Budget Statement

Lord Lee of Trafford Excerpts

Thursday 16th March 2023 Lords Chamber

[Lord Lee of Trafford (LD)]

My Lords, I have had the privilege of experiencing 30 years of Budgets in both Houses here at Westminster. As the noble Lord, Lord Skidelsky, alluded to earlier, in the old days if there was the slightest leak from a Budget, the security services would be called in. Today, we seem to have a Budget by instalments: a virtual daily leak.

When you are speaker number 13 in a Budget debate, as I am, there is really no point in repeating many of the things that have already been said. I am not even going to say what an excellent maiden speech the noble Baroness, Lady Moyo, made. I am going to focus on a few different areas, and maybe express a few personal ideas and thoughts.

On health and the lifting of the pension cap, I think the jury is out. On the one hand, it might well encourage senior consultants to stay on longer; on the other hand, it could encourage others—maybe not in the health service—to retire early. It is also vital that we increase the number of medical school places, which I am sorry there was no mention of in the Budget. We need to do something to stop the drain of nurses from our health service. We now have approximately 200 health trusts. A lot of consolidation is taking place, and many trusts are very big businesses. Their performances vary greatly, and we need more training for senior management. I suggest that we establish a standalone dedicated health business school, which would I hope bring about a significant increase in the quality of management of these large organisations.

I have asked a number of Questions recently on prescription charges, which are now rising to almost £10 an item. The total revenue the Government get is only about £600 million. Some 60% of the population do not pay, and there is some evidence now that people are forgoing their medicines because of the cost. There have been no prosecutions whatsoever for prescription charge fraud over the last 12 months. Prescription charges are free in Scotland, Wales and Northern Ireland, and I suggest they should be abolished here in England to ease the pressures on so many family budgets.

On housing, we clearly need more owner-occupancy, but we also need many more properties for rent. The rental situation, particularly for young people trying to find accommodation at a reasonable price, is a nightmare. Landlords are selling up and the stock of rental accommodation is drying up. In my view, the Government should act. They could easily reverse the disallowance of interest on landlords’ borrowings. They could abolish the extra stamp duty and perhaps even reduce capital gains tax on disposal of rental properties. If they wanted to, they could transform the rental market.

Tourism and hospitality—I declare an interest as the president of the Association of Leading Visitor Attractions; I was chairman for 30 years—is a major employer at all skill levels. It is probably the number one private sector industry in more parliamentary constituencies than any other single industry. Virtually every business in tourism and hospitality is experiencing recruitment problems. Vacancies are something like 9% nationally and 15% in London. The industry has been heavily hit by Brexit and I believe we have to and should allow more immigration in this area.

Tax-free shopping should also be reintroduced, where visitors can reclaim VAT. High-spending tourists are now deserting the United Kingdom and heading to France, Italy and Germany. Some 70% of tax-free forms validated at Eurostar Gare du Nord were from non-UK visitors—those shopping in Paris and claiming the tax back before visiting the United Kingdom. A survey of 10,000 Chinese travellers planning to visit Europe showed that only 42% were heading to the United Kingdom, whereas in 2019 over 70% headed here.

On defence, after years of neglect and denial obviously I welcome the increase in defence expenditure to 2.25% and maybe up to 2.5%, but we have to go further. In 1984, let us remember that defence expenditure was something like 5.5% of GDP. The head of the Army, General Sir Patrick Sanders, said very recently that we would struggle to mobilise a division of 10,000 troops if forced to fight a European war. Defence Secretary Wallace said very recently that we have hardly enough pilots to fly the F35s. It is commonly agreed the Army has reduced to far too low a number at 73,000. It is also questionable if we can recruit the 30,000 reservists intended to complement our regular forces.

On welfare, I think it is time we start to query the balance between the benefits we give to the old—I declare an interest as someone in his 81st year—and the young. I get free prescriptions, a free travel pass and of course a pension. Most pensioners have paid off their mortgages, whereas the young are more likely to be struggling to find a deposit for a house and have the costs of children’s clothing and childcare, as we know. Normally they are on fairly modest early salaries. I believe it is time we look again at the balance between young and old in terms of benefits.

Finally, I come to financial education—or indeed, the lack of it—in this country. There is hardly any teaching of budgeting, savings or investment in our schools, and it should be of serious concern to the Government. We have a situation where more young people speculate on cryptocurrency than invest through the stock market or in more traditional forms of investment. The Government should consider setting up—I think this is the first time it has been mentioned—what I would term a financial education fund, which would recruit and fund specialist qualified speakers to go into our schools, for the first time, to make a serious attempt to financially educate our young people.