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My IEA article on budget

September 12, 2026 1 Comment

Here we go again. 47 more days until the budget. 47 more days for stories to run about higher and new taxes. 47 more days for the left inclining think tanks to identify more sources of above average wealth and income that they think should be confiscated by state taxation. 47 more days for the media to generate stories that persuade more people and companies to avoid spending in case they will face a higher tax bill. 47 more days to tempt more well off people to leave the country altogether, to cancel more business investment projects and delay creating more jobs.

This was what happened before the two Reeves budgets. Long run up periods led to much unhelpful speculation about increased taxes leading to the exodus of millionaires, billionaires and talented people. Coupled with substantial tax rises in the final packages this drove down new jobs and vacancies, forced up unemployment, slowed growth and undermined the housing market. When asked about this possibility again the government says they have shortened the time to the budget to limit the damage. Two months, now 47 days, is still a long time.

The trouble is the two Reeves budgets did put up taxes by a stated £40 bn and £26 bn so people are right to have fears of more to come. If the government was seriously worried about growth and jobs they would learn from the experience of the last two years and would rule out any tax rises in Budget 3. They say you cannot rule out tax rises in advance of the budget, yet their Manifesto ruled out all rises in the big three taxes for the whole Parliament. Labour could only win the election by promising not to impose more taxes on working people. They have already distorted the promise by the hike in employer National Insurance Contributions. These do of course hit the self employed and have served to destroy jobs which does affect working people. The failure to calm fears of higher taxes implies higher taxes are still on the agenda.

The March 2024 last budget of the Conservative government proposed spending £1226 bn in 2024-5, rising to £1323 bn by 2027-8, an increase of £97 bn or 8%. In last November’s plans the Labour government proposed to spend £1468bn in 2027-8, an increase of 11% over the Conservatives and 20% higher than Conservative plans for 2024-5. £145 bn of extra spending next year has proved to be difficult to finance, with the extra taxes falling well short of the extra spending. As a result the Conservative forecast of borrowing just £50 bn in 2027-8 has risen to £147 bn under Labour.

Labour in its end 2025 budget set out plans to borrow almost £100 bn more, to tax £66bn more and to spend £145 bn more. Lower growth and fewer jobs so far help account for the need to increase borrowing and taxes by more than spending to allow for lower than expected tax revenues to pay for everything. Mr Burnham should study these poor figures and poor results. With John Healey he should try to do something different this time round. Instead it looks as if they think they need to spend yet more money than Starmer/Reeves and offset some of the costs with yet higher taxes owing to the difficulties of borrowing more at realistic interest rates.

The government was given a higher growth rate in the OBR forecasts for saying they would get some extra growth from their attempts to reform planning. So far there is little sign of this having a positive effect, with housebuilding way below required levels. Large projects still take a long time to get approval. Permissions to go ahead with new oil and gas have remain stymied by political hostility. They were also given a higher growth forecast for their increase public sector investment. The more they spend this money on things like the heavily loss making British Steel, the computer remediation costs at the Post Office and the endless delays and overruns of budget at HS2 the less they are likely to create extra growth from more nationalisation and public capital spending.

The markets have decided to charge the government a high premium in extra interest costs to borrow because many bond investors and traders think the government is spending and borrowing too much. The government needs to borrow around twice the £147 bn of new borrowing in 2027-8 in order to replace debt that needs repaying as well. The debt issuance is scheduled to be £275 bn this year and £308 bn next, leaving bond investors plenty of opportunity to acquire UK debt and plenty of bargaining power over how much interest they want in return. This creates the doom loop, with interest charges shooting up. These add to total public spending which in turn requires yet more borrowing. The UK state has to borrow to pay the interest on the debts.

So what should the budget contain? It should contain no new tax rises. It should reduce tax rates where they can collect more revenue by setting a lower rate. The taxes on wealth and transactions are now such that many people either leave the country or take legal routes to avoid the charges, lowering the receipts. It should deliver a package of tax cuts and subsidies that help many more people into jobs and allow businesses to create the extra jobs that are needed. This needs to be paid for by offering far fewer sicknotes for life, with benefit reform to incentivise work and lower the overall bill.

