Oral Answers to Questions

Debate between Angela Smith and David Gauke

Tuesday 21st June 2011 Commons Chamber

[Mr David Lammy (Tottenham) (Lab)]

8. What recent assessment he has made of the effect on the economy of trends in the rate of inflation.

[The Exchequer Secretary to the Treasury (Mr David Gauke)]

The Government consider a range of factors when making their assessment of the United Kingdom economy. The Office for Budget Responsibility is responsible for producing independent economic and fiscal forecasts. The OBR published a full analysis of recent developments and the prospects for growth and inflation in its forecast at the time of the Budget.

[Angela Smith]

Do the Minister and the rest of the Front-Bench team now regret raising VAT at a time of rising commodity prices, which has helped to push inflation up to double the Government’s target rate and has added to the squeeze on pensioners and families?

[Mr Gauke]

First, the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), said that he would have done the same. Secondly, a cut in VAT would do nothing to reverse the rise in global commodity prices, but would do a lot to reverse the Government’s hard-won credibility for getting the deficit down.