King’s Speech

Lord Balfe Excerpts

Monday 13th November 2023 Lords Chamber

[Lord Balfe (Con)]

My Lords, it is always a pleasure to follow the noble Lord, Lord Hendy. I think he is misplacing his hope if he thinks the Labour Party is going to do much—but we will let him live in hope. From time to time, I do a bit of lecturing. One of the subjects I lecture on is British politics, and occasionally I point out that the Conservative Party is the most successful party in the world. From time to time it loses elections and then reinvents itself. In the past, of course, everybody has sat there feeling rather smug and thinking, “Yes, we are in government”, but I say to my good and noble friends on the Front Bench, if they still are my friends, that we are soon going to have do a bit of reinvention by the look of things, because the state we are in is somewhat dire.

Part of the problem is quite simply this: there is no longer room for incentive and aspiration among the group of people who create the wealth of Britain. I see my noble friend Lord Callanan sitting there and he knows who I will mention: the huge army of trade unionists who run middle Britain. They are people with degrees who work hard, go to work every day and create the wealth of this country. I am afraid my party still does not seem to have come to terms with the fact that the average trade unionist today is a middle-aged woman with a professional qualification—the days of the old working-class TUC are gone—and these people are leaving the Conservative Party behind because they do not feel that incentive and aspiration are being looked to.

I shall just point out one or two things. If the higher rate tax threshold, 40% at £50,271, had increased with inflation, it would be £55,340. Every year, roughly 1.6 million people move from the lower rate into the 40% rate, and they do not see that as an incentive. Also, people who get to £50,000 find they lose their child benefit. They find they have a tax rate of around 60% between £50,000 and £60,000—but the children still need feeding. I know much is said in this Chamber, rightly, about the plight of the poor; but there is a middle group, which Theresa May characterised as “just managing”. They are just managing, but they are not managing to feel very happy with a Government who do not appear to want to help them earn a bit more money.

I will also give another challenge to the Government: in 2006, George Osborne promised an overhaul of inheritance tax. Our Government—and the Labour Party, for that matter—think, “Oh, not many people pay it; it doesn’t matter”. But there are millions of people in middle-class housing, in middle age, who are looking forward in a grim sort of way to inheriting the wealth of their parents, and we are doing nothing about it. If you want to do something, I say to the Government, “Do it now”—because I do not think Labour will do much.

My final point is that we need a strategy for the public schools. If Labour imposes VAT on public schools, they will not go bankrupt; they will be full of foreign children, as they increasingly are at the moment. We will have another large increase in migration as the children—with their mummies—come over and fill the places, and that will be a cause, again, of great resentment. So I say to both sides of this House, “Think of middle Britain and the people we need to innovate. Think of Harold Wilson and the way that he stirred middle Britain into action. For goodness’ sake, we all love the poor, but let’s start doing something for the wealth creators”.