Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Chancellor, before you began
Speaker 1: your budget, the Office for Budget Responsibility some what stole
Speaker 1: your thunder with its surprise leaf of its forecast. Should
Speaker 1: its boss, Richard Hughes be sacked?
Speaker 2: Well, Richard Hughes and the OBR have confirmed that they
Speaker 2: are launched. They have launched an investigation into what happens.
Speaker 2: It obviously was a serious breach. They've apologized for that
Speaker 2: and put out a full statement.
Speaker 1: So leik aside, are you happy with the market reaction today?
Speaker 2: I think it's best for chancellors not to comment on
Speaker 2: what's going on in the market. But what I was
Speaker 2: determined to deliver today, as well as cuts to the
Speaker 2: cost of living and cuts to NHS waiting lists, was
Speaker 2: cutting borrowing and the debt. And you can see in
Speaker 2: the budget today the increase in headroom, more than doubling
Speaker 2: the headroom to twenty one point seven billion pounds and
Speaker 2: indeed meeting that target on the stability rule a year early.
Speaker 1: You talk about borrowing, The Institute for Fiscal Studies says
Speaker 1: it's a spend now, pay later budget. What do you
Speaker 1: say to traders who are still concerned that this fiscal
Speaker 1: tightening's backcluded. Well.
Speaker 2: Listen to the IMF, and the IMF say that there
Speaker 2: is a faster rate of consolidation in the UK than
Speaker 2: in any G seven economy, and we see that borrowing
Speaker 2: as a share of GDP falling right through the forecast
Speaker 2: period after hovering around five percent for many years, we
Speaker 2: are actually getting that down.
Speaker 1: But the Resolution Foundation says this budget leaves much of
Speaker 1: the fiscal repair job to twenty twenty eight and beyond.
Speaker 2: Well, some tax reforms like the high Value Council tax surcharge,
Speaker 2: take a while to introduce, and also want to make
Speaker 2: sure that we get these things right. And similarly the
Speaker 2: changes with the further freeze in the tax allowances, they're
Speaker 2: being frozen after they were already frozen for seven years
Speaker 2: from twenty twenty eight. But there are also real savings
Speaker 2: in spending right now with better balance sheet management, cracking
Speaker 2: down on some of the waste and inefficiencies, and indeed
Speaker 2: introducing a further efficiency drive within our public services. So
Speaker 2: this is not all about tax We've also taken measures
Speaker 2: on the spending side as well.
Speaker 1: You mentioned the freeze on income tax thresholds for three years.
Speaker 1: It's going to create millions of new tax payers. Do
Speaker 1: you accept that breach is the spirit of your manifesto?
Speaker 2: Well, the manifesto was clear that we wouldn't increase the
Speaker 2: rates of income tax, national insurance or vaight. But I
Speaker 2: do recognize, and I said this clearly in the House
Speaker 2: of Commons today, that freezing the thresholds for a further
Speaker 2: three years after they were already frozen for seven years
Speaker 2: under the previous government does mean that I'm asking ordinary
Speaker 2: people to contribute more. I think that is the fair
Speaker 2: thing to do in the wake of the productivity downgrade
Speaker 2: from the Office for Budget Responsibility, which will see sixteen
Speaker 2: billion pounds less come in in terms of tax revenue.
Speaker 2: But I've kept that cost on ordinary working people as
Speaker 2: low as possible by closing loopholes in the tax system
Speaker 2: and by introducing some taxes, for example on ev charging,
Speaker 2: which the previous government ducked, even though it's been a
Speaker 2: ticking time bomb for some time.
Speaker 1: But do you accept the obr's conclusion that this stealth
Speaker 1: tax rise is going to reduce economic output because of
Speaker 1: the financial incentive against working in order to spending on benefits.
Speaker 2: I think the OBR have been pretty clear that no
Speaker 2: measures in this budget impact their growth forecast. Indeed, they
Speaker 2: point to things like the India Deal, the Planning and
Speaker 2: Infrastructure Bill as being positive for the economy. And indeed
Speaker 2: our changes to universal credit will result in an additional
Speaker 2: fifteen thousand people in the workforce in the next few years.
Speaker 1: Well over all, the ABR says, none of your policy
Speaker 1: measures boost growth. What does that say about the government's
Speaker 1: growth ambitions.
Speaker 2: Well, in the spring, you'll remember that they scored six
Speaker 2: point eight pounds the biggest ever non fiscal scoring that
Speaker 2: their OBR have ever done for our planning reforms. Just
Speaker 2: a couple of days ago the Planning and Infrastructure Bill
Speaker 2: was in the House of Lords. That is now almost complete,
Speaker 2: just one more return to the House of Commons and
Speaker 2: then that bill will get royal ascent. And the OBR
Speaker 2: haven't scored the India Deal, the EU Deal or the
Speaker 2: US Deal. And that's why I'm confident we can beat
Speaker 2: these forecasts on growth. We've beaten them this year with
Speaker 2: one and a half percent growth now forecast, not the
Speaker 2: one percent they forecast in the spring, and I'm confident
Speaker 2: that we can beat those forecasts again.
Speaker 1: So finally, Chancelly, you've effectively just broken your promise made
Speaker 1: after the last budget not to raise taxes again. Will
Speaker 1: you now rule out more tax rises, whether directly or
Speaker 1: by stealth this parliament.
Speaker 2: So last year I had to close the black hole
Speaker 2: in the public finances left by the Conservatives, and in
Speaker 2: the budget last year I lived within the forecast set
Speaker 2: by the OBR. They have now change their forecasts around
Speaker 2: productivity and they are very clear that's nothing to do
Speaker 2: with the policy of this government, but that does mean
Speaker 2: they forecast lower tax revenue coming in. And I was
Speaker 2: always clear that would never play fast and loose with
Speaker 2: the public finances because it's ordinary working people and businesses
Speaker 2: that pay the price when that happens. So these are
Speaker 2: the fair and necessary choices in the circumstances that I face.
Speaker 2: But what I'm now determined to do more than ever
Speaker 2: is to grow our economy so that we have the
Speaker 2: revenue both to keep taxes down and also to fund
Speaker 2: our public services. And that is what this government's plan
Speaker 2: for growth is all about, whether it's pensions reform, planning reform,
Speaker 2: the changes today to help make Britain the best place
Speaker 2: to start up, to scale up and to stay with
Speaker 2: the changes to stamp duty for shares for companies newly
Speaker 2: listing in the UK. I'm determined that we get the
Speaker 2: growth that our economy has been sorely lacking for too long,
Speaker 2: and we do that through the forms that we've set out.
Speaker 1: No confirmation of no new taxes.
Speaker 2: Well, no chancellor can write future budgets. I took the
Speaker 2: fair and necessary choices today, but my focus has been
Speaker 2: and always will be on growing our economy so that
Speaker 2: we can keep taxes down and have the money we
Speaker 2: need to invest in our public services.