hope, in this House. In the meantime, let it be explained honestly, openly and repeatedly to all the most deserving, to the strikers inflicting present misery and smashing the rights of others, and to the millions still suffering from crippling cost of living pressures that rewards and better days will come—but not, as most of the nation in past times understood intuitively, for the duration of the present world crisis that we are in and must, as a priority, overcome.

I turn to pension tax allowances. First, I welcome the decision on the aggregation of pension input amounts where employees belong to more than one scheme for the same employment. While it looks like a technical issue, and is not mentioned specifically in the Chancellor’s speech, it is one of the most significant decisions and truly to be welcomed. It is an issue I have raised several times in this House and at a meeting with the Minister for Health, so I am pleased that what seemed obvious has at last been accepted by the Government. Other Members were involved, of course, not least the noble Baroness, Lady Altmann, but I also need to mention that it was an issue of importance to the late and sadly missed Lady Masham.

I do not agree so much with the proposed abolition of the lifetime allowance. I need to mention that I have an interest in the matter, in that I could benefit from the change, but I still think it is wrong, particularly in current circumstances. Clearly, there is a crisis in the NHS—the shortage of doctors—that requires urgent action. It has been widely acknowledged, not least by the Chancellor himself as chair of the Health and Social Care Select Committee, that pensions tax was one of the factors involved and that action is required, but a more targeted approach would be better than the blunderbuss adopted by the Chancellor. I believe that the most immediate problems around retaining doctors in the NHS arise from the annual allowance, not from the lifetime allowance, so to deal with the undoubted problems, it would be better to spend money on reducing the impact of the former rather than the latter and target the problems of the NHS specifically.

Pensions taxation is a complex mess that needs thorough review. We continue to suffer from one-off decisions that increase complexity and unfairness. The Chancellor based the argument for change in the lifetime allowance on the concerns of many senior NHS clinicians, but he went on to say that he realised the issue goes wider than doctors. That was echoed by the Minister in her introduction, but in his interview this morning on the “Today” programme, the Chancellor referred only to doctors. What we do not know from the figures from the Treasury or from the OBR is how many of those being helped by this change are doctors, and how much of the resources being employed to facilitate the change are going specifically to doctors as opposed to other parts of the public service. I accept that doctors are a priority—that is clear—but the point is that it is for not the sake of the doctors but for the sake of people on the waiting lists.

The noble Lord, Lord Willetts, said we could not have a special one-off for the doctors. I am afraid that that is clearly not correct. There is already a special one-off for the judges. We passed an Act last year creating a scheme specifically for the judges that addressed exactly the same problem. I explained this in debates and was told, “There will not be any more special cases”. Well, I think doctors are a special case here, and a more targeted approach could have been adopted. Can the Minister tell us who else will benefit from the change, and why, in the current context, they represent such a priority to spend such an enormous amount of money? How much of the total cost will go to other groups of employees?

There are other more technical points that need to be clarified. Looking at the impact of abolishing the lifetime allowance, the OBR flagged this as a major uncertainty, both in relation to the cost and the numbers involved. Commentators, not least the coalition Government’s long-serving Pensions Minister, have cast considerable doubt on whether this change will actually achieve the stated objective of keeping people at work. On the other hand, I have no doubt that changing the annual allowance will have a direct impact in terms of keeping doctors working.

What research has been undertaken to ascertain the impact of the changes to the tax credits? It is worth noting that, of the total cost over the next five years, £2 billion is being spent on abolishing the lifetime allowance and only £1 billion on adjusting the annual allowance, but to my certain knowledge it is the annual allowance which is the focus of the particular problems that people face.

There are also practical issues. What about those who have agreed to retire over the next three weeks? The change will not come into effect until 6 April, so can they reverse their decision? Those who have retired over the past few years—while the Government were refusing to acknowledge the problem—will have a justified sense of grievance at having paid a substantial amount of tax that the Government now declare they should not really have paid.

Finally, on a slightly more positive note, I welcome the first step in limiting the generosity, and I use the word advisedly, of the

“anomalous but much-loved tax-free lump sum”—[Official Report, Commons, 19/3/85; col. 791.]

the words of Nigel Lawson back in 1985.

