Budget Resolutions — House of Commons, 2018-10-29
Topic: Macroeconomics
Nicky Morgan (Conservative, Centre-right): It is undoubtedly the case that our economy will be worse off because of Brexit. We could have the best possible deal, but no deal secured will be as good as the deal we have at the moment. As a strong and ardent remain campaigner, I have to accept how 17.4 million in this country voted. The hon. Lady, and I am sure others in this House, will be very aware of my particular position, which is that if we are going to go down this route, there is a deal that can be done that mitigates the worst of the damage. That deal is the Norway option, which I hope my Government will seriously, seriously consider. I also gently say to the hon. Lady that had the Opposition Front Bench, particularly the Leader, played its part fully in the referendum campaign, we might well not be in this position now It has been said repeatedly that the divorce bill and the UK’s contributions to the EU budget will be dwarfed by how the future UK-EU relationship impacts on trade, migration and productivity. Amid this uncertainty, the Treasury Committee will support Parliament in scrutinising the economic implications of the UK’s withdrawal agreement. My right hon. Friend the Chancellor will know that we have requested detailed assessments of the withdrawal agreement and the future framework, once negotiated, from the Treasury, the Bank of England and the Financial Conduct Authority. We need those assessments in good time before Parliament comes to vote. The Committee has appointed a specialist adviser, Professor Sir Stephen Nickell, a former member of the OBR budget responsibility committee, who will subject the Treasury’s analysis to independent assurance. The Committee will also take evidence from the Chancellor. I know he is looking forward to that session As far as the Budget is concerned, the forecast on which it is based can only be considered preliminary until the OBR gets an opportunity to review the Brexit deal. The OBR’s next forecast, the spring statement, will therefore assume a greater importance than usual. The Committee will expect the OBR to receive the analysis and information it needs from Government Departments and agencies in good time to incorporate the agreement fully into its forecasts. I note that the OBR has made it clear in some documents today that it was pushed for time in the analysis that it did before the Budget. We all understand why the Budget is early, but we want to make sure that the OBR has sufficient time in future In that context, I remind the House of my comments at last year’s Budget debate concerning the role of the Treasury Committee in upholding the independence of the OBR as well as subjecting it to scrutiny and challenge. The OBR is a vital tool in helping this Parliament to hold the Government to account, and the Committee will continue to seek assurances that the OBR has done its work free of political interference and will defend its reputation for independent judgment, if need be. That is all the more vital given the extraordinary situation that UK politics finds itself in at the moment. I am sure the whole House would agree that when Jon Thompson, the chief executive of Her Majesty’s Revenue and Customs, receives death threats for the evidence that he gives to my Committee, that is abhorrent and has no place in our democracy I have said before that the Government should not wait for Brexit before moving forward on their domestic policy agenda. In an uncertain economic climate, households are also under financial pressure, with the saving ratio at record lows and negative in cash terms. Earlier this year, the Committee’s household finances inquiry called for the Chancellor to report on the state of household finances and savings at the Budget and set out his strategy for improving their resilience. I do not think that has happened today, but I hope that it happens in future fiscal statements. I note, however, the Chancellor’s announcement of such things as income tax cuts, which very much help with the cost of living, and savings to beer duty—although I did notice the calls from my hon. Friends on the Bench behind me regarding wine duty, which I am sure he will have heeded. I also note that the Chancellor has announced a package of support for affordable credit and credit unions, including announcements on the "breathing space" changes, which will be very welcome Following last year’s Budget, the Committee also called for the Treasury to publish robust equalities impact assessments in future that include gender breakdowns of Budget measures. I gently remind the Leader of the Opposition that it is the Conservative party in government that has introduced the gender pay gap regulations and is on its second female leader, while the Opposition still need to have their first. The Committee will be taking evidence from the Women’s Budget Group and others later this week, and I welcome the evidence that they will give us The Committee has also just published its report on SME finances, making a number of recommendations that, if implemented, will allow small businesses to make an even greater contribution to our economic performance. The Chancellor has announced measures today, including in relation to the annual investment allowance, that will support small and medium-sized enterprises I note that the Chancellor said he would encourage the expansion of the Financial Ombudsman Service to deal with problems that small and medium-sized businesses have with their banks. Neither I nor the Committee think that that goes far enough. A tribunal is needed to allow those for whom going to court is simply not an option to have their access to justice when their relationship with their bank—a critical relationship—goes so badly wrong.