Budget Responsibility Bill

Lord Murphy of Torfaen Excerpts

2nd reading & Committee negatived & 3rd reading
Monday 9th September 2024 Lords Chamber

[Lord Murphy of Torfaen (Lab)]

My Lords, I very much support the Bill. The debate has been extremely interesting, although noble Lords seem to want to rewrite recent history. The purpose of the Bill is to reflect on what happened when Liz Truss was Prime Minister. There is a revisionist view going around that she was not so bad after all. The idea that you can have £46 billion of unfunded tax cuts everybody knew was bonkers, which of course was why she did not involve the Office for Budget Responsibility and why she sacked an eminent civil servant, the Permanent Secretary to the Treasury, because he disagreed with her.

It is ironic that the Office for Budget Responsibility was brought in by the Government of the noble Lord, Lord Cameron. It was not a Labour proposal. We have had all this business about how it is not democratic and how we have to go to the people and all the rest of it—but it was brought in by a Conservative Government, apparently in response to what they regarded as the profligacy of the Labour Government of which I happened to be a member. At the very end of that Government, in 2008, 2009 and 2010, when we were facing the international financial crisis, and I was a member of the National Economic Council, the problems that we faced were global. Over the past number of months, the Conservatives have argued, rightly, that many of the problems that they faced in government were global, with Covid and the war in Ukraine, as well as the problem with energy supply.

Of course, the truth lies somewhere in the middle, but there is no doubt in my mind that if Gordon Brown had not tackled the financial crisis as he did, it would have been much worse not just for our country but for the whole of the western world. I recall having to meet the Prime Ministers of Canada and Japan because he had called together the leaders of all the major economies in the world to resolve this matter.

Having formed the OBR, the Conservatives, having used what they regarded as the profligacy argument, embarked on a terrible period of austerity which effectively eroded our public services to the extent that they are at rock bottom. It has been 14 years of austerity and now we are told that, in the last year of that, there was no comprehensive spending review, no effective management of revenue spending in the departments and no funding for policies announced during the last six or seven months, and the result of all that is that it is all the more important for there to be an Office for Budget Responsibility to give an independent and transparent account, analysis and assessment of where we are in our economy.

The noble Lord, Lord Frost, said we should not have these bodies; they should be elected and we should rely on the good sense of the British people to assess and make a judgment on the economic mess in which we now find ourselves. Well, they did. They gave the Labour Party a majority of nearly 170 and virtually destroyed the Conservative Party in the House of Commons. They did give a verdict on the Liz Truss mini-Budget and that is why we have a Labour Government and why the Conservative Party will be out of office for a very long time.