The stark omission from the government’s pre budget planning, and from most of the debate in the establishment media and left facing think tanks is a proper debate about where savings can be made in the bloated public sector budgets. Why send Mauritius large sums with the gift of islands which are British and should stay so? Why put so much public money into carbon capture and storage projects? Why grant so many long term benefit entitlements to people who would be better off working? Why allow the continuing cost overruns at HS2 whilst paying large salaries and even bonuses to the senior managers who have wandered so far off the original budgets and management plan? Where is the business plan to cut the £500 m a year losses at the Post Office before grants, and the £500m losses at British Steel? Where is the plan to slim the civil service and return public sector productivity at least to the higher levels of 2019?

The government cannot succeed with this budget without substantial reductions in current costs. The OBR forecast which determines the fiscal rules is likely to show a worse position than last year. Inflation is up, productivity disappointing and interest charges high. All this means less revenue and more cost. To get closer to the fiscal rules the government needs to narrow the gap between current spending and income. It needs to take more measures to promote growth. The OBR might need to revise down the credits it gave for planning reform and public investment in the light of how they are working out. It will need to reflect the market penalties on borrowing more in its outlook.

The government will in turn need to break out of its doom loop. With interest rates well above the one day worst Truss level borrowing more is not a sensible option. Borrowing £300 bn a year at these levels for new debt and rolling over old debt is crippling the finances. With the last two sets of tax rises so visibly hitting jobs, investment and growth more tax rises offer no hope. The 1970s Labour government tried to outrun markets with more spending and borrowing and high taxes. It ended in tears, borrowing from the IMF who forced it to cut spending. This government needs to restrain the hands that want to sign the cheques for more public sector costs before some external force comes in to do it to them.

Meanwhile the ticking timebomb under the budget is the Chancellor’s former promise to boost defence spending by more than the government agreed. He still has to find the cuts in the MOD budget promised as part of the package to edge the total up to the 2.7% of GDP he thought too little. It looks as if Mr Burnham expects him to eat his former words on the timetable for more defence spend. It could be a gripping story as the battle for better defence becomes a serial drama.

Railways. Speech on nationalisation Bill

September 11, 2026 21 Comments

My Lords, I welcome these probing amendments and look forward to the Minister’s response to some very important general issues. It is right that the staff in all the operating companies that will be affected by this should have an early idea from the Government about what is planned for their future employment.

I am one of those who welcome the idea that we want a well-paid profession serving on the railways. For the sake of taxpayers, who are putting in substantial grant in aid and capital money, and of fare-paying passengers, who often have to pay very high fares, we need a system for negotiation between staff and Great British Railways which is more likely to achieve the increase in productivity that could justify the higher pay for staff without imposing an ever-higher charge on the taxpayer and fare-paying passengers. This is more than a detail that can be left open; we need to know who the employer will be, what the status of the current contracts is and how they will be put into transition to new contracts for the staff when their employment changes.

Is there anything the Government can tell us about how they might—they hope—have better relations with the unions in future? Can we look forward to a better experience in getting that balance of better pay for better delivery, smarter working, adopting work practices and being willing to operate new capital investment in a way that delivers higher productivity and higher quality of service?

I also welcome my noble friend Lord Moylan’s draft of what the purposes should and could be, which may not entirely match all the Government’s aims. It would be interesting to hear from the Government which of his suggestions are intended or implied in the current legislation, so that we can have some early indication of what the mission statement of the new railway might be.

I think taxpayers and railway users are expecting more services, not fewer. That has not been the early experience of the last two years. They are expecting better punctuality and timeliness, which would also be welcome. What the new railway will definitely require is more feel for where more passenger movements are required or possible. As in the early days of privatisation, surely the early days of full nationalisation they might want to achieve a trend of rising passenger numbers. Privatisation achieved that very well, with the ability of companies to develop timetables and services more suited to modern travel needs and therefore fuel the continuing progress of providing more growth in passengers and revenue.

If a new railway management—the controlling mind of GBR—knows how to do that, it will make everything a lot easier if the background of the completion of these arrangements is rising passenger use, rising revenues, greater flexibility over timetables and thinking about growth rather than cost cutting and the elimination of less profitable routes. That can easily get you into a spiral of downturn, as with the nationalised railway experience for most of its time post war, until privatisation reversed those difficult trends.

