Office for Budget Responsibility (Manifesto Audits)

Debate between Baroness Morgan of Cotes and Clive Efford

Wednesday 25th June 2014 Commons Chamber

[Nicky Morgan]

I entirely agree with my hon. Friend, who, as usual, talks complete economic sense, unlike the Labour party.

As academic evidence noted at the time of the OBR’s creation, it is vital that there should not

“even be a scintilla of doubt…about the OBR’s independence and impartiality, as negative perceptions may undermine the OBR’s reputation, requiring a major effort at changing such perceptions”.

Unfortunately, the Opposition’s proposal not only presents a risk to that impartiality, but raises several difficult practical questions, which I shall go through briefly.

[Clive Efford]

The right hon. Lady will be aware that the shadow Chancellor wrote to the Chancellor last October. How many meetings have Ministers had with the chair of the OBR to discuss this issue in the intervening period?

[Nicky Morgan]

As the hon. Gentleman will know, meetings held by Ministers are published in the normal way. I cannot give him a specific number, but a list of meetings is published in the usual way.

[Clive Efford]

In that case, the right hon. Lady is indicating that these discussions have taken place and that there have been meetings at which this issue has been discussed. If so, did the chair of the OBR indicate whether, if a consensus could be reached before the end of June, he could deliver these budget assessments before the general election?

[Nicky Morgan]

I certainly did not indicate that. It is to be expected that Treasury Ministers will meet the head of the OBR and that various matters will be discussed, and we received a clear letter from him about the motion and the proposals before us today.

I want about to talk about the practical questions that would require much greater scrutiny in the future. First, as I mentioned, the Opposition do not seem to have assessed how their proposal might compromise the OBR’s ability to avoid being drawn into political debate or the real danger that such a change could undermine its perceived independence and, by extension, the credibility of the UK’s official forecasts.

Oral Answers to Questions

Debate between Baroness Morgan of Cotes and Clive Efford

Tuesday 10th December 2013 Commons Chamber

[Clive Efford (Eltham) (Lab)]

3. What assessment he has made of recent trends in the level of average earnings.

[The Economic Secretary to the Treasury (Nicky Morgan)]

Real average weekly earnings have fallen since 2010, owing to the previous Government’s financial legacy left to us. However, last year real household disposable income grew at its fastest pace since 2009. In its latest forecast, the Office for Budget Responsibility expects the growth of real household disposable income to accelerate in every year of the forecast period, reaching 2.6% in 2018.

--- Later in debate ---

[Nicky Morgan]

If the hon. Lady wants to talk about the largest anything, perhaps she would agree with Paul Johnson, who said that wages have increased much less quickly than inflation. As I say, that is not surprising. We have had a great big recession. We had the biggest recession in 100 years. It would be astonishing if household incomes and earnings had not fallen.

[Clive Efford]

Her Majesty’s Revenue and Customs liabilities table published in May shows that the number of people earning more than £1 million jumped from 13,000 in January to 18,000 after the Budget. Their combined income rose from £27 billion to more than £47 billion. Is that why April was the only month in which earnings rose above inflation?

[Nicky Morgan]

That is a very interesting question. The hon. Gentleman will know that the OBR last week said that the only thing that would raise wages was increased productivity in the economy. That means more people creating more jobs and more growth in our economy. I would have thought the hon. Gentleman welcomed the fact that 2.7 million people have been taken out of income tax completely as a result of our changes and 25 million people are paying less income tax.