Fiscal Rules

Lord Forsyth of Drumlean Excerpts

Tuesday 29th October 2024 Lords Chamber

[Lord Livermore (Lab)]

I wholeheartedly agree with both points made by my noble friend. Our fiscal rules, as he says, were set out by the Chancellor in her Mais Lecture and set out again in our manifesto. Everything that we have said subsequently is consistent with what we said in our manifesto, and I think that the policy of the Opposition is the reason our country is in the state it is in. It is why growth has been held back and why our critical infrastructure is basically on its knees.

[Lord Forsyth of Drumlean (Con)]

My Lords, I am a little confused. The Chancellor said before the election that she would not change the fiscal rules, because that would be fiddling the figures. Was she right then and wrong now? Can the Minister explain why we are having this Statement at all, ahead of the Budget? Why is it not part of the Budget consideration? Is it to distract attention from the fact that the Government are basically fiddling the figures and, in fiddling the figures, committing us to borrow more money to pay the interest on the money that has already been borrowed?

[Lord Livermore (Lab)]

The noble Lord knows that I have huge respect for him, so I hate to say when he is wrong, as I think he is in his first point. We were extremely clear that we would change the fiscal rules to the new ones that we set out, first, as my noble friend Lord Eatwell said, in the Mais Lecture and then in our manifesto, which said:

“This represents a clear break from the Conservatives who have created an incentive to cut investment; a short-term approach that ignores the importance of growing the economy”.


We were crystal clear that we would change the fiscal rules. On the second point, it is perfectly reasonable that, when the Chancellor is at the IMF, she sets out her policies in this regard.

--- Later in debate ---

[Lord Livermore (Lab)]

I am grateful to the noble Lord for highlighting the guard-rails that will be set out tomorrow, when further details will be set out in the Budget.

[Lord Forsyth of Drumlean (Con)]

My Lords, the noble Lord corrected me and said I had made a mistake in saying that the Chancellor had said that she would not alter the fiscal rules, because that would be fiddling the figures. On 9 October 2023, in interviews around the Labour Party conference at that time, that is exactly what she said. She stressed that Labour would not alter the fiscal rules to fit its spending goals, as doing so, in her words, amounted to “fiddling the figures”. What happened between October 2023 and the Mais Lecture to change her mind about the unwisdom of fiddling the figures?

[Lord Livermore (Lab)]

Nothing changed. There is a slight misunderstanding here. We have always been very clear that we would change the previous Government’s fiscal rules. The Chancellor was referring to the fact that we would not change the fiscal rules we set out—and we have not. The fiscal rules that we are delivering absolutely fit our manifesto commitments, and I do not understand the lack of understanding on the Benches opposite. The

“stability rule will mean that day-to-day spending will be matched by revenues”,

exactly as we committed to in our manifesto—that is a direct quote. In addition, the investment rule will deliver on our manifesto commitment to get debt falling as a proportion of our economy. Both those things were set out in our manifesto, both were set out in the Mais Lecture and both will be delivered in tomorrow’s Budget.