Spring Budget 2024

Lord Tugendhat Excerpts

Monday 18th March 2024 Lords Chamber

[Lord Tugendhat (Con)]

My Lords, in his great novel Anna Karenina, Tolstoy remarked that:

“Happy families are all alike; every unhappy family is unhappy in its own way”.


How true that is of the situation in Europe today. Whether one looks at the Netherlands, Germany, France or Sweden, one sees Governments and society coping with severe problems, economic and social, that are very similar to our own. I make that point because there is a tendency in this country, which has been reflected during this debate, to assume that the problems with which we are confronted are somehow unique to us and the result of particular British circumstances. That is why my noble friends Lord Lamont and Lady Lawlor, and the noble Lord, Lord Macpherson, were right to draw attention to how, in a variety of areas, the British economy has outperformed forecasts and performed better against other countries than many people suppose. I agree very much with the points that they made and will not repeat them.

In the short time available to me at the end of a long debate, I had intended to make only three points. Before I make them, I would like to refer to something which my noble friend Lord Horam said when he was talking about GDP per head and GDP itself. He linked what he was saying to the very considerable rise in equality in this country and the effect that this has had on people’s attitudes to their own position, as well as to politics in general.

I turn to my three points. First, I congratulate the Government on shifting the balance of benefits in favour of those of working age and away from pensioners. Pensioners have done very well in recent years, as I and many other Members of this House know from our own experience. However, as my noble friend Lord Lamont said, there is a great need to encourage more people back into work. Making work pay is an important part of doing that. It is an important carrot; sticks are needed as well, but it is a very desirable policy change to promote work in this way. An additional advantage is that, if we could encourage more people back to work, we would have less need of immigration in order to fill so many of our public services, especially the NHS.

My second point is to congratulate the Government on the £3.4 billion that has gone to the NHS, specifically to improve productivity. I spent some years as chairman of the Imperial College Healthcare NHS Trust. Although it was some time ago, I can see how important this initiative by the Chancellor is. The effects of digitising operating theatre processes could be dramatic— the same number of consultants could do an extra 20,000 operations a year. This is exactly the sort of initiative that the NHS needs, and it provides a precedent for other public services.

Having praised the Government on two points, I am afraid that my third point is to criticise. In the defence debate last September, I called for a start to be made in increasing defence expenditure. Since then, the world has become a good deal more dangerous, as a result of events in the Middle East. In their rhetoric, the Government recognise the change that has taken place and continue, quite rightly, to send considerable quantities of military equipment to Ukraine. They are quite right to do that, but the effect is to deny our own forces that equipment. It will take a long time to fill the gaps. The Government talk a great deal in other circumstances about the increased dangers in the world, but they are not putting their money where their mouth is. An ambition to increase defence spending to 2.5% when economic circumstances permit is all very well, but, unfortunately, the dangers to this country do not follow the same rhythm as our economic circumstances. I regret that the Government did not take advantage of this Budget to take a first step towards increasing our defence expenditure.

The fact that the Secretary of State for Defence cannot even fly anywhere near the Russian border because his aeroplane does not have the right kind of equipment to prevent the Russians interfering with it is one example of the situation that we are in. The embarrassments that are being caused by our aircraft carrier are another. I very much regret that the Government did not take a first step. I hope that my noble friend the Minister can say something about that in her wind-up.