My Lords, the Conservative Government were swept from power, first because they did not deliver on immigration control in the way that they promised but, secondly, because they presided over a very major surge in inflation in the early 2020s, which had been brought about by excessive spending, excessive borrowing, the deliberate repression of interest rates and the artificial creation of very large sums of money by the Bank of England. Like many, I supported the first very substantial injections into the economy when lockdown was first announced. Lockdown took a lot of activity and income out of the economy and a very major offset was needed. However, I became increasingly critical and impatient in the recovery period because the Government and the Bank of England did not seem to understand that we were into recovery and carried on with excessive borrowing, excessive spending and excessive money creation. I and others told them that it was bound to be inflationary, but much of the great British economic establishment was slow to see that and the result was a nasty cost of living crunch that did damage to the electorate and drove the Conservatives from power in a perfectly understandable way.
By 2024, however, the Conservative Government had got much better control of the economy and, for the first six months of 2024, under Conservative direction, the inflation rate came back down to the 2% target. For those six months, it was the fastest-growing economy of the G7. The Government set out a five-year plan in their 2024 Spring Budget, as always, which had entirely credible figures to show the deficit and therefore the borrowings coming down year by year to reassure bond markets. Under the Conservatives, of course, it was considerably cheaper than it is today for the Government to borrow because there was a bit more credibility in the medium-term prospects for controlling borrowing than there is today.
I think the fairest thing to do to try and analyse where we are, because I want the Government to succeed and I think they need to consider very carefully where they are when framing their next Budget. Let us compare the plans of the outgoing Conservative Government in the 2024 Budget for 2027-28 with those of this Government. Let us concentrate on 2027-28 because that is when the new Prime Minister and his new Chancellor can make any changes they like. They have inherited the current year and have chosen not to make many changes, just a few incidental, very small increases in spending. They have basically lived with the Reeves/Starmer construction of this year, but let us hope they think carefully about what they want to do for 2027-28.
What have they inherited from Reeves and Starmer? Well, in two Budgets, Reeves and Starmer increased taxes by £66 billion by policy changes—there is also, of course, a much bigger increase in taxes from fiscal drag and inflation—and for 2027-28 they suggested that they wanted to borrow £97 billion more than the outgoing Conservative Government had planned to do. The Conservatives were planning to borrow £50 billion in 2027-28, and the current Government inherits £147 billion of planned borrowing. There is then the level of spending: the Reeves/Starmer Government added £145 billion extra spending for 2027-28 compared with the £97 billion extra that the Conservatives were planning for that year. So spending will be £242 bn up. The total package is to borrow a lot more, tax a lot more and spend a great deal more.
Looking at the economic performance of the last two years, we see that this has not been a benign policy mixture for the economy. Unemployment has gone up and inflation has gone up, not entirely because of world events in the Middle East, but also driven by public sector costs where there has been a very big increase in public sector wages. I have no problem with paying people in the public sector more, but there should be productivity gains to help pay for it, and those have been sadly lacking. We have seen the Government stumbling to maintain tax revenues at the more elevated levels because they have triggered what in the 1970s was called a brain drain. A lot of talented people and a lot of people with wealth have decided that they want to make their lives or to make their investments elsewhere, which is a considerable concern. I have no problem with wanting to tax the rich more than everybody else, because they have the money to tax, but if you overdo it they do not stay to pay the money you wish to raise from them and then everybody else has to pay rather more. You lose those easier amounts you can get if you tax the rich in a sensible and internationally competitive way.
As has been made very clear by my noble friend Lord Bridges, the Government has to take action on spending. I do not think higher taxation is going to help get the Government out of this, given that they have ruled out the main taxes on most people. They would have to target the wealthy, the energetic, the people who work harder rather more than anybody else. More of that would do damage to growth and would mean less revenue rather than more, so they have to find public expenditure reductions that can start to bring the budget into a proper shape.
I do not share the view of those who think we should pick on the pensioners or the disabled to make particular sacrifices at this juncture. Those who are genuinely disabled need our proper financial support and I think both parties were right to promise the triple lock in the election and should keep to their word. There are many easier targets, which I have often mentioned, but which time does not permit me to handle today. My party has set out a very good set of cuts for the benefits bill to start us off.
September 13, 2026
Unfortunately past governments have chosen the stealth route of taxation, rather than being honest with voters.
All Tax allowances should be inflation and index linked.
Reason Government is resp[onsible for inflation, not the general public.
The gifting allowance last updated when,.perhaps 40 years ago.
Inheritance tax last updated when, perhaps 18 years ago
Earnings allowance last updated when, perhaps 5 years ago.
