Autumn Budget 2024

Viscount Chandos Excerpts

Monday 11th November 2024 Lords Chamber

[Viscount Chandos (Lab)]

My Lords, there was much comment about the new Government’s first Budget not being delivered until 117 days after they took office—one of the longest intervals in recent history. George Frideric Handel may, famously, have written “Messiah” in 24 days, without much sleep or even food—which I am sure my noble friend the Minister will recognise—but for a Budget of this importance and complexity, with the accompanying new fiscal framework, the time taken and the preparations before the election are justified and have been well-spent. I pay tribute to my noble friend the Minister for the important part he has played, along with my right honourable friend the Chancellor, as well as for introducing today’s debate with such authority.

I am the first speaker from these Benches to have the opportunity to congratulate the noble Lord, Lord Booth-Smith, on his outstanding maiden speech. He may not be the youngest of the recent appointments to this House, but for many of us he still feels extremely young, and he has packed an extraordinary amount of public service and experience into his career so far.

I welcome the new fiscal framework, like the noble Lord, Lord O’Neill of Gatley, and the adoption of public sector net financial debt as the primary measurement, which brings sensible changes to the treatment of at least some government investment. The obstacles to productive public investment presented by irrational fiscal rules and their erratic interpretation seem to have prevailed throughout my adult life. I well remember, though not, I suspect, as vividly as the noble Lord, Lord Howell of Guildford, the collapse of the important gas-gathering pipeline project in the North Sea over 40 years ago, because the proposed guarantee by HMG was going to be included within the PSBR, which was the fetish of the then Prime Minister.

Operating within this new framework, the Government have introduced a well-judged package of measures, balancing the need to fund public services, reintroduce honest financial discipline and support and encourage investment. The incremental increase in employers’ national insurance to a level that the last Government previously imposed is a fair and reasonable ask for larger employers to contribute to the improved resilience of the society from which their employees and customers are drawn and will be to the ultimate benefit of their own businesses.

The noble Lords opposite express outrage at the idea that their Government left a financial black hole. The Economic Affairs Committee report on the sustainability of public debt, to which the committee’s chair, the noble Lord, Lord Bridges, has already referred, referred to two numbers provided to the OBR by the then Government: total current spending and total capital spending. Richard Hughes, the chair of the OBR, gave evidence to the committee and said:

“Some people have referred to that as a work of fiction. That is probably generous, given that someone has bothered to write a work of fiction, whereas the Government have not even bothered to write down their departmental spending plans”.


Is it surprising that the new Government inherited a black hole from the old Government?

I come finally to the increases in inheritance tax on agricultural land and private company shares, including those traded on AIM, albeit to only half the rate applied to other assets. The noble Lord, Lord Johnson of Lainston, in his intemperate and dishonest remarks from the Opposition Front Bench, concentrated on the issue of agricultural land, but as a former investment manager, he will be even more familiar with aggressive promotion of IHT-avoiding AIM portfolios by members of the industry of which he was a member. He may, none the less, have forgotten that the Office of Tax Simplification, created by the then Conservative Government, recommended the abolition of the distorting allowances lying behind these avoidance schemes. Of course, the then Conservative Government ignored the recommendations and abolished the Office of Tax Simplification, demonstrating perhaps once again the prioritisation of vested interests over professional, independent advice.