Autumn Budget 2025

Lord Hodgson of Astley Abbotts Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Hodgson of Astley Abbotts (Con)]

My Lords, it is a pleasure to follow the noble Lord, Lord Tyrie, with whom I have made common cause on a number of issues—most notably, the evils of extraordinary rendition.

In my four minutes, I want to raise two points. The first is the strategic choices the Government have made in this Budget and how that is going to set the tone for the country’s economic performance over the rest of this Parliament. Secondly, picking up the point made by my noble friend Lord Saatchi, I will say a word on tax.

If you talk to experts about tax—I do not just mean economic experts but sociologists and so on—they will tell you that an ideal tax needs to have a clear purpose, be simple to understand and universal in its impact, raise a sufficiently large amount of money immediately to off-set the frictional costs of its introduction, and be progressive and fall more heavily on broader shoulders. Amid all the ferocious pitch-rolling before the Budget was announced, I thought I heard the Chancellor prepare to undertake an action of considerable personal, political and economic courage by raising income tax. That, as my noble friend Lord Tyrie said, would be simple and straightforward, and it meets almost all the tests that I have just outlined. However, it was not to be. Instead, we have ended up with a smorgasbord. This has broken nearly every one of those golden rules. Indeed, the Minister was good enough to say that it was regressive as far as the thresholds were concerned, though he did not say what my noble friend Lady Neville-Rolfe said—that there will be no money coming from it for several years to come.

As many other noble Lords have said, this is a strange policy choice for a Government and a party who pride themselves on claiming to be in favour of the working man. Instead, the Government fell into the trap of believing, as they say, that they can make all sad hearts glad by making a raft of changes to assuage different groups of recalcitrant Back-Benchers, a policy that is bound to fail. It was said, “Don’t offend this lot, don’t alienate that lot, and eventually you become a vaporous, borderless blur—a grey mush impossible to understand or even defend”. That quote is not from me and not from a Tory commentator, but from Andrew Marr, who is not a friend of the Conservative Party, writing in the New Statesman about this Budget.

This takes me to my second and final point, which is about the dog that did not bark: the failure in the Budget to address in any serious way the conflict between guns and butter. For 80 years, and certainly the last 40 years, we have lived comfortably under the American umbrella, and we have been able to eat a lot of butter. That umbrella is now being withdrawn and slowly dismantled, and we will have to take more responsibility for ourselves. At the same time, behind that, we as a medium-sized power can expect to be caught in the backwash of the shifting tectonic plates as the struggle between the US and China as to who will lead the world in the second half of this century intensifies. Nowhere in that Budget speech did I see any recognition of this strategic challenge. There was certainly no suggestion that we might have to draw in our belts a notch or two to provide funds to address it.

I conclude with a Russian proverb that the Government could study with advantage:

“Better bread with water than cake with trouble”.


This is a cake budget, and we are going to have some trouble.