---

Autumn Budget Forecast

My Lords, was not all that fun? I really think that at least the noble Lord, Lord Eatwell, studied the documents, to which we will come in a minute, unlike the noble Lord, Lord Myners. There is nothing of substance from the opposition Benches, so we have the noble Lord, Lord Myners, brought out of retirement to give us a bit of theatre to cheer up our early evening. But we really have got some serious things to talk about. The Statement made by my right honourable friend the Chancellor was made against a very difficult situation in the eurozone. The Government’s overriding priority is to demonstrate our commitment to live within this country’s means and to keep our interest rates low and stable. We have to ensure that we work to stimulate the supply of money and credit to make sure that those low interest rates are passed on to families and businesses. My right honourable friend’s Statement supports our business and invests in our infrastructure. I am pleased that the noble Lord, Lord Myners, at least welcomes that increased investment in our infrastructure because that is what will lay the foundations for sustainable growth into the future. If the noble Lord, Lord Myners, had spent time reading the documents today, he would understand some of the facts that have been laid out by the independent Office for Budget Responsibility. Let me remind him and other noble Lords of some of that. First, yes, growth is lower. But why is growth lower? The OBR sets it out in forensic detail. First, it ascribes the lower growth to date as being substantially attributable to the higher inflation as a result of imports of commodities. Secondly, it highlights the current risks and the reasons for its reduction in the forecast growth as being principally as a result of difficulties in the eurozone. The noble Lord is shaking his head at those, but perhaps he will nod approvingly at this. Thirdly, he will have noticed when he talks about the structural deficit that the OBR’s analysis since it has re-looked at the numbers is that the so-called boom under Labour was even higher and more fictitious than before and that the structural deficit that it built up was even larger, which is why, additionally, we are not going to make up the structural shortfall that we need to make up. Having said that, the OBR goes on to lay out its growth projections for the next few years. In terms of the top-line growth from 2012 through to 2016, those numbers in each year are forecast to be higher than the growth of the eurozone. So we should not talk down the prospects of the country. The noble Lord asked what the sources of that growth had been. If he had got as far as chart 1.4 in Autumn Statement 2011, which is not very far in, it shows exactly where the OBR expects the growth to come from. For example, it expects total investment to contribute four percentage points to growth between 2010 and 2016, while net trade will contribute two percentage points. The noble Lord, Lord Myners, shakes his head. Does he have better numbers? Does he not share the analysis of the OBR? Those are its numbers. If the noble Lord was to look a bit further into the masterly document that the OBR has produced, its latest forecast for reduction in general government employment over the period 2011 to 2017 will be 710,000 jobs. It forecasts that in the same period the private sector will generate not 700,000 new jobs but 1.7 million new jobs. Again, I say to the noble Lord and others on the opposition Benches that the policies that this Government are driving through are those which will underpin sustained growth and that the private sector is already delivering that growth. On borrowing, we had all sorts of contradictory thoughts from the noble Lord. I am not sure whether he wants us to go faster or slower on the pace of balancing the budget. It was not at all clear to me. All I know is that, if we were sticking in the current environment to the previous Labour Government’s plans, borrowing in 2013-14 would not be the £79 billion which this Government will be borrowing, but £100 billion. To look at it another way, over the spending review period, under the plans of the previous Government, there would be an additional £100 billion of borrowing. That would not be just borrowing: it would be £100 billion of additional debt, with which a Labour Government would have wished to saddle this country. As to credit easing, it will not be the Government who make the decision. Again, if the noble Lord had chosen to look at it, the banks will be taking those decisions. The noble Lord also gets it wrong on the pension funds and infrastructure. The pension funds have come to us and have said that they wish to allocate something of the order of 2 per cent to 2.5 per cent of their funds to infrastructure. They have asked us as the Government to facilitate that, which we are happy to do. After all, this is the noble Lord who a few months ago—perhaps last month—was advising HSBC’s retail bank to move to Paris. This is a man who does not have the best interests of British banking or the British economy at heart.