Oral Answers to Questions

Lord Tyrie Excerpts

Tuesday 12th October 2010 Commons Chamber

[Mr Osborne]

My answer to the right hon. Gentleman is yes and no—yes to the first part of the question. I listened very carefully to what the Treasury Committee said about the two other members of the budget responsibility committee, and I propose that it should indeed have a veto over those two appointments, which were made on the recommendation of a panel that included Robert Chote. I made the suggested appointments, but it will be for the Treasury Committee presumably to hold hearings and hopefully give its approval.

I do not propose to follow the second path that the right hon. Gentleman suggested. If the OBR begins commenting on the fiscal mandate, it intrudes on what is a legitimate matter of debate in the House between elected representatives who have strong views on this. I want to do everything I can to preserve the independence of the OBR, not just for this Government but for future Governments as well.

[Mr Andrew Tyrie (Chichester) (Con)]

Would the Chancellor just confirm that the veto on the other two members of the OBR will function in exactly the same way as it would for the chairman? Would he also confirm that, in line with our recommendations, the OBR will be permitted at the request of Opposition parties at election time to examine their fiscal policies as well?

[Mr Osborne]

What I would say to my hon. Friend in response to his first point is yes, the procedure that I propose is exactly the same, unless he wants to volunteer some alternative method. On his second point, this is genuinely a matter that should be debated in the House in a non-partisan way, because it does not affect just this Parliament. There is a question of whether we want the OBR to be able to cost Opposition policies at the time of a general election. I propose to have discussions with Opposition party leaders about whether that is the appropriate thing to do, and it would be a legitimate matter for the House to debate and decide.

Equitable Life (Payments) Bill

Lord Tyrie Excerpts

Tuesday 14th September 2010 Commons Chamber

[Mr Hoban]

The ombudsman’s letter is clear. She said that she welcomed much of the Government’s approach, including the appointment of an independent commission, the publication of a clear timetable for the beginning of payments to those affected and our commitment to consider representations on the best way forward. I do not feel that I can give the House the outcome of a private meeting, but the ombudsman reiterated her findings, which were set out in the report that she published in July 2008 and which the previous Government sat on for six months before responding. She will also have the opportunity to make her views known when the Public Administration Committee works on this. I just want to do all that I can to ensure that the recommendations published by the ombudsman in July 2008 are honoured, and that is the task that we have to achieve.

[Mr Andrew Tyrie (Chichester) (Con)]

Does my hon. Friend accept that the six-month delay to which he alludes is just the tip of the iceberg? We faced years of delaying tactics, not least a calculated attempt to try to prevent the parliamentary ombudsman from even producing a report.

[Mr Hoban]

Indeed, and it was the work of my hon. Friend, who was characteristically modest in his intervention, that found a way in which the ombudsman could publish her second report into Equitable Life. Had he not found the way through, we would not be in this position today, so the House and policyholders owe him a debt of gratitude for getting us to this position.

My hon. Friend is absolutely right that the previous Government did everything they could to avoid a second ombudsman’s inquiry into Equitable Life. The Penrose report, published in 2004, demonstrated that there had been regulatory failure at Equitable Life over a decade covering both Governments—I have no problem accepting that. However, the previous Government could have acted in 2004, but instead they dug their heels in—and here we are in 2010 with policyholders still waiting for justice.

--- Later in debate ---

[Mr Thomas]

I think that the hon. Gentleman should have been listening to my earlier remarks, but I recognise the difficulty that he has, along with that of many of his constituents. He marched his constituents up the hill, promising them great sums of money in compensation, and it is now becoming clear that his Front Benchers will not deliver on that commitment. The hon. Gentleman should start to put a bit of pressure on his colleagues. Perhaps he will join us in supporting the amendments we will seek to table to improve the Bill further.

[Mr Tyrie]

Will the hon. Gentleman say how much more than Chadwick proposed that policyholders would have had any chance of getting had Labour won the last general election?

