Charter for Budget Responsibility

Debate between George Osborne and Caroline Lucas

Wednesday 14th October 2015 Commons Chamber

[Mr Osborne]

I will give way to the hon. Gentleman in a moment.

Of course, the problem with people who say that now is a good time to borrow is that they always say it is a good time to borrow: in bad times they say we should borrow because we cannot afford not to, and in good times they say we should borrow because we can afford it. According to them, there is never a right time to stop borrowing and start saving. That is precisely the thinking that got Britain into a mess eight years ago.

This budget charter provides the discipline we need along with the flexibility we might require. It says that debt as a share of GDP should be falling every year when the economy is growing normally, but when recessions come or economic growth is very weak and below 1% the rule is suspended and the automatic stabilisers kick in. Then the Chancellor of the day will come to Parliament and present a plan to return the public finances to health and Members will either support or reject that plan. That is simple, clear, accountable, strong and flexible. It is a commitment to sound money and stability—the bedrock of economic security for working people.

The third argument we have heard today is that we do not need fiscal rules at all and that they are meaningless. Again, I disagree. I believe that democratic Governments should set out their approach to public spending. It is the public’s money, after all, and we should be held to account by them. Successful countries do set out long-term objectives and hold their Government Departments to account, rather than lurch from one year to another.

Of course, rules are meaningless if people are their own judges of the rules they set—we know that from the golden rule the Labour party set when it was in office—but we have an independent Office for Budget Responsibility and it is the impartial judge of whether we deliver what we promise.

There is an argument that because we have the OBR it can come to its own conclusion about the soundness of our fiscal policy, but that is profoundly undemocratic. Public spending should be determined by this House of Commons. That is why we are having this debate and this vote tonight. Under our system, the rules are set democratically and are independently judged, and the people can hold us to account.

[Caroline Lucas (Brighton, Pavilion) (Green)]

This might be clever politics, but it is staggeringly bad economics. The Chancellor is incredibly irresponsible to imply that borrowing is always bad. If we borrow to invest, we increase jobs, stabilise the economy and increase tax revenues. That is good for the economy, not bad for it.

[Mr Osborne]

That is borrowing forever. There is never—[Interruption.] When would the hon. Lady stop borrowing and run a surplus? I am happy to give way to her as the representative from the Green party. When is the moment to stop borrowing and run a surplus?

[Caroline Lucas]

The moment to stop borrowing is when we can no longer afford to pay it back—[Laughter.] We can perfectly afford to pay back our investment, which is why economists are laughing at the Chancellor—[Interruption.]

[Caroline Lucas]

Thank you, Mr Speaker. If we are investing in jobs, that gets taxes going back into the Revenue, which is good for the economy. That is why economists are saying that the Chancellor’s silly trick is very bad economics, even if it is very clever politics to make all his friends laugh a lot. People across the country are not laughing, because he is increasing austerity and increasing the burden on the poorest.

[Mr Osborne]

Borrowing until it cannot be paid back leads to national bankruptcy. That might be a good pitch from the hon. Lady to be the next shadow Chancellor, but it is not how we should run this country’s economic policy.

Greece

Debate between George Osborne and Caroline Lucas

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

As my hon. Friend well knows—the Prime Minister was explaining this at the Dispatch Box just an hour or so ago—one of the issues we are seeking to address in our renegotiation is Britain’s involvement in ever-closer union, which is not something that the British people are very comfortable with. I would make the broader observation, which relates both to the UK and to members of the eurozone, that we have to make the European continent, ourselves included, a competitive place to do business. We have to have businesses that can export around the world. We have to be able to make sure that jobs are being created in the European Union. A very important strand of what we are seeking to change in our relationship with the European Union is to make the EU more competitive for all its citizens, Greek as well as British.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Since implementing austerity measures in return for loans has shrunk the Greek economy by a quarter and massively increased its debt-to-GDP ratio, as well as caused untold suffering, will the Chancellor consider increasing calls for the organisation of a European conference, similar to the London conference of 1953 for Germany, to agree a package of debt cancellation and restructuring, which is likely to be a far more effective way of addressing both the economic and the social crisis unfolding in Greece?