I hope that the Minister will not rule out one of the modest successes of recent years, which is the ability to have a competitive challenge to the monopolist. There are times when people outside will see ways of harnessing people, talent and capital to provide additional and better service using the existing track, and for that they will clearly need fair terms for access, and that will provide an innovative stimulus to the nationalised monopoly. However, I fear that the Government will not want to do that, and so I think they will find it that much more difficult to innovate and improve the timetables without that stimulus or spur from others generating such ideas and providing such a challenge and opportunity for the growth of the railway.

The modern pace of change needs continuous learning

September 10, 2026 56 Comments

My Conservative Home article

It is a strange myth that the three years people spend as undergraduates dictates their views, determines their skills and fixes their lives.

In the fast changing world we live in, every day is a day to learn something new, to battle your own ignorance and to embrace improved opinions and skills. I learned a lot more when I took private capital and free enterprise solutions to the governments of the world as a Director of Rothschilds, when I applied my investment experience to qualifying as a fellow of the Chartered Institute of Securities and Investments , and when I led a couple of international industrial businesses than I did as a student.

It is true if someone reads law or medicine the undergraduate experience is part of their wider and longer professional education, but they opt for a life of continuous study and experience in their chosen fields. For the rest of us a first degree may be a remote memory, with little influence over what we think and do now. Most of us needed to train and learn very different lessons once we got into the world of work. The best things a university can impart to alumni is the need to be able to teach yourself, the skill to know where to go to be better informed about today’s challenges, and the self-criticism needed to acquire higher standards and better understanding.

It is true my three years of undergraduate history at Oxford did have four lasting effects on my views. I oriented my course through the limited choices we could make to pursue special interests in economic history and in the history of science and technology, appreciating their fundamental impact on living standards. The brilliance of the technology in the UK ‘s Industrial revolution and social and economic pioneering of entrepreneurs like Wedgwood and Cadbury were models of greater success.

That helped in my business career and as an MP.

We all had to take a paper on Political thought. I cannot remember much of Plato, Aristotle, Hobbes, Locke or Rousseau though I had to master their principles and main works at the time. They had no influence over my personal political philosophy. The sixth appointed thinker was Marx. He did have a profound impact on me as I sought to expose the lack of history, common-sense and compassion in his evil and divisive creed.

I saw the haunting damage his ideas were doing to the lives of people in the Soviet Union and Mao’s China. I started developing the freedom and free enterprise alternative, publishing my Popular Capitalism Manifesto in the 1980 s and taking it into Eastern Europe as the Berlin Wall came down. I explained how the period 1950 to the 1980s was a giant experiment between communism and a more free enterprise system based on personal liberty in the democracies. The freer societies became much richer, offering more comfortable lives. Anyone could travel from the US or UK to ask to live in the Soviet Union. People wanting to flee the poverty and tyranny of communism were shot trying to cross the border. Freedom won the Cold War.

We had to study general continental European history. I would have preferred to have studied American history. It was more relevant as background to understanding the superpower of the twentieth century, being a country of more importance to the technological success and defence of our own. The Oxford course designers included many European style socialists who thought the US too new and too brash to warrant general study. They wanted the UK inside the European Community and saw English history as a branch of European , probably disliking the later centuries when Great Britain became a global seafaring power. They wanted history in foreign languages to add to its cultural complexity.

This did also have a considerable influence over me.

The more I read of the attempts of the Romans, Vikings, French, Spanish, Dutch, Germans to create a European empire by force of arms with their invasion plans against England the more I wished to disentangle my country from damaging European politics.

The more I read of slavery and serfdom introduced by our Roman and Norman overlords, of the slavery in the German occupied Channels islands from 1940, of the sale of Englishmen into slavery by the Vikings the less I liked the continent’s past values. The bitter fight against new and liberating ideas by Galileo, Newton, Darwin and the others and the endless wars of religion were also a turn off. The course made me a conviction Eurosceptic. I voted to leave the EEC in 1975 in one of my first adult votes . Most attempts at creating a united Europe by arms or by diplomacy had caused endless trouble.

