1 00:00:02,520 --> 00:00:08,879 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Chancellor, before you began 2 00:00:08,960 --> 00:00:11,559 Speaker 1: your budget, the Office for Budget Responsibility some what stole 3 00:00:11,640 --> 00:00:14,720 Speaker 1: your thunder with its surprise leaf of its forecast. Should 4 00:00:14,760 --> 00:00:16,360 Speaker 1: its boss, Richard Hughes be sacked? 5 00:00:16,960 --> 00:00:20,560 Speaker 2: Well, Richard Hughes and the OBR have confirmed that they 6 00:00:20,600 --> 00:00:24,640 Speaker 2: are launched. They have launched an investigation into what happens. 7 00:00:24,760 --> 00:00:28,680 Speaker 2: It obviously was a serious breach. They've apologized for that 8 00:00:28,720 --> 00:00:30,200 Speaker 2: and put out a full statement. 9 00:00:30,240 --> 00:00:32,760 Speaker 1: So leik aside, are you happy with the market reaction today? 10 00:00:33,840 --> 00:00:36,080 Speaker 2: I think it's best for chancellors not to comment on 11 00:00:36,400 --> 00:00:39,199 Speaker 2: what's going on in the market. But what I was 12 00:00:39,240 --> 00:00:42,400 Speaker 2: determined to deliver today, as well as cuts to the 13 00:00:42,440 --> 00:00:45,440 Speaker 2: cost of living and cuts to NHS waiting lists, was 14 00:00:46,120 --> 00:00:48,760 Speaker 2: cutting borrowing and the debt. And you can see in 15 00:00:48,840 --> 00:00:52,400 Speaker 2: the budget today the increase in headroom, more than doubling 16 00:00:52,440 --> 00:00:55,440 Speaker 2: the headroom to twenty one point seven billion pounds and 17 00:00:55,560 --> 00:00:59,320 Speaker 2: indeed meeting that target on the stability rule a year early. 18 00:00:59,440 --> 00:01:02,000 Speaker 1: You talk about borrowing, The Institute for Fiscal Studies says 19 00:01:02,000 --> 00:01:04,560 Speaker 1: it's a spend now, pay later budget. What do you 20 00:01:04,560 --> 00:01:07,320 Speaker 1: say to traders who are still concerned that this fiscal 21 00:01:07,360 --> 00:01:09,119 Speaker 1: tightening's backcluded. Well. 22 00:01:09,160 --> 00:01:11,720 Speaker 2: Listen to the IMF, and the IMF say that there 23 00:01:11,800 --> 00:01:14,759 Speaker 2: is a faster rate of consolidation in the UK than 24 00:01:14,760 --> 00:01:19,280 Speaker 2: in any G seven economy, and we see that borrowing 25 00:01:19,280 --> 00:01:23,240 Speaker 2: as a share of GDP falling right through the forecast 26 00:01:23,560 --> 00:01:28,399 Speaker 2: period after hovering around five percent for many years, we 27 00:01:28,440 --> 00:01:29,600 Speaker 2: are actually getting that down. 28 00:01:29,640 --> 00:01:32,040 Speaker 1: But the Resolution Foundation says this budget leaves much of 29 00:01:32,080 --> 00:01:34,720 Speaker 1: the fiscal repair job to twenty twenty eight and beyond. 30 00:01:35,640 --> 00:01:41,360 Speaker 2: Well, some tax reforms like the high Value Council tax surcharge, 31 00:01:41,520 --> 00:01:44,080 Speaker 2: take a while to introduce, and also want to make 32 00:01:44,080 --> 00:01:47,480 Speaker 2: sure that we get these things right. And similarly the 33 00:01:47,560 --> 00:01:52,440 Speaker 2: changes with the further freeze in the tax allowances, they're 34 00:01:52,560 --> 00:01:55,760 Speaker 2: being frozen after they were already frozen for seven years 35 00:01:55,800 --> 00:01:59,360 Speaker 2: from twenty twenty eight. But there are also real savings 36 00:01:59,840 --> 00:02:06,200 Speaker 2: in spending right now with better balance sheet management, cracking 37 00:02:06,240 --> 00:02:09,240 Speaker 2: down on some of the waste and inefficiencies, and indeed 38 00:02:09,320 --> 00:02:13,960 Speaker 2: introducing a further efficiency drive within our public services. So 39 00:02:14,000 --> 00:02:18,080 Speaker 2: this is not all about tax We've also taken measures 40 00:02:18,080 --> 00:02:19,320 Speaker 2: on the spending side as well. 41 00:02:19,400 --> 00:02:22,360 Speaker 1: You mentioned the freeze on income tax thresholds for three years. 