Savings interest limit, reduced.
On top of all of the above many new taxes introduced, the biggest being unused Pension funds into IHT..
All the above and the regular moving of the goalposts in so many areas, make people trying to plan for a reasonable and stable financial future impossible.
September 13, 2026
Stealth taxes are even less efficient taxes than just increasing the main taxes the parking taxes and fines, bus lane and boxed junctions mugging cameras etc. must waste over 50% of what they grab in admin costs
We are however so over taxed now that any increases in tax rates or new taxes will produce less overall tax not more.
Chris Rokos is off to Greece talking his estimated £ 330 million PA of taxes with him. Quite a few ordinary workers to replace that? Good for him he will doubtless spend it far better than Burnham and Labour would.
The Lockdowns cost a fortune and did vast net harm too. In the main they just delayed many people getting a natural and more effective vaccination. The health young and children never needed protecting or vaccines even had these been safe and effective they were far from this. The vaccinations also (as is now very clear despite the government trying to hide the stats.) did vast net harm amd are still doing so. What wonderful experts governments select. Now they are even trying to force net harm artificial folic acid into all our bread and flour with clear negative effects for people on average.
Serial governments since Ed’s moronic climate change bill which nearly everyone voted for (not JR and a tiny handful) have wasted over £1 trillion on the mad devil gas climate religion.
September 13, 2026
When all the political parties agree on some policy they are almost invariable wrong the EU, climate alarmism, the net harm Covid Lockdowns and net harm Covid Vaccinesm Net Zero, the Post office Scandal, Hillesborough, blood contamination, public transport subsidies, the NHS system, road blocking, rigged markets in transport, banking, schools, universities, housing, open door immigration levels…
September 13, 2026
So today wind supplying 1gw orc3% of demand plus overcast so solar is down to 14% until dusk.
We are Importing 20% of our electricity at £199 per mwh and it’s not even winter.
September 13, 2026
Indeed and, for what strongly appeas, to be reasons of the by-election in Hoborn it seems that they attacking Israel and the USA and still delaying decisions on reopening the oil and gas platform.
Labour party by-elections first, the UK polulation second or third or perhaps not at all. Other then for tax grabs of course.
September 13, 2026
a feature of the way the public sector runs things is increasingly work is not done by people on the public sector payroll, ever more often the work is delegated to quangos, and outsourcing companies etc ed. and we have (lax? ed)decision making where ex public servants in the quangos and (possibly in an outsourcing company ed) have cosy relationships and are given work by the people they worked with when they were on the public sector payroll themselves. there is not efficient subcontracting, rather we have ( cosy? ed)relationships where sub par performance is tolerated, and often encouraged. the public sector is so bad at delivering stuff that mostly they get someone else to deliver, but the public sector is also bad at leading subcontracters, being the overall system integrator themselves, and driving success. so we have mediocre delivery, and nobody really running things, no real accountability. and of course the end workers are often given far worse pension etc deals than they would get if they were directly on the public sector payroll. so the actual public sector itself is just an organisation which watches others do work, so over time is less skilled itself, and less able to manage much other than politicians.
it also makes the true headcount working for the public sector very hard to see.
the good people doing their best to manage their subcontractors well and strictly according to merit do not do well in the public sector, in the same way that people who deliver good public services do not do well. a great nhs unit which treats people well attracts more patients but they get screwed because money does not follow success. the people who do well in the public sector are those with ( questionable ed) relationships with their suppliers, who lie and manipulate their results, and pull the wool over the eyes of politicians.
Reply There may well be bad management of contracts. If you wish to allege more serious malpractice you need evidence.
September 13, 2026
seen it all first hand, that’s evidence enough for me. you cannot put the burden on one individual like me for documenting and collating this.
the feedback is real.
September 13, 2026
My regional mayor (quango by any definition), is to create a investment/development company to manage an allotted zone/area probably employing who-knows …this zone is within a council that already has a well managed development, planning & investment department ….and no one can stop him !
September 13, 2026
This is an outstanding speech from our kind host. One hopes that their Lordships and the government listened/reads it carefully. Particularly the final paragraph concerning not “taxing” the pensioners and the disabled.
September 13, 2026
SG. I too love reading our hosts speeches but alas I think the HoL is an echo chamber. I cannot see Burnham or any of the liebour party taking a blind bit of notice.
The government is like a kid let loose in a sweet shop. They will gorge themselves until sick which of course means bankrupting the country.
I fear there is worse to come.
September 13, 2026
yes speech is very good. I like to think the feedback john gets in the comments here helps him.
