Budget Resolutions
Debate between Yuan Yang and Mike Wood(3 weeks ago)
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Mike Wood (Kingswinford and South Staffordshire) (Con)
This Budget underlines the cost of a Labour Government who are making bad choices that are hurting working people. Once again, the Government talk about growth, but it is clear that the biggest growth that will come from the Budget is in people’s tax bills. This is a Budget that takes £12 billion from people who work or who have spent most of their adult lives working hard and doing the right thing, and gives it to people on benefits. It doubles down on the mistakes that the Chancellor made in last year’s Budget that have killed jobs, damaged our high streets and made our country poorer.
The proof is there for all to see in the OBR forecasts, which were helpfully published early. Unlike last year, when the Chancellor told the House that the OBR was going to back up her claims of a £22 billion black hole, but when we read the document it said nothing of the sort, today we could see the gaping chasm between the Chancellor’s claims and the reality contained in the report as she was delivering the Budget. The OBR is clear that it is downgrading growth forecasts not since Brexit or anything that happened under the last Government, but since March. These are downgrades under this Labour Chancellor, caused by this Labour Chancellor.
The Chancellor boasted that this year’s projections increase expected growth to 1.5%, which is still less than was being predicted at the time of last year’s Budget when she told us that 2025 would see 2% growth, but she was silent about the growth forecasts being slashed for every subsequent year of the forecasting period.
The OBR says that inflation will stay higher for longer. At a time when the cost of living is falling and inflation is at low levels in other countries, we are the outlier. That is the result of the Chancellor’s choices. It is clear that, despite the claims of the hon. Member for Rugby (John Slinger) a few moments ago, debt will rise as a proportion of GDP, not fall. That is a direct result of the Chancellor’s extra borrowing.
It is also clear that the OBR expects the cost of that borrowing to be higher—to cost the public purse more money each year. While long-term borrowing rates have fallen for most major economies since July last year, the rate that we must pay on UK Government bonds has risen.
Mike Wood
I think the hon. Lady is extremely brave to come to that point so early, given the levels that bonds are still trading at.
The OBR report is clear that the extra cost of borrowing, which is not replicated in other major economies, amounts to an extra £3 billion a year by 2030—more than the OBR expected just in March. In short, we are paying what I understand the markets call a “moron premium” because of the Chancellor’s choices.