We also had to offer papers in what they called English history. It was of course GB history from 1603 and UK history from 1800. I loved the triumphs of our progress. I marvelled at our early limitation of royal power and establishment of legal rights. I admired the painful evolution of a universal franchise. I was humbled by the sacrifices so many made to see off Spanish, French and German attempts at European domination. I was relieved when Britain and our navy led the campaign to abolish slavery elsewhere.

What I learned of our past constitutional struggles was of great value as I and others led the Parliamentary fight to return our sovereign powers to people and Parliament after their usurpation by the EU. The English civil war they told me about became the war of the three kingdoms in later accounts. It prefigured the Brexit debates. Remain used Northern Ireland to hinder Brexit. Scotland voted a different way to England. I remarked that the Brexit rows were the civil war rows without the muskets.

It was a privilege to attend the university. Its great wealth of libraries and research materials were humbling and its intellectual. standards high. I did develop the history of science and technology I studied through two books I published. I took into politics the need to help defeat the evils of communist tyranny by the power of the pen. I held a determination that the hard won liberties of the British people should not be idly tossed away to a world of international treaties, overmighty quangos and the EU.

In today’s fast changing world graduates need to understand much of their real world education starts the day they graduate.

Speech on EU and Northern Ireland

September 9, 2026 62 Comments

This is no way to legislate for Northern Ireland. It is not right to annex part of our country to the European Union. At the time of the Windsor Framework, I and some colleagues in the Commons opposed it and pointed out that there were much easier ways of organising the trade and border arrangements between Great Britain, Northern Ireland and the Republic of Ireland. The Government should go back to that work and understand that we do not have here a system of handling Northern Ireland’s law and trade which meets the requirements of the loyalist community, and maybe others in Northern Ireland as well.

The Government should be ashamed of how undemocratic this process is. As the noble Lord, Lord Dodds, has rightly identified, there is no point in consulting all the people who are to be affected by regulations in these areas in Northern Ireland because the Government cannot change them—and the Government cannot be bothered to work out the impact costs, or even the impact benefits, of the regulations because they rightly understand that they are a spectator. They are not in charge of any of these things.

Then we are told in the documents that there is going to be no review of how this works out. All the other examples that come to the Commons and the Lords from government for consideration go through a proper process. There is consultation with the people they are going to affect. Both Houses expect a proper assessment of costs and benefits. We expect a proper debate and if the Government have got it wrong, we expect them to go away and change or amend it. We certainly expect there to be a review after the process, so that we can see whether it has worked out in the way that the Government wanted.

The fact that none of these things can happen on any of these SIs means that we are going to spend a lot of time, on SI after SI, complaining about the process, so I have this suggestion for the Government. They have embarked on negotiations for something they call the EU reset. So far, all I have seen is a list of things that the EU wants, with the Government indicating that they would like to give those away in order to purchase some greater friendship or influence. It is always very odd that they think you get influence by giving in to what the other party wants. That is not the way most people negotiate.

Would it not be a good idea for the Government to put to the EU that this is doing damage to relations between communities in Northern Ireland and to the way in which they are governed; that it is undemocratic; and that we surely need a new settlement over how Northern Ireland legislation and trade are conducted? I very much recommend the mutual enforcement model, where we say that we will not send anything that is non-compliant from Northern Ireland to the EU and that we do not want to impose any new barriers on the Republic of Ireland/Northern Ireland border—indeed, that we would dismantle all barriers between GB and Northern Ireland.

Dire speech from Chancellor leaves economy adrift

September 8, 2026 51 Comments

The Chancellor underwhelmed as he stumbled through a tedious and uninformative speech. There was no attempt to tell us when defence spending will reach the target he wanted when Defence Secretary and no comment even on how to pay for the increase he inherits from Rachel Reeves. He tells us about a £4.7 bn new black hole where the revenue to pay the extra defence bills should be. There was a complete absence of ideas to cut or control spending. Tax rises were not ruled out. More spending and more borrowing look inevitable.

