Autumn Budget 2025

Lord Bailey of Paddington Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Bailey of Paddington (Con)]

My Lords, I will speak about my fears in the Budget for the poorest communities in the country. Many of our Labour colleagues in the Chamber chuntered when they heard the words “benefits Budget”. As someone who spent 35 years working in some of the poorest communities in this country and who hails from one of those communities, I want noble Lords to be in no doubt that it will be perceived as a benefits Budget.

The Labour Party has a proud history of trying to represent those who have the least financial power in our society. A Labour Party that has forgotten that the antidote to poverty is not welfare but work, leaves those poor communities at risk. Let us be very clear: if working does not pay, people will not work. Anybody who has worked in a poor community knows that there is more to work than the pay at the end of the week: there is dignity and there is freedom. Was it not this Prime Minister who said how unfair the benefits system was, how it trapped people in benefit and how he had a lifelong mission to free people from that? Fast-forward two months and he seems to have forgotten that: I hope Labour colleagues can remind him of it.

This Budget has been part of building a welfare system with perverse incentives which trap people on welfare. That is not fair or right. The economic impact both on people’s family finances and on the country are unbelievable. The Chancellor said that the welfare bill was not sustainable. She seems to have forgotten that. Please go back and remind her.

I now want to comment on the two-child benefit cap being lifted. Many colleagues in the House have stood up and said that it will lift lots of children out of poverty. They are wrong—very wrong—and I will tell them why. When the Chancellor left those levels in place that will lift more and more people into paying tax and more people higher up the taxing, that will wipe out any saving or change to household finances that those benefits may have given. I return to my theme: make work pay. If you want to support poor people and eradicate things such as domestic violence, you have to make work pay.

We have 1.79 million unemployed people, a figure that is growing, and it is young people who bear the brunt of that. We have 111,000 fewer young people in employment than when the Government took office. This is something that they have to turn around. If young people do not learn the skill of working, they may never learn the skill of working. You have young people who cannot go to university unless they can get a job to finance themselves at university. You have households where, if a teenager or someone in their early 20s cannot get a job, the household is no longer financially stable.

One noble Lord here made a comment about not turning this into party-political gesturing. I will do my level best but, as someone who comes from a poor community, I need my Labour colleagues to remind the people in their Executive that this is not about their jobs; anyone here could fill their jobs. We need a Labour Party that is realistic for poor people, a Labour Party that will tell its Chancellor she has done the wrong thing. I ask the Minister: what happened to his leader’s lifelong passion for freeing people from the trap that is our benefits system? What will the Chancellor do about making sure that work pays for the people at the lowest end of the salary scale? That is what will make a difference to this country, that is what will help us replace our economy and that is what will help us get on with growth.