Autumn Budget 2025

Lord True Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord True (Con)]

My Lords, it is always a great pleasure to follow my noble friend—she is my noble friend from coalition days and long before. I am always entertained by her nostalgia for the weekly reports from Katya Adler in Brussels, but if we can get beyond that, she is a coherent critic of the Government—all Governments—on economic policy, and I agree with a lot that she said in her remarks.

I also thank the noble Lord, Lord Livermore, for the measured way in which he opened the debate and his exquisite courtesy in sitting here all the time during it. He has the advantage of being a bit younger than I am, and I apologise for my short departure.

This has been a compelling debate—compelling in one sense in the admirable loyalty of so many noble Lords opposite in circling their wagons around this failing economic policy and accepting the repudiation of a core manifesto promise not to raise taxes on working people. It has also been compelling in the clinical dissection and challenging of that policy by so many noble Lords, although not all have come at it from the vintage Corbynista direction of the noble Lord, Lord Sikka, or, indeed, agreed with the catalogue of nationalisations and tax increases being demanded by the noble Baroness, Lady Jones of Moulsecoomb. I wondered whether she was trying to catch the eye of her new leader. The noble Lord, Lord Sikka, certainly seemed to me to be being attracted to the Green Party as he listened to the noble Baroness.

The contribution by my noble friend Lord Bridges of Headley was challenging and pithy. He was pithy in his honesty, and one of the things he was honest about was that the previous Conservative Government spent, borrowed and taxed too much. We did, but some of those who criticised that might for a moment also remember that we had to confront the savage cost of the Covid pandemic. My noble friend was also brutal in exposing how this Budget and the previous one, taken together, pile more spending on top of overspending, more borrowing on top of overborrowing, and more taxation—£66,000 million in two Budgets—on already overtaxed families and businesses. As my noble friend Lord Moynihan of Chelsea said in a brilliant speech that shot a few Brexit foxes—he ought to circulate it around the House—this policy is simply not sustainable. There is also a glaring absence of serious supply-side reform in this Budget. Will the Minister tell us when we will see real deregulation?

This House likes it very much when it has a Minister who has real influence inside government. There is one sitting opposite me now. The noble Lord is very much respected. Sometimes he could lighten up a bit; we love him when he smiles. His hands are all over the Budget. He was there beside the Chancellor when she held up her red box last week. I read the words of a loquacious aide who told Tim Shipman, that indefatigable journalist, that the noble Lord and Torsten Bell dined with the Chancellor twice a week in July to plan this Budget. We are told that they waved away Treasury officials who came with spreadsheets and scorecards, saying that they were not interested in numbers—they had decided their strategy. Part of that, as we now find, was £406 billion on welfare by the end of the survey period. I submit again that that is simply not sustainable. I hope when he winds up that the noble Lord will answer the specific challenges on the welfare figures and what has been said about them, as levelled by my noble friend Lady Shawcross-Wolfson.

The other thing I have to refer to that the Chancellor and the noble Lord planned was that long autumn of “project fear”. The noble Lord complained in his opening remarks about leaks and speculation, but where did all that come from? Who was talking to whom? I think my noble friend Lord Kempsell probably knows a thing or two about that. Never have we had such a maelstrom of spin; never have more kites been flown; never have more proposals been leaked. It culminated in the carefully planned spectacle of the Chancellor herself, weeks before the Budget, organising a press conference with all the panoply of the state—the union jacks—to tell the world that she was going to put up income tax.

History will judge the truth of what the Treasury team knew from the OBR and when. I agree with the noble Lord, Lord Razzall, that we should not waste time on that; we will come to know. But my noble friend Lord Kempsell was right to refer to the real-life effects of the spin—the uncertainty. We now know that hundreds of millions of pounds were moved in those weeks. That, as the noble Lord, Lord Macpherson, said, is the Treasury’s responsibility. I agree with him and the noble Lord, Lord Burns, with their immense and peculiar experience, that this should never happen again.

We now know that, to justify massive tax increases, the Chancellor and the noble Lord dug their own bogus black hole. You can see the soil there under the noble Lord’s fingernails. We now know that they did not need to tax and borrow so much. Higher tax was a choice—a deliberate choice to take money from the successful, the hard-working and the wealth creators and spend it on welfare. To be fair, they are proud of it; they planned it. Many on the other side have declared that today. My noble friend Lord Lamont of Lerwick was the first of many to point out that this was a political Budget—a Labour Budget. It is what socialist Governments do. As my noble friend Lord Dobbs reminded us, Labour tax, borrowing and spend policies fail every time.

