Lord Razzall (LD)

My Lords, like the first two speakers, I look forward to the maiden speech of the right reverend Prelate the Bishop of Portsmouth. The purpose of this debate is to debate the Budget. We dealt with the omnishambles of the Budget process in the debate on the Statement on Monday. Unlike the Minister, I hope that every Tory speaker is not going to repeat what was said then. Dare I say, we will otherwise assume that their repeated and offensive personal attacks on the Chancellor are only to deflect attention from their mismanagement of the economy in recent years. There is enough to criticise in the detail of the Budget, although not all of it. We on these Benches are happy with the removal of the two-child cap, the most immediate step that could be taken to reduce child poverty. We welcome the proposals for energy price reduction, even if they do not go quite far enough, and we are glad that the Chancellor has finally listened to the calls of my noble friend Lord Foster and others to tax the big online gambling companies. The Chancellor says that the Budget is about making choices. We agree, but we think that she has made the wrong choices. Freezing tax allowances, as referred to by the Minister, is deeply unfair to struggling families. Taxing the huge windfall profits of the large banks would have been preferable, but I think the Chancellor did not want to do that because she wanted them to announce investments, which they have subsequently done. For struggling high streets and small business, the Budget brought little hope. Our calls for an emergency VAT cut for the hospitality sector have been ignored. The Budget is silent on the ticking time bomb of social care. We need an urgent cross-party plan to fix it, as without one the National Health Service will never truly recover. The elephant in the room is our relationship with the European Union. Noble Lords would expect us to say that from these Benches. The respected US National Bureau of Economic Research has concluded that, by 2025, Brexit had reduced UK GDP by 6% to 8%. Investment was reduced by 12% to 18%, employment by 3% to 4% and productivity by 3% to 4%. It said that the original adjustment calculation of 4% estimated by the OBR was true for the first five years but underestimated output over a decade. My colleague Al Pinkerton, in another place, who has taken over from the noble Lord, Lord Gove, as Member of Parliament for Surrey Heath, is tabling a parliamentary Bill calling for the UK to renegotiate a bespoke new customs union with the European Union—the biggest single step we could take to boost our economy. The Government’s proposed reset with the EU, from a youth mobility scheme to a sanitary and phytosanitary agreement, has gone nowhere. We believe that the EU would welcome a bespoke new deal, which would generate over £25 billion a year for the Exchequer. Of course, the other, rather different elephant in the room, which nobody has yet mentioned, is the impact of artificial intelligence. This is clearly the most significant invention since the internet, and the impact on the economy will be significant. Many of us suspect that the Chancellor is hoping that the impact of AI will enable her to reduce the burden of taxation by the time of the next election. Whether this forecast assumption is correct remains to be seen. I tend to agree with the American economist JK Galbraith that the only function of economic forecasting is to make astrology look respectable. Let us hope the stars are aligned for the Chancellor.