42 00:02:22,400 --> 00:02:25,440 Speaker 1: It's going to create millions of new tax payers. Do 43 00:02:25,480 --> 00:02:27,960 Speaker 1: you accept that breach is the spirit of your manifesto? 44 00:02:28,080 --> 00:02:30,640 Speaker 2: Well, the manifesto was clear that we wouldn't increase the 45 00:02:30,720 --> 00:02:34,720 Speaker 2: rates of income tax, national insurance or vaight. But I 46 00:02:34,760 --> 00:02:37,320 Speaker 2: do recognize, and I said this clearly in the House 47 00:02:37,360 --> 00:02:41,000 Speaker 2: of Commons today, that freezing the thresholds for a further 48 00:02:41,080 --> 00:02:44,240 Speaker 2: three years after they were already frozen for seven years 49 00:02:44,320 --> 00:02:47,720 Speaker 2: under the previous government does mean that I'm asking ordinary 50 00:02:47,720 --> 00:02:50,600 Speaker 2: people to contribute more. I think that is the fair 51 00:02:50,600 --> 00:02:53,400 Speaker 2: thing to do in the wake of the productivity downgrade 52 00:02:53,600 --> 00:02:56,520 Speaker 2: from the Office for Budget Responsibility, which will see sixteen 53 00:02:56,560 --> 00:03:00,120 Speaker 2: billion pounds less come in in terms of tax revenue. 54 00:03:00,240 --> 00:03:04,280 Speaker 2: But I've kept that cost on ordinary working people as 55 00:03:04,320 --> 00:03:08,880 Speaker 2: low as possible by closing loopholes in the tax system 56 00:03:09,000 --> 00:03:13,720 Speaker 2: and by introducing some taxes, for example on ev charging, 57 00:03:14,040 --> 00:03:16,640 Speaker 2: which the previous government ducked, even though it's been a 58 00:03:16,639 --> 00:03:18,080 Speaker 2: ticking time bomb for some time. 59 00:03:18,200 --> 00:03:20,560 Speaker 1: But do you accept the obr's conclusion that this stealth 60 00:03:20,600 --> 00:03:23,760 Speaker 1: tax rise is going to reduce economic output because of 61 00:03:23,800 --> 00:03:27,880 Speaker 1: the financial incentive against working in order to spending on benefits. 62 00:03:27,960 --> 00:03:31,320 Speaker 2: I think the OBR have been pretty clear that no 63 00:03:31,520 --> 00:03:37,320 Speaker 2: measures in this budget impact their growth forecast. Indeed, they 64 00:03:37,400 --> 00:03:40,080 Speaker 2: point to things like the India Deal, the Planning and 65 00:03:40,120 --> 00:03:44,800 Speaker 2: Infrastructure Bill as being positive for the economy. And indeed 66 00:03:44,840 --> 00:03:48,440 Speaker 2: our changes to universal credit will result in an additional 67 00:03:48,480 --> 00:03:51,000 Speaker 2: fifteen thousand people in the workforce in the next few years. 68 00:03:51,080 --> 00:03:53,120 Speaker 1: Well over all, the ABR says, none of your policy 69 00:03:53,160 --> 00:03:55,520 Speaker 1: measures boost growth. What does that say about the government's 70 00:03:55,520 --> 00:03:56,400 Speaker 1: growth ambitions. 71 00:03:56,480 --> 00:03:59,320 Speaker 2: Well, in the spring, you'll remember that they scored six 72 00:03:59,360 --> 00:04:04,080 Speaker 2: point eight pounds the biggest ever non fiscal scoring that 73 00:04:04,120 --> 00:04:08,560 Speaker 2: their OBR have ever done for our planning reforms. Just 74 00:04:08,600 --> 00:04:12,040 Speaker 2: a couple of days ago the Planning and Infrastructure Bill 75 00:04:13,320 --> 00:04:16,600 Speaker 2: was in the House of Lords. That is now almost complete, 76 00:04:16,720 --> 00:04:18,960 Speaker 2: just one more return to the House of Commons and 77 