What is it like today? What is the state of that separation today? The fact is that it has been fatally undermined. The Bank of England has been stoking up inflation when it was set up to do the exact opposite. It has been given a green mandate that conflicts with its inflation mandate, and no one knows exactly what the relationship is between fiscal and monetary policy. It has become hopelessly fuzzy, as we found out on the Economic Affairs Committee when we interviewed the Governor of the Bank of England. The whole relationship is shrouded in fictions that no one is meant to penetrate. That is not the basis for giving confidence in macroeconomic policy. In fact, the confidence has been withheld.

“Our plan is working”, said the Chancellor. What plan? To reduce inflation? To get growth? To reduce the inactivity rate? To achieve energy security? He must realise that any improvements that have been recorded since he became Chancellor, or in the last two or three months, are not due to anything the Treasury has done but result from what has been going on in the world economy. There have been beneficial developments, particularly what has happened to energy prices.

A remarkable thing about Budget making today is what it says about markets, media and policy networks. If you analyse it, you will find that there is actually very little difference between the Truss-Kwarteng and the Sunak-Hunt Budgets; the first just came at slightly the wrong time, that is all. Now, things have got a bit better. These are Budgets that depend on five-year forecasts; you cannot say that the difference of a month or two in the presentation of a Budget should have caused such panic in the market—unless, of course, no one had any real confidence in the long-term forecasts on which the Budgets were made.

At one time, there were things called “Budget leaks”. You were not meant to reveal what was in the Budget. In fact, the Chancellor of the Exchequer in 1947 resigned because of a Budget leak. Now, Budget leaks are routine; they are sort of trailers in which the Treasury lays out what it is going to do. What about the opportunities for speculation, for example, that that might give rise to? No one thinks about that any more. You have to make the newspaper headlines.

The Chancellor might have taken advantage in his Budget to display the beginnings of a coherent framework. There is one such framework—it is a very old model; no one knows about it any longer—called the balanced budget multiplier. That approach underpins the Biden Administration’s $738 billion Inflation Reduction Act, which was passed into law last year; I do not think that the Chancellor referred to it in his speech. It is based on an intelligent combination of extra investment and higher social spending to be paid for by higher taxes on the rich and the very rich. Split roughly half and half between tax and spending increases, the combined effect is forecast to secure—again, one has to make the point that it is a forecast—a cumulative reduction in the federal fiscal deficit of about $300 billion over five years. It may not happen—it probably will not—but at least there is a mechanism in it which suggests that it could happen. What we do not have in the present enthusiasm for the policy working is any mechanism or theory which gives you confidence that what the Chancellor is doing will achieve what he wants it to do.

I will make two final points—I am sorry that I have gone on a bit—about where we are in the cycle. It is very difficult to assess what is happening in the labour market; the noble Lord, Lord Bridges, talked about this. On the one hand, we have a very high inactivity rate of about 7 million altogether, which is usually connected with a slack labour market. On the other hand, we have unemployment very low at 3.7% and lots of job vacancies, which would suggest a tight labour market. What is the explanation of that puzzle? The truth, I think, is that headline unemployment figures no longer accurately measure the capacity utilisation of an economy; I think that that has been true for some time, but it has been brought to the forefront recently. A shortage of supply in some areas is combined with a general deficiency of demand in the economy. We would expect the latter to be the case, given that the economy has not grown for three years while the population has grown by 1 million and real wages have fallen substantially. Therefore, we would expect a deficiency of aggregate demand, even though there are pockets of shortage of supply. The Budget might have addressed its attention to that.

I wish that the Chancellor had argued in favour of job creation, rather than incentives to people to apply for jobs that do not exist. Gordon Brown and I, two years ago, argued for a public sector job guarantee scheme, which I still think would act as a kind of buffer stock of employment which would oscillate with the oscillations of the cycle. I am sorry that it was not adopted; it would have been—and still would be—a good method of job creation today that would also tie in with the devolution strategy.

