Surplus Target: Corporation Tax

Debate between Lord Wrigglesworth and Lord O'Neill of Gatley

Monday 4th July 2016 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, forecasts are forecasts and I have spent a considerable part of my life having that dubious challenge. We are dealing with an outcome as opposed to a forecast. From what I remember of the specifics, I do not remember a statement that interest rates “will” rise, I thought it was more that they “could” rise. Importantly, while the Chancellor has responded with the appropriate flexibility for the new circumstances we may find ourselves in, based on what the OBR comes up with in its new forecasts for the Autumn Statement, it may well be that there are still difficult choices to be made.

[Lord Wrigglesworth (LD)]

My Lords, is it not clear that the Government are not going to meet their borrowing targets? The Chancellor has said that. Is it not ludicrous against that background to be announcing today that there is going to be a cut in corporation tax costing £4 billion to the Exchequer? Can the Minister tell us what the position is going to be in the autumn? We will have a new Prime Minister, a new Chancellor of the Exchequer and a new OBR forecast. Can he guarantee that this announcement today will ever be carried out?

[Lord O'Neill of Gatley]

My Lords, I could give a very brief answer and say, “No, I can’t tell you what is going to happen in the autumn”. It is pretty hard these days to tell people what is going to happen next week.

Income Per Capita

Debate between Lord Wrigglesworth and Lord O'Neill of Gatley

Tuesday 14th July 2015 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, I am still learning the practices here, and I am extremely tempted to give a very long answer to that very detailed question. I shall find the appropriate moment do so. Suffice it to say, at the risk of repeating myself, that I think I am right in saying that the very specific attention this document gives to all the factors that are important for productivity has never before been given, including virtually every single topic that the noble Lord mentioned.

[Lord Wrigglesworth (LD)]

My Lords, as the Minister has done so much work on this subject, can he tell the House which he thinks comes first: higher pay or higher productivity?

[Lord O'Neill of Gatley]

My Lords, there is considerable debate in leading academic circles about causation, as I am sure many Members of this House are aware. Historically the conventional belief has been that higher productivity will lead to higher wages. Due to the length of time during which this country and many others have shown signs of weak productivity and wages there is growing evidence, which has obviously influenced the choice of policy, that deliberately trying to raise wages for the less well off may result in a boost to productivity, as the ONS estimated in its independent analysis of this measure when it was announced last week.