(1 day, 12 hours ago)
Lords ChamberRead Hansard Text Read Debate Ministerial Extracts
Baroness Neville-Rolfe (Con)
My Lords, two weeks ago the Chancellor held an unprecedented press conference at Downing Street. As a result, everyone believed that income tax rates would be increased in the Budget. However, last Friday, the Financial Times, obviously briefed by Downing Street, said that this plan had been scrapped, leading to an instant increase in bond rates and debt servicing costs. Has the Treasury launched an investigation into the source of this and related leaks? If not, why not? Is it that the source of such leaks is all too obvious—the noble Lord’s political friends?
The Financial Secretary to the Treasury (Lord Livermore) (Lab)
I am grateful to the noble Baroness for her question. She claims that it is unprecedented for a Chancellor to comment on the economic situation ahead of a Budget. I do not think it is in any way unusual; there is always speculation ahead of it. As she knows, I am not going to speculate on the next Budget now or comment on any individual tax measure, nor will I comment on the ongoing Budget process. The Chancellor has asked the OBR to produce a new forecast. The OBR and the Treasury exchange information throughout the forecast process, which is usual practice, established over many years. The Chancellor will then take decisions based on that forecast and set out our fiscal plans in the Budget. She has been very clear that the Budget will protect the NHS, reduce the cost of living and reduce the national debt. We will continue to rebuild the economy after 14 years of failure from the party opposite.
Baroness Kramer (LD)
My Lords, the country was led up the hill and then marched right back down again. Does the Minister recognise that this sort of kite-flying is really undermining confidence in the comments that anybody now makes from the Treasury Benches? Does he accept that, although bond yields steadied a few days after flurrying, with that flip-flop and change in policy, we still find ourselves paying over the odds for issuing gilts, largely because markets are so uncertain about the direction of public finances? Steadying and calming surely ought to be the order of the day.
Lord Livermore (Lab)
The noble Baroness says that comments from the Treasury Benches create uncertainty and then invites me to comment, so I shall not do that. I shall not comment on bond yields as she asks me to do; as she knows, I never do. I will not comment on the ongoing Budget process or on speculation on individual tax measures.
Lord Harper (Con)
My Lords, it is not good enough for the Minister to talk just about speculation, as his colleague did in the House of Commons. This comment was driven, first, by the Chancellor’s speech, which was not about economic policy but specifically about the Budget, and then by the interview that she did on Matt Chorley’s programme, specifically on the Budget. This information has been put into the public domain by Ministers. It has had real-world economic effects and it should stop.
Lord Livermore (Lab)
With the greatest respect to the noble Lord, I am not sure that it is for him to say what is and is not good enough. He expresses shock and horror that the Chancellor should comment on the Budget; that is somewhat overdone. It is perfectly in order for the Chancellor to comment on the Budget before, during and after it. As I say, I am not going to comment on the ongoing Budget process.
Lord Moore of Etchingham (Non-Afl)
My Lords, may I ask the Minister a question as a journalist? I wonder what happened to Budget purdah. For years, we journalists could never get anything out of the Treasury before the Budget approached. Nowadays, we print story after story that the Government have kindly given us, then we print the contradictions to those stories which the Government have also kindly given us. That seems to be of great benefit to our headlines but of very little benefit to the country. Is the Minister planning to bring a return to purdah?
Lord Livermore (Lab)
The noble Lord is far more experienced in these matters than I am, but he will know very well that there is always speculation ahead of a Budget. I do not think there is anything unusual about that. I am slightly unclear whether I am being told that speculation is wrong or being invited to speculate. As I have been clear, I am not going to comment on the Budget process, on speculation ahead of the Budget or on any individual tax measures.
The Lord Bishop of Hereford
My Lords, over the last few months not only have the bond markets been affected by this speculation, but people have made life-changing financial decisions, in part fuelled by speculation rooted in private government press briefings. These decisions may prove to be unwise when the Government’s actual decisions are revealed. Have the Government considered other, less damaging means of gauging public opinion than fishing through the media?
