OBR Forecasts

Lord Eatwell Excerpts

Monday 1st December 2025 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to the noble Lord for his kind words about me, and I am grateful that I have his full confidence. Do I agree with what he says about the Chancellor? It will not surprise him to hear that, no, I do not. The Chancellor has been completely honest and consistent with the public in everything she has said.

The noble Lord says that no one believed the £22 billion black hole. It may be living rent-free in his head, because he has mentioned it probably more times than anyone other than me in this House, so, on that measure alone, it has been extremely successful.

The noble Lord said that he feels misled. I am sorry about that, but the Chancellor said absolutely nothing misleading. As I say, she has been completely honest and consistent. She set out in advance what her priorities were, and she delivered on those priorities. She set out in advance that a productivity downgrade would mean lower tax receipts, and it did mean £16 billion lower tax receipts. She said that she intended to build more headroom, and she built more headroom—to £21.7 billion. She was clear in the summer that policy choices would need to be paid for, and the Budget shows that those policy choices cost £6.9 billion. She said that challenging decisions would be needed on tax and spending, and she froze thresholds for a further three years, among other taxation decisions. So, as I say, she was entirely consistent in what she said before and what she did in the Budget.

[Lord Eatwell (Lab)]

My Lords, the Opposition suggested that markets were misled. Does the Minister agree that, if markets had been misled by the Chancellor’s speech on 4 November, there would have been a sharp market reaction when the truth was revealed in the Budget? But quite contrary to the erroneous statement by the noble Baroness, Lady Neville-Rolfe, there was no sharp reaction. Indeed, the markets after the Budget displayed a similar rate of return on 10-year bonds as they did immediately after the speech on 4 November. There was no significant change because they were not misled. The fiscal balance in both cases was roughly the same. Do these erroneous statements not suggest that the Chancellor’s critics have a lamentable lack of understanding of how the financial markets actually work?

[Lord Livermore (Lab)]

I am grateful to my noble friend for what he said. Obviously, I cannot comment on any specific market movements or lack thereof, but he is absolutely correct that no one at any point was misled. The Chancellor was honest and consistent with the public in everything that she said. My noble friend is absolutely right about the positive market reception to this Budget because we have put fiscal responsibility at the heart of it. We have reduced borrowing every single year of the forecast. We are reducing borrowing further than any other G7 country and net financial liabilities are lower at the end of this forecast period than the beginning. As I said, this is completely consistent with what the Chancellor set out at the start of this process—that she wanted to see debt and borrowing fall as a result of the Budget.