Spring Budget 2024

Lord Sherbourne of Didsbury Excerpts

Monday 18th March 2024 Lords Chamber

[Lord Sherbourne of Didsbury (Con)]

My Lords, it is a great pleasure to follow my noble friend Lord Tugendhat. I echo many of the remarks made by other Members of the House, including the noble Lord, Lord Lamont, a former Chancellor of the Exchequer, the noble Lord, Lord Macpherson, a former head of the Treasury, and many others, in being very optimistic at the start of my speech.

The economy, which was so badly hit by the pandemic, the war in Ukraine and so on, is now beginning to show signs of recovery. Inflation is falling, interest rates look set to fall and the prospects for growth are good. There has been a positive reaction to the Budget. I have some quite interesting figures which show popular reaction to those proposals; the approval ratings range from 56 %, 63 % and 76 % to 81 %. I can only hope that it will not be long before these figures are reflected in more important opinion polls in the country.

There was an optimistic theme running through the Chancellor’s speech, and it was the same in the published Budget Report—the Red Book—although all 36 paragraphs of the executive summary had so upbeat a theme they were almost Panglossian: the best of all possible worlds.

However, I was struck by one other thing in the Budget Report. The text was not in black but in light grey—making it slightly more difficult to read. It is as if the Treasury were trying to tell us, “Well, it is not all black and white. The pale grey is sending a subliminal message that what we, the Treasury, say is nuanced with cautious subtexts”.

I will take one example: government borrowing. The Chancellor, in his speech, and my noble friend the Minister in her speech this afternoon, talked about falling national debt. It is forecast to fall every year from now until 2028-29. That, of course, is national debt, not the annual deficit, but what determines the national debt is the deficit—or surplus, if we ever get back to those days—and the deficit depends on two variables: revenue coming into the Government and spending by the Government. Both are highly variable.

Public spending depends on many events outside the control of government. We have seen already, as I have said, the pandemic, the war in Ukraine, and the oil and energy crisis. On the home front, much of the public spending is also outside government control. Here is something that the OBR says, which I think everybody in the House knows, and which should worry us all:

“The number of inactive working-age adults is … 9.3 million … 700,000 more than before the pandemic … Around one third of the working-age inactive population cite long-term illness as their principal reason for not being in the labour force”.


This should set alarm bells ringing, not just about the cost to the public purse, but about the nature and causes of these illnesses and the economic loss to the country. This requires serious analysis because, ultimately, it is unsustainable.

For these reasons and many others, the forecasts of public spending and borrowing are bound to become ever more speculative with every future year, which is why we need a substantial contingency reserve. This year, it is forecast to be £9.2 billion. Is this enough? Is it based on the recent experiences of the crises we have had?

Even without the predicted pressures on public spending there will be increasing further demands on the health service and, as my noble friend has said, on defence. Looming ahead there is one other horror, if there were a Labour Government—the rolling back of the trade union reforms brought in by previous Conservative Governments, which were broadly accepted by the Blair/Brown Governments but which would be repealed by a Starmer Government. I wonder whether the noble Lord, Lord Livermore, who served in No. 10 when Gordon Brown was Prime Minister, is a whole-hearted supporter of his party’s proposals to ditch these trade union reforms.

Finally, and quite separately, I make two simple pleas to the Treasury. First, despite the voluminous information published in the OBR report and in the Chancellor’s Budget Report—or perhaps because of it—it is sometimes difficult to find the most basic information. Hardly anywhere is there a table setting out clearly, side by side, government revenue and government spending. The nearest you get to it are the two pie charts stuck away in an appendix on the very last two pages of the Budget Report—pages 93 and 94. We need more of a plain man’s guide to help the general public understand the basic realities.

My second plea echoes what my noble friend Lord Horam said. It may be just me, but I am losing track of Budget Statements, Autumn Statements and Spring Statements. Again, this seems to make it more difficult for lesser mortals to understand the relationship between public spending and taxation. Surely it is possible to have just one Budget Statement a year setting out public expenditure, tax rates and government borrowing.