September 13, 2026
Mrs Gold and I were relieved to have received a letter from the police yesterday (a Saturday, how’s that for the new privatised Royal Mail) advising that we will not be prosecuted over the hosepipe “incident” in Mrs Gold’s orchid greenhouse last month
We have subsequently discovered that the local Neighbourhood Watch woman managed to organise a drone which flew over our back garden and which provided the police with “evidence” that we had a hosepipe in operation. This raises it’s own privacy concerns.
It seems that they cannot press charges because the hosepipe was not connected to the water supply, only to Old Jim’s rainwater harvesting system – which was empty on the day
We were, however, reminded that compliance with hosepipe bans is mandatory. I am going to have this letter framed and hung in the downstairs lavatory, where all can admire it.
September 13, 2026
Perhaps give your neighbour a copy, and thank them for their concern !
September 13, 2026
Good morning.
All governments lose power because they fail to remember or realise the importance of TRUST. When you make promises to the electorate the, electorate have every right to expect that said promises should be kept. Why allow yourself to be fooled again and again.
And there is another dynamic that I am for one happy to now see, and that is emergence of rival political parties. I have long believed that, one of the core cornerstones of modern Conservatism is that of ‘choice’. Choice gives the consumer / electorate the real power needed. I have long believed and indeed argued that; “We will never have true democracy until every candidate MP in every constituency has to fight for every last vote.”
The reasons I believe we are in such a mess, is because the ‘System’ of governance, both politically and bureaucratically, is broken. Which is why I believe in either root and branch reforms or, Direct Democracy.
Too much power is held by too few people with little interest in the good of the nation and its people. This must change !
September 13, 2026
John – “excessive money creation” that does scan, if there was money creation the money would have been to ‘pay’. From my lowly position in the World I saw it then as now, as an excessive tax take that removed money from the economy crippling growth.
The USA and Japan run massive debts, but the also run massive earning economies that can fund that debt. The are funding tomorrow. The UK Parliament just racks up debt at the expense of the economy, growth and a way forward, they are killing tomorrow.
September 13, 2026
“excessive money creation” that doesn’t scan, if there was money creation the money would have been available to ‘pay’.
September 13, 2026
Sir John has established some scary facts and possible ways to alleviate the debt problems. However, they will all fall on the deaf ears of this wretched government, which appears oblivious to the dangers of higher debt. And now, with the new PM thinking that the bad old days of Labour in the 70s were a good thing, surely OUR Nation is once again sick.
That Labour is now leading in some polls suggests many of the electorate have had no experience of the terrible economic mismanagement of OUR country at the hands of socialists back then and are prepared to believe that doing the same thing all over again will produce a different result.
Perhaps they should heed the warnings of the economists who predict we shall need external help by 2023 and/or drive us mad. Again. The government has managed to do much damage in the past two years in office; I shudder to think how low the country can further sink before the next scheduled GE.
September 13, 2026
UK national debt (£3 trillion) figures do not include future State Pension commitments …which the tax payer alliance suggests is an additional £11.7 trillion
September 13, 2026
There was a little more to it than that.
As I recall they instigated policies that labour would have been proud of, two styles of justice evolved during their time in office and they pursued net-0 in as fanatical a way as the greens.
The promised bonfire of quangos never took place, and the Tories showed how weak they were by surrendering to the EU on too many occasions.
Basically they became the government of the left. It was not just that they lost their way with so many pointless leaders in a short time, we could no longer trust them. Their actions were ‘1984’ in style, and on top of that they got us involved in the pointless Ukraine war.
The covid era was a total disaster and showed how they were unfit to manage any pandemic, bordering on the criminal. They wasted £Billions and created the debt mountain.
In their short time in office labour have already followed the Tories down the same route, but worse, and even make the last government look good.
Yes, I like the Tory leader, but no way have they done anything yet to compensate for the sins of their last 10 years in power. They still retain too many leftie intellectuals.
Tax cuts are badly needed to inspire confidence and get the economy growing.
September 13, 2026
Cuts in spending needed before cuts in tax, otherwise no one (especially the bond markets) will take the government seriously.
During the 1970s Labour took bond yields over 15%. Will they not take the economy seriously until those levels are repeated?
September 13, 2026
So many things intertwined, overlaid that have become clunky and over expensive to ‘just’ administer. The UK Parliament has become obscenely ‘hooked’ on running Ponzi schemes.
