Oral Answers to Questions

Alison McGovern Excerpts

Tuesday 21st June 2011 Commons Chamber

[Justine Greening]

As my hon. Friend knows, one of the key aspects of the Budget this year was to launch “The Plan for Growth”. A key part of that was to provide for more apprenticeships and more work experience so that we can make sure that people have the right skills that companies in this country need.

[Alison McGovern (Wirral South) (Lab)]

18. What assessment he has made of the most recent growth forecast by the Office for Budget Responsibility.

[The Chief Secretary to the Treasury (Danny Alexander)]

Growth forecasts are for the independent Office for Budget Responsibility. In March it forecast the economy to grow by 1.7% in 2011, 2.5% in 2012 and 2.9% in 2013.

[Alison McGovern]

If the OBR embarrasses the Treasury again by downgrading growth forecasts yet again, how will the Government respond?

[Danny Alexander]

As I say, growth forecasts are a matter for the independent Office for Budget Responsibility. I am clear that the deficit reduction programme is essential to ensure that we have confidence in the UK economy. Given that the Opposition caused the mess we are trying to clear up, I hoped the hon. Lady would support that.

--- Later in debate ---

[Mr George Osborne]

My hon. Friend is right. Manufacturing halved as a share of our economy under the Labour Government and financial services grew dramatically over that period. Since the last election, manufacturing output is up 4.2% and the private sector has created more than 500,000 new jobs net, which is all good news. The example he brings to the Chamber is just one of many companies that are investing and employing people, and despite a choppy recovery we should celebrate that.

[Alison McGovern (Wirral South) (Lab)]

T7. On 14 February the Governor of the Bank of England told the Chancellor that his VAT rise had caused inflation. On 16 May the Governor again told him that his VAT rise had caused inflation. Will he tell me how he is measuring the impact of his VAT rise on the rest of our economy and whether it was a rise too far, too fast?