Autumn Statement

Baroness McIntosh of Hudnall Excerpts

Thursday 5th December 2013 Lords Chamber

[Lord Deighton]

I thank the noble Lord for his analysis of our need for investment. We also talked about productivity. The review that the noble Lord referred to that the Treasury did on corporation tax is what we describe as dynamic modelling, which means understanding the long-term effects of the tax cuts and demonstrating that the increase in income that flows afterwards pays for the majority of them. The way that we are dealing with making sure that overseas companies pay their fair share is through the OECD and taking leadership internationally. I think that is the only way that you can do it. You have to be able to deal with these international companies on a global basis, otherwise it is impossible to close them down, so that is probably the right way to approach it. The general trend of getting people to pay less tax and making sure that everybody pays that tax is the right strategy, and one that is working well for this country.

[Baroness McIntosh of Hudnall (Lab)]

My Lords, I was not here at the beginning so I merely repeat something that has been said by somebody else. I do not believe the Minister answered the question from my noble friend Lord McFall about the OBR. Perhaps I could repeat the question. I believe my noble friend asked why the OBR was predicting that the economic situation would get worse in the years ahead.

[Lord Deighton]

The short answer is that you would probably need to ask it. As a former economist I can take this lightly, but in the short term, where I would rely much more on their forecast, the recovery is strong. In the longer term, if you look at the way the OBR handles it, it shows a fan of growth forecasts which comprehends just about every single possibility in the longer term.