A big one, where the media and the left get to blame the pensioners, the people now unable to respond and adjust due to age. My interpretation of what was meant a National Insurance scheme was just that a ‘State run scheme’ that was compulsory to act in a similar way to traditional Insurance schemes. So instead of ring fencing the money taken by compulsion, by Law it is now treated as income tax absorbed, squandered. It could be rationalised to suggest the basic rate of income tax in the UK is 43%(including the job tax) not the political partisan 20%. There is a complete lack of honesty in this UK Parliament
At today’s rates the crude figure (as the UK Parliament contrives and distorts things) is for each employee in the private secure the Government takes 23% of their income payable as NHI – their Tax is separate. Yes, the money pays for the NHS, Pensions and unemployment Benefit. The point I am making is the same money going to a proper Insurance scheme is traditional invested and would be well funded. The NHS would be claiming from an Insurance fund, pensions would come from similar funds the system would no longer a political football. No longer robbing Peter to pay Paul, no longer overseeing the World’s Largest Ponzi scheme.
Margeret Thatcher saw the flaws did well in weaning pensions off the State and providing a future, then along came the Socialist anti-UK Gordon Brown saw these private funds growing being able to service their customers so he raided them removed £5 billion overnight from the growing personal pension pots – killing the drive to being self-reliant and sustaining.
The problem of funding health, pensions, unemployment-benefits still exist, the UK Parliament is still running the Worlds Largest Ponzi Scheme a scheme to make Bernie Madoff proud. Madoff received a 150year sentence for what the UK Parliament does daily – who got the raw deal?
All the tinkering in the World wont change things, it needs someone with ‘bulls’ to get a grip, take charge, manage, something that this UK Parliament is devoid of. Blaming others, punishing those that can no longer due to age reassess and change is also not the answer. Political Religion, extremist terrorism, rules, and not common sense, logic and good management skills – above all working with and not fighting the people of this Nation
Reply 97% of the outgoings from the National Insurance fund are now to pay state pensions. The other large contributory benefits are no longer contributory. The fund is super solvent at current high NI Contribution rates.
September 13, 2026
@Reply – the bit that is hard to grasp, the suggestion that it is a good idea that the money coming in is only to pay for today’s recipients, with no connection to today’s payees, that is not the accepted version of self funding.
Its not super solvent if the money stops coming in its dead in the water. That is how Ponzi schemes works, cross your fingers and hope something turns up. No correlation, or real reward for the payee. People rightly at all stages of that type of vague agreement feel aggrieve, and that’s the problem. As is often commented here that the last people to have running and managing what should be a commercial operation would be those that turn up in the UK Parliament.
The Country is in a vicious trap that can only end badly. In the current set of circumstances I don’t have the answer, I can’t see the answer, just at some stage a lot of people are going to get burnt. Margaret Thatcher had the foresight started the process to change the balance and push the ownership towards the recipient, it would have been a 50year project, then Labour screwed it up, they refuse the idea of people not being beholden to the State. It will take a few generations to turn it around and as we have a UK Parliament just interested in themselves, today and the next election
Reply The National Insurance fund has run for almost 80 years without running out of money. The Actuary has to sign off its solvency annually. People are still going to have to pay NI Contributions.
September 13, 2026
when Blair took power the national dept was 42% of gdp on leaving office it had reduced to 36% thanks to
economic growth.The the rot sets in.For 2025 the national debt had increased to 96% of gdp.Thankyou
four disastrous governments 2 Con (I ignore Truss) and 2 Labour.Clearly no matter who we vote into power
they are incapable of averting the accelerating slide to disaster.Or am I being unfair on the politicians
of all parties
September 13, 2026
I think we are beyond that point. When you have more takers than givers then you have more voters for more State than less. ie More taxes and borrowing. Both of which those in the real world and not on the take know will end once the money markets call time.
September 13, 2026
According to Sir Dieter Helm, Professor of Economic Policy at the University of Oxford, it is not only national debt which is a problem but also private and corporate debts. He says: “The four fundamental problems are: not enough production, too much consumption, too little savings, and too much debt. We import rather than produce, and have almost no supply chain domestically for the net zero target. We live beyond our means, with imports exceeding exports, and calling capital maintenance “investment” supported by debt rather than paying as we go. We have virtually no savings net of capital depreciation, and hence rely on foreign investors not domestic savings. The result is too much debt, exacerbated by failing to realise that the great financial crisis of 2007-08 and the Covid-19 pandemic left us poorer, but without the willingness to accept an adjustment to our consumption.” Listen to his podcasts 58 & 59.
September 13, 2026
Even the injections on the first lockdown were unnecessary. How many fit folk under 40 had any issues with Covid? Crazy to shut everyone up for more than about 10 days, which could have been designated annual leave. 99% of the money splurging by Sunak could have been avoided.