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.

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.

I am publishing this again as it is live news, for those who did not see it last time.

As someone who studies bonds and sometimes writes about them I dread the times when they become leading news items. It is usually for a bad reason. Markets can get in a panic if governments issue too much debt or if inflation takes off, hitting the value of the bonds and driving up the interest they pay the saver.  It leads to a lot of fevered and often badly informed commentary on the media, as the media accept the credentials of some  “experts” who struggle to explain a bond in simple language or in some cases struggle to understand the bond themselves.

A bond is a government debt. Many governments like the UK and US borrow large sums from the banks, pension funds, insurance companies and the investing public. They do so by issuing a large new debt for anyone to buy a small portion of the new big loan. The buyer gets an electronic certificate that they have bought a share of the debt which states how much interest they will get on their investment, and when they will get their money back. The UK government will borrow the money for a specified time period with a fixed repayment date (the duration of the loan) and will guarantee to pay a fixed rate of interest every six months throughout the duration of the bond. Inflation linked bonds are different.

These bonds are a convenient way for funds and savers to invest. They know exactly what rate of interest they will get, like making a fixed rate savings deposit with a bank. They know exactly when they will be repaid. More importantly, they know that if their circumstances change and they need to get their money back in a hurry, they can sell their bond to someone else in the market any time it is open. So far so good.

The catch is if you do need to sell before the repayment date, you might not get back the amount you paid the government in the first place, or the amount you paid to buy the bond in the market. If interest rates go up in the meantime the value of your bond in the market goes down, as people will want to get a higher income on your bond than you are getting. They can only do this  by paying you less for the bond than the original issue price because the amount of interest paid is fixed. The interest paid is then a higher percentage of their cost of the bond than it was of your original cost of the bond.  A bond with no repayment date (like a stock with a very  distant repayment date)  issued with a promise to pay 1% interest annually will halve if the interest rate goes up to 2%, as the £1 guaranteed interest stays the same so to get 2% on that bond you can only afford to pay £50 for £100 of the original issue. £1 interest is 1% of £100 and 2% of £50.

Where I often part company with the commentariat is when I hear them say these government bonds are safe assets. If you or your pension fund had bought the UK government’s 0.5% 2061 bond at issue you would be sitting now on a 77.5% loss on your original purchase price. So if you had bought £100 worth you could sell it today for just £22.40.  These longer dated government loans or bonds are highly volatile. Before covid the Bank of England and the UK government issued a lot of debt at very low interest rates with repayment dates many years ahead. Once interest rates started going up to deal with a bad inflation, you were bound to lose a lot of money if holding these investments. It is true that if you wait until 2061 you will get your money back, but in the meantime you will only be getting an unacceptably low 0.5% on your money when a savings deposit or a shorter dated government bond would pay several times that.  If you own the 4.25%  UK  gilt  repaying in December next year you can sell your £100 worth of that for £100 today, or hold and enjoy the 4.25% annual interest for the remaining  year and bit when the government sends your £100 back.

It is true that a government bond from a reliable state like the UK or US is safer than some corporate bonds issued by some companies. They might go bust, or get into financial difficulties so they delay or cut the interest payments. The US and UK have met all their interest payments in the past and are very likely to continue to do so. That has not been true of all other governments with some failing to meet payments when they have got into financial difficulties. Germany signed a 1953 Debt Agreement cutting some of its debt obligation by agreement  with its creditors. Brazil reneged on some debts in 1987. Since 2020 Sri Lanka, Argentina, Ghana, Zambia, Ecuador, Ethiopia and Lebanon  have all defaulted or suspended some payments on debts.

It is untrue to say that any government bond with a very distant repayment date is “safe”. In times like today those bonds will sell off to low prices. They can be ravaged by inflation at any point in their long lives. Both the US and UK governments are having to pay a much higher rate of interest on  their borrowings today than at any time this century. That is because they have already borrowed too much and are refusing to rein in their high levels of new borrowing which places more strains on a  reluctant bond market. The danger is a doom loop, where higher interest rates drive up the amount government has to pay in interest charges on its debts, which in turn worry the markets as these could become unaffordable.That happened to the UK Labour government in the 1970 s when it ended up having to pay 15.5% on one of the bonds it issued. It then of course had to announce spending cuts to try to get back in control of its runaway finances.

