Pre-Budget Report

I will not at the moment. The pre-Budget report was, as I said, the Government's last chance to turn this situation around and to restore Britain's reputation and credit-worthiness. It needed to do two things: first, to put in place a credible plan to restore fiscal balance, and secondly to demonstrate the political courage to implement it, instead of merely talking about it. The Government failed on both tests. The plan that the Chancellor set out has reassured no one. It was immediately attacked by business leaders, economists, market analysts and commentators. Richard Lambert, director general of the CBI, said on 9 December:""The Chancellor has made a serious mistake imposing an extra jobs tax at a time when the economic recovery will still be fragile…He has also missed the opportunity to increase the UK's credibility by reducing the public deficit earlier."" David Frost, of the British Chambers of Commerce, said that the national insurance rise is""Terrible news...It's an additional cost for business when they can least afford it."" The PBR was slammed by economists for being driven by politics, not by economics, with widespread agreement that the failure to produce a credible plan to tackle the deficit leaves Britain vulnerable to higher interest rates and a downgrade of the sovereign debt rating, which I assume is something that the Government will be concerned about. The right hon. Member for Holborn and St. Pancras will be pleased to hear that I am going to quote Michael Saunders at Citigroup, who is one of the City's most respected economists:""The PBR appears to be aimed at reviving Labour's core support rather than seriously tackling the UK's medium-term fiscal problems…These measures do little or nothing to alter the medium- and longer-term fiscal outlook."" Let me give the right hon. Gentleman a few more examples. Barclays said:""The PBR is unlikely to dispel concerns about the UK's public finances…The government has demonstrated that it is willing to raise taxes to fund extra spending, but not that it is willing to project a more aggressive overall tightening in policy"." Nor were analysts impressed by the Chancellor's forecasts, upon which even his modest plans for fiscal consolidation depend. BNP Paribas said:""The Chancellor's new forecasts also continue to look massively over-optimistic"." Morgan Stanley said that""the Treasury's forecasts for GDP growth, particularly beyond the next couple of years, still look optimistic to us."" Citigroup, again, said:""The revenue forecasts…look over-optimistic."" RBS said that the Treasury has been consistently too optimistic on how much tax revenue""a given amount of GDP growth generates"." All of this leaves us exposed to higher interest rates, of course. Citigroup has said:""We suspect that as this budget is digested, gilts and sterling will react badly."" RBS said:""Issuance remains at historically highly elevated levels and this is seen forcing yields higher in a post QE environment."" The soaring national debt threatens a credit rating downgrade. Barclays—