Jeremy Hunt: Response to Chancellor’s Statement

"Thank you Mr. Speaker and I thank the Chancellor for advance sight of her statement and I echo her thoughts for the people and the emergency services in Southport.

Today she will fool absolutely no one with a shameless attempt to lay the ground for tax rises she didn't have the courage to tell us about.

She says, Mr. Speaker, the information is new.

But she herself told the Financial Times ‘you don't need to win an election' to find out the state of the public finances as ‘we've got the OBR now.' Paul Johnson of the IFS says the state of public finances were 'apparent pre-election to anyone who cared to look' which is why he and other independent figures say her argument is ‘not credible' and ‘won't wash.'

Those public finances were audited by the OBR just 10 weeks before the election was called. We are now expected to believe that in that short period a £20 bn black hole has magically emerged.

But every single day in that period, in fact since January, in line with constitutional convention, she had privileged access to the Treasury Permanent Secretary. She could find out absolutely anything she needed.

So will she confirm today to the House, she did have meetings with the Permanent Secretary of the Treasury before the election?

Will she tell the house if they discussed public finances?

Will she tell the House if they discussed any of the pressures she is talking about today?

And if so why are we only hearing today what she wants to do about them?

That's why today's exercise is not economic, it is political.

She wants to blame the last Conservative government for tax rises and project cancellations she's been planning all along.

The trouble is even her own published numbers expose the fiction behind today's announcement.

Just four days ago she presented to the House the government's Estimates of spending plans for the year. Those Estimates are a legal requirement and the official guidance manual is clear: ‘departments are responsible for…ensuring that Estimates are consistent with their best forecast of requirements.' They are signed off by the most senior civil servants, the accounting officers, in every department.

Yet four days on, the Chancellor is saying that those Estimates are wrong.

So who is right, politically neutral Civil Servants or a political Chancellor?

If she's right, will she ask the Cabinet Secretary to investigate those Civil Servants and apologise to the House for laying misleading Estimates?

Of course not - because she knows that those Civil Servants are right and today's black whole is spurious.

Just like when she says she inherited the worst set of economic circumstances since the Second World War.

When BBC Verify asked a professor at the London School of Economics about that claim, he responded ‘I struggle to find a metric that would make that statement correct.'

Because, Mr. Speaker, the metrics speak for themselves. Inflation is 2% today, nearly half what it was in 2010 when we had to clear up the mess inherited from a Labour government. Unemployment is nearly half what it was then with more new jobs than nearly anywhere else in Europe.

And so far this year we are the fastest growing G7 economy and over the next six years the IMF say we will grow faster than France, Italy, Germany or Japan.

Indeed, just two days before the election was called, the Managing Director of the IMF praised the previous government's handling of the economy and said it was in a good place. This week the Institute for Fiscal Studies said it was ‘not a bad situation to take charge of' and certainly not comparable to the 1940s or 1970s.

Mr. Speaker, if you're in charge of the economy, it's time to stop trash-talking it. What's the point of going to New York or Brazil to bang the drum for more investment if you come home with a cock and bull story about how bad everything is?

She should stop playing politics with Britain's reputation and get on with running the economy.

So when it comes, when it comes to public finances, will she confirm to the House that far from being ‘broke and broken' as Downing Street briefed the media, the forecast deficit today is 4.4% compared to 10.3% when Labour left office in 2010? In other words when Labour was last in office, we were borrowing double current levels.

And will she confirm another difference between today and 2010? The Conservatives came to office being honest about our plans and saying very straightforwardly we needed to cut the deficit. Whereas she's just won an election telling us repeatedly taxes will not go up. How many seats were won on a commitment not to raise tax while she's quietly planning to do just the opposite?

So turning to the details of today's announcement, will she confirm that around half today's fictitious black hole comes from discretionary public sector pay awards - in other words not something she has to do but where she has a choice?

Will she confirm that apart from the teachers recommendation, none of the other pay review body recommendations were seen by the last government as they arrived after the election was called?

Now today, she has chosen to accept those recommendations. But before doing so, was she advised by officials to ask unions for productivity enhancements before accepting above inflation pay awards as the last government did?

And if she was asked to do that, why did she reject that advice and simply tell the unions ‘here's your money, thanks for your support in the election'?

And will she confirm… I know they don't like the truth, but there it is. Will she confirm that one of the reasons for her funding gap is that she has chosen to backdate a 22% pay award to junior doctors to cover the time when they were striking?

We are just… Mr. Speaker, we are just three full months into the financial year.

So why did she not mention today that at the start of the year the Treasury had a reserve of £14 bn for unexpected revenue costs and £4 bn for unexpected capital costs?

Additionally, why has she not accounted for the Treasury's ability to manage down in-year pressures - last year by £9 bn?

Why has she not accounted for underspends, typically £12 bn a year?

Has she totally abandoned the £12 bn of welfare savings planned by the last government and if so will she confirm that to the House?

Has she also abandoned £20 bn of annual productivity savings planned by the last government - and if so, if not, why aren't they in her numbers?

Finally for someone who claims the mantle of fiscal rectitude, will she confirm that in order to pay for her public spending plans she will not change her fiscal rules to target a different debt measure so she can increase borrowing and debt by the back door?

Every Chancellor faces pressures on public finances. After a pandemic and energy crisis those pressures are particularly challenging - which is why in the Autumn of 22 the previous government took painful but necessary decisions to tax and spend.

But we knew, going forward, that if we continued to take difficult decisions on pay, productivity and welfare reform we could live within our means and start to bring taxes down.

She, on the other hand, knew perfectly well a Labour government would duck those difficult decisions.

She has caved into the unions on pay, left welfare reform out of the Kings Speech, soft pedalled on our productivity programme, and that is a choice not a necessity.

And that choice, that choice, means taxes will have to go up, and she chose not to tell us before the election.

Instead, in 24 days, just 24 days, she has announced £7.3 bn for GB Energy, £8.3 bn for the National Wealth Fund and around £10 bn for public sector pay awards.

That's £24 billion in 24 days - around a billion pounds for every day she's been in office, leaving taxpayers to pick up the tab for her profligacy.

And doing it this way she makes the first major mis-step of her time as Chancellor. Because that great office of state depends more than any on trust.

Yet in her, in her first, in her first big moment, she breaks that trust with an utterly bogus attempt to hoodwink the public about the choices she has.

Over 50 times in the election they told us they had no plans to raise taxes. Now, in a u-turn that will forever shame this Labour government, she is laying the ground to break her word. And when she does, her first budget will become the biggest betrayal in history by a new Chancellor - and working families will never forgive her."