My Lords, I share the mood of this House about the tragedy of Hillsborough. I pay tribute all those who have spoken so movingly and with great sensitivity about the long suffering that it has caused. They have drawn, rightly, on their own experiences.

Surely the very least we can expect of all of us and of all public servants, elected and unelected, is that we should tell the truth to an inquiry. That should be a minimum requirement or expectation. Surely we should go further and expect all public officials facing an inquiry to collaborate willingly, to offer information and to share the relevant papers, rather than seeing it as a defensive measure they have to take to protect themselves and their small part of the public sector from proper scrutiny. They should want to get to the bottom of it to learn from the experience. How do you run a good organisation? You learn from your mistakes, as well as reinforcing your successes.

I want to concentrate, in my brief remarks, on how important a properly enforced and widely accepted and adopted duty of candour is throughout the public sector to avoid another series of chapters of disasters of the kinds we unfortunately have to review today—everything from bad blood to the Grenfell fire, the Hillsborough disaster and the Post Office mugging some of its best employees. If we could get the public sector to adopt that more widely we would start to intercept problems early and avoid them getting out of control, and we would succeed in stopping some problems ever emerging. There are many good public officials who already do that automatically and do not need to be told, but clearly there are not enough, because we have seen too many tragedies coming from too many different parts of the public sector.

I pay tribute to the noble Lord, Lord Arbuthnot, who led a small group of us MPs in the Commons some years ago. We were quite convinced that the sub-postmasters were being wronged and that Post Office senior management was doing bad things by not understanding that the fault was from a computer and not from the people. I remember asking a succession of Ministers at the time, “Is it likely that, suddenly, a lot of your best managers, who have been honest and running good businesses for many years, would all become crooks at the same time? Would they become such incompetent crooks that it would all show up in the accounts and the computer runs as soon as they took the money off the Post Office?” It was completely nonsensical, yet we were not able to get this simple point across to Ministers taking briefs from the Post Office and from senior executives who were working with lawyers, so they lived the lie and tried to persuade us of something that was patently absurd.

This is not just history; the Post Office tragedy goes on because many of the things are still not being fixed. There are still sub-postmasters whose reputations have not been rehabilitated properly or publicly enough, so I say to the Government: get on with it. There are still sub-postmasters who have not received their compensation. Successive Governments have failed. Again, the Government must get on with it. If we are to make any sense of this new spirit embodied in a Bill that has a very welcome aim then these things need fixing now.

Let us take the case of the British Steel workers in Scunthorpe. The Government recently nationalised British Steel. They have led the public and, I presume, the workers in Scunthorpe to believe that the main purpose is to save the jobs of those working at the blast furnaces there. Will that actually be the case? Do we have enough candour here? We also know that the Government think that blast furnaces should be replaced with electric arc furnaces and that there used to be plans to do that for Scunthorpe. We also know that, if that happened, there would be a very big loss of jobs because far fewer workers are needed in an electric arc furnace plant than in a blast furnace plant.

Let us have some candour from the Government. If they are genuinely going to preserve these jobs for many years then that would be very good news for the workforce, but can they guarantee that? Let us have some candour for the taxpayers. How much will that cost? Apparently, British Steel is losing £1.3 million a day. For how many more days and years can you go on losing that amount of money? Is there a plan—we still have not been told the plan—that would reduce those losses while preserving all those jobs? These are the kinds of things that a Government need to get right if they are to persuade people in favour of more nationalisation and that a doctrine of candour can actually work.