My last point is about securing the long-term growth of the economy. Of course, I welcome the incentives that the Chancellor has provided for investment—the creation of 12 new investment zones modelled on becoming potential Canary Wharfs—but I wish he had given a bit more attention to two British institutions for investment, which I do not think that he mentioned: the UK Infrastructure Bank and the British Business Bank, both of which could be developed. As the noble Lord, Lord Eatwell, said, we know that investment has been a problem in the British economy for a long time. We also know that the share of public investment in total investment has dropped dramatically, and it has not been compensated by any increase in private investment. Here is a good opportunity to insert the state into the long-term recovery of the economy and to provide for the energy and security autonomy, which is the aim of the Government and us all.

In short, there are quite a few interesting initiatives, but I do not think that they have been properly joined-up, and we still await a commanding framework for action in a world that is spinning out of control.

There are three reasons why I am excited about the Budget. First, it is a Budget for growth. Never again can people accuse the Prime Minister or the Chancellor of not having some framework for growth. In his speech, the Chancellor said this sentence which I think is very important:

“Not just the growth that comes when you emerge from a downturn, but long-term, sustainable, healthy growth”.—[Official Report, Commons, 15/3/23; col. 833.]

As you look back over the last 50 years in the UK, you see exactly that emergence from a recession, then you have a period of growth but it blows up. That is exactly what happened in the Barber boom in the early 1970s. It happened with Denis Healey in the mid-1970s. It actually happened with Nigel Lawson in the late 1990s, when inflation had got down to 3% after Geoffrey Howe’s tough Budget. When the Prime Minister at the time left government in 1990, the rate of inflation was 9%.

I do not want to go through the litany of things in this Budget—full expensing, new investment zones, nuclear energy, pharma and so on—but I would like to mention, which others have referred to, that getting the over-50s and people suffering from disability and long-term sickness back into work is very important.

One issue I have a slight problem with is childcare. I believe in childcare—we used it when our children were very small—but my noble friend Lord Willetts, for example, referred to these measures as radical. When I listened to the Budget speech, I thought to myself, “Do I want my great-grandchildren to be away from their home and parents from eight o’clock in the morning till 6 o’clock every day, five days a week?” I recognise that there is a demand for it, but the sheer scale of what is being introduced needs thought and debate before we rush headlong into it.

To meet the objection that the noble Lord, Lord Eatwell, made in a powerful speech, there is the embryo of a medium-term financial strategy here.

My second point is about something absolutely crucial that the Chancellor said in his speech and has said on a number of occasions. He is committed to reducing inflation to 2% a year. We know from the cost of living crisis the damage inflation does, especially to the most vulnerable in our society, who have the fewest options when their standard of living is threatened. We have heard of the problems for business—the uncertainty it creates over cost and pricing power; over what the central bank or the Government will do; over what will happen to wages, given the strikes—the resulting distrust in society and, in turn, the social conflict.

Some quite respected academics and commentators have proposed to raise the rate of inflation from 2% to 4%—which, in my judgment, would be a disaster, because as inflation rises so volatility and instability rise with it—or to move from an inflation target to money income because that gives you greater flexibility. Indeed, Andy Haldane has proposed to drop the target completely, as far as I can see. Reducing inflation, with a fixed target of 2%, is actually the bedrock of policy and is very important. One should add that inflation is actually a tax. Therefore, reducing the rate of inflation reduces tax, and this could be considered a tax-cutting Budget. The Chancellor never referred to it as such, but inflation is an onerous tax. It taxes not only people with money holdings but savings and pensioners in the private sector.

Thirdly, I support the Budget but I was always impressed by a maxim that President Reagan used to use when dealing with the Soviets: trust but verify. I raise this issue not because I do not trust the OBR but simply because I am ignorant of exactly what is happening. As I read this Budget, and having listened to the speech and so on, it is intimately bound up with and depends critically on the OBR’s numbers. But we know that OBR forecasts have not worked out. It has made mistakes, some of them pretty bad. What kind of model did it use in arriving at the numbers it generated? Was it the new Keynesian model which others were using, and who predicted that inflation was simply transitory? What about the unforeseen events—pandemics, wars, financial instability—which the noble Lord, Lord O’Neill, referred to? We had our own problems with the LDC and the pension funds, some time ago. At least two significant cryptocurrency operations in the States have gone, as has Silicon Valley Bank. Credit Suisse has had its problems for a long time in terms of compliance and so on, but one gets the feeling that more credit is being expended in the international financial system than one is happy with.

