Autumn Budget 2025

Baroness Morrissey Excerpts

Thursday 4th December 2025 Lords Chamber

[Baroness Morrissey (Con)]

My Lords, my noble friend Lord Kempsell has rightly just spoken about the shambolic orchestration of this Budget and the damage it has done: the erosion of public trust, the damage to business confidence and how it has undermined Britain’s credibility abroad. That is particularly important, because there are two other major issues that I will focus on that have created more of a problem as we try to move on from the Budget.

I hope it is fair to suggest that many Britons have an ambivalent relationship with ambition, certainly compared with Americans, who celebrate success as fulfilling the American dream. There is, sadly, no equivalent British dream, although there have been times when the Government of the day have encouraged aspiration. I was just 13 when Margaret Thatcher became Prime Minister. I attended the local state school—originally a secondary modern—and I longed for a brighter future. The Government’s approach then encouraged me to seek and to seize opportunities: to be a worker, not a shirker. Contributing to society, aiming high, being productive and self-reliant: that is what my husband and I now encourage in our family of nine children—the right reverend Prelate the Bishop of Manchester might be pleased to hear that we are doing our bit for the birth rate.

This Budget sends the opposite message. It says, “Work hard and we will come after the fruits of your labour; succeed and we will penalise you. We will tax your income, your home, your dividends, your pension, your savings, your inheritance and school fees—if you dare to send your children to private school—and we will give that money to those who do not work, including 1 million foreign nationals and 9 million working-age economically inactive British adults”. This is disastrous for the future of our country. The brain drain of the best and the brightest, referred to by my noble friends Lord Elliott of Mickle Fell and Lady Meyer, will only get worse as the ambitious and entrepreneurial leave for countries that do offer, as Margaret Thatcher put it, an

“economic background which enables … private enterprise to flourish for the benefit of the consumer, employee, the pensioner, and society as a whole”.

Without wealth creation, Britain will quickly run out of money: in fact, we already have. We are living far beyond our means. What is more worrying is that we may also quickly run out of road to borrow in order to sustain this. That is my second big concern.

I was a bond fund manager for 15 years, and now chair an endowment fund, as set out in my registered interests. In my view, the risks of investing in gilts far outweigh the potential rewards now. The gilt market is unusual in two important respects. UK Government debt is an average 14 years to maturity, much longer than in other G7 countries. In France, for example, the figure is eight and a half years. That means we have now locked in high borrowing costs for far longer than other heavily indebted counties.

The second idiosyncrasy is a much bigger proportion of index-linked bonds, 25% of the total, so stubbornly high inflation—as we have today—adds more to interest costs, and we could not inflate our way out of a debt crisis, even if we wanted to.

Both factors increase the risk of a borrowing crisis. The gilt market initially reacted benignly to the Budget, because it was not as bad as was feared. But the harsh reality is that it is a “spend now, tax later” Budget. We are increasingly dependent on the kindness of strangers to keep our credit lines open: a third of gilts are held by foreign investors. We are walking a borrowing tightrope and, without fundamental reform of our welfare system, the only route to the other side is stronger economic growth. That is clearly the Government’s objective, as the Chancellor is fond of repeating. But the reality is that her economic policy is dampening growth now, and significantly limiting its future potential. This Budget makes us dangerously exposed to the next economic crisis, and increases the chances of that happening. It takes Britain backwards at a time when we badly need to reignite optimism, economic activity, ambition and aspiration.