[Mr Thomas]

I say gently to the hon. Gentleman that rather than looking back, we need to look forward. The hon. Gentleman, who serves as Chair of the Select Committee on the Treasury, will, I hope, work with his hon. Friend the Chair of the Select Committee on Public Administration to hold those on his Front Bench to account.

Even though Lord Penrose concluded that regulatory system failures were secondary to the society’s own behaviour as a cause of its problems, the last Government, rightly in my view, recognised that many policyholders had been disproportionately affected. The ombudsman suggested a scheme with a case-by-case review that considered 30 million investment decisions by 1.5 million people, but that would have taken an estimated 4,000 staff years to resolve. That is the scheme to which the Conservative party committed in its manifesto. Case-by-case comparison for policyholders was not something that we thought was practicable.

Sir John Chadwick has proposed a simpler arrangement. If Government Members are now accepting the fundamentals of Sir John’s approach, they should at least be honest with the ombudsman and, crucially, with the hundreds of members of the Equitable Members Action Group and with this House. Is it not the truth that the parties on the Government Benches knowingly allowed members of EMAG to believe that they were opposed to Sir John Chadwick’s work and that they wanted a far greater sum to be available for compensation? In reality, yet another manifesto commitment is being ignored and yet another group of electors is having to come to terms with the fact that, despite what they were led to believe that Government Members wanted, their Front Benchers now have no commitment to the original pledge and no intention of following it through.

Proposed Public Expenditure Cuts

Lord Tyrie Excerpts

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

I draw the hon. Gentleman’s attention to the central forecasts produced by the Office for Budget Responsibility, the Bank of England, the OECD and the European Commission. They forecast steady and sustainable growth over the coming period. I take the view—a view shared by quite a number of people who observe the British economy—that if we had not put in place, in the Budget, a credible plan to reduce the budget deficit, this country would be in an economic mess.

[Mr Andrew Tyrie (Chichester) (Con)]

The Chancellor helpfully published, decile by decile, the distributional effects of a number of his measures in the Budget. But the exclusion from his analysis of a number of other measures has led to a lot of controversy about whether his Budget is progressive or regressive. Will he now commit to publishing in the comprehensive spending review a full analysis of all the measures in aggregate, decile by decile, so that we can see whether their effects will be progressive or regressive?

Office of Tax Simplification

Lord Tyrie Excerpts

Tuesday 20th July 2010 Commons Chamber

[Mr Speaker]

Order. The opening contributions of the Minister and the shadow Chief Secretary were a little on the long side. Many people want to take part. What I require is brevity—a textbook example of which can now be provided by the Chairman of the Treasury Committee, Mr Andrew Tyrie.

[Mr Andrew Tyrie (Chichester) (Con)]

I am not so sure about that, Mr Speaker.

I warmly welcome anything that simplifies the tax system; I think we all do. The Chancellor described the new office as a

“a permanent force for a simpler tax system”,

but he has appointed it initially for only one Parliament. Can the Minister explain why? What is to be the annual budget of the office’s permanent staff, and will permanent appointments be subject to scrutiny by the Treasury Committee?

[Mr Gauke]

On the appointment process, we will see how we go. We are keen that the OTS should be accountable to Parliament, and I dare say that it will give evidence to my hon. Friend’s Committee. As for the cost, as I said a moment ago, the intention is that the costs will be borne from the existing budgets of HMRC and the Treasury. There will be secondees from the private sector, and we expect them to fund that at their own cost. As regards longevity, the initial appointments are for 12 months. We have set up the OTS for a Parliament, but I hope that it will be a permanent feature of our tax system.

Alignment (Clear Line of Sight) Project

Lord Tyrie Excerpts

Monday 5th July 2010 Commons Chamber

[Mr Andrew Tyrie (Chichester) (Con)]

The hon. Member for Harrow West (Mr Thomas) strayed rather a long way out of the line of sight of the line of sight project, if I may say so. His points about the importance of the Office for Budget Responsibility are well made and well taken, and that is something that I hope my Committee will consider and something that I am not yet convinced we have achieved. However, I think that that is a debate for another day.

