Growth Plan: OBR Assessment

Treasury – in the House of Commons on 11th October 2022.

Alert me about debates like this

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

The hon. Gentleman will have seen that I have brought forward the publication of the medium-term fiscal plan to 31 October.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport)

I think the House will agree that the uncertainty over the date has not exactly helped forward planning on benefits. Any real cut in benefits will mean people not having enough money to buy food and clothing for their children, so does the Chancellor agree that increasing benefits in line with inflation is the only fair way forward? Indeed, it would be immoral to do otherwise. As the chief executive of Inverness citizens advice bureau pointed out to me, such benefit money is spent in the local economy and is a boost to what the Chancellor has talked about many times: growing the economy.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

I am delighted to see that one member of the anti-growth coalition is focusing on growth. However, on the hon. Gentleman’s specific question, he will understand that the medium-term fiscal plan is coming out on 31 October, and I will not prejudge any measures in it.

Photo of Robert Halfon Robert Halfon Chair, Education Committee, Chair, Education Committee

Does my right hon. Friend agree that the levelling-up fund is an important part of the plan for growth, and has he seen Harlow Council’s levelling-up fund bid, which I wholeheartedly support? It would transform a derelict area of our town centre into a thriving cultural quarter with jobs and investment, tackling antisocial behaviour. Those abandoned buildings have blighted the heart of our town for far too long.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

My right hon. Friend is a redoubtable and highly persuasive representative of his constituents. I would be happy to talk to him about what we can do together to help his great constituency.

Photo of Stephen Doughty Stephen Doughty Shadow Minister (Foreign and Commonwealth Affairs and International Development)

The Bank of England has had to intervene not once, not twice, but three times now. The impact on pension funds is very significant, and many of my constituents will be deeply worried. What assessment has the Chancellor made of the impact of potential additional pressures on the economy on public sector pensions and the damage to pension funds for pensioners up and down this country? Is that another reason why he did not want to publish the OBR’s forecast at the time of his mini-Budget?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

The OBR will be fully scoring and giving a forecast ahead of the medium-term fiscal plan. I speak very frequently to the Governor of the Bank of England, who is absolutely independent and is very effectively managing what is a global situation.

Photo of Mel Stride Mel Stride Chair, Treasury Committee, Chair, Treasury Committee, Chair, Treasury Committee, Chair, Treasury Sub-Committee on Financial Services Regulations, Chair, Treasury Sub-Committee on Financial Services Regulations

I very much welcome my right hon. Friend’s decision to bring forward the medium-term plan and the OBR forecast; he has listened, and he is right. However, may I caution him to reach out as much as he can across both sides of the House, to be certain that he can get through this House the measures he puts forward to underpin that forecast? Any failure to do so will unsettle the markets.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

My right hon. Friend is absolutely right. He does a brilliant job of chairing his Committee and is full of wise counsel; he is absolutely right that we will and should canvass opinion widely ahead of the publication of the plan.

Photo of Alison McGovern Alison McGovern Shadow Minister (Work and Pensions)

The OBR was the creation of a Conservative Government and was designed to curtail wishful thinking in economic policy, so does the Chancellor agree that it is unfortunate, to say the least, that we seem to have Cabinet Ministers briefing against the economic expertise of that independent institution?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

As far as I am concerned—I speak to investors regularly about this—the OBR is an institution that commands wide respect, not only in the UK but across the world. Its independence, to me, is absolutely sacrosanct.

Photo of Guy Opperman Guy Opperman Conservative, Hexham

The energy price guarantee is an outstanding part of the growth plan. It is key, but far too few businesses and households know about it. May I urge the Chancellor to have a nationwide mail-out campaign, coupled with the Government taking the lead on the reduction of energy in all public buildings, as Germany and other countries are doing? That would have the twin benefits of saving consumers money and reducing taxpayer subsidies.

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

My hon. Friend makes an excellent suggestion. Obviously I am very careful not to make unfunded spending commitments on the Floor of the House, but his suggestion is very well made and we should look into it.

Photo of James Murray James Murray Shadow Financial Secretary (Treasury)

The Chancellor’s refusal to publish OBR forecasts just over two weeks ago played a key role in falling confidence in the pound, rising borrowing costs and market panic. His woeful decision to avoid scrutiny by gagging the OBR helped to increase mortgage costs for working people, who are now paying the price for Conservative failure.

The Chancellor’s behaviour has been described by the former Bank of England Governor Mark Carney as “undercutting” economic institutions. Jonathan Haskel, a member of the Monetary Policy Committee, has made it clear that a

“sidelined OBR generates more uncertainty”.

Does the Chancellor accept that they are right?

Photo of Kwasi Kwarteng Kwasi Kwarteng The Chancellor of the Exchequer

As I have repeatedly said today, the OBR will have a fully forecasted and scored response to the medium-term fiscal plan in less than three weeks.