Yet the OBR is very confident. Inflation last October was 11%; it is coming down, in the last quarter of this year, to 2.9%. There is no recession in the UK and unemployment will rise only sightly, to less than 150,000. We need to be able to shed more light on this, and I hope we can do that as the discussion goes on.

I started by saying that I really do have confidence in the Chancellor, and I am sure he is a person of prudence. Frankly, I congratulate him on a good Budget in difficult circumstances, and I hope it will be the first of many.

On housing, we clearly need more owner-occupancy, but we also need many more properties for rent. The rental situation, particularly for young people trying to find accommodation at a reasonable price, is a nightmare. Landlords are selling up and the stock of rental accommodation is drying up. In my view, the Government should act. They could easily reverse the disallowance of interest on landlords’ borrowings. They could abolish the extra stamp duty and perhaps even reduce capital gains tax on disposal of rental properties. If they wanted to, they could transform the rental market.

Tourism and hospitality—I declare an interest as the president of the Association of Leading Visitor Attractions; I was chairman for 30 years—is a major employer at all skill levels. It is probably the number one private sector industry in more parliamentary constituencies than any other single industry. Virtually every business in tourism and hospitality is experiencing recruitment problems. Vacancies are something like 9% nationally and 15% in London. The industry has been heavily hit by Brexit and I believe we have to and should allow more immigration in this area.

Tax-free shopping should also be reintroduced, where visitors can reclaim VAT. High-spending tourists are now deserting the United Kingdom and heading to France, Italy and Germany. Some 70% of tax-free forms validated at Eurostar Gare du Nord were from non-UK visitors—those shopping in Paris and claiming the tax back before visiting the United Kingdom. A survey of 10,000 Chinese travellers planning to visit Europe showed that only 42% were heading to the United Kingdom, whereas in 2019 over 70% headed here.

On defence, after years of neglect and denial obviously I welcome the increase in defence expenditure to 2.25% and maybe up to 2.5%, but we have to go further. In 1984, let us remember that defence expenditure was something like 5.5% of GDP. The head of the Army, General Sir Patrick Sanders, said very recently that we would struggle to mobilise a division of 10,000 troops if forced to fight a European war. Defence Secretary Wallace said very recently that we have hardly enough pilots to fly the F35s. It is commonly agreed the Army has reduced to far too low a number at 73,000. It is also questionable if we can recruit the 30,000 reservists intended to complement our regular forces.

On welfare, I think it is time we start to query the balance between the benefits we give to the old—I declare an interest as someone in his 81st year—and the young. I get free prescriptions, a free travel pass and of course a pension. Most pensioners have paid off their mortgages, whereas the young are more likely to be struggling to find a deposit for a house and have the costs of children’s clothing and childcare, as we know. Normally they are on fairly modest early salaries. I believe it is time we look again at the balance between young and old in terms of benefits.

Finally, I come to financial education—or indeed, the lack of it—in this country. There is hardly any teaching of budgeting, savings or investment in our schools, and it should be of serious concern to the Government. We have a situation where more young people speculate on cryptocurrency than invest through the stock market or in more traditional forms of investment. The Government should consider setting up—I think this is the first time it has been mentioned—what I would term a financial education fund, which would recruit and fund specialist qualified speakers to go into our schools, for the first time, to make a serious attempt to financially educate our young people.

“as soon as we can responsibly do so.”—[Official Report, Commons, 15/3/23; col. 839.]

In the personal sector, I am equally sure that the Chancellor’s pension and childcare measures are at different ends of the wealth and income spectrum, and are the right way to encourage people to stay in work and to return to work. They will have a more direct and targeted impact on the balance sheets of individuals and families than simply a cut in income tax.