Oral Answers to Questions

Debate between George Osborne and Caroline Lucas

Wednesday 17th June 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right to draw attention to the success that Manchester University and Jodrell Bank have had in securing the international headquarters of the Square Kilometre Array experiment. I visited Jodrell Bank in the middle of the election campaign—I dropped in to congratulate them on the achievement, which was achieved during the purdah period but under instructions issued by the previous Government. It is the world’s largest science experiment. It is an incredible collaboration across nations, and I am extremely proud that its headquarters are in the northern powerhouse.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Today sees a mass lobby here in Westminster of people who are demanding urgent action on climate change. Since coal is the most damaging of the fossil fuels, does the Chancellor agree that as well as phasing out coal, we in this House have a responsibility to divest our parliamentary pension fund from fossil fuels, as has been done in Norway very recently?

[Mr Osborne]

It is way above my pay grade to interfere with the parliamentary trustees of the pension fund here, and I leave the decisions on investments to them. I agree with the hon. Lady that the lobby of Parliament today is important and the Paris talks at the end of the year are a real opportunity to get a global commitment to binding standards and carbon targets. Britain will play its full part. What we want to achieve is dealing with those greenhouse gas emissions and meeting our international obligations on climate change, but doing so in the cheapest way possible for the consumers of electricity here in Britain.

Charter for Budget Responsibility

Debate between George Osborne and Caroline Lucas

Tuesday 13th January 2015 Commons Chamber

[Mr Osborne]

I think the shadow Chancellor is trying to perpetrate a grand deceit on the British public. I think he has no intention of delivering the £30 billion of cuts. He does not want to do that: he wants to spend and borrow more, but he does not want to tell the British people the truth about that. We had independent confirmation from the IFS today that Labour would borrow £170 billion more. It confirms what we already know—that the Labour leader and the shadow Chancellor would do it all over again: tax, borrow and spend their way into an economic crisis, letting the British people pay the price in lost jobs, lost incomes and lost futures.

The shadow Chancellor faces a choice. He can either confirm by voting for this charter that he accepts the £30 billion of deficit reduction required to fulfil the objectives, in which case, since he does not approve of our spending plans, he admits that there will be major tax rises under a Labour Government; or he can reject the deficit reduction required, in which case he is confirming that voting for this charter today is nothing other than a grand deceit—pretending to the British people that Labour does not want to borrow more when that is exactly what it plans to do. With the Labour party, it is either a tax bombshell or a borrowing bombshell. The only question is which will it be. Either way, it leads to economic chaos for this country.

[Caroline Lucas (Brighton, Pavilion) (Green)]

rose—

[Mr Osborne]

I give way to the Green party Member. We want her and her colleagues in the TV debates. At least the Green party is being straight about the fact that it wants to borrow and spend more money. Why does the Labour party not tell the truth about that?

[Caroline Lucas]

Does the Chancellor agree with me that with the feeble and inconsistent opposition coming from the Labour Front Bench, there is a very good reason for seeing the SNP, the Greens and Plaid as the real opposition on this issue because we are clear and consistent about the fact that austerity is not working?

Autumn Statement

Debate between George Osborne and Caroline Lucas

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

We do have a programme, which we have extended, to renovate the accommodation of service families. We are all aware of the challenges that many families face with that accommodation. The special military reserve was created to fund overseas military operations—that is what it exists for. When we came into office, this country was spending £4 billion a year on operations in Afghanistan. The special military reserve is now down to about £1 billion; I have been able to reduce it a little today. Despite what the reserve is for, I am always willing to consider specific requests for support. I did not have time in my speech to set out the very many military good causes that we are supporting with the LIBOR money.

[Caroline Lucas (Brighton, Pavilion) (Green)]

New analysis shows that an ambitious energy efficiency programme would create up to 108,000 new jobs, generate £1.27 in tax revenues for every £1 invested by the Government and end fuel poverty. Will the Chancellor explain why this statement fails to direct one penny of the infrastructure budget towards tackling the cold homes crisis in places such as Brighton?

[Mr Osborne]

We have proposals to help, for example, off-grid consumers with energy efficiency, and we also have the energy companies obligation programme to help with energy efficiency. We have announced this week a commitment to look at the idea of the Swansea bay tidal lagoon project, which could be a very interesting project for renewable energy generation in the future.