These proposals will significantly improve parliamentary scrutiny of spending. The previous Labour Government deserve a lot of credit for having put this work in train, just as the coalition Government deserve some credit for acting on what they inherited. I also want to pay tribute to the Liaison Committee and its staff and, in particular, to the work of the Treasury Sub-Committee under the chairmanship of my hon. Friend the Member for Sevenoaks (Michael Fallon). He put in a great deal of hard work on all this, some of which is now bearing fruit. I understand that he intends to catch your eye in a moment, Mr Deputy Speaker, and he will no doubt make these points in more detail. However, in the 2007 report he expressed a number of concerns, and two main concerns in particular. One was about the timetabling of publications and the other was about the treatment of income lines in the estimates. On the first, the Government have proposed to publish their departmental reports and accounts by mid-June of each year and to publish the main estimates earlier. That is a step forward. On income streams, the Government’s original proposal—this has been mentioned—was that the House of Commons would vote only on the net estimate. That would have been a step back from the current arrangements whereby Parliament at least votes on both the gross and net figures.

The Treasury Sub-Committee, when considering this matter, acknowledged that with alignment it would not be possible for Parliament to maintain controls over gross totals, but it argued strongly that adequate information should none the less be provided. That is the point that my hon. Friend the Member for Gainsborough (Mr Leigh) made a moment ago.

On the question of income streams, I think that the Government’s latest plans are a great step forward. Let me explain why. If I get this wrong, the Minister can intervene and tell me. As I understand it, under his proposals any income used by Departments to support spending must be of a type specifically approved by Parliament. That is the first key point, of which there are four. The second is that tax receipts cannot be used as income by Departments to boost spending. In other words, the tax receipts must still go to the Treasury in the normal way. The third is that information on estimated income will still be presented to Parliament and the fourth is that Departments will still be required to explain variations between planned income and actual income at the year end. The Minister has not intervened on me yet, so I have high hopes that I have got that right. If I have, the Government have gone a long way towards satisfying the concerns of the Sub-Committee’s report of the previous Parliament.

This is a complex area with a lot of unknowns still as we develop these changes. We must be realistic about what is achievable and we must be clear that there was no golden age when Government estimates were routinely rejected or reduced. The House of Commons abandoned any attempt to debate estimates in that sort of detail not in the post-war era, as many people suppose, but sometime in the 19th century.

I am also clear that great care needs to be taken before pressing for dramatic increases in powers for Parliament in this area as they can have unforeseen consequences. It is certainly worth considering, for example, ensuring that supplementary estimates are approved by the relevant Sub-Committee, but I am wary of anything that could create the conditions for the growth of a pork barrel style of politics in Britain through the back door. I have been an advocate of stronger Select Committees for many years and we have a lot to learn from our counterparts in Congress, but I do not think that we have much to learn by importing pork barrel politics.

[Mr Leigh]

Will my hon. Friend give way?

[Mr Tyrie]

If my hon. Friend will forgive me, I am near the end of my remarks and I would rather get to the end because I have discovered—surprisingly on this subject—that quite a few people want to speak.

We will have to see whether the proposals provide better opportunities for the Select Committees that shadow spending Departments and we will soon see whether they can start to scrutinise better the spending decisions taken by them. We will have to wait to find out whether these Committees take up those opportunities—that includes the Treasury Committee, which also monitors spending Departments.

I warmly welcome these proposals from the Government. We now need to monitor them carefully.

Budget Resolutions and Economic Situation

Lord Tyrie Excerpts

Tuesday 22nd June 2010 Commons Chamber

[Mr Andrew Tyrie (Chichester) (Con)]

It falls to me to respond just as everybody quite reasonably goes off for a bite to eat. I commiserate with the right hon. and learned Member for Camberwell and Peckham (Ms Harman) about having to respond to the Budget without a chance to absorb it, although I must say that that showed in some of the things she said. She made the best of a very weak hand, but a couple of points must be borne in mind. I shall say this as best I can without partisanship.

