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