Autumn Budget 2024

Lord Razzall Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Razzall (LD)]

My Lords, to follow on from that remark, Budgets normally have a pattern. On the day they come out there is one reaction and then, after a while and some reflection, there is a different reaction. In this case, the reaction was the same: disappointment and criticism.

I do not want to go into the issue of the £22 billion black hole, not only because there are not enough Tories to boo if I do but because it seems entirely irrelevant. I do not think anyone can doubt that taxes had to rise as a result of what had happened in the past. To maintain even our existing level of public services, taxes clearly had to go up.

As we know, the major tax increase was the increase in national insurance contributions for employers; from these Benches we think that was a mistake. As a number of speakers said earlier, we think it was a mistake because of the damage done to charities. We think it was a mistake because of the damage done to care homes. As Warwick University said, many care homes will go bankrupt faced with the slightest mild economic shock. We think it was a mistake because of the damage done to the catering industry. Pubs and restaurants are faced with a triple whammy of the national insurance contribution increase, the minimum wage and living wage increases and the possibility of an end to effective zero-hours contracts, which they rely on for their employees. It raised £25 billion but it was a mistake.

Unlike the Tory party, we are prepared to say what we would have done as an alternative. We would have ensured that large corporations bore that burden. We would have reversed the bank levy. We would have had a proper windfall tax on the oil and gas companies. We would have increased the tax on online gambling companies. We would have had a better reform of capital gains tax. We would have had an attack on the social media companies, which have huge revenues in the UK but do not pay their fair proportion of tax.

As people have said, the one thing missing from this Budget debate was the issue of growth. The Chancellor realised that and gave interviews after the event, saying that she was relying on other factors to produce growth, such as the reform of planning controls and the promise of private investment. The elephant in the room that she did not mention, and that noble Lords will not be surprised to hear me raise from these Benches, is Europe.

The Office for Budget Responsibility has confirmed the ongoing damaging effect of Brexit, so what should we do now? We are not demanding an immediate return to the European Union, but we must do a number of things. We must develop closer links with Europe. We must develop a better relationship with the EU agencies, on issues from the restriction of Erasmus to help with the asylum process. We must deepen our trade discussions, giving access for food and animal products. We must negotiate work visas, particularly for the creative industries, and we must obtain a mutual recognition of professional standards. When all that has been done, in due course, we must apply to rejoin the single market.

I turn for a moment to the Tories. They have attacked this Budget but have not said in any way what they would have done instead. Indeed, the noble Lord, Lord Johnson, who I have always rather respected, but who unfortunately is not in his place, said the Budget was unkind, dishonest and incompetent. I find that extraordinarily hypocritical from that former Government. Let us take unkindness. Was ignoring care for the elderly during their years in government kind or unkind? They say the Budget was dishonest. Was saying there were no parties in Downing Street honest or dishonest? They say it was incompetent. Was the behaviour of the noble Baroness, Lady Truss—no, sorry, not a Baroness yet—and Kwasi Kwarteng incompetent? On the basis of their unkindness, dishonesty and incompetence, the Tories deserved to lose the last election, and if they do not provide better opposition they will lose the next one.