Economy: Public Sector Net Borrowing

Lord Davies of Oldham Excerpts

Monday 14th July 2014 Lords Chamber

[Lord Newby]

Yes, my Lords; my noble friend is absolutely right. The report to which he refers demonstrates two things: first, with an ageing population, there will over a long period be significant pressures on the public finances, everything being equal; secondly, that a number of steps which have been taken with cross-party support, such as raising the retirement age, are making those long-term additional burdens more acceptable and possible to deal with in a sensible fiscal framework.

[Lord Davies of Oldham (Lab)]

My Lords, did not the Government promise in 2010 to balance the books by 2015, and is it not now the case that they will be lucky—well, they will be out of office, but they would have been lucky—to have balanced the books by 2018? Is the Minister aware that in the early months of this year borrowing was £2 billion higher than in the same period last year? So it is not getting better.

[Lord Newby]

My Lords, it is getting better. It has got better in the year up to now. The OBR says that we are on track to reduce borrowing during this year. As the noble Lord knows, there were substantial economic headwinds from the euro area crisis, high commodity prices and the ongoing impact of the financial crisis. I am not sure whether he is really proposing that we should have cut the deficit more quickly by cutting public expenditure further or putting taxes up.