First, all three parties were committed at the last election to sharp cuts in spending. According to the Institute for Fiscal Studies, Labour was planning about £45 billion-worth of cuts, which, because of ring-fencing, would have had to fall on only four main areas: education, defence, transport and housing. To give people an idea of the scale, defence spending is only about £40 billion, so massive adjustments would have had to be made by Labour, but that did not seem to feature in anything the right hon. and learned Lady said.

A second point that needs to be made is that we went into the recession carrying a huge structural deficit. Again, the right hon. and learned Lady did not acknowledge that at all. That deficit developed as a result of over-ambitious spending over many years by the previous Government, particularly by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). It simply had to be tackled; it could not have been left unaddressed. It really is not correct to attribute most of the tightening we need now to the mistakes of banks, the global recession or, as she has suggested today, to coalition ideology. The overwhelming majority of people who have looked at this have concluded that we must take early action to curb the huge, burgeoning deficit.

[Mr John Redwood (Wokingham) (Con)]

Does my hon. Friend agree that it was a disgraceful performance by the acting leader of the Labour party to accept no responsibility for the disgraceful state of the public accounts, and to dare to say that we wanted to cut when Labour was going to have to cut?

--- Later in debate ---

[Mr Tyrie]

In my new job, I am doing my best to avoid putting things in such trenchant terms, but I feel that not enough has been accepted by the Labour party about the scale of the mismanagement on the economy—requiring us to do something about it now.

This was an astonishing and phenomenal Budget—a tour de force. It really was a further addition to the early economic radicalism of the coalition Government. We have already had announcements about a complete overhaul of financial regulation and an innovative body, the Office for Budget Responsibility, has been created. We have also had announcements about vigorous action being taken on the deficit as well as major proposals for tax and benefit reform. The first of these measures is needed, among other things, to change the culture. The politics of plenty have to give way to the politics of thrift in Whitehall. That, above all, is why it is right for the Government to make the £6 billion-worth of cuts.

On the second of the measures that I have just mentioned, we must have tax reform and simplification if we are to have any chance of improving Britain’s long-run growth rate, which has been imperilled by immense complexity in the tax system.

[Kevin Brennan (Cardiff West) (Lab)]

On taxation, when the Prime Minister said on 1 April, when he was the Leader of the Opposition:

“Our plans don’t involve an increase in VAT”,

did the hon. Gentleman believe him?

[Mr Tyrie]

As I recall, all three parties talked about having no plans to increase VAT, and it would not have surprised me a scrap, had the positions been reversed, if we had had an increase in VAT. How would Labour have filled the £45 billion deficit? We have not heard a word on that. That brings me to a point that I had decided, on the grounds of non-partisanship, not to make, but that I now think needs to be made. It was irresponsible and damaging to British democracy not to have had a spending review on which to judge the decisions to be taken. In my current job, if I were to find the coalition Government as evasive as that, I would do everything in my power to call them to account and to make sure that they told us the facts.

[Albert Owen (Ynys Môn) (Lab)]

I congratulate the hon. Gentleman on his election as Chair of the Treasury Committee. Does he accept that the rise in VAT that the Chancellor announced today will have a huge impact on small companies in the construction industry in my constituency that are looking for business building extensions to houses and so on? They will have to pass the rise on to those individuals, so the rise will slow down growth in that sector and will cause further job losses.

[Mr Tyrie]

All tax rises slow down growth in one way or another. They, by definition, take demand out of the economy. The only question is how one should do it. The Chancellor has had a very difficult choice to make.

[Iain Stewart (Milton Keynes South) (Con)]

Does my hon. Friend recall that when the former Chancellor temporarily reduced VAT to 15%, a Treasury document clearly showed that afterwards the Labour Government were planning to increase it to 20%?

--- Later in debate ---

[Mr Tyrie]

I thank my hon. Friend for reminding me about that, as I had completely forgotten it. The whole House has heard the point he made.

