Public Expenditure: Deficit Reduction

Debate between Lord Sassoon and Lord Renton of Mount Harry

Tuesday 6th September 2011 Lords Chamber

[Lord Sassoon]

I do not know to which “he” the noble Lord is referring, whether it is me or my right honourable friend the Chancellor, but we all believe in it and we are sticking to it. However, as I have explained, the cyclically adjusted nature of the mandate which the Chancellor has set means that, in times of economic uncertainty, factors such as varying levels of employment and inflation feed through so that the economy benefits, for example, from increased social security benefits and we do not in some slavish way have to cut back on other expenditure. The flexibility is there for very good reasons and it is operating.

[Lord Renton of Mount Harry]

My Lords, could I ask my noble friend perhaps a rather simpler question? Despite the dreadful headlines in today’s newspapers, to what extent does the Chancellor of the Exchequer feel that he is on course in deficit reduction?

[Lord Sassoon]

My Lords, I remind noble Lords, lest they forget it, that we have introduced an independent Office for Budget Responsibility so that we can no longer keep fiddling the numbers and restating the cycle like the previous Government did. The Office for Budget Responsibility’s latest numbers, produced at the Budget, confirmed that we are on track to meet the Chancellor’s fiscal mandate on the rolling five-year period.