Government Performance against Fiscal Rules

Lord Razzall Excerpts

Tuesday 8th July 2025 Lords Chamber

[Lord Livermore (Lab)]

I slightly disagree with the noble Lord’s characterisation of the Parliamentary Labour Party, but I certainly agree with what he says about the fiscal rules. They are essential to maintaining our ability to invest in our public services. The second fiscal rule absolutely allows the additional investment into our public services, but, as he says and as I have said before, the previous Government doubled the national debt, and we have to fund that. The more that it looks like we will not, the harder it becomes. I give him that undertaking. Our commitment to the fiscal rules is non-negotiable.

[Lord Razzall (LD)]

My Lords, does the Minister agree that the original purpose of the change in the fiscal rules brought in by his Government was to ensure that we did not have a ball-by-ball commentary, every time there was the remotest whiff of a financial crisis, on whether or not the fiscal rules were being observed? As I understood it, there was going to be a five-year look at the fiscal rules, but, as things stand, it appears that we are going to be subjected constantly to the noble Baroness’s question about whether the Government is complying with them. I thought the whole point about these rules, as they stand, was that that question was unnecessary.

[Lord Livermore (Lab)]

There are two things here: the fiscal framework and the fiscal rules. On the fiscal framework, we have moved to one fiscal event a year, which is the November Budget. There are two fiscal forecasts, in the spring and in the autumn. The noble Lord is absolutely right: we should not give a running commentary on the fiscal forecast. That is, quite properly, for the Office for Budget Responsibility to do. It will do that in the usual way ahead of the annual Budget, and then the Chancellor will make decisions based on that forecast.

The noble Lord talks about the fiscal rules. The one thing I will say is that the changes to the fiscal rules that we made when we came into office were to enable us to invest sustainably in infrastructure and in public services, to stop the cannibalisation of investment to patch up day-to-day spending which we saw under the previous Government. It is interesting that the party opposite has opposed that change to the fiscal rules yet still supports the additional investment that that changed fiscal rule brings. Again, I am not sure that that is entirely consistent.