He says he will back innovation and growth, but fails to say how beyond a £150 m fund for smaller businesses in the North. This tiny sum is just 0.005% of the economy! He promises a 25 % cut in business regulations without any clue of which he will cut. It is a ludicrous over claim, probably copied from the laughable EU pledge to cut its rules by 25%. Instead this government is likely to sign a humiliating EU Re set deal signing UK businesses in a number of important sectors to a wide range of additional EU rules. This is fatuous as the 8% of UK businesses that do export to the EU already conform with their regs to sell into their market. The other 92% do not export so should not be lumbered with these needless extra costs.

He said he would deliver the findings of the Fingleton Review and “ extend those to other sectors, including launch of a review of the costs review of rail infrastructure”. Whatever does that nonsense mean?

Ten government policies that destroy growth

September 7, 2026 47 Comments

National Insurance increase, taxing employers too much so destroying jobs
Banning all new exploration for oil and gas
Failing to agree the development of Jackdaw and Rosebank fields
Putting up Business rates on High Street, leading to shop closures and fewer retail jobs
Banning the production of diesel and petrol cars from 2030
Putting up energy prices to the highest in the advanced world, leading to industrial closures
The Family Farms and Small Business tax has led to business closures
Employment Rights Act has led to fewer jobs
Borrowing too much has pushed up interest rates, hitting investment and housebuilding
VAT on school fees has closed down schools, sacking teachers

Time to back the iconic English sporting venues

September 6, 2026 25 Comments

My IEA article

England should be proud of its great contributions to world sport. Games invented and developed in England have become world favourites, bringing much entertainment, great competition and many well paid jobs to participants all round the world. Today I wish to look at three remarkable English venues that shine in their sporting firmament ps and have built big global brands. They are Lords, Wimbledon and Henley.

These are small places with big reputations. So many great cricket players want to play in a test at Lords and see their name on the honours board. Many in world cricket call Lords the home of cricket and look to it for wisdom and guidance over the development of the international game. So many budding tennis stars want to play on the Centre Court at Wimbledon to become Wimbledon champion. It is the only grass court rated for Grand slam tournaments in a fiercely competitive tennis world. World class rowers will come half round the world to row in the Henley week races on the Thames to add lustre to their achievements.

The joy comes from the pursuit of excellence. This is a world where prizes only go to the most talented and hardest working. Standsrds are so high that competitors are great achievers for being allowed to take part.

What has made and sustained their fame? Some of it is the tradition and history they represent. Some is their skill in modernising and investing as the sport has expanded and changed.

All three have dress codes. To preserve some of the past, players at Wimbledon or Lords tests must play in all white. Rowers must wear club kit and colours. Spectators using the Lords Pavilion or the Henley Stewards Enclosure must wear jackets and ties or the female equivalent. Henley aims to look like a well dressed Edwardian Garden party, and many attendees respond with coloured jackets and club or old school ties for the men and long elegant dresses and hats for the women. The iconic Centre Court at Wimbledon from 1922 and the Pavilion at Lords survive with some modern improvements. Henley keeps the old tents of the temporary Regatta in modern structures for the boat house and still uses the original progress boards adjusted by hand as the race proceeds so spectators can see what is happening below them on the course. All three venues also now use digital communications and drones.

The three venues are owned or controlled by members of a private club. The MCC membership owns the Lords ground and trading assets. Wimbledon is owned by a company controlled by the members of the All England Lawn tennis and croquet club committee. Henley Regatta is owned by a private company limited by guarantee controlled by a self regenerating Committee of Stewards of the Regatta. All three started as clubs for amateurs, but have adapted to the increasing presence of well paid professionals in their sport. All three have royal Patrons, the Princess of Wales for Wimbledon and the King for the other two.

All this looks idiosyncratic and quirkily English. What is remarkable is there has also been a steely professionalism in building these brands, expanding their tournaments, and growing such a strong reputation in their global sport. To do this Lords had to evolve from being a North London/Middlesex amateur club ground to be a premier world ground for the most important cricket matches. Wimbledon had to go from being All England to be all world tennis and Henley had to be well managed and important enough to attract the best from as far away as New Zealand and Australia to row.

Crucial to Wimbledon’s continuing success was the all weather roofs for the Centre Court and Court No 1 introduced this century. At Lords the improved and enlarged seating areas and the state of the art enlarged modern media centre were important to retaining a strong position. At Henley better catering and entertainment facilities have helped keep the crowds.

