Budget Resolutions

Debate between Iain Duncan Smith and Emily Thornberry

Monday 27th November 2017 Commons Chamber

[Emily Thornberry]

Of course I welcome that, but I am concerned that we still have no answer from the Government on what will happen to the European body that currently regulates pharmaceutical trade across Europe. With no answer on that, it is difficult to be able to look at a long-term plan in that regard.

I was talking about the mess. We saw that mess last week in the Office for Budget Responsibility’s latest projections. Growth in the UK, which was already projected to be the lowest of all major economies, has now been cut again, in one of the biggest downgrades in our economic history. The truth is that it could be much worse. Let us face the reality. The OBR’s forecasts last week were still based on an optimistic assumption of Brexit.

The OBR said:

“Given the legal requirement for the OBR to produce its forecasts on the basis of current Government policy, we once again asked the Government to provide us with any detail on post-EU exit UK policies in relation to trade, migration and EU finances.”

Let us note two points about the OBR’s language, because Robert Chote is not one to use his words loosely. He said that he had “once again” asked the Treasury for its Brexit plan—presumably, he has been making that request for many months now. What he asked for was very simple but very shocking: he asked the Treasury for “any detail” about its plan. What did the Treasury do in response? According to the OBR, the Treasury sent it a copy of the Prime Minister’s Florence speech. How utterly pathetic. That was followed up with a bunch of documents full of aspirations and pipe dreams, with no detail and of no practical worth.

The OBR was left to conclude:

“We were not provided with any information that is not in the public domain.”

In other words, the organisation whose legal responsibility it is to forecast the future state of the British economy asked the Government what their plan was for Brexit and was treated just as dismissively as every Member of this House has been treated for the past 17 months. As a result, the OBR concluded:

“Given the uncertainty regarding how the Government will respond to the choices and trade-offs it faces during the negotiations, we still have no meaningful basis on which to form a judgment as to the final outcome and upon which we can then condition our forecast”.

Seventeen months on from the referendum, the OBR still has “no meaningful basis” on which to make a forecast about what Brexit will mean, either because the Government refuse to tell them, or because the Government cannot decide what kind of Brexit they want.

However, let us be absolutely clear about one thing: as dreadful as the OBR’s forecast for growth and the public finances is, it still assumes that there will be a deal on future trading arrangements between Britain and the EU. It has not even attempted to look at the consequences of a no-deal outcome on trade, employment and growth. Therefore, when the Economic Secretary to the Treasury responds at the end of the debate, will he address one specific question? The Government have said that they will conduct precautionary preparations for the prospect of a no-deal, cliff-edge Brexit. Can he please reassure the House that, as part of those preparations, the OBR will be asked to assess the likely economic and fiscal impact and to publish that paper as soon as possible, so that Parliament and the British public can fully understand the costs of that scenario?

[Mr Iain Duncan Smith (Chingford and Woodford Green) (Con)]

Will the right hon. Lady give way?

[Emily Thornberry]

I will of course give way to the right hon. Gentleman, but I wonder whether we could do it this way: if he has a question for me, I have a question for him. Of the 32 taxes listed in the Red Book’s table of current receipts, which one is forecast to take in less money year on year over the next six years?

[Mr Duncan Smith]

rose—

[Mr Duncan Smith]

If the right hon. Lady wants me to become her adviser, I am very happy to do so, although of course that has a cost attached: I would advise her to leave her position at once. Can she answer a very simple question? During the election, her party made it very clear that it would have Britain leave the customs union and be outside the single market, and it said that again after the election. Then her party began to drift, and the other day the hon. Member for Brent North (Barry Gardiner), now sitting on her right-hand side, said, “Actually, we could remain in the customs union and the single market.” While she is interrogating the Government, perhaps she would like to make clear what her party’s position is on leaving the European Union.

[Emily Thornberry]

It is such a shame that during those 20 seconds or so the right hon. Gentleman did not answer the question. The answer is on page 82 of the Red Book—[Interruption.]

--- Later in debate ---

[Emily Thornberry]

The table on page 82 shows that only one of the 32 taxes listed will fall, and that is the bank levy. That tells us all we need to know about the Government’s priorities in the Budget.

As for what the Government’s plans are and what they are doing to the country, let me turn to the substance of the Budget and today’s theme of global Britain. In recent years the Treasury has taken great pleasure in writing a section of the Red Book entitled “The Global Economy”, which is usually used to trumpet the fact that Britain’s economy was the envy of the western world.

[Mr Duncan Smith]

Will the right hon. Lady give way?

[Emily Thornberry]

I am not going to.

In 2016 that section of the Red Book ran to a full 10 paragraphs, beginning with the boast that:

“Britain is forecast to grow faster than any other major advanced economy”.

Well, what a difference a year makes. Now that section runs to just one measly paragraph, on page 13, and it does not state how much Britain will grow compared with the rest of the world. For that comparison, we must turn to the OBR, which has stated:

“The pattern of strengthening growth across the other major advanced economies this year contrasts with the slower pace of growth in the UK.”

While it has slashed its forecast for UK growth up to 2022, it has upgraded its forecast for the rest of the world. George Osborne used to boast in every Budget that Britain was winning “the global race.” We now have a Government lagging along at the back of the global field and falling ever further behind. So much for global Britain.

If anyone thinks that growth figures are just numbers on a spreadsheet with no real-world implications, they should turn to two areas where the downgrading of Britain’s growth is already having direct and immediate effects: our spending on defence and on development.