I am a supporter of the Budget. I have just one caveat or warning, which refers to defence—a point made by my noble friend Lord Howell. I very much support the Government’s rhetoric and actions regarding Ukraine and China. However, I worry that our rhetoric is in danger of running ahead of our capacity to deliver. We talk a very good talk, but how many troops, ships and aircraft do we actually have at our disposal? I am delighted that we have helped the Ukrainians as much as we have, but how much do we have left? If we are to continue playing the role that we wish to play, defence is likely to cost more and perhaps a very great deal more, and we all know how that will have to be paid for.

Today’s Budget announcement falls far short of the strong climate action needed. I have to repeat to the Government that, as Greens often say, green growth is an oxymoron. The minute you grow anything, you have to degrow in a different area. Green growth is possible but not if you do not cut somewhere else. Every time we grow the economy, we take a bite out of the planet’s resources—and it is a bite that will not grow back. Whatever this Government do, they seem to be moving in a way that is even more damaging to climate change.

Speaking to the Dutch Parliament recently, Professor Jason Hickel—his book, Less is More, should be compulsory reading for this Government—debunked the concept of green growth, saying:

“Decarbonization with growth is like trying to run down an escalator that is accelerating upwards”—

you are likely to fall on your face. People have to understand that using a tonne of fossil carbon and then trying to replace it with a tonne of new trees does not work. It is not a fair exchange; it is nowhere near compensation for the fossil fuel used. Carbon offsets will not save us from the worst of climate change; they are just something that make people feel good. They are absolutely ineffective and we have got to stop.

The simplest way to solve the problem of climate change is stopping the extraction and burning of fossil fuels. The Government have not even understood that; they are still mad about digging up coal and using oil. It is incredible that after decades of Greens like me telling the Government how to mitigate climate change, they still do not get it—plus, of course, this Chancellor continued the regressive freeze on fuel duty. That shows no grasp of the situation we are in; neither does his tweaking of the pension pot while not paying nurses and doctors. It is unbelievable stupidity. I know that there is now a deal, thank goodness, but why was there not one weeks ago? Why did we have to go through this pain? Why did patients have to go through it? I simply do not understand.

By the way, nuclear is not green. I cannot tell you how many times I have said that in this Chamber. Nuclear power is not green. It is filthy, it is very expensive and it is going to cause us problems in future. It is not green and it is not sustainable.

Our Green Party MP, Caroline Lucas, said in the other place that the Chancellor could have announced a

“wealth tax on the 1% richest people”,

which

“could raise up to £70 billion”—[Official Report, Commons, 15/3/23; col. 864.]

and fund cheaper public transport, more home insulation and public sector pay rises for millions. He did not do that. He put in a measure that will benefit millionaires.

If you are worried about jobs, why not upscale green initiatives—green growth, if you like? For example, clean, green, abundant and affordable renewables are so much quicker, easier and cheaper than nuclear; with onshore and offshore wind, tidal and solar, we could do it and do it quickly. We must remember that growth is not necessarily prosperity; people seem to conflate the two but it is not true.

Green Alliance was very quick off the mark to give us a rapid review of the Spring Budget. It shows that the Chancellor has taken absolutely no steps on the path to a green economy. While the fiscal situation might be improving, the UK’s economy is still forecast to shrink this year, with falling living standards for households being a primary reason. It is not falling living standards for people such as us—we can manage; it is falling living standards for people who cannot even manage at the moment.

There is one tiny thing the Chancellor did right: alcohol duty will rise in line with RPI from 1 August. That might reduce alcohol harm in the UK while raising perhaps crucial public funds, but it is really so minor as to be almost not worth mentioning.

A Green Party economist, Molly Scott Cato, former MEP, said that a green Chancellor would ensure major investment in a green economy. That means meaningful investment in affordable renewables and a nationwide insulation programme. We have had so many complaints about Insulate Britain, the campaign group that caused so much fuss. In fact, we should have said, “You’re absolutely right: we need to insulate Britain. It is cheap, it is fast and it helps people”. This Government got hung up on the group’s campaigns, and now we are seeing the Public Order Bill, and so on, which are trying to stop people protesting again. Just those two measures—insulation and renewables—would help tackle greenhouse gas emissions and mean that people could afford to be warm in their homes. Is that not a kinder thing to do than to cut living standards?

