Autumn Budget 2024

Lord Borwick Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Borwick (Con)]

My Lords, in 1961 Viv Nicholson won £152,319—the equivalent of about £4.3 million today. She, or rather her husband Keith, won it on the Littlewoods football pools. It was unimaginable wealth, but she spent it in a few months. She gained flashy furs and a few cars but also widespread criticism and contempt. She announced that she was going to “spend, spend, spend”.

Rachel Reeves opened her maiden Budget speech with the ringing cry of “invest, invest, invest”, but what did she mean by that? There are many definitions of investment, but all of them try to draw the distinction with expenditure. I know that Whitehall would love to blur that difference, and I have heard that several Ministers in the last Government prohibited the use of the word “investment” when “expenditure” was meant.

Among the rotten ideas produced by the Chancellor is the imposition of VAT on school fees. Taxing behaviour that saves the state from spending money is daft. This particular change would have been impossible without Brexit, but that does not make me content. Children will be moved to state schools, increasing pressure on the best schools because those parents will be extra demanding by demanding that their child gets an education equivalent to that provided by a private school. Just recently, I was told by a headmaster of an excellent state school that his school has six teachers seconded from a private school, and there was no guarantee that generous gift will continue by the charitable arm of the private school.

We congratulate the right honourable Lady on being the first female Chancellor, even though there have been four female leaders of the Conservative Party and two or more of ethnic minority background, but none in Labour history. But “spend, spend, spend”—or “invest, invest, invest” is Rachel’s motto. It was remarkable how quickly the public in 1961 saw that Viv Nicholson was a spendthrift. However, it was Viv’s own money, not taxpayers’ money.

The Chancellor will increase the national debt by a huge amount. Borrowing money to spend it is not wisdom. I am sure that it is possible to borrow it in the short term, but is it wise? I am sure it is not. It is just deferred taxation. Increasing the national debt is not free money. It will have to be repaid eventually, and the interest on it will have to be paid continuously, by us, our children and our grandchildren.

It might be okay for companies to borrow to invest, but there is a stream of accounting standards defining investment. Those business standards are unknown to government and there does not appear to be much spending which does not get included in the phrase “invest, invest, invest”. Training schemes of remarkable idiocy will doubtless be included. Will we see training schemes to allow overpaid train drivers to work from home?

Any independent financial adviser who advised a client to borrow money to pay for day-to-day spending would lose their authorisation—a sad end for both adviser and client. What was the sad end for Viv Nicholson in the 1960s? Her last job was in a nightclub, singing “Big Spender”.