Let us take the railways. There have been a couple of unfortunate crashes over the summer. I presume that Network Rail and those involved looked quickly at what had gone wrong, because if something really bad had gone wrong that could repeat itself then they would have had to shut down other parts of the network, which they did not do. However, we did not have any candour at the time about why those people had been injured and why two people had died. Should we not have more candour about that? Now that the railway is becoming fully nationalised, why do not we get a debate into the issue of why you do not get a seat belt on an intercity or express train? The crash investigations usually reveal that most of the serious injuries and deaths are caused by people being flung out of their seats into hard surfaces and sharp surfaces, or thrown against windows. That is what causes the real damage to people.

I say this to the Government. I love the idea of candour and honesty; it is the only way to run things well. You need to be honest as soon as something starts to go wrong. You need to share it with people. You have to come to the House of Commons or the House of Lords and say, “This has gone wrong, but we know the fix, and this is what we’re going to do”. That is not happening in enough cases. The Government, who want more nationalisation, should particularly look to the nationalised industries. As someone who has thought and written a bit about them, I find that it is becoming fashionable again, but please get it right.

Mr Burnham says he believes he will get more growth and prosperity if he devolves more power to Regional mayors and if he nationalises more industries. These are two wrong turnings.

He immediately contradicts himself by saying when it comes to tackling homelessness, his first priority, he needs to take powers away from Mayors  and local government in order to enforce a uniform and effective national policy. When  is he going to do that to show he means business with his stated prime aim?

He has also discovered that pressing for full nationalisation is too expensive. A wish to build hundreds of thousands of Council homes has been changed to hundreds of thousands of social or affordable homes not in Council  ownership, presumably  owing to cost and the  inability of Councils  to get things done. A passion to nationalise Thanes Water comes up against a nationalised version having large capital needs to build more reservoirs and treatment works which the Chancellor cannot afford.

Mr Burnham ignores  just how bad our nationalised industries  are. The Post Office secured the imprisonment of many key staff on false charges of fraud and now needs taxpayers to pay  large compensation bills. British Steel is losing £1.3 m a day with no plan of how to sort it out and save the blast furnaces. Indeed, the government wants to close them for net zero reasons, leading to the loss of many jobs they say they wish to save! HS 2 is an enormous cash sink, running way  over original budget and more than 10 years delayed.

So what is the attraction of nationalisation? When will Mr Burnham admit we cannot afford more  of it?

With no sense of irony the Governor in his global capacity working for financial stability  warned against excessive borrowings for AI possibly leading  to a sell off in AI shares which could lead to a collapse of bonds. Well he should know. It was the announcement of a large sales programme of UK government bonds just before the Truss budget that helped collapse the gilt market. This was proven when the Bank reversed its sales policy and wiped out much of the bond damage almost as soon as it had happened. It took Labour and its higher spending and borrowing plans to take interest rates well above the worst Truss level and keep them there  throughout 2025 and 2026 to date.

This is not the first warning of possible market falls we have had from the Governor. He warned in April  of a private debt led collapse, after correctly identifying a big build up of such debt. He now seems more concerned about AI and leverage ownership of shares though e mentions private debt in passing.

I am against the Bank issuing such general warnings and gloomy forecasts. If the Governor thinks tec based borrowing is excessive then he has a range of powers to stop that being true in the UK banking system. As it is more likely to be happening  in the US than in the UK he can have  a firm and private conversation with the Head of the Fed who can do something about it in the US. The UK needs more tec investment, not less. Putting out a general warning either makes him look foolish  when the forecast turns  out to be wrong, or weak if it is right and he has taken  no regulatory measures  to stop it.

There was some flurry of concern when recently the UK state debt passed £3,000 bn. The debt has trebled since 2010 when the OBR was set up to help control all that borrowing! According to Labour much of the time since 2010 has seen public sector austerity, yet state spending has risen well ahead of prices and state borrowing has trebled.

