Budget Statement

Lord Bishop of Chester Excerpts

Thursday 27th March 2014 Lords Chamber

[The Lord Bishop of Chester]

My Lords, the reason that the Bishops sit on the government side of the Chamber, I am told, is the recognition that the task of government is so difficult that the Government need all the help available to them. Managing the economy in recent years has been an enormously difficult task and we can only express relief and, indeed, gratitude that things seem to be moving on to a more normal plane despite all the challenges ahead, about which the Chancellor himself is fairly candid.

The present Budget reminded me a bit more than its immediate predecessors of the iconic Budgets of the 1980s, with their emphasis on deregulation and personal freedom. There was a similar tone, which the unexpected radical announcement in relation to defined contribution pension savings illustrated. I have always been a cautious and strictly apolitical supporter of many of the policies introduced in the 1980s. I could recall only too well the moribund character of much of the 1960s and 1970s in my formative years. The British economy did need opening up in many of the ways achieved in the 1980s, and it was significant how few of the changes made then were actually reversed by the long subsequent period of Labour government, apart from an increasing trajectory for public borrowing, as has been noted.

However, an underlying problem of the past 30 years has been the difficult interplay of freedom and responsibility in our society. Greater freedom demands a greater degree of responsibility in the exercise of that freedom and in how to deal with its fruits, if it is genuinely to serve the common good, otherwise greater freedom is likely just to generate a greater selfishness and individualism in all its guises. The sense of necessary responsibility is something which not only individual citizens have to recognise but the institutions of society and, especially, Government themselves.

Any society which increases the degree of freedom available to its citizens is liable and likely to generate an increasing disparity between winners and losers. Some will take advantage of the new freedoms, and much greater and more concentrated levels of personal wealth will emerge, while others will tend to sink to the bottom of the pile and form part of a growing underclass. That seems to me to be just what we have seen in the past 30 years. At the top of the pile, the rich get seemingly ever richer; and if the plans for inheritance tax are brought in, wealth will tend to be even more entrenched in particular families. We are told that 30% of our income tax in the UK is collected from 1% of taxpayers. However, that can be presented in two entirely different ways: as evidence that the rich are indeed paying their fair share of our taxes but also as evidence of the very imbalances which I indicated just now between the rich and the poor. Both may have a degree of truth.

I speak of a growing underclass. What is the evidence? The prison population has doubled in the past 30 years. The problems of ingrained poverty in a benefits-dependent culture, which noble Lords have referred to, are a new set of problems for our society and are well recognised. There are stubbornly high figures for child poverty. Beyond economic measurement, there is the strong perception that social mobility in our society has actually tended to decrease. That was the subject of a five-hour debate in your Lordships’ House just two weeks ago, in relation to our education system. I was able to sit through much of the debate and was struck by the fact that at the end of the day, for all the fine talk, people did not really seem to understand or know why there had been this decline in social mobility or, indeed, where the answers might be found.

A few months ago, I heard the former boss of Tesco, Terry Leahy, on “Desert Island Discs”. At the end, he was asked whether, today, someone like him from a working-class estate in Liverpool might rise to an equivalent position. He said that it was possible but much less likely. The reason he gave was the absence today of the social institutions which surrounded his upbringing and protected and encouraged him: the family, the local church—in his case a Roman Catholic church—and other local institutions.

All these supported the schooling that he received. That brings me back to the Budget. If, as surely we all hope is the case, we are now at the beginning of a new period of economic growth and prosperity, how will we avoid some of the problems that we have seen in the past 30 years? I will briefly doff my mitre—an imaginary cloth mitre—in three directions.

First, we must all do what we can to support strong social institutions in our society. Unavoidably, that must include the family. Independent estimates tell us that the cost of family breakdown to the Exchequer is something like £45 billion a year, a figure that the noble Lord, Lord Freud, accepted a few weeks ago in response to a Question. Of course, families can take a variety of shapes and all deserve support. Indeed, all who care for children, whatever their immediate circumstances, deserve and need our complete support. I just do not think that we will achieve a strong and renewed sense of family life in our society without having, in some sense, marriage as a core institution in the spectrum of actual family relationships. The Budget includes a modest introduction of transferable allowances within marriage and civil partnerships as both a symbolic and an actual gesture, and that is to be welcomed. It is very modest and I hope it can be built upon in the future.

Secondly, we must welcome unreservedly the Government’s commitment to maintain the real value of our overseas aid programme. In an ever more globalised world, the great disparities in wealth will be an ever greater source of instability. The notion of the common good is not just a national idea; it is a transnational and international idea. Wealth always brings power, and lasting peace is ultimately built upon some form of power-sharing.

Finally, as I said earlier, freedom has its in-built dangers. I can welcome the deregulation of defined contribution pension savings but only if robust protections are put in place to safeguard people against the misuse of those freedoms—here I agree entirely with the noble Lord, Lord Hollick. These protections include much better education about financial realities at all levels of our society, from school upwards. I am always struck by how the younger generation seem not to have been taught to think about these things, but pension saving is, if nothing else, a very long-term requirement. One has to look only at the way in which payday loans have been advertised in our society to see the equivalent dangers that are going to arise.

Let us be clear: in the future most people in our country are going to have some form of defined contribution pension pot. That is the whole trajectory of pensions changes in recent years. Robust advice and information must surely be made widely available if these new freedoms are to end up being used responsibly and wisely and in genuinely serving the common good in our society.