Economy: Deficit Reduction

Lord Barnett Excerpts

Monday 15th October 2012 Lords Chamber

Asked by

[Lord Barnett]

To ask Her Majesty’s Government what is their latest estimate of the debt to gross domestic product ratio in 2015 under the current deficit reduction plan.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the Office for Budget Responsibility produces the official fiscal forecasts. The OBR’s March 2012 forecast shows public sector net debt peaking at 76.3 per cent of gross domestic product in 2014-15 and subsequently falling in 2015-16 consistent with the Government’s supplementary target for debt. The OBR will publish updated forecasts alongside the Autumn Statement on 5 December.

[Lord Barnett]

My Lords, I thank the noble Lord for his Answer. Is he aware that there has been a later report from a more independent source—namely, the IMF—which states that in 2015 the net debt as a percentage of GDP will be about £50 billion more than the Chancellor previously expected? In those circumstances, does he not accept that the OBR is less independent for the very good reason, as was set out in the beginning, that its forecasts are influenced considerably by the general and regular meetings that it has with the Chancellor and Treasury officials? How many have there been in the past 12 months?

[Lord Sassoon]

No, my Lords, I do not accept for one minute any questioning of the independence of the OBR. It was set up on a statutory basis through a Bill to which the noble Lord, Lord Barnett, contributed. It is set up totally independently under a respected head, Robert Chote, and his team and I refute absolutely any question that it is not independent. All of its meetings with the Chancellor and the dates on which data are transferred over are transparently set out on the Treasury website.