00:04:19,000 --> 00:04:21,280 Speaker 2: then that bill will get royal ascent. And the OBR 78 00:04:21,360 --> 00:04:23,880 Speaker 2: haven't scored the India Deal, the EU Deal or the 79 00:04:24,000 --> 00:04:26,040 Speaker 2: US Deal. And that's why I'm confident we can beat 80 00:04:26,120 --> 00:04:29,120 Speaker 2: these forecasts on growth. We've beaten them this year with 81 00:04:29,240 --> 00:04:31,320 Speaker 2: one and a half percent growth now forecast, not the 82 00:04:31,360 --> 00:04:34,360 Speaker 2: one percent they forecast in the spring, and I'm confident 83 00:04:34,400 --> 00:04:35,960 Speaker 2: that we can beat those forecasts again. 84 00:04:36,000 --> 00:04:39,479 Speaker 1: So finally, Chancelly, you've effectively just broken your promise made 85 00:04:39,520 --> 00:04:42,599 Speaker 1: after the last budget not to raise taxes again. Will 86 00:04:42,640 --> 00:04:45,640 Speaker 1: you now rule out more tax rises, whether directly or 87 00:04:45,680 --> 00:04:47,279 Speaker 1: by stealth this parliament. 88 00:04:48,080 --> 00:04:50,000 Speaker 2: So last year I had to close the black hole 89 00:04:50,000 --> 00:04:54,120 Speaker 2: in the public finances left by the Conservatives, and in 90 00:04:54,160 --> 00:04:57,680 Speaker 2: the budget last year I lived within the forecast set 91 00:04:57,720 --> 00:05:01,400 Speaker 2: by the OBR. They have now change their forecasts around 92 00:05:01,440 --> 00:05:03,800 Speaker 2: productivity and they are very clear that's nothing to do 93 00:05:03,880 --> 00:05:07,120 Speaker 2: with the policy of this government, but that does mean 94 00:05:07,279 --> 00:05:10,120 Speaker 2: they forecast lower tax revenue coming in. And I was 95 00:05:10,200 --> 00:05:12,520 Speaker 2: always clear that would never play fast and loose with 96 00:05:12,600 --> 00:05:16,080 Speaker 2: the public finances because it's ordinary working people and businesses 97 00:05:16,080 --> 00:05:19,000 Speaker 2: that pay the price when that happens. So these are 98 00:05:19,040 --> 00:05:22,760 Speaker 2: the fair and necessary choices in the circumstances that I face. 99 00:05:23,040 --> 00:05:25,640 Speaker 2: But what I'm now determined to do more than ever 100 00:05:25,800 --> 00:05:28,039 Speaker 2: is to grow our economy so that we have the 101 00:05:28,120 --> 00:05:31,719 Speaker 2: revenue both to keep taxes down and also to fund 102 00:05:31,839 --> 00:05:34,400 Speaker 2: our public services. And that is what this government's plan 103 00:05:34,520 --> 00:05:38,680 Speaker 2: for growth is all about, whether it's pensions reform, planning reform, 104 00:05:38,839 --> 00:05:42,239 Speaker 2: the changes today to help make Britain the best place 105 00:05:42,320 --> 00:05:45,000 Speaker 2: to start up, to scale up and to stay with 106 00:05:45,120 --> 00:05:49,280 Speaker 2: the changes to stamp duty for shares for companies newly 107 00:05:49,320 --> 00:05:52,159 Speaker 2: listing in the UK. I'm determined that we get the 108 00:05:52,200 --> 00:05:55,080 Speaker 2: growth that our economy has been sorely lacking for too long, 109 00:05:55,279 --> 00:05:57,919 Speaker 2: and we do that through the forms that we've set out. 110 00:05:58,080 --> 00:06:00,400 Speaker 1: No confirmation of no new taxes. 111 00:06:00,480 --> 00:06:04,640 Speaker 2: Well, no chancellor can write future budgets. I took the 112 00:06:04,640 --> 00:06:08,200 Speaker 2: fair and necessary choices today, but my focus has been 113 00:06:08,360 --> 00:06:11,400 Speaker 2: and always will be on growing our economy so that 114 00:06:11,440 --> 00:06:14,280 Speaker 2: we can keep taxes down and have the money we 115 00:06:14,279 --> 00:06:16,080 Speaker 2: need to invest in our public services.