In 2010, the Government inherited from Labour a deficit at a post-war high. Since then, owing to decisions the Government have taken and the hard work of the British people, the deficit has reduced by about four fifths and is forecast to be just 1% of GDP by 2021-22. The Government’s balanced approach is ensuring that debt is falling while also supporting vital public services, keeping taxes low and investing in Britain’s future.
I am sure the Chancellor will join me in celebrating the fact that for the first time we are starting to see a sustained reduction in our overall debt. Does he agree that the worst thing we could do is hand over the levers of our economy to the Labour party so that it might leave us yet another toxic inheritance to clean up?
My hon. Friend is right. The public finances have reached a turning point. This is the first time in 17 years that we are not borrowing for day-to-day expenditure. Debt has peaked and now begun to fall—its first sustained fall in a generation—and the last thing we want is for the hard work of the British people to be thrown away by the incompetence of a Labour Government delivering higher debt and higher interest payments, which they always do.
The Bank of England has forecast a range of negative impacts on the economy from Britain’s leaving the EU, with or without a deal. What assessment has the Chancellor made of the impact of these on the public sector deficit and his current public spending plans?
The Government have made a cross-departmental assessment of the medium to long-term effects of different Brexit outcomes, which the Government have published. The Bank of England, because it is better equipped to do so, has made an assessment of the short-term impacts of leaving the EU under different scenarios, which it has published.
Order. The hon. Gentleman is a cerebral denizen of the House. I know he is arguing the toss about what he thinks is the inapplicability of the personal views or the professional opinion of the Chancellor, but he should not offer a lecture from a sedentary position. We are accustomed to hearing this eloquence when he is on his feet. We do not need to hear him when he is in his seat.
The next most important update on the deficit will be the Office for Budget Responsibility’s statement around the time of the spring statement, but the OBR has been clear that it can only make a forecast once it knows the Government’s plans for Brexit, so could the Chancellor give the House an update on when he thinks the OBR will be able to produce that work for the spring statement in relation to the Brexit timetable?
Yes I can. My understanding is that the OBR is basing its forecasting work on the same assumptions it used at Budget 2018, but, as my right hon. Friend has asked me, I can inform the House that the spring statement will be made on Wednesday 13 March. I remind the House that it is not a fiscal event but that, as I have said before, if the economic or fiscal outlook changes materially, it is always open to us to turn it into one.
World-class connectivity is vital to tackling the deficit, but the Treasury’s decision to stop investors in community benefit societies receiving 30% tax relief could undermine the good work of broadband pioneers such as Broadband for the Rural North—B4RN—in Cumbria. Given that B4RN has reached the parts of Cumbria that the Government and BT could not or would not reach, what assessment has the Chancellor made of the effect of that decision, and will he think again about his damaging proposals?
I am not familiar with the case to which the hon. Gentleman has referred, but obviously we want to encourage the delivery of high-speed connectivity in all areas, including rural areas. If the hon. Gentleman wishes to write to me with the details, I shall be happy to look at them and respond to him.
We have taken a large number of measures to ensure that all companies pay the appropriate amount of tax, and we have closed a significant number of loopholes that have been used to avoid corporate tax in the past. My hon. Friend will understand that I cannot discuss individual taxpayers at the Dispatch Box, but of course the Government want to see every taxpayer paying the appropriate amount and contributing fairly to the support of our public services.
Bonkers, Mr Speaker. Let me add, respectfully, that I am referring not to you, Sir, but to the response of the Resolution Foundation’s director to the Chancellor’s £6.2 billion corporation tax giveaway. Even the adviser to the previous Chancellor says that the cut represents poor value for money, and the danger is that it will slow progress in reducing the deficit. If the Chancellor is giving away £6.2 billion, does he accept that it would be better given to, for example, cash-strapped local councils, rather providing handouts for cash-rich corporations?
Well, I know where the deep divisions lie. [Interruption.] We have heard many Opposition Members express concern about a lack of investment and the potential relocation of businesses, but now the hon. Member for Bootle (Peter Dowd) has popped up on the Front Bench suggesting that we hit business with an additional tax charge. Labour is the party that is proposing to increase corporation tax for businesses, including the smallest in our country. We will remain the party that is encouraging businesses, large and small, by ensuring that ours is an attractive jurisdiction for investment to take place.
Not content with his Government’s manic drive—and there was an example of it—to turn Britain into a bargain basement economy, the Chancellor is splashing out billions of pounds of taxpayers’ money to prop up a no-deal Brexit. Will he come clean and admit that the hard Brexit for which he is reluctantly preparing may lead to increased borrowing, more debt and the widening of the deficit, not to progress in reducing it?
Some might think it a bit rich for Labour Members to lecture us about increasing deficits and debt, given that their stated policy is to increase the deficit and the debt. Let me be frank with the hon. Gentleman. He has seen the analysis that the Government have published. If we leave the European Union without a deal, yes, it will lead to an increased deficit, and it will lead to an increase in the debt. That is why the Conservatives are working to ensure that we deliver the deal that will protect the British economy. What I do not understand is why Labour Members who genuinely fear a no-deal outcome do not get behind the solution.