Lord Livermore (Lab)
The right reverend Prelate says that the Government are the source for this speculation when he has no such evidence for that. I am not going to comment on the ongoing Budget process, as I say, nor on the speculation that is perfectly usual ahead of a Budget.
Lord Watts (Lab)
My Lords, is the Minister surprised at the criticism that has come from the Opposition Benches about leaks when, in the past, leaks went as widely under any previous Government as under this Government? Is he surprised to hear criticism about the impact on the bond markets after we have had one of the worst times, financially, as mismanagement by the previous Government caused a crash in the market?
Lord Livermore (Lab)
My noble friend is absolutely right to say that there is always speculation ahead of a Budget. As he knows, I am not going to comment on the bond markets, but he is right to point out that the Liz Truss mini-Budget crashed the economy and sent interest rates soaring.
Lord Bridges of Headley (Con)
My Lords, on 10 November, the Chancellor said on BBC Radio:
“It would, of course, be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending”.
Does that statement still stand?
Lord Livermore (Lab)
As I have said, I am being told by noble Lords opposite that speculation is wrong and now the noble Lord is asking me to speculate. As I have made very clear, I will not be commenting on individual tax measures.
Lord Scriven (LD)
My Lords, does the Minister agree with his colleague, the Chancellor of the Exchequer, who, when she was shadow Chancellor, said that teasing major policy shifts can create market uncertainty and should be avoided?
Lord Livermore (Lab)
As a general principle, I always agree with my right honourable friend the Chancellor of the Exchequer. As I said already, I am not going to comment on the ongoing Budget process.
The Earl of Effingham (Con)
My Lords, the Minister mentioned October 2022 in his previous response, so I ask him: is the yield on the 30-year UK government bond higher now than it was in October 2022?
Lord Livermore (Lab)
The noble Earl knows full well that I will not be commenting on the movements of bond markets.
Baroness Penn (Con)
I will not ask the Minister to comment on bond markets or to speculate. I will simply ask him whether he agrees with himself when he told this Chamber last year that a freeze on income tax thresholds would be a tax rise on working people costing them billions of pounds.
Lord Livermore (Lab)
The noble Baroness did exactly what she said she would not do and asked me to comment on individual tax measures—something she knows that I am not going to do.
Lord Murray of Blidworth (Con)
Mr Sam Coates on Sky News said that this Budget had “unravelled” before it had been given. Does the Minister agree?
Lord Livermore (Lab)
As I have said several times already, I am not going to comment on the ongoing Budget process.
Baroness Foster of Oxton (Con)
My Lords, following the Chancellor’s climb-down on increasing income tax, £27 billion was wiped off the FTSE 100 on Friday. Does the Minister think that that was helpful?
Lord Livermore (Lab)
As I have said already, I am not going to comment on the ongoing Budget process.
Baroness Fox of Buckley (Non-Afl)
No one was speculating until the Chancellor raised the subject of income tax. Does the noble Lord take the public for fools by thinking that there is nothing to see here, when we can all see that there is something to see here? Secondly, if any of the public are looking at these Questions, does the Minister think that this behaviour in answering the last two questions is likely to engender trust in politicians or undermine it?
Lord Livermore (Lab)
The answer to the noble Baroness’s first question is no. On her second question, I am not going to comment on the ongoing Budget process. There is always speculation ahead of a Budget and it is quite right that I do not comment on any individual tax measures.
Baroness Jones of Moulsecoomb (GP)
Does the Minister understand that he has to answer questions and not just butt them away?
Lord Weir of Ballyholme (DUP)
My Lords, given the answer that the Minister has given on a number of occasions that he is not prepared to comment or speculate, could he perhaps outline to the House which matters he is prepared to comment on?
Lord Livermore (Lab)
That would be quite a long and exhaustive list. Right now, I am not prepared to comment on individual tax measures, speculation ahead of the Budget and the ongoing Budget process.
Lord Geddes (Con)
Going back to a previous question, my noble friend behind me asked whether the noble Lord would comment on something that he had said. It was nothing to do with the Budget. Would the noble Lord please reply?
Lord Livermore (Lab)
I was asked to comment on individual tax measures, which is something that I said I would not comment on.