The central judgment in the Budget is about the scale and speed of the fiscal adjustment. Whatever the Chancellor does, there are risks. If he shows lack of resolve on the deficit, the Greek experience beckons, as markets lose confidence in our ability to service our debts. The Chancellor was right to emphasise sovereign debt risk in his speech. That is not a fanciful risk, but a clear and present danger for Britain and he was right to flag it up. If we show too much zeal, too early, on the deficit, some people fear that the Japanese experience awaits us—being caught in a heavily indebted deflationary trap.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I voted for the hon. Gentleman to hold his new position and even told his opponent that I had done so, but I am deeply concerned that today he is making the same mistake as the Chancellor. He said that the greatest problem facing economies is sovereign debt, when in fact analysis shows that it is bank indebtedness. Greece has a sovereign debt problem, but other countries of Europe have a problem with bank debt. That is the problem, so we are looking at the wrong target.

[Mr Tyrie]

I agree that both are extremely important. I do not think I said that the greatest threat is necessarily sovereign debt, although Hansard will show whether I did. I said that I agreed with the Chancellor that it was an extremely grave risk. That is supported by the overwhelming majority of commentators—the International Monetary Fund, the OECD and a large number of independent commentators.

From the remarks made by the Leader of the Opposition, I presume that she is more fearful of the recovery being snuffed out by further tightening than of the risk of a downgrade in the bond markets. I shall not form an instant judgment now. I shall want my Committee to take a look at the situation and report to the House. None the less I noted a couple of relevant points. With the benefit of hindsight—looking historically—most fiscal retrenchments in this country have erred on the side of too little, too late, rather than too much, too soon.

My other general comment is that although the Japanese parallel is well worth examining, it should be borne in mind that the Japanese banking system was in a shocking state even by comparison with ours, and it has remained in grave difficulties. The revival of our banking system is crucial if we are to have sustained recovery. In some degree, that answers the point made by the hon. Member for Linlithgow and East Falkirk (Michael Connarty), and agrees with it.

Whether the Chancellor’s judgment turns out to be right or wrong, there are a couple of points on which I should like to hear more from him over the coming days and weeks. First, although he must be resolute in his judgment his policy framework could, and I think should, signal that if the facts change, he will change his mind—he hinted at that in his speech. The global economic situation is fluid and fragile, so if we were to find ourselves in another global downturn, possibly triggered by global fiscal contraction, we need to know that he would deploy whatever tools were required to avoid deflation. There must be some risk of that. It is not just a matter of Governments around the world, and particularly in Europe, beginning to address their deficits after their bail-outs. The banking system, too, will remain under strain. Banks will be subjected to a levy and will be required to secure major increases in capital and liquid assets, both of which will reduce lending. On top of that, there is the risk that household saving might sharply increase at the expense of consumption.

However, looking at things from an international perspective, I am heartened by the global growth forecasts of the IMF, which suggest that global growth for the next two years will be running in excess of 4%. I have not yet had a chance to see what the Office for Budget Responsibility has written in, but I suspect it will probably be in line, which would appear to buttress the Chancellor’s judgment that the cuts are sustainable.

My second question to the Chancellor relates to the first: what is the overall macro-economic framework for the Budget judgment? I should like more information about that. In previous squeezes on fiscal policy, it has been reasonable to argue that tight policy has created room for a compensating looser monetary policy through short-term interest rates. This time, however, interest rates are already very low, so the only offset comes in long-term bond rates. Interestingly, the OBR has already published a second estimate for gross debt interest, which takes account of the tighter fiscal policy that has just been announced. On its forecast, the figures show a reduction in central Government gross debt interest of £7 billion over the planning period, so there is a long-term bond yield dividend to be had from the tighter fiscal policy.

In any case, the Chancellor may have spelt out his macro-economic framework in more detail in the Red Book. None of us has yet had a chance to read it, although some people may be taking that opportunity while I am speaking. It would be worth hearing more about the policy framework, because it must leave the Chancellor with enough room to alter course if circumstances change, otherwise credibility could collapse in the face of unforeseen events. The one thing I can predict is that there will be quite a few of those.