I have been struck by how many noble Lords in this debate have drawn attention to continuing black holes in this Budget. Take SEND funding, referred to by the noble Baroness, Lady Kramer. The right reverend Prelate the Bishop of Portsmouth, who I greatly welcome, was right to ask a fundamental question in his notable maiden speech about how the costs will be met. This was followed up in more detail by my noble friend Lady Barran. Can we please have the answers? The OBR could not have been clearer that

“no savings have been identified to offset the estimated £6 billion pressure”.

Where will the money be found? Can the noble Lord tell us when he winds up?

Let us take the £5 billion negative impact of the Employment Rights Bill, where my noble friend Lord Willetts observed—rightly, probably—that your Lordships’ House has done more to benefit youth employment by blocking day-one rights than anything in the Budget. Can the Minister tell us whether that Bill’s effect been scored by the OBR? Can he also tell us, when he replies, the latest estimate of the cost to the NHS of the recent UK-US pharmaceutical deal? The Government must have that cost. They have signed a deal. Even if you are signing a deal with President Trump, you must have some sense of what it is going to cost the NHS and the country. This is Parliament: can he tell us what the cost will be and whether it has been scored?

Again, what of defence? The noble and gallant Lord, Lord Craig of Radley, and my noble friend Lord Hodgson of Astley Abbotts, among others, referred to this. To reach the 3.5% commitment, the OBR calculates that the Government face a £32 billion shortfall today. Again, we have no hint in these documents of how that will be funded. When will we be told? The survey period reaches into the next decade.

While these uncertainties remain, what we are certainly told is that we face a splurge of spending and a boom in borrowing. The borrowing and spending are coming now, but the tax—or much of it—is, as the noble Lord, Lord Macpherson, said, only coming later. The Minister spoke of a fiscal consolidation that reduces public sector net borrowing by £12 billion in 2029-30. However, this figure of course relies on £26 billion of tax increases. Can he confirm that borrowing will be higher than the March forecast in four of the next five years? Does he agree that total borrowing over the period to 2029-30 will be £57 billion higher than was forecast just eight months ago? The noble Lord, Lord Burns, in a notable speech based on, as I say, unique experience, gave a sober warning to the House at the outset of the debate about the continued burden of debt: £110 billion at the end of the survey period. This theme was picked up by many others.

The Government are also failing on their central claim to be a Government for growth. This has in fact been the major area of concern from all sides of the House. We respect the Government’s desire to secure growth: the trouble is that their policies are designed to stunt it. There are positives, including incentives for start-ups, and I hope the Minister will listen carefully to the constructive points that I think he will agree were made by my noble friends Lord Leigh of Hurley and Lord Massey of Hampstead and the noble Baroness, Lady Bowles of Berkhamsted. There are other considerations that we must have on growth. My noble friend Lord Hintze was right to counsel us about the importance of considering growth per capita. We must do that; we do not talk about it enough.

The Minister declares that the OBR has mildly uprated forecasts for growth this year—and then the tape stops. He skates over the fact that forecasts are revised down for all the succeeding years. The OBR estimates that this Budget’s policies will have “no significant impact” on growth by 2030. As a keen allotmenteer, I like growing my own vegetables, and Britain will need a lot more people like me if Ed Miliband goes on covering up good farmland with solar farms. By the way, how right the noble Baroness, Lady Moyo, was to point out the disastrous structural impact of high energy prices on the UK economy. Collectively, across all parties, we must have the courage to address that. However, I have to tell the Minister that, from my experience, if you plant vegetables and you want them to grow, they do not do so if you keep battering them with a big stick day after day. This Government are mercilessly battering businesses, particularly small businesses, with the big sticks of taxation and regulation, and it cannot succeed.

Last year’s devastating NIC increases have brutally impacted business confidence and jobs, particularly in SMEs, which many of your Lordships—led, in a distinguished speech, by the noble Lord, Lord Eatwell—so rightly said we need. Unemployment is grimly rising every month, small business by small business, place by place, as it ever does, although it is the big closures that catch the news. As the noble Baroness, Lady Kramer, and others said, the hospitality industry and the high streets, which were told that they should be rejoicing at what was in the large print of the Budget, are now reeling at the prospects of the business rates stealth tax that was hidden in the small print. Today, their trade body has warned of a further 100,000 jobs at risk in the hospitality sector as a result of the cumulative impact of this Government’s policies on SMEs and hospitality in particular.