The truth is £3,000 billion is a number that does not mean much to most people. If that is what it takes to provide public services so be it, say many. It only becomes a problem if one day the government discovers it cannot borrow any  more to keep things going at anything like an affordable cost. That is what brought down the 1974-9 Labour government. They overspent and overborrowed. They ended up having to pay 15.5% for a new loan. The shortage of savers willing to lend to them also forced them to borrow from the IMF, with conditions attached to make them rein in spending.  Then people get the seriousness of a government that cannot control the money and throw it out of office.

It is easier to understand what is going on if we set out the figures per head of the population. The state debt today stands at £52,000 per adult or £43,000 per person living in the country. Taxpayers have to pay the interest on that borrowing, now running at £1800 per adult this year.  The government is likely this year to add another £2400 to the debt per adult as they borrow more to sustain their high spending. Each adult is having to cover benefit costs of more than £6000. State spending is £24,000 per adult.

Of you just take the figures per Income taxpayer then they become larger. State debt is then £75,000 on average, debt interest this year will be £2575, and state spending will be £35,000.

Perhaps the most realistic way to view the costs of the debt is to average it between the 8.5 million people who pay higher rate Income Tax. They are also the ones paying the IHT, CGT, Stamp Duties and higher Council taxes without receiving benefit payments back. They pay the bulk of the costs. So for each of them state debt is now £350,000, state spending £164,000 and state interest payments £12,000 a year. Within the 8.5 m the top one percent of taxpayers have been paying 28% of the bills. It is this group which is depleting as some leave the country to avoid penal taxes. No wonder, when you see the growing costs of the state and the impact is having on the debts those remaining have to help pay for. Each time a rich person leaves the burden gets bigger for the rest of us.

Mr Burnham has said he wants to revive our High Streets. So far all he has promised is to cut Business rates on pubs  and cafes , put up to business killing levels by Rachel Reeves. What about the shops and many other small businesses that enliven town centres? He says he will pay for this by raising rates on warehouses  used by on line retailers, so shoppers will still have to pay the extra to feed the government monster.

We know Mr. Burnham has visited some High Streets. He seems aware of closed businesses and the tatty state of some of them. But where is the vision or thought out plan to right them?  Where the concern about dreadful levels of unemployment for the young, denied jobs in hospitality, leisure and retail by the Labour tax storm?

He should start by reversing the huge damage Starmer/ Reeves did to employment and service levels in shops. The jobs tax or National Insurance surcharge, the higher Minimum Wages and the rip off business rate hikes all left many shops reeling. Many young people cannot get their starter or student jobs on the High Street anymore because government taxes have priced them out.

The government has failed to supply the police officers and the money needed to clamp down on shoplifting, graffiti and anti social  behaviour, putting shoppers off going into town. They can buy on line instead.

The government attacks and blames some of our most successful shops, the large food retailers. It wants to blame  them for the inflation the Bank and Treasury have unleashed.. The government seems unaware of the low single figure percentage margins the supermarkets make. It is oblivious to how competitive they are and what good service they provide.

Think again, Mr Burnham. Get the taxes and government imposed costs down. Back small business and independent shops. Introduce  enough police to tackle the crimes on the High Street, making them safe and pleasant again.

Are we being set up for the final give away? Is the idea of going to the UN General Assembly an effort to show the PM under pressure from some members of that body to surrender our islands? Does tge PM not understand the  General Assembly cannot order a Security Council member to give away sovereign territory? Doesn’t he see it will make him seem weak if he is harangued to give away the Chagos, then does so?

Therecis no defence case fir giving Diego Garcia away. Mauritius is a friend of China’s who might well grant China access to the waters around the Chagos. Mauritius is a non nuclear nation. Once in charge of the islands they might object to nuclear powered and nuclear armed  boats and planes using the base.

The UK’s title to the islands is good There is no good Mauritius claim, a country 1200 miles  away and without a navy to protect the base. The islands enjoy strong environmental protection. Mauritius would want to exploit the fishing potential and other natural resources.

It is madness to surrender the ownership. Even worse to offer them large sums of money to do so. I advise the PM to cancel the visit to the UN General  Assembly. It could prove expensive and not even give him good pictures.