Charter for Budget Responsibility

The charter sets out a plan for managing the nation’s money prudently to support economic stability. It includes difficult decisions worth around £55 billion aimed at reducing debt while protecting public services and vulnerable populations. The Government aims to reduce inflation, control expenditure within predetermined caps, and ensure fiscal transparency through OBR forecasts.

Questions the reliability of five-year forward debt forecasts given recent inaccuracies by official forecasters.

Echoes the Chief Secretary’s condolences to Robert Key, criticises the Government's fiscal record, pointing out that the UK is the only G7 country not to recover its pre-Covid economic position. Highlights the increase in national debt from billions to £2.4 trillion and criticises the Government for breaking their fiscal rules 11 times. Emphasises the negative impact of the former Prime Minister's intervention on the current Government's credibility, mentioning that her mini-Budget caused issues with pension schemes and mortgage rates. Criticises the inconsistency in respecting the role of the Office for Budget Responsibility (OBR) after disparaging its importance during the crisis last year. Concludes by stating that the Conservative party has forfeited its right to be considered a sound economic manager due to poor fiscal performance, high tax burden, and lack of growth.

Expressed condolences to Robert Key, mentioned the death of a dear friend and constituency Member of Parliament.

Discussed the rationale for setting up the Office for Budget Responsibility, highlighted the importance of its external nature in marking Treasury forecasts. Critiqued the fictional projections for fuel duty and suggested a more realistic approach to forecasting.

Acknowledged the work of the OBR but criticised the Government's economic management over the past year, highlighting issues with borrowing, inflation, and weak business investment. Emphasised the lack of fiscal headroom and expressed concern about a focus solely on debt targets without ambition for growth.

Mr Malthouse supports the motion and the economic charter, but raises concerns about the Office for Budget Responsibility's independence. He argues that forecasts should be produced by both the Treasury and the OBR to highlight differences between them and increase accountability. He also discusses issues related to policy costings and the iterative process involving the OBR, suggesting this could undermine its perceived independence. Additionally, he questions whether the OBR adheres to certain economic principles like the Laffer curve. Mr Malthouse expresses concern about the mandate's omission of balancing the budget within three years, noting potential difficulties in chasing a debt-to-GDP ratio amidst falling GDP. He further highlights long-term issues such as demographic changes and pension fund sustainability, urging for consideration of fiscal measures to encourage entrepreneurship and capital investment during a technological revolution.

Agreed with John Malthouse on the effectiveness of cutting tax rates and criticised OBR forecasts for exaggerating deficits. Noted that the current control framework has not worked in the past and proposed a balanced mandate combining inflation and growth targets. Highlighted issues with government debt management, particularly how it is treated by the Bank of England.

Defended the Government's fiscal policies and highlighted the importance of an official forecast provided by the OBR. Criticised the Labour Party for its uncosted net spending commitments, and argued that the Charter represents a bedrock to prosperity.