Charter for Budget Responsibility

Debate between Ed Balls and Geoffrey Robinson

Tuesday 13th January 2015 Commons Chamber

[Ed Balls]

He is. As my hon. Friend says, not only has the Chancellor overspent in this Parliament, but he is promising £12 billion of further cuts in the next Parliament, and as the IFS made clear in December, his party has been totally unspecific about where any of those will fall, beyond the fact that they will be hitting the tax credits of working people.

[Mr Robinson]

If the Chancellor wanted to say 2017-18, why did he not say 2017-18, instead of using this convoluted third year of a five-year rolling average? By definition, we never get to it—that is probably what his policy really is.

[Ed Balls]

It is either a three-year rolling five-year target to avoid ever getting to be judged on it, or it is because he could not get his quad partners to agree with it before the autumn statement. We know from the letter from the OBR that the quad signed up to the spending cuts, but perhaps the quad did not quite sign up to the fiscal charter the Chancellor wanted.

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[Mr Geoffrey Robinson (Coventry North West) (Lab)]

It is always a great pleasure to follow the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr Clarke), and to see him so loyally supporting the present Chancellor. He does so against all the evidence, because I cannot think of a single target of any significance—apart from on unemployment, which we will come to in a moment—that this Government have achieved from what they set out to do in 2010. I think the shadow Chancellor wanted to set this proposal up—

[Ed Balls]

Chancellor.

[Mr Robinson]

I beg his pardon—the Chancellor, soon to be shadow Chancellor.

It is worth thinking briefly about why we are having this debate at all. Like my right hon. Friend the Member for Morley and Outwood (Ed Balls), I do not often agree with the TaxPayers Alliance, but on this I think the TPA has got it dead right. Mr Jonathan Isaby, the chief executive, says:

“This is a meaningless political gimmick of the most transparent kind, and one that serves only to remind taxpayers”—

of this Government’s failure. We will come to that in a minute, along with what happened under the Labour Government all those years ago. What the Chancellor always fails to mention is what happened on black Friday, when the Prime Minister, no less, was a senior adviser to the Treasury. That was only a few years before the period on which the Chancellor dwells with such delight, thinking it indicative of future events. What he is doing is meaningless.

The TaxPayers Alliance statement continues:

“This…serves only to remind taxpayers how dramatically the Chancellor has missed his own original targets.”

I could not agree more. The TPA says that

“Mr Osborne was right to call this legislative pantomime ‘vacuous’”—

and that is about what it is. Today, the right hon. Gentleman tried to turn this into a political, general election-type of debate—way ahead of the date of course—and to step up the temperature, but, quite simply, it backfired. The shadow Chancellor—and some of the Chancellor’s own Back Benchers—turned the tables on him. Much though the right hon. and learned Member for Rushcliffe, the former Chancellor, might try to make a case for the Government’s policy, the case simply does not stack up.

We will deal with unemployment in a moment, because that is very important. What single major target in the Government’s 2010 plan have they actually met? I know targets or aims—whatever one calls them—are difficult. The bigger the entity one tries to budget for and forecast, the bigger the difficulties get; we all know that. Some are hit and some are missed, but this Chancellor has missed every single target since 2010. Growth—apart from unemployment, which we will come back to—[Interruption.] All right, let us deal with it.

Why is it that, the unemployment target having been hit, tax receipts are so low? It is because all other parts of economic policy have failed and the Chancellor does not want to face up to it. My right hon. Friend the shadow Chancellor gave the figures. Why are tax receipts so below what the Chancellor forecast, despite doing well on employment? It is because we have, despite what he says, a low-skill, low-wage economy. That is why tax receipts are much less than we would expect at this stage in the economic cycle. That is his failure, yet again.

Exports have failed. Growth has failed. The budget deficit has failed. Borrowing has failed. It is staggering: the Chancellor is borrowing £220 billion more than he forecast. He said he would eliminate the deficit, but what has he actually achieved? The deficit is still running at almost £100 billion a year. These are mind-boggling sums and it is a mind-boggling failure by the Chancellor that he has given us the opportunity today to debate. I hope he is regretting it. We are certainly enjoying it.

Financial Services Bill

Debate between Ed Balls and Geoffrey Robinson

Monday 6th February 2012 Commons Chamber

[Ed Balls]

My very clear advice to the Chancellor is that when he gives people a clear statutory responsibility for a particular function and legislates for three deputy governors who are the heads of individual agencies, he should also design his crisis resolution and decision-making procedures so that his experts are in the room and he can hear the array of their views. The idea that it is better for the Chancellor to require the Bank to resolve such issues internally and come to him with one voice—one Governor, one decision maker—is a flawed structure of regulation. The point, however, is that that is not what the Bill intends. It intends for the FCA and PRA to be important institutions, in which case the Chancellor should get them in the room.

[Mr Robinson]

Does my right hon. Friend agree that the further decision to install the Governor for eight years will make the inherent difficulty of dealing with only one person more difficult?

[Ed Balls]

I understand my hon. Friend’s point, but to be honest I do not have strong views on that. The reality is that there was not cross-party support or support more widely in civic society for Bank of England independence when we established it. The Conservatives voted against it. In those circumstances, it would have been difficult for the then Government to pass legislation for one eight-year term—there would have been a lot of opposition to the idea of giving one unelected individual such power for an eight-year term. This Bill moves us not only from a four-year to an eight-year term, but gives one individual massively more power than they ever had. That is what concerns me.