Autumn Budget 2026

Lord Fox Excerpts

Thursday 12th November 2026 Lords Chamber

[Lord Fox (LD)]

My Lords, like the noble Baroness, Lady Neville-Rolfe, I look forward to the maiden speeches later in the debate.

The Budget was launched into a very challenging financial environment. That challenge was enumerated by the report from the Office for Budget Responsibility, and it is a tough read. However, while it was the Chancellor who was under pressure for a few hours during Budget Day, it is the British people who will be feeling the squeeze for years to come, with the poorest affected most. The OBR projects little or no growth in household income for the foreseeable future. Up and down the UK, families and individuals will find things very challenging. Despite claims to the contrary that we have just heard, this Budget will only play around the margins of those personal challenges. To employ a rather curious metaphor, the Minister’s metaphorical Tube train does not have enough seats to offer the breathing space that the British people need.

We have already heard from the Government Benches about the IMF upgrades and we have heard some encouraging statistics today about growth. Indeed, we are doing better than some of the other G7 countries. But our growth, at best, even if everybody is right, will be sluggish and our debt is absolutely massive.

In the face of this, the Chancellor set out a huge range of relatively small measures; in fact, he set out dozens, perhaps hundreds, of tweaks and adjustments. All that was a few weeks ago. Can anyone actually remember any of the details? If Chancellor Healey set out to deliver an invisible Budget, he basically succeeded. Perhaps he looked at the highly visible first Budget of his predecessor and resolved not to make the same mistake. As I am sure we will hear many times today, the unexpected rise in employers’ NICs heralded by that Budget hangs like a bad smell over UK business, scaring off investment and depressing job creation. It was, and remains, one of the biggest disincentives to growth that this Government have produced, although there are others.

To be fair to Chancellor Healey, there were no NICs moments in his Budget. To be fairer still, there are significant external factors too—factors that not even our new Prime Minister can control, not least of which is the massive rise in energy costs caused by a war with Iran. I note that this war was initially supported by the Conservative Party. Sensibly, it seems to have changed its mind on that. As a result of this conflict, families across the UK face a brutal winter of rising bills and disappearing support. Energy bills are going up; petrol prices are going up; prices in the high streets are going up. VAT will go back on electricity bills in the spring, solar panels that generate cheap electricity will have VAT taken off them, and rail fares will be unfrozen. Some consumer energy support measures have been announced, as the Minister said, and the British industrial competitiveness scheme for manufacturers will kick in next spring, but, in the main, their effect will be more or less wiped out by the costs as they rise.

Perhaps President Trump’s electoral drubbing will ride to our rescue. But even if the Strait of Hormuz opened to traffic tomorrow, the destruction of refining capacity and LNG facilities will take years to replace. The recent Bank of England rise in interest rates is driven by these inflationary fears. That rise means that mortgages will rise too. Subsidies to help first-time buyers will likely be wiped out as mortgage rates increase.

I will say a brief word about our hard-pressed retail sector. The Chancellor trumpeted a freeze on its business rates. There is less to this than meets the eye. The Chancellor used the word “freeze”, but he actually announced that increases will be capped at inflation—an increase that will cost the sector an extra £250 million on top of the £7 billion that it is already paying. It is disproportionately the largest payer of business rates.

Another reason why the Budget has faded in people’s memory, as the Minister illustrated, is the activity elsewhere. Welfare reform hangs in the balance. The Milburn report is now gradually being filtered out, and the Timms report we await. Even more breath is being baited in anticipation of Prime Minister Burnham’s 10-year plan. Indeed, the Minister took a big inhale as he was giving his speech. It is a plan that seems by many to have been touted as a universal panacea. I ask the Minister to commit to a full debate in your Lordships’ House early next year. If this report is published before the end of the year, we will have some Christmas reading and we will need to come back and have a full debate in your Lordships’ House. A 40-minute repeat of a Statement will not be sufficient if this 10-year plan is as important as the Minister tells us it is.

Taken together, these policy announcements need to establish a solid platform from which traders can trade and investors can invest—a platform that supports consumers. It will be vital that there is consistency and stability to ensure that the UK builds the infrastructure we need to deliver green, low-carbon growth for future generations. Stability is also needed to attract private investment. Success will depend on a durable policy framework that can give long-term private capital the confidence to support the massive investment that this country needs.

There are other ways in which the Government could help British business. The Chancellor touched on the drag of excessive and repetitive regulation. All his words made sentences, but will they make any change? Since the dawn of time, Chancellors have made similar comments about red tape, but there is undoubtedly a need for change, and perhaps we can help.

Liberal Democrats have been listening hard to what business has told us about regulations across round tables, our national call for evidence, and our meetings with trade and professional bodies. Four messages are cutting through consistently. First, they said, “Ask me once. If I have had to prove who I am, what my product is or what my carbon footprint is, do not make me prove it again and again for the next bodies as they come”. Secondly, they said, “Make it fit my size. Do not hand a business of 10 people a rulebook for 10,000 people”. Thirdly, they said, “Tell me how long it will take. Give me a deadline for a decision and keep to that deadline”. Finally, they said, “Give me someone to turn to. When the rules clash, or something goes wrong on the border, or we have problems, I need one place and an answer that I can rely on”. Those are four rules that the Government can use and apply to every regulation that exists across our community. On that basis, we will set out a commitment to simplifying regulation while retaining the important consumer protections and safety issues. We aim to use this as a basis for ensuring that financial innovation supports consumer choice, competition and growth.

No Liberal Democrat can make a speech without mentioning the European Union—it is written in our by-laws. In this case, I will highlight Brexit red tape that is being absorbed by British traders. Official data obtained by our Europe spokesman, Al Pinkerton MP, shows that between 2022 and 2025 the cost of extra regulation in trading with the European Union has hit businesses with a staggering £7.7 billion bill. That is 7.7 billion reasons why the Government must use the upcoming UK-EU summit to address the mounting economic crisis and stop ignoring the financial strain that Brexit has put on British businesses. A UK-EU customs union would wipe most of these costs away and make a huge injection of growth into the United Kingdom economy.

There is even more at stake in our relationship with Europe. There is huge scope for economic and defence co-operation that would drive growth and help us meet our defence needs. This would benefit both the economic well-being and the security of every UK citizen. The Prime Minister talks about this quite a lot. We want to see him deliver.

I have to disagree with the Minister. He did not show us how the country will pay for its defence and this Budget does not provide meaningful breathing space. In a sea of events, headlines and shocks, this Budget was out of its depth. The Chancellor seemed to acknowledge that he was over his head and his response was a Budget of small ideas. There is no theme, no strategy and no vision in this Budget, which is why most people have forgotten all about it already.