Other measures would include fair pay for public sector workers and 35 hours a week of free childcare for all. I support the Government’s idea of capping bus fares, although it is not in every place. The Greens would put a £1 single fare on all bus routes in England.

It really is time this Government were gone, before they cause yet more damage to us, our society and the reputation of the UK, and before they damage the planet any more than they have already.

This measure goes further. It recognises that swimming pools play an important role in our communities for all ages and all people. Swimming is more than a recreation; it is a key life skill. Physical inactivity is associated with one in six deaths in the UK and is estimated by the Government to cost the UK £7.4 billion annually. Deloitte has published research which shows that improving the level of physical activity in the workforce would benefit the UK economy by up to £17 billion a year.

As pointed out in the report by your Lordships’ National Plan for Sport and Recreation Committee, which was debated on 9 February this year, it is recognised that the time has come to have a radical rethink of financial incentives and health policies, both within and outside the workforce. Members serving on that committee unanimously called for a national plan for sport, health and well-being. It was pointed out that successive Governments over decades have tried to address stagnating activity levels, with disappointing results. Nearly 40% of all adults are active for fewer than 2.5 hours not a day, but a week, which includes walking to work and the shops. It is not surprising that the noble Lord, Lord Willis, who chaired that committee, reflected:

“How is it possible that the UK is world-leading in elite and professional sports, that 3 billion people across the world watch our Premier League matches in over 187 different countries and that … at Olympics after Olympics … we have failed at grass-roots level to get more people from more diverse backgrounds to be more active, despite all the investment that successive Governments have made?”—[Official Report, 2/2/22; col. 1208.]

With schoolchildren facing growing obesity, with PE marginalised in the school curriculum and no longer inspected by Ofsted, with many primary school teachers getting fewer than three hours’ training in a three-year degree course, it is not surprising that physical literacy in most of our primary schools means nothing. With the closing of swimming pools and leisure facilities, tragically we have become one of the most inactive nations in the world.

When looking for solutions, the Chancellor could do worse than turn to New Zealand, whose strength at elite level is celebrated across the globe for a nation of just 5 million people and whose success lies in a strong emphasis on participation and opportunity for all. There is a pathway for all local communities and all people wherever they live in New Zealand to become engaged in sport, health and well-being activities. From that platform, podium success for the elite is delivered because every child is assessed in order to be able to deliver their potential and every community is offered help for health, well-being and physical activity.

However, the chancellor in New Zealand goes further. The country has a well-being budget that brings health, sport and well-being together into one policy framework, delivered to Parliament by its Finance Minister, who happens to be the Deputy Prime Minister. The only way in which that could be delivered here would be to move responsibility for sport and recreation into the Department of Health, as proposed by your Lordships’ committee. Being embedded in the Department of Health, by moving the 25 civil servants responsible for the sector from the DCMS to the centre of government, would enable the Department of Health and Social Care to live up to its name—not a department of treatment but a department taking an important lead in the area of health promotion, with all the benefits that are so needed in this country today.

The evidence is clear. Systemic reforms to taxation, regulation and policy can allow the fitness, sport and leisure sector to play its fullest role in getting the UK workforce moving more and supporting our national productivity. The time for action is now. A National Plan for Sport, Health and Well-being provides an excellent starting point and, like Sir Patrick Vallance’s first published report into the regulation of emerging digital technologies referred to yesterday, the sport, health and well-being report of your Lordships’ House should have all its recommendations accepted in full.

We desperately need changes in departmental responsibility, budgetary support and enlightened policy thinking if we are to address the steady closures of sport and leisure facilities, increasing levels of inactivity and obesity and the consistent, corrosive decline in participation and active lifestyles that we have witnessed since the wonderful hosting of the Olympic and Paralympic Games here in London, now over a decade ago. Helping to save our swimming pools is very welcome, but facing the wider challenges that I have outlined is long overdue.