OBR Forecasts
Debate between Lord Eatwell and Lord Livermore(2 days, 11 hours ago)
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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.
Sterling: Rise in Yields on 30-year Gilts
Debate between Lord Eatwell and Lord Livermore(10 months, 2 weeks ago)
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Lord Livermore (Lab)
We absolutely will. I completely agree with the noble Baroness. I met Shevaun Haviland last Thursday and we had a very constructive conversation about the measures that the British Chambers of Commerce wants to see to grow the UK economy, which are exactly the same measures that we want to see. The noble Baroness is absolutely right that growth was one of the biggest failures of the previous Government. We are determined to turn that around, which is why we are going further and faster. We are reforming planning, pensions and skills, all of which will significantly boost growth in the UK economy.
Lord Eatwell (Lab)
My Lords, the House will be aware that this country has an outstanding Chancellor of the Exchequer at the moment. However, will the Minister enlighten me as to what influence she really has on the US treasury bill market, which has shown the same spike as in the UK, or on the market for the euro, which has fallen against the dollar to the same extent as has the pound? Is it not the case that questions from the Opposition Front Bench might have more economic relevance if they reflected some understanding of how global markets actually work?
Lord Livermore (Lab)
My noble friend is absolutely right and I echo his comments about the Chancellor of the Exchequer. There are limits to what she can do, but she is absolutely able to focus on the priorities of this Government. As noble Lords will know, this Government inherited a £22 billion black hole in the public finances left by the previous Government. She has taken very difficult decisions to deal with it, every single one of which has been opposed by the party opposite. However, they were the right decisions because we had to repair the public finances and ensure fiscal responsibility. She has set extremely tough fiscal rules—tougher than those of previous Governments—again, opposed by the party opposite. Meeting those fiscal rules is non-negotiable because we will not compromise on economic stability.
Budget: Taxes and Borrowing
Debate between Lord Eatwell and Lord Livermore(1 year ago)
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Lord Eatwell (Lab)
My Lords, the noble Lords opposite have some difficulty in understanding the arithmetic of coming through the black hole of £22 billion. Even if they cannot do the arithmetic, they can see that the prisons are full, waiting lists in the NHS are the highest they have ever been, schools are crumbling and there is a lack of police on the streets. It is their failure. Would the Minister agree that that is the core of the failure that this Budget is designed to correct? Is there not one important word missing in statements from the party opposite? That word is “sorry”.
Lord Livermore (Lab)
I 100% agree with my noble friend. It is incredibly striking that, in everything we have heard from the party opposite, not once has it apologised for the record we inherited. One of the reasons this is a once in a generation Budget is that we have had to simultaneously repair public finances and rebuild public services. That is why it is such a historic Budget. My noble friend is absolutely right that what we have not heard from those in the party opposite is an alternative. Would they not have repaired the public finances? Would they not have prioritised working people? Would they now cut funding to the NHS and schools?
Fiscal Rules
Debate between Lord Eatwell and Lord Livermore(1 year, 1 month ago)
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Lord Livermore (Lab)
Once again, I address a noble Lord who has far more experience in these matters than I do. I agree with a huge amount of what he says. I think that stability in fiscal rules is incredibly important and that they should not change particularly frequently—perhaps at the point when Governments change. I am tempted to agree with a lot of what he said, but unfortunately the Chancellor will set out the Government’s full fiscal plan, including the precise details about fiscal rules that he asks for, in tomorrow’s Budget, alongside an economic and fiscal forecast produced by the OBR.
Lord Eatwell (Lab)
My Lords, does the noble Lord agree that the noble Baroness, Lady Vere, is quite wrong when she suggests that the Chancellor has just announced her change in fiscal rules? They were proposed in her Mais Lecture in February, if one keeps up. Does he also agree that the fiscal rules implemented by Mr Hunt were yet another component of the irresponsible economic policies pursued by the Conservative Government?
Lord Livermore (Lab)
I wholeheartedly agree with both points made by my noble friend. Our fiscal rules, as he says, were set out by the Chancellor in her Mais Lecture and set out again in our manifesto. Everything that we have said subsequently is consistent with what we said in our manifesto, and I think that the policy of the Opposition is the reason our country is in the state it is in. It is why growth has been held back and why our critical infrastructure is basically on its knees.
Public Spending: Inheritance
Debate between Lord Eatwell and Lord Livermore(1 year, 4 months ago)
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Lord Livermore (Lab)
I am grateful to the noble and right reverend Lord for his question. As was set out yesterday, we will conduct a complete review of the new hospital building programme, with a thorough, realistic and costed timetable for delivery. I cannot give him any specific information on the project he mentioned. As I said to other noble Lords, we are absolutely committed to reforming adult social care to create a sustainable system that delivers for the people who draw on that care, their families and the social care workforce. We will work to build consensus for the reforms needed to build a national care service.
Lord Eatwell (Lab)
My Lords, with respect to the details revealed in the Chancellor’s statement yesterday, on some of which the noble Baroness, Lady Penn, casts some doubt, has the Minister noticed the statement published by the IFS yesterday evening? It stated:
“some of the specifics are indeed shocking, and raise some difficult questions for the last government. If the scale of these overspends and spending pressures was apparent in the spring—and in lots of cases, there’s no reason to suppose otherwise—then it is hard to understand why they weren’t made clear or dealt with in the Spring Budget. Jeremy Hunt’s £10 billion cut to national insurance looks ever less defensible”.
Does the Minister agree that the Spring Budget was another example of the economic mismanagement and fiscal irresponsibility that is a persistent characteristic of this Conservative Party?
Lord Livermore (Lab)
I am grateful to my noble friend for drawing the House’s attention to yesterday’s remarks from the IFS. It is clear that it is as shocked at the rest of us at the scale of this overspend. I 100% agree with my noble friend that the Spring Budget was just the latest and, fortunately, last episode in 14 years of failure from the party opposite.