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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 22 June 2025
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Displaying 1200 contributions

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Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

We were talking about that earlier. Obviously, different interpretations can be made of the data that is available to allow the OBR to make its predictions. You are absolutely right to say that the biggest challenge for the UK economy, in order to increase productivity, is to ensure that we get far more people back into the labour market than we have at the moment. However, different age groups seem to have different reasons as to why they are out of the labour market. That is a really big challenge.

Different policies will have different effects on younger cohorts or on older people who are approaching retirement and who happen to have taken it early because of the pandemic. I am interested in what policies we should be pursuing, especially if there are different reasons for people being out of the labour market. Are there specific trends that we should be wary of?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

I will come on to inactivity in a minute. On unemployment, are there trends suggesting that there are different parts of the UK where the threat of rising unemployment is worse, or is it too early to tell?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

Thank you, that is helpful.

Inactivity is another critical issue for the future of the economy. The Chancellor of the Exchequer has tried various measures—some of them a bit more successful than others—to ensure that inactivity is reduced, which is critical to productivity. Do you see any trends in the different age structures that suggest where people are more likely to come back into the labour market? Could you expand on that a wee bit?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

Is early retirement a big factor in that?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

It is all a very inexact science; I completely appreciate that, and I know how difficult it is because of the time periods. However, it would be helpful if the accuracy of the forecasting improved; it is critical for Governments to be able to make the right decisions. I am interested to know your views about how we can try to continue to improve forecasting.

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

That is very helpful, because I think that that is about factors other than those in the current set-up.

I asked the OBR witnesses this morning where they feel we have the greatest challenge when it comes to productivity, in terms of unemployment and the participation rate. I would also like to ask you whether you detect, in the slight increase that is forecast for unemployment, that that will happen on a UK basis, or are there particular aspects that mean that unemployment in some parts of the UK is rising faster than it is in others, and that different sectors are showing different trends?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

Good morning. I will pursue that issue of productivity, which is absolutely critical, as Professor Miles said. I also want to interrogate the panel about the unemployment forecast and the participation forecast, which are extremely important.

You said earlier that for the unemployment forecast you are using material from the business labour market surveys, information from HM Revenue and Customs and the Department for Work and Pensions, and so on. Your prediction for the end of next year is that the unemployment rate will be 5.5 to 6 per cent. Are you detecting that there is a danger of an increase in unemployment in any particular sectors?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

That is all very helpful. During the past several years, we have had various deliberations about how we articulate the forecasts from the OBR, the Scottish Fiscal Commission and the Office for National Statistics. Although it is nobody’s fault, there is frustration that we cannot get the forecasts all lined up and covering the same time period. That is very difficult for both Governments, particularly the Scottish Government, which is having to interrogate all three of the forecasts, whereas that is not the case in Westminster. Based on comments that we have had from other witnesses, I understand that co-operation between all three groups is very good. Is there any way that we can try to minimise the problem with the time lag between different forecasts and ensure that they are all on the same page?

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

That is very helpful because it is an area that is absolutely critical to productivity. It is important to ensure that we have absolute accuracy when it comes to the numbers of people in the different categories of income levels, as they will obviously benefit the tax revenue and things like that.

10:15  

Finance and Public Administration Committee

Budget Scrutiny 2024-25 (United Kingdom Context)

Meeting date: 12 December 2023

Liz Smith

I am sorry. May I come back on that? You are arguing that there should be other factors in improving that fiscal rule, so I am a bit confused as to why you think that it is too loose, when you feel—