Whatever else people conclude about the Budget, it is fair to say that it shows extraordinary political courage by the Chancellor and by the coalition Government. There will be rumblings in the undergrowth in both coalition parties. The vested interest groups will cause enormous trouble, just as they would have done if a Labour Government had been implementing their cuts. It will take sustained resolution by the Prime Minister, his Deputy and the Chancellor to stick to their course. The relationship between No. 10 and No. 11 will be absolutely crucial in the months ahead.

I have concentrated on the deficit and the macro-economic framework, but the Budget will be judged on more than just accountancy. There are a number of other important issues. Does the Budget pave the way for providing better economic performance in the long run? Does it adequately protect the poorest and the most vulnerable in our society? I hope the Treasury Committee will look at that issue. Does it take enough account of both regional and structural imbalances in the economy? What role will Britain play in addressing the large global imbalances that still remain? Those are some of the questions that I very much hope my colleagues on the Treasury Committee will agree should be looked at in the months and years ahead.

I look forward to the formation of the Committee, the first-ever Treasury Committee that will benefit from a democratic mandate. Our task now is to get on with the job. I am open to suggestions from both sides of the House about what exactly we should look at; indeed I am already being inundated with proposals and suggestions, so we shall need to prioritise. Of course, I shall await the views of my Committee colleagues, but it would surprise no one—certainly not me—if we concluded that the central fiscal judgment of the Budget, and both the structure and early output of the new Office for Budget Responsibility, should be high on our agenda.

Banking Reform

Lord Tyrie Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

I welcome the hon. Gentleman to his new role and I am grateful to him for his welcome to me. Although I listened very carefully to his remarks, I am not quite sure whether the Opposition accept our proposals or whether they are stuck in the past defending to the last the former Government’s regulatory architecture, which they put in place in 1997. It is time that the Opposition faced up to this problem: do they accept that the system put in place by the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) was flawed and needs reform, or are they the last people to defend the status quo in this country?

The hon. Gentleman asked a number of detailed questions. Let me address them. He recognised the build-up of systemic risk in the economy over the course of the past 13 years, but he must acknowledge that the reforms introduced by his right hon. Friend in 1997 took away from the Bank of England the power to monitor and respond to those risks.

The hon. Gentleman asked about the appointments to the Financial Policy Committee, and they will be consistent with the approach currently adopted towards the Monetary Policy Committee. He referred to the Bingham report and the collapse of BCCI and, as he will remember from the exchange between the right hon. Member for Edinburgh South West (Mr Darling) and my right hon. Friend the Chancellor yesterday, the Chancellor is going to look into that matter.

The hon. Gentleman is right to say that the FSA has made progress, and that is one reason why we are delighted that Hector Sants has agreed to lead the FSA through the transition period and then to become the chief executive of the PRA. No matter how far the FSA improves in the execution of its role, the reality is that the flawed architecture that the hon. Gentleman’s Government put in place undermines all that it does. This package of reforms ensures that we have the right regulatory architecture in place to identify and tackle the systemic risks to which he referred and ensures proper protection for consumers so that they will never again be let down.

[Mr Andrew Tyrie (Chichester) (Con)]

Is it not clear that if public money is to be put at risk during a financial crisis, the only person with the moral authority to take a decision will be the Chancellor of the Exchequer? Surely the Chancellor of the Exchequer should therefore have the power to assume the chairmanship of the Financial Policy Committee during a crisis. Will my hon. Friend confirm that that will be possible under the legislation that will be brought before the House?

[Mr Hoban]

My hon. Friend makes a good point about who takes control in a crisis. My right hon. Friend the Chancellor was very clear yesterday that, given his responsibilities in respect of public finances, he will ultimately be in charge in such situations.

Financial Services Regulation

Lord Tyrie Excerpts

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

We need to take some time before coming to decisions on how to dispose of the bank shares that we own in the Royal Bank of Scotland and Lloyds, and the banks we own, such as Northern Rock, not least because at the moment the British taxpayer would make a substantial loss on many of those share purchases. However, we are prepared to consider lots of options. Sir John Vickers’ commission is going to look at competition in the banking industry. It has become incredibly consolidated in the past couple of years and that is not necessarily the best thing for bank customers, as many of us will know from representing businesses that cannot get access to credit. It is sensible to look at what Sir John Vickers and his commission have to say about this.

