OBR Forecasts

Earl of Effingham Excerpts

Monday 1st December 2025 Lords Chamber

[Lord Livermore (Lab)]

I definitely agree with the middle part of the noble Lord’s question on the importance of fiscal responsibility to securing the objectives that we want to see. The best way to provide more money for public services is to reduce the amount we are paying on debt interest; fiscal responsibility is vital to that. As I have said, we are cutting borrowing in every year of this forecast. We are cutting borrowing faster than any other G7 country and we have doubled the amount of headroom. That all helps to support the amount that we pay on debt interest coming down. That gives us more money to spend on the priorities that we all want to see: improving living standards, cutting NHS waiting lists and having more money to fund the public services. Fiscal responsibility is completely consistent with the objectives of this party in funding public services and improving living standards.

[The Earl of Effingham (Con)]

My Lords, please allow me to quote the former chair of the OBR on the black hole that the Minister has now referenced over 50 times at the Dispatch Box:

“Nothing in our review was a legitimisation of that £22 billion”.


Last week, the OBR said that:

“At no point in our pre-measures forecast process were either of the Government’s fiscal targets missed by more than £2.5bn”.


Why are the Government saying something completely different from the OBR?

[Lord Livermore (Lab)]

I am grateful to the noble Earl for pointing out my message discipline at this Dispatch Box. I am proud to have mentioned that £22 billion black hole over 50 times. The two noble Lords sitting next to each other are the other two Members of this House who have mentioned it almost as many times as I have. I think every time the noble Earl has made reference to the £22 billion black hole, I have pointed out to him that the OBR review ran up to six months before the end of the previous Government’s time in office. It identified a black hole and then the party opposite had another six months to continue adding to that hole and to continue to conceal it from the OBR. The OBR says in terms that it was concealed from it. That is a very serious charge.

Regarding what the OBR says about headroom, as I said, on 4 November, the Chancellor had £4.2 billion of headroom before any policy choices we had already announced were accounted for. Once those policy choices were accounted for, she would have a deficit of £2.7 billion. I do not think that anyone on the opposite side of the House thinks that going to the country with a £2.7 billion deficit rather than any headroom would be a fiscally responsible thing to do, given how uncertain the world around us is. It is absolutely right that we increased headroom to £21.7 billion.