The important issues are how can the UK keep these great centres and make sure they expand as their sporting worlds expand globally? Both Wimbledon and Lords are embarking on major expansions. Wimbledon wants to put in a new big show court with 38 other new courts to handle the growing numbers that want to compete. They have the land in the adjacent old golf course. Lords is pressing on with rebuilding old stands to provide more seats with more modern facilities for spectators.

The sadness is the planning system seems to set out to make it difficult or to undermine or delay the enthusiasm of the clubs to improve and expand. Wimbledon has been delayed by planning issues over converting the old golf course to more tennis use and are still waiting on an appeal to a permission which had been hard won with many detailed submissions and much expense. Lords was not allowed to put full roofs on stands to protect spectators from sun and rain and has issues with a private owner of tunnels under the Nursery land to the north of the site about any development of that part of the property.

So far these three sports have been spared the special regulation that is now being meted out to football by a government agency. Some lottery money does help the three underlying sports in England. Many other countries if they had brands as big and so full of possibilities as these three would ensure they could develop their sites as they needed to and would see what an asset it is for the country. Tennis and Cricket now mobilise huge sums and generate many good jobs for those who host tournaments, training and good home teams. English test cricketers now can earn seven figure annual sums with a major contribution from their England central contact basic payments. Top tennis stars earn millions a year from prize money. The presence of these large events generates a lot of business in their own right, but also attracts talent and wealthy tourists to the UK to boost our economy further.

Politicians should keep out of sport, and should not get involved in regulating their rules or their finances. They often wish to be associated with winning teams and winning people and like attending the big events. That should encourage them to see just what a crucial success England has had with these venues, and make them more inclined to faciliate their further development and investment.

We are fortunate indeed that successive generations of members and Stewards and of the Directors of the private companies that run these elite sporting events have balanced old and new, preserved and enhanced reputations and developed their real estate. If these great venues had fallen under international corporate ownership, traditions would have been diluted or removed and talent and resource would have been diverted to outside England. If the UK state had nationalised them or taken a bigger regulatory role they would have cancelled their history in a fit of embarrassment. They would have throttled them with wokeish values. They would doubtless have plunged them into loss to become subservient subsidy junkies attentive to the damaging wishes of a bossy government.

Devolution will make people angrier

September 5, 2026 30 Comments

Devolution is seen by Labour as balm for a troubled state. The way they go about it it institutionalises the divisions and builds deep resentments.

The Blair government returned to Labour’s failed previous attempts to devolve power to a Scottish Parliament and a Welsh Assembly. Gorden Brown thought that would end the rise of nationalist parties in both countries. Labour out in a voting system designed to stop the SNP and Plaid ever gaining control. In my book The death of Britain? I pointed out the new elected bodies gave nationalist parties the perfect platform to build independence movements at to practice the politics of grievance. So it proved.

This new pro EU Labour leader wishes to resume with the EU agenda of breaking up England into EU style regions . These ride roughshod over counties and boroughs, the building blocks of English local government. They are tone deaf to local loyalties. Sunderland does not want to be governed from Newcastle, Exeter does not look to Bristol, the satellite towns to Manchester have different problems and outlooks to the city centre.

Worse still is the way devolution will be conducted. Many local rural and suburban communities want less development on greenfields but will not gain powers to achieve that. Many do nit want migrant hotels and hostels but will have to take them. Many want lower taxes by regional mayors just get powers to put taxes up and waste more money.

In defence of the state pension

September 5, 2026 28 Comments

My Lords, I was happy to support previous Conservative Governments in implementing the triple lock, and I support the current Government in honouring their promise. This has been a useful policy in reducing pensioner poverty.

As one of the Members of this House probably keenest to control public spending, I am very conscious of cost, and I have regularly recommended that we should raise the state retirement age, which gives you a substantial reduction and is a fair way of achieving the savings. It is also very much in the spirit of this report, which I welcome; namely, that people in their 60s, unless there is disability or a serious health problem, should be encouraged to work, and they will probably have richer lives as a result. This is now possible because life expectancy is greater than when the lower state retirement pension ages were first set.