[Mr Andrew Tyrie (Chichester) (Con)]

Why was so much of this announced on this morning’s “Today” programme rather than here? Who will chair the financial stability committee in a crisis? Will it be, as it should be, the Chancellor of the Exchequer?

[Mr Osborne]

There has been quite a lot of speculation, and as we will see in the coming days not all of it has been very accurate. I cannot account for the speculation, because it certainly has not been coming from my office. I am discovering that it is a feature of being in government that lots of people anticipate one’s views before one expresses them.

I congratulate my hon. Friend on becoming Chair of the Treasury Committee and I hope to have the engagement of his Committee in this important debate over the next year. When it comes to the commitment of taxpayers’ money, the elected Government, who are accountable to the House, will remain in charge.

Oral Answers to Questions

Lord Tyrie Excerpts

Tuesday 8th June 2010 Commons Chamber

[Mr Osborne]

I thank the right hon. Gentleman for his welcome. He is Labour’s “man of letters”, and it is good to see him still on the Front Bench. The point that I make to him is that Labour had 13 years in government, and inequality increased during its time in office. What we will do is deal with the very large budget deficit bequeathed to us by him and his colleagues in a way that is fair and reasonable, and protects people across the country.

[Mr Andrew Tyrie (Chichester) (Con)]

It is clear that in the past few days a new system of public expenditure control has been put in place. What will the Chancellor do to ensure that Parliament is fully informed about the new system? Will he publish a full explanation of exactly how it works?

[Mr Osborne]

I think that we have the two candidates for the chairmanship of the Treasury Committee here today. [Interruption.] I do have a vote, but I am not going to exercise it on that matter. The point that I should make to my hon. Friend—I shall speak about this a bit more in our debate on the Queen’s Speech later—is that we are publishing today details of the framework that we will adopt in conducting the spending review. I will say more about that at the time of the Budget—and I will, of course, answer questions about it in detail before the Treasury Committee, whoever is in the chair. Parliament will also have a number of opportunities to discuss it, and when the spending review is finally produced in the autumn it will, of course, be presented to this House. I want all Members of this House, from all parts of it, to engage in the big national challenge of resolving how we get this country to live within its means.

Government Spending Cuts

Lord Tyrie Excerpts

Wednesday 26th May 2010 Commons Chamber

[Mr Laws]

Of course we would not, but I have to tell the right hon. Gentleman that the policy that we set has to be informed by the facts, and the facts and advice that we had from the Department for Work and Pensions about the future jobs fund suggested that it was simply not effective and that the money was wasted. We have a £156 billion deficit to deal with, and if we did not tackle the wasteful expenditure we would have to make cuts in the areas that matter. I repeat the point that I made to the right hon. Member for Don Valley (Caroline Flint) a moment ago: we are reinvesting money in apprenticeships, which will make a real difference to many of the young people about whom the right hon. Gentleman cares.

[Mr Andrew Tyrie (Chichester) (Con)]

The whole House will have heard the concerns expressed in all parts of the House about the need to make statements here first, and I am sure that the Chief Secretary will take that on board when formulating policy for the Budget and for the vital spending review that will come in the autumn. Will he do a little more to remind the House why such an emergency set of policies was necessary—in particular the Greek-style deficit and debt level that he has inherited?

[Mr Laws]

The hon. Gentleman is exactly right, and in the news even this morning and over the past few days we have seen the real risk that the lack of financial confidence could spread across the European Union and engulf even some nations that have not been affected to date. As a consequence, all countries are having to take very hard decisions. Because of the mess in the public finances created by the last Government, the amount of debt interest that we have to pay out is growing and beginning to exceed some core Government budgets. Had we not acted to maintain the credibility of our fiscal policy, there was a real risk that we could have seen a big rise in interest rates that would have gobbled up additional expenditure and helped to wreck the recovery that is now taking place.