Autumn Statement — House of Lords, 2015-12-03
Topic: Macroeconomics
John McFall (Labour, Centre-left): My Lords, it is a pleasure to follow the noble Lord, Lord Carrington, on the Autumn Statement. In the past year, we have had four Budgets and Autumn Statements but all they have done is to serve to confuse, not clarify. My first plea is: let us stop the nonsense of this plethora of set pieces for the Chancellor and go back to the time when there was one Budget per annum. Then we might have some sense in our debate On 27 November, the Autumn Statement gave the Chancellor an early Christmas present from Santa in the guise of the Office for Budget Responsibility. The figures from the last three months alone improved by £27 billion and, like a nervous gambler, the Chancellor has cashed in all his chips on this issue, despite the OBR saying that there is just over a 50% chance of the Government achieving their fiscal mandate. This was from a Chancellor who has consistently failed to achieve his borrowing targets. Seven months into this financial year he has already borrowed £54 billion, adding to the £1.5 trillion of national debt. He has failed not only his own targets but those of Alistair Darling, now my noble friend Lord Darling, who would have had £74 billion in his Budget this year—a target the Chancellor proclaimed at that time risked economic catastrophe. Yet we are in a much more difficult situation today At a Thursday breakfast at the Institute of Economic Affairs, I was on the panel along with quite a number of distinguished Conservatives, former Cabinet Ministers, Select Committee chairs and others. At the beginning of my speech, I asked, "Did anyone here understand the figures produced by the Chancellor yesterday in the Autumn Statement?". Everyone said no, so I have a message for the OBR. I am aware that on 15 September, the Treasury Select Committee endorsed Robert Chote for a second term on the basis of his professional competence and personal independence. That is a judgment with which I fully concur, having known Robert for many years in that position and elsewhere, but I have a warning for him. The OBR’s integrity will be questioned if he allows the Chancellor to play his Budget games What is the solution to that? It is for the OBR to have a bit of courage and make the reports publicly available a decent time before the Autumn Statement. Then the whole of Parliament can have that opportunity to analyse them and there can be meaningful engagement and a sensible debate between Parliament and the Executive. The Office for Budget Responsibility has to show its teeth here. There is also the issue of data across departments. Those were the bane of my life when I was chairman of the Treasury Committee; I note that Paul Johnson has asked for that very point to be addressed. The OBR could do that and help to demystify the figures The Autumn Statement has been defined by asset sales, the taxation of banks and pensions—asset sales which are, by the way, larger than we had in the 1980s under Mrs Thatcher. The taxation of banks will penalise the challenger banks at the expense of the too-big-to-fail banks and, on pensions, the Treasury coffers have been increased but the long-term costs and the risks to individuals are being loaded. So the Chancellor has put short-term reform above long-term reform, as we can see in terms of intergenerational fairness. People aged 40 now earn significantly less than people who were aged 40 earned 10 years ago On housing, the Chancellor made the proclamation, "We are the builders". If so, we are not very good at it because, today, the construction survey showed that housebuilding is at its weakest pace since June 2013 and that the rise in construction jobs is the worst since that date. It said that there were shortages in key materials, supply chain capacity and skill capability. These are the core issues a Chancellor should be focusing on. Instead, we have vanity statements and projects that hope to ease his path into No. 10. When I came in here, I was thinking, "What is the Autumn Statement?". It is a bit like a satnav and, given that, we should hear an instruction: "Make a U-turn at the next exit and make it quickly". I think we wait in hope, rather than expectation, for that.