Autumn Statement

Debate between George Osborne and Caroline Lucas

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

That will be an interesting opportunity to hear what the Labour party and any other party in this House that does not support our consolidation plans for 2016-17 and 2017-18 would do. If one listens carefully to what the shadow Chancellor says, one finds he makes a promise about current spending in the year in which the election will be held, but he makes no promise about capital spending in that year and says absolutely nothing about spending plans thereafter. We have an important opportunity to entrench this country’s commitment to fiscal consolidation. We will see what the Opposition do.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Chancellor has turned doublespeak into a new art form today with his mind-boggling claim to be helping the fuel-poor by slashing the very programmes they depend on to insulate their homes. Does he accept that this statement is a hugely squandered opportunity to offer lasting relief to the fuel poor by launching a major retrofit programme that would cut bills, cut carbon, and create hundreds of thousands of jobs?

[Mr Osborne]

As I said, we are launching a huge scheme to help home movers insulate their homes, help public authorities insulate their buildings, and ensure that private landlords also have incentives. I disagree with the hon. Lady—and, I guess, her philosophy—in that I think such things are better done through incentives and lower taxes than through higher taxes and higher charges that put people off the agenda she wants to promote.

Spending Review

Debate between George Osborne and Caroline Lucas

Wednesday 26th June 2013 Commons Chamber

[Caroline Lucas (Brighton, Pavilion) (Green)]

Given the news this week that the Government’s flagship green deal is failing in terms of both the planned jobs and its environmental targets, why will the Chancellor not introduce a big, bold investment in green infrastructure and home insulation in particular, to get people into jobs, get tax revenues up, reduce benefits and give hope to the millions of young people around the country today?

[Mr Osborne]

We have introduced investment. We have increased investment in renewable energy, so that a record amount is now going in. My right hon. Friend the Chief Secretary to the Treasury will set out the strike prices this week, which will give long-term investors the certainty needed to increase renewable energy investment.

Autumn Statement

Debate between George Osborne and Caroline Lucas

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

My hon. Friend speaks very powerfully about the way in which we have helped people. We have helped basic rate taxpayers by increasing the personal allowance, we have taken 2 million of the lowest paid out of work, and we have halved the income tax bill for people on the minimum wage; but, above all, we have helped working families throughout the country with a further income tax cut today.

[Caroline Lucas (Brighton, Pavilion) (Green)]

One glimmer of good news was the announcement of ultra-fast broadband for Brighton, and I thank the Chancellor for that, but there is plenty of bad news about the dash for gas. Not only will it bust our climate targets, but it simply is not cheap. Deutsche Bank, the CBI and the International Energy Agency all say that gas prices will rise. This is the Government who say that they like to make evidence-based policy, so why will the Chancellor not look at the evidence in this instance?

LIBOR (FSA Investigation)

Debate between George Osborne and Caroline Lucas

Monday 2nd July 2012 Commons Chamber

[Mr Osborne]

I can tell my hon. Friend that we are absolutely committed to a vibrant banking sector. I have gone out of my way in these exchanges to draw attention to the fact that this is an incredibly important sector to the British economy. The fact that an American bank employs 4,000 people in Bournemouth reminds us that this sector is not just in the square mile of the City of London or in Canary Wharf. This industry employs many hundreds of thousands of people around the country. It is the largest private sector employer in the country, and of course it has a huge impact on the rest of the economy, which is why it must now be properly regulated.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Chancellor keeps repeating his intention to follow the Vickers recommendation of ring-fencing retail and investment banking, but in the light of this scandal will he not accept that simple ring-fencing is not enough because any firewalls will soon be circumvented, which is why we need nothing less than the full legal separation of retail and investment banking?

[Mr George Osborne]

There are people who share the hon. Lady’s view, but we specifically asked John Vickers and his commission, whose membership was drawn from people who had expertise in the consumer industry, banking and elsewhere, to consider whether we should physically separate the banks as she suggests. They explicitly addressed that issue and came to the conclusion that ring-fencing was a better approach, and one of the reasons why they did so is that ring-fencing might provide more stability for the retail arm, as it would be able to draw on the resources of the investment bank. They specifically looked at that and came to the conclusion that having a retail ring fence was better than separating the banks.

Autumn Statement

Debate between George Osborne and Caroline Lucas

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

We have negotiated the first real freeze in the EU budget. Important negotiations are coming on the future financial perspective. I am absolutely clear, as are some other member states, that the EU has to live within its means as well.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Will the Chancellor explain why he is taking £250 million from hard-pressed families and giving it to some of the country’s biggest polluters, especially as green economies employ far more people than energy intensive industries?

