Autumn Budget 2024

Lord Davies of Brixton Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Davies of Brixton (Lab)]

I thank the noble Lord, Lord Booth-Smith, for his maiden speech; I welcome him to the House, and I am sure he will be an asset. I also thank my noble friend Lord Livermore for his comprehensive report to this House on the contents of the Budget, as is entirely appropriate.

There is much that is good in the Budget. My noble friend Lady Crawley identified and summarised the good things in it, so I hope I will be forgiven for mentioning my major point of concern, which is the promise, made by the Chancellor in introducing the Budget, to make welfare spending more affordable. That causes me considerable concern. Of course, we will not know the details until we get the “Get Britain Working” White Paper, and I wonder whether my noble friend is able to provide us with a date. Perhaps the White Paper has been delayed because the Government are trying to learn lessons from the winter fuel payment problems. There are lessons there that I hope they have drawn.

There were two specific references in the Chancellor’s speech that caused me particular concern. When we talk about a crackdown on fraud, as she did, we have to ensure that it is done in a way that does not create collateral damage for people who are fully entitled to the benefits. The problem with crackdowns is that they can affect innocent bystanders unless massive efforts are made to ensure that does not happen. I hope my noble friend will be able to assure us that everything will be done to avoid the downside of crackdowns.

I have a particular concern, and we debated this in the last Parliament, about direct access to bank accounts. The Government seem to be stressing the influence of criminal gangs. My guess is that you cannot access the bank accounts of criminal gangs. Accessing bank accounts without probable cause seems a growth of the power of the Government. Again, if that is introduced in legislation, it needs to be done with considerable care.

I am very pleased with what the Budget said about pensions, which was very little. Pensions are an area where stability is essential because people are making long-term plans, so I am glad that the number of changes in the area of pensions was limited.

The changes to the Mineworkers’ Pension Scheme were very welcome. I need to say here that I was the actuarial advisor to the National Union of Mineworkers at one stage so I am familiar with the issues here. The mineworkers fully deserve what they are now being given.

The major change affecting pensions was charging inheritance tax on unused pension. Unused pension is a new concept. If you accumulate a pension fund and it has not been used in order to provide you or your dependants with an income, from 2027 that will form part of your estate and be subject to inheritance tax. I think that is entirely reasonable. I welcome the change. The money was put in the pension fund tax free and it seems eminently reasonable that, when the money is taken out, it should be subject to tax. Pension funds are for the purpose of providing pensions; they are not for the purpose of inheritance tax planning or tax avoidance.

We have a technical consultation going on that raises particular issues. I have some concerns that the proposals in the document go beyond technical issues and raise issues of principle. Of course, anyone who has dealt with a will knows that the problems of probate are profound and, when you put pensions into that mix, it is going to create considerable difficulties. I hope these issues will come out in the consultation.