Public Spending: Borrowing Increase

Baroness Kramer Excerpts

Thursday 13th October 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

My noble friend is right. The Government are reducing the tax burden by delivering tax cuts worth around £45 billion by 2026-27. We know that is for both individuals, through the EPG, and businesses, through reversing the increase in corporation tax from 19% to 25%. It is an ambitious first step towards this mission of cutting taxes. However, as I said earlier, this includes looking at the public sector and liberating, in particular, the private sector.

[Baroness Kramer (LD)]

Yesterday, the Prime Minister was very clear that there would be no cuts in funding for public services. Could the Minister clarify whether she meant no cuts in real or nominal terms? Public services will be very badly hit if this is protection in only nominal terms and they have to absorb all the costs of inflation, well in excess of 10%.

[Viscount Younger of Leckie (Con)]

I am well aware of what the Prime Minister said yesterday. I reiterate that the 2021 spending review set out the departmental budgets for three years and overall departmental spending is still growing in real terms. It also cited that 5% efficiency savings against day-to-day budgets would be looked at for 2024-25. Having said all that, a reprioritisation, efficiency and productivity review has been announced and will be undertaken.