Autumn Budget 2024

Lord Young of Cookham Excerpts

Monday 11th November 2024 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, my comments will be more nuanced than some of those from this side of the Chamber. It may not be for me to say this, but I am not sure it assists our debate for noble Lords to trade accusations of dishonesty across the Chamber.

I agree with the noble Lord, Lord O’Neill, that it was sensible to change the fiscal rules to allow for more productive investment. Within that, I welcome the extra £500 million for more affordable housing. On the revenue side, I welcome the extra £200 million for homelessness and rough sleeping support as well as the extension of the Household Support Fund.

However, we should judge this Budget by the criteria that the Minister himself chose at the beginning of our debate when he said it was about growth and reform. In the debate on the King’s Speech, the Prime Minister said his plan for government would

“take the brakes off Britain”.—[Official Report, Commons, 17/7/24; col. 59.]

That is not a verdict that we have seen widely reported in the press.

The OBR’s comment on the Budget has been referred to before: it will

“leave GDP largely unchanged in five years”.

The Minister sought to downplay that by saying that the OBR had not taken into account all the planning reforms and the rest, but the point made by the noble Baroness, Lady Moyo, is crucial: institutional investors, both in this country and overseas, will have read that the independent forecaster, the OBR, has said GDP is going to remain unchanged for five years, and one cannot downplay the impact of that verdict.

On reform, I was struck by what the rather thoughtful Cabinet Minister Pat McFadden said recently in the Times. He said that

“with extra money comes reform. We cannot keep spending taxpayers’ cash on the same problems without changing the way we tackle them”.

However, the record so far is not good. The train drivers’ dispute was settled with none of the productivity improvements that the employers wanted, and the employers now include the Government; likewise the junior doctors’ dispute, while the extra £22 billion for the NHS was accompanied by no proposals for reform until next spring. I note in passing that that £22 billion dwarfs the extra £600 million for social care next year; again, as my noble friend Lord Forsyth said, problems due for reform have been ducked. Much of that £600 million will be absorbed by the national insurance contributions that providers of care homes and of domiciliary care will have to pay. You cannot fix the NHS without fixing social care.

While I understand the Government’s wish to block IHT loopholes, I agree with the noble Earl, Lord Devon, and others that they have pitched the exemption for farmers far too low. Let me respond to the challenge from the Government to say how I would find the extra money—here, I agree with the noble Lord, Lord Burns; this may upset some of my colleagues. The £3 billion cost of the freeze on fuel duty was wholly misguided, a point made by the noble Lord. The Resolution Foundation estimates that the tax cost of driving has gone down by 38% in real terms since 2010, while cars have become more efficient. Further, petrol now costs 60p per gallon less than it did two years ago, so freezing the fuel duty was quite unnecessary and sits uneasily with the Government’s ambition to promote purchase of electric vehicles and to hit their carbon reduction target. It is perverse to freeze fuel duty while increasing rail fares by 4.6% next year and lifting the cap to £3 on bus fares.

The £600 million for social care is not going to be enough. I think it is absurd that council tax has not been revalued for over 30 years. The highest band in Westminster pays £1,828, whereas the same band in Liverpool pays £4,615. That is absurd. If we are not going to revalue, we should at least introduce two higher bands and put the extra money into social care.

I will end with a sentence from the Budget speech:

“When it comes to choices on tax, this Government choose to protect working people every … time”.—[Official Report, Commons, 30/10/24; col. 821.]


One tax it is indisputable that working people will pay is council tax, so will they be protected from an increase in council tax next April when the bills go out, or will local government get blamed for the breach of a government pledge?