Select Committee
Parliament

George Kerevan continues to ask about how the OBR reaches its predictions on economic growth.

Sir Stephen Nickell says the last quarter was "disappointing" in terms of growth, but that growth predictions commonly varied from one quarter to the next. He says that if the figures are "smoothed" out of a period of time then the trend is upwards.

Mr Chote says the OBR has to make a series of judgement based on the ongoing relative weakness of the economy since the financial crisis of 2008.

House of Commons
Parliament

MPs begin the day shortly, with questions to Health Secretary Jeremy Hunt and his ministerial team.

After that Labour MP Wes Streeting has a Ten Minute Rule Bill on Taxi and Private Hire Vehicle Operators (Regulation) - this aims to increase training requirements for those seeking a PHV (private hire vehicle) licence, externaland to improve safety and ensure a more level playing field between training requirements for drivers of taxis and PHVs.

Select Committee
Parliament

SNP MP George Kerevan asks about the OBR's predictions on the UK's economic and productivity growth.

Robert Chote explains why the OBR has revised its predictions downwards since the November Autumn Statement, but "it's difficult to predict".

Mr Kerevan presses further on Mr Chote's assertion that productivity will increase. Mr Chote says one impact of the financial crisis is that businesses have struggled to access finance to expand in recent years, but that this is now improving.

For the 2016 budget, the OBR forecast UK growth to be 2% in 2016, down from 2.4% predicted in the autumn statement.

GDP is predicted to grow by 2.2% and 2.1% in 2017 and 2018, down from 2.4% and 2.5% predicted in November.

Select Committee
Parliament

Committee Chair Andrew Tyrie presses Sir Stephen on the likelihood of a "sharp" rise in interest rates causing a recession.

Sir Stephen says a "sharp" rise would be defined as a rise back up to 5% or more, within the space of a year.  A gradual rise would not result in a return to recession, he says.

House of Commons
Parliament

Following the Budget debate, Transport Secretary Patrick McLoughlin will have a second attempt at getting his programme motion, external for the High Speed Rail (London - West Midlands) Bill approved after it was blocked yesterday through some procedural shenanigans from Conservative MP Cheryl Gillan, external - who is opposed to HS2.

The adjournment debate will be on government policy to prevent breast ironing in the UK led by Conservative MP Jake Berry, who is urging the government to act on the abuse that he says has now reached Britain.

Select Committee
Parliament

Conservative Mark Garnier asks about the trade deficit and lending.

Sir Stephen Nickell says household debts compared to income and savings are in a healthy state.

Mr Garnier questions whether the economic recovery is sustainable if households become financially "stressed" as a result of rising interest rates.

Sir Stephen says while a rise in interest rates might reduce household spending, but that savers would see a benefit.  

He goes on to say that the predicted rise in interest rates is so small and gradual that it is unlikely to impact households negatively.

House of Commons
Parliament

Business in the House of Commons is about to begin.

George Osborne will go on the front foot today, to defend his record. He plans on becoming the first chancellor since Ken Clarke to open the final day of Commons debate on the Budget - Chancellors normally close the debate. 

It's the first time he's been seen publicly since Thursday and Mr Osborne is being forced to defend a Budget that has been unravelling before his eyes. The Labour party says he should scrap the Budget and start again, but it's not only the opposition attacking him: it's his own side, too. 

He can expect to be challenged about the resignation of Iain Duncan Smith from the Cabinet, and how he plans to cover the £4.4bn hole in the welfare budget created by abandoning his planned cut to personal independence payments. 

Labour MPs were not satisfied with new Work and Pensions Secretary Stephen Crabb’s promise last night that the government “had no plans” to make further cuts to welfare.

There are two amendments to the Budget, both of which - according to the prime minister's official spokeswoman - the government will not oppose. The first is a cross-party amendment calling for an end to the so-called tampon tax.

The second would prevent any rise to VAT on solar panels, wind turbines, insulation and energy saving devices and has been tabled by Labour.

The last Chancellor to be defeated on a Budget measure was also Ken Clarke in 1994.

Select Committee
Parliament

Labour's Rachel Reeves asks the witnesses by how much they expect the government to breach the welfare cap.

Mr Chote says even before the decision to shelve plans to cut PIP the government was "missing" the welfare cap and the overspend is now likely to be £4bn.

MPs approved the government's proposed welfare cap in 2014.

Select Committee
Parliament

John Mann asks Sir Stephen Nickell about the OBR's predictions on migration and unemployment, in the context of the forthcoming EU membership referendum.

Sir Stephen says forecasts are based on the current position, but they have taken into account both a low and high population projection. He says the government will still hit tax revenue targets in either case.

Select Committee
Parliament

Labour's John Mann asks about the OBR's prediction that interest rates are likely to fall by a quarter of a percent - when the Bank of England are predicting a likely future rise in interest rates.

Mr Chote says their prediction is based on the financial market at the point at which they close their forecast, which pointed to a reduction in interest rates.

The current Bank of England base rate is 0.5%.

Select Committee
Parliament

What is the row about PIPs all about?

Former Work and Pensions Secretary Iain Duncan Smith resigned on Friday, citing disagreements with the Chancellor, George Osborne, and Prime Minister David Cameron on the decision to make further cuts to the Personal Independence Payment.  

PIPs are benefit payments made to help people aged 16 to 64 cope with the extra costs they face due to ill health or disability. Not means-tested, they are gradually replacing Disability Living Allowance (DLA).

Nearly 700,000 people currently claim PIP, with another 1.5 million still to be reassessed.

Read more here.

Select Committee
Parliament

Helen Goodman's last question is about the impact of announcements yesterday, that there would be no further welfare cuts by the Department of Work and Pensions

She asks if it is "credible" to find £5bn to £8bn of savings from the remaining government departments which are not protected from spending cuts

Mr Chote says he can't comment on whether it is credible or not, and that their numbers may imply certain conclusions about the impact on those departments not 'ringfenced' from spending cuts

Select Committee
Parliament

Helen Goodman moves on to ask about the predicted savings as a result of the devolution of business rates to local authorities.

Graham Parker, from the OBR, says a breakdown of figures for local business rates doesn't appear in their forecasts because they are looking at overall central government spending.

The proposal to devolve business rates applies in England only.

Select Committee
Parliament

Labour's Helen Goodman asks about the long term prediction of government spending by 2019 - 2020.

Robert Chote says they don't know at this stage how cuts will be distributed across government departments to pay for savings to pensions.

He says the government has not allowed for "compensation" to departments for extra costs incurred for pension payments, which is how the overall savings are to be achieved.

Select Committee
Parliament

Committee chairman Andrew Tyrie introduces the session, saying there have been a few "noises off" since the Budget was announced.

He then asks OBR Chairman Robert Chote about the OBR's prediction that there is a 55% chance of the Chancellor achieving his stated aim of running a surplus by 2019 - 2020.

Select Committee
Parliament

The Treasury Committee is scrutinising the 2016 Budget, announced by the Chancellor George Osborne on 16 March.

The Office for Budget Responsibility, external (OBR) provides independent economic growth forecasts used by the Chancellor in setting the budget.

Welcome to our coverage of Westminster. 

We are kicking off today with the Treasury Committee, which is taking evidence on the Budget from members of the Office for Budget Responsibility.

Who's facing the MPs? Chairman Robert Chote, Sir Stephen Nickell, Member of the Budget Responsibility Committee, and Graham Parker, a member of the Budget Responsibility Committee - all from the Office for Budget Responsibility.