[Mr Osborne]

As I said, we have introduced and funded the green investment bank, and we are supporting the green deal. The hon. Lady did not mention that there are £200 million of incentives to make the green deal work so that people can insulate their homes, their bills can come down and we can reduce our carbon emissions. I do not see how we would save the climate of our country and the world by pricing ourselves out of steel making, operating chemical factories, aluminium smelting and so on. If anything, it is likely that those industries would continue in other countries and be more polluting because those countries do not have the same regimes. I think that it supports our effort to reduce carbon emissions around the world that we keep those industries in Britain.

Oral Answers to Questions

Debate between George Osborne and Caroline Lucas

Tuesday 21st June 2011 Commons Chamber

[Mr George Osborne]

My hon. Friend is right: it is a decision of great regret. The gold was sold at £2.3 billion, and it would now be worth £12 billion, which as he says is a £10 billion loss. The Labour party, on the advice of the shadow Chancellor, managed to sell gold at its record low price. Indeed, gold traders now call it the Brown bottom. That is how they know the number, and it is yet another disastrous decision after which we are having to clean up.

[Caroline Lucas (Brighton, Pavilion) (Green)]

The Chancellor will be aware of the recent Office for National Statistics finding that the regressive nature of VAT means that the UK tax system is doing almost nothing to prevent income inequality. In that context, will he pay particular attention to a Fawcett Society report, to be launched tomorrow, which shows that his fiscal policies, such as increasing VAT, cause particular harm to lone parents, 92% of whom are women?

Comprehensive Spending Review

Debate between George Osborne and Caroline Lucas

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

I agree with my hon. Friend. Whoever won the general election—whoever formed the Government—was going to have to come to the House of Commons to set out a plan for reducing the highest budget deficit in our peacetime history; the deficit is considerably higher than it was when Denis Healey had to go to the International Monetary Fund. We have set out those proposals, and I believe that they will deliver certainty and stability going forward. The market interest rates for British businesses and British families are already lower as a result of the decisions that we have taken since coming into office. As for the decisions that we have announced today, I have noted that not a single Labour Member has asked me about the increase in the child tax credit, which will help 4 million families.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I am not sure how the Government can claim to be the greenest ever when it is estimated that Department of Energy and Climate Change and Department for Environment, Food and Rural Affairs funding combined will reduce by 47% in real terms over the next four years. However, my question is this: should the Chancellor not do more than just hope that the private sector will fill the huge gap between the £1 billion he has set aside for the green investment bank and the £4 billion to £6 billion that Ernst and Young says is the minimum required? He said that he would try to find a bit more through the sale of assets, but how much does he imagine that will fund as well?

[Mr Osborne]

There is commitment, even in these difficult times, to a carbon capture and storage demonstration, to the development of offshore wind technology and manufacturing at port sites, and to a renewable heat incentive. On the green investment bank, it would have been easy to say, in my position, “Let’s wait to see whether we can get some Government asset sales and some private sector money; just create the body and hope it gets the funding.” I wanted to provide a back-stop and I have done so today by making available £1 billion from general Government expenditure. However, I also want to see substantial Government asset sales go into the green investment bank and to lever in some private sector money, so that it is a multi-billion pound force for investment in our country.

Proposed Public Expenditure Cuts

Debate between George Osborne and Caroline Lucas

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

I think it does have something to do with the new Government setting out their plan, and it is easy to see why. We can compare what has happened to market interest rates for the United Kingdom with market interest rates for countries such as Spain, Portugal, Ireland and Greece. At the time of the general election, it was well understood that people in the world were concerned about the record UK budget deficit, the largest in the G20. As a result of the steps that we have taken in the Budget—which we now need to see through in the spending review—we have restored stability to the economy and helped to bring down market interest rates. That would not have happened if Labour had stayed in office.

[Caroline Lucas (Brighton, Pavilion) (Green)]

How does the Chancellor think that slashing jobs at tax offices up and down the country will help with the collection of the £120 billion that is lost every year through tax evasion and tax avoidance in this country? What other measures does he have in mind for collecting that money, which could be saved and used to prevent these enormous cuts, which are going to hit the poorest the hardest?

[Mr Osborne]

As I was saying in reply to my hon. Friend the Member for Colchester (Bob Russell), we are keen to ensure that the tax gap is reduced and that Her Majesty’s Revenue and Customs is an organisation that is able to collect that tax that is due to us all. Unfortunately, as has been well documented in recent days, we have inherited a whole string of problems, including 6 million people being given the wrong tax information under the previous Government. We are putting in place the measures that I believe will improve HMRC and enable it to focus on reducing that tax gap.