More importantly, there are now very few people who do hard manual work. Clearly, they needed a much lower retirement age because they could not continue. Now people have hydraulics, automation and robotics, so it is much more feasible to carry on working for longer. Really, the most power or muscle pressure you now need is the ability for your fingers to press a touchscreen; you are then able to do most of the interesting jobs in our community.

Those who wish to abolish the triple lock or make other changes to pension arrangements would be well advised to remind themselves that the pension is not a welfare benefit but an entitlement based on contributions to the national insurance scheme. Of course, that can all be changed, but it would require complex legislation and a lot of political argument. No Government to this day have been willing to attempt that, I suspect because it would be very unpopular with the public.

The contributory principle is, to me, fundamental. It shows that people have to work and have to pay national insurance. There is an annual sign-off of the fund, with a review. It is a pay-as-you-go fund, not an endowment fund. It embodies a very important contract between generations: the working generation say that they will pay for their parents’ generation on the basis that their children, when they are working, will then pay for them. I do not want to disturb that social contract between generations; I want to keep the contributory principle—you get something for something—and I do not want to take away the triple lock. That would be a great pity.

Beware the bond markets. The UK cost of debt is too high.

September 4, 2026 33 Comments

My Speech on what needs to be done to promote growth and prosperity.

My Lords, I agree with the noble Lord, Lord Whitty, that the national insurance increase and the farms tax were very bad ideas which did considerable damage. It is a pity that more noble Lords behind the Government did not make that clearer in time to avoid the disaster.

I hope that the new Prime Minister and new Chancellor will have learned from the bitter experience of the two Reeves Budgets, which allowed a large amount of adverse speculation, threatening everyone who is successful or enterprising or who has some savings with higher taxes. The Government were surprised when confidence was knocked. They then put taxes on in the Budget, which did considerable damage, and we ended up with higher unemployment, fewer job vacancies, cancelled , deferred investment projects and a lack of confidence in the business community. We need the opposite of all those things. I wish the new Prime Minister well if he can translate his TikTok optimism into a genuine set of policies which will promote enterprise, business, jobs and success, which are what is needed in this country.

As someone who has had conversations with and offered advice to a series of Prime Ministers and Chancellors on the Conservative side from Margaret Thatcher onwards, I have had the chance to observe at quite close quarters what has succeeded and quite often what does not succeed, and I have tried to learn from those experiences. I will share this piece of advice with the new Treasury team: take the bond market seriously. You may not like it and you may think it is wrong, but you are going to find it very difficult to argue with it.

Those very high costs of government borrowing now are a message. They are saying that the tax option is no longer there. Put taxes up more and you may even collect less revenue. They are saying that the spending is too high. You need to look at the benefits bill, as my noble friend the leader of the Conservatives in this House and our right honourable friend the leader of the Opposition have set out in considerable detail. They have described how sensible, modest cuts and proposals would help. By all means accelerate the work on how you can get more young people into work by positive means and get them off benefits, because that is crucial.

However, look at those interest rates. Labour made a lot of fuss when for one day under Liz Truss there was a spike to quite high levels in government borrowing costs, and some of them still carry on about it. I do not think they have understood that for the whole of 2025 and now for the whole of 2026 to date, government borrowing costs have been considerably higher than that one-day spike under Liz Truss. If the Truss spike was wrong, they are gratuitously wrong on an extended basis. There are two differences in the situation.

The Truss Government did not borrow a penny at that very high rate on the spike day; this Government are borrowing, day after day and week after week, at these very elevated rates, which are at least 20% higher than the worst rate under Liz Truss.

The Government have not persuaded the Bank of England to stop selling bonds into a very depressed market. The thing that got the rates back down again after the Truss Budget—which was spending too much—was of course the Bank of England stopping, for a period, selling the bonds at very depressed prices. The Government need to get a grip on that because they are doing themselves and us grave damage.

I want this country to succeed, I want a strong, fast-growing economy, and I want those young people back into work. That takes lower interest rates, not higher interest rates, and it takes proper fiscal discipline. Spouting about fiscal rules does not work. You have to do the hard work and get the Budget into more balance.