My Lords, the most significant actor in forecasting the development of the UK economy is, of course, the Office for Budget Responsibility. It is mandated to provide two forecasts each year, yet there has been no updated forecast on the impact of Brexit since the Economic and Fiscal Outlook of November 2016. Uncertainty about how the Government will respond to the choices and trade-offs they face during the withdrawal negotiations renders forecasting extremely difficult. There has been no meaningful basis on which to form a judgment on the final outcomes.
The Government have given the OBR short shrift, referring it to the Prime Minister’s Florence speech as definitive. In that speech, Theresa May said the UK would seek to achieve a deep and special partnership with the EU and that this should span a new economic relationship. Not surprisingly, the OBR did not consider that a basis on which to update its analysis. However, the OBR did set out to forecast the outcome for certain parameters of the negotiations. It made several key assumptions about what will happen when the UK leaves the EU next March. New trading arrangements with both the EU and leading states will slow down the pace of import and export growth over the 10 years following the 2016 referendum.
The Treasury Select Committee finds this situation highly unsatisfactory, given that the OBR is required to produce regular reports analysing the risks surrounding the economic outlook for the UK. Committee members saw no reason why the OBR should not provide an update, the rationale being that it already has information on migration flows and can assess the likely state of the public finances, plus the OBR has already formed the judgment that,
“the consequences of Brexit on economic growth, whether positive or negative, are likely to be so substantial as to dwarf the impact of the financial settlement”—
a settlement that has so exercised members of the Cabinet through and since the referendum campaign.
While the Select Committee report came too late to be considered in the other place during its debates on the European Union (Withdrawal) Bill, it is being discussed tonight. The amendment in my name and the names of my noble friends Lord Davies of Oldham and Lord Judd offers this opportunity and calls on the OBR to publish a fresh economic outlook, something that would incorporate the terms of the withdrawal agreement and inform Parliament’s conclusions on whether to act on the outcome of the negotiations. Challenging as this task might be, a flow of firm and up-to-date information will obviously be in demand over the course of this year. Parliamentarians have the right to ask the OBR, the best placed institution, to provide the information we so clearly require. I beg to move.