Amendment of the Law

Part of the debate – in the House of Commons at 3:45 pm on 8th March 2017.

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Photo of Jacob Rees-Mogg Jacob Rees-Mogg Conservative, North East Somerset 3:45 pm, 8th March 2017

That was broadly the point I was making—the OBR is quite cautious. I was not disputing that it is cautious, but I am not cautious. I am sorry to say that, much though I respect the OBR and much though I think it does its work diligently, it got it hopelessly wrong a year ago and had to raise its forecasts for GDP growth consistently, because it did not manage to get them right. It revised down the November autumn statement and has had to revise back up again now. I think it is a terrible mistake, though earlier I quoted holy scripture, to take forecasts from these people as holy writ. They are not.

This comes down to a question of judgment, both political and economic. The political judgment is on whether this Government are going to be competent to negotiate well and effectively. I have complete confidence that they will do that—that they will be able to negotiate in the councils of Europe more effectively than anybody else could on our behalf. The economic judgment is on the balance between what we get from the European Union and what we can do with the rest of the world. I expect that, if we trade more freely with the rest of the world, that will more than compensate for the risks that we may take in having harder terms of trade with the European Union.

Having taken up the challenge from the hon. Members for Hackney South and Shoreditch (Meg Hillier) and for Nottingham East (Chris Leslie), who both wanted a Government view on Brexit—I cannot claim to speak for the Government, but I can at least say something about Brexit—I want to go through some of the details. This Budget has some very good news about the deficit. Although £51.8 billion, the deficit for this year, is still a very large amount of money, as a percentage of GDP we are now back within the norms of the types of deficits that Governments can run with. That is not to say that I think having a deficit is a good thing in principle, but GDP growth is near 2.6% and this is about remaining steady with total debt and GDP. If we go no further than that, it is an amount that can be lived with. That is important, because although there is more to be done, the vast bulk of what was necessary to live within our means has now been done.

I want to make some little points about certain areas of concern. I would encourage the Government not to proceed with the personal injury discount rate reduction to minus 0.75%. The idea that awards against the Government should be calculated with a negative time cost of money is wrong. It would be better and cheaper for the Government to underwrite annual payments, rather than making lump-sum payments with a discount rate of a negative kind—[Interruption.] Rob Marris mutters that I do not understand this. I do understand it, and I know that the Government are obliged by law to do this, but they have the ability to introduce new laws in this House and can often do that as part of the Finance Bill.