Autumn Budget 2025

Lord Griffiths of Fforestfach Excerpts

Thursday 4th December 2025 Lords Chamber

[Lord Griffiths of Fforestfach (Con)]

My Lords, it is a great pleasure to take part in this debate. I thank the noble Lord, Lord Sikka. We disagree on many things, but whenever he speaks he always raises in my mind that economics is not just about money: it is about values and principles. In that sense, what he raised in his speech is a challenge to us.

I want to refer in my speech to two fundamental judgments that I believe the Chancellor and the Treasury made when they drew up this Budget. The first was the refusal to tackle the scale of the problem of public sector debt, and therefore to live with the problem of economic stability or to make it precarious. At present, public sector debt, as we have heard, stands at roughly 95% of GDP. It is twice the average of other advanced economies. The reason why our interest rates and 10-year gilts are higher than in other advanced countries is precisely that. Borrowing is set to come down annually, but national debt is not. In fact, it is due to increase annually for the next three years, as the noble Lord, Lord Burns, reminded us, and then it will come down by a very small fraction.

It is painful to tackle the problem of national debt, in both economic and political terms. Roy Jenkins found it difficult in the 1960s, as did Denis Healey in the 1970s, Geoffrey Howe in the 1980s, and my colleague and noble friend Lord Lamont in the 1990s. I believe, however, that there is no way to tackle the size of our public debt without cutting expenditure. Even though debt is rising, there are still spending risks. We do not really know what the outcome of the welfare bill is because we do not know what the demands will be. We do not know what immigration is. We have NHS strikes—will there be more? We have a defence budget that, frankly, does not really meet our defence needs. We also have the issue of public sector wages.

The OBR’s conclusion is that despite the greater headroom, which is welcome, it

“remains a small margin compared to the uncertainties”.

It mentioned, first, our economic forecast; secondly, our fiscal forecast; thirdly, the uncertain yield from tax changes; and fourthly, fundamental departmental budgets. There is one other element that is at risk, which is to do with the Bank of England. The Bank has a difficult situation: fixing interest rates, and yet not pulling them down enough to deal with the challenges of inflation.

My second point is that every successful economy needs a vibrant middle class that creates wealth. This Budget is really an attack, and a road to a two-class system between the very wealthy and workers, but with a shrinking middle class. Frankly, that is not grounds for hope through the Budget.