Taken together, the last two Budgets and the Employment Rights Bill have devastated business confidence and the prospect of jobs for young people. The Federation of Small Businesses, the IoD and the CBI are all saying it. Frankly, one thing is stark staring obvious, including to the many noble Lords opposite who stayed away from our votes on the Employment Rights Bill: if you penalise employers, you penalise employment. In its Economic and Fiscal Outlook, the OBR is clear that unemployment is set to go on rising—all without taking into account the effects of the Employment Rights Bill.

My noble friend Lord Dobbs was devastating, in his particular and idiosyncratic way, on unemployment. We must not go down that road again. Then there is the central issue of welfare, on which we have heard differences across the House. As my noble friend Lord Bridges said, and I agree with him, this Government have a huge majority in the other place and a clearly stated will to reform the welfare state, which the Prime Minister seemed to reiterate this week. They must use that majority and, as my leader has said, we will support them in difficult decisions to cut welfare spending.

Welfare is increasingly shifting from being a source of temporary support to a form of long-term income for an ever-increasing number of people, and that stifles hope. Around 5,000 people a day are being signed off work and on to long-term sickness benefits. It could have been a historic task for the Labour Party to carry out this reform. As the noble Lords, Lord Wood of Anfield, Lord Eatwell, and others referred to, it has opportunities to do remarkable things on this and on tax simplification. In a brilliant and balanced speech, the noble Lord, Lord Hollick, pointed out many significant realities, good and bad, which we all collectively have to address. This country is underperforming: not because of this Government but because of systemic problems—but they are being accentuated by mistaken choices now being made.

Instead of dealing with the welfare challenge, faced with dissent in their ranks, the Cabinet ran away—enfeebled prisoners of their own Back-Benchers, as the noble Lord, Lord Tyrie, and my noble friend Baroness Noakes said, panicking at the frailty of a majority in the high hundreds. Now, with this Budget, they are leading the stampede further in the opposite direction. It cannot and need not go on, as my noble friend Lord Saatchi and the noble Lord, Lord Bird, in their different ways, challenged us.

We on this side have set out carefully costed plans for some initial savings. But we must surely all agree that the purpose of the welfare system is to support as many people as possible into work. We must not create a system, as we seem to be doing, where for far too many, being on welfare is an alternative to getting a job. Too often, you can be better off. That is the very reverse of what was intended when universal credit was introduced. My noble friend Lady Coffey made a searching speech with piercing questions on this, and the noble Baroness, Lady Deech, made a powerful contribution on family. As my noble friends Lady Stedman-Scott and Lord Bailey of Paddington, in a striking speech, reminded us, the best way to tackle poverty is a J-O-B: a job. The Government can help by supporting businesses to open, hire and grow. I think that is what they truly want, but the OBR has made it clear that the Government simply have not done this in their Budget. Not a single measure is said by the OBR to promote growth—and working people will pay the price.

The Government have given us the first death tax on family farmers, the first death tax on family businesses, the first tax on family homes, the first tax on children’s learning—a shameful worldwide first, that one—and the first tax on green electric vehicles. They have even given us the first tax on milkshakes—I wonder who, in No. 11, thought that one up. Hit after hit at the struggling green shoots of growth and at success. When the Chancellor said she wanted a more “innovative” economy, we did not know that she meant inventing new taxes.

This was a fundamentally dishonest Budget, founded on a bogus black hole of the Chancellor’s own digging. The Government did not need to raise the income-tax take; it was a choice. They said that they would not tax working people, but they have. They said they wanted to help workers, but they have given us a Budget for non-workers. They said that they wanted to create growth, but they have pummelled the very businesses, and SMEs in particular, that create it. They said that they wanted the UK open for business, and the Minister repeated it, but they have reinvented the brain drain, as my noble friends Lord Elliott of Mickle Fell and Lady Morrissey said. They even talk of an exit tax to stem an outflow that they could see themselves. The only high streets that are booming are in Dubai.

The British people have been given higher taxes, higher borrowing and a Budget as unserious in its strategy as it was cynical in its spin. Huge costs have been imposed on the private sector, with a rising toll on jobs, as my noble friend Lord Lamont observed. It cannot and must not go on.