Budget: Taxes and Borrowing

Debate between Lord Livermore and Baroness Penn

Monday 4th November 2024 Lords Chamber

[The Financial Secretary to the Treasury (Lord Livermore) (Lab)]

My Lords, the Budget raises taxes by £40 billion as we repair the public finances and rebuild our public services. Borrowing falls from 4.5% of GDP this year to 2.1% of GDP by the end of the forecast. The current budget moves into surplus from 2027-28, ensuring that we do not borrow to fund day-to-day spending.

[Baroness Penn (Con)]

My Lords, after delivering the biggest tax-raising Budget on record, the Chancellor rightly said at the weekend that she was wrong to rule out those tax rises ahead of the election. She also said that this Budget

“wiped the slate clean … set the spending envelope for the remainder of this Parliament”,

and that

“we don’t need to increase taxes further”.

Will the Minister repeat the Chancellor’s reassurances today and rule out any further tax rises in future Budgets, or should we not believe what the Chancellor has said this time round either?

[Lord Livermore (Lab)]

We had to take some very difficult decisions in the Budget. They were the right decisions to clear up the mess that we inherited from the party opposite, to rebuild the NHS after years of neglect, to choose investment and not decline, and to keep our promises to working people. However, the noble Baroness is absolutely right and of course I agree with what the Chancellor said. This was a very significant Budget, because of the need to repair the public finances and rebuild our public services simultaneously. We have now wiped the slate clean, meaning we never have to do a Budget like this again. The noble Baroness asks about tax, and I point out that we have kept every single promise that we made on tax. Her Government, when she was a Treasury Minister, froze income tax thresholds, costing working people nearly £30 billion. We could have extended that but we chose not to.