Oral Answers to Questions

Danny Alexander Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mike Freer (Finchley and Golders Green) (Con)]

4. What recent estimate he has made of the public sector borrowing requirement.

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

The July public sector finances release issued by the Office for National Statistics estimates that the out-turn for public sector net borrowing in 2010-11 is £142.7 billion, or 9.7% of gross domestic product—£14 billion lower than in 2009-10.

[Mike Freer]

Citibank economist Michael Saunders recently said that

“the major risk to the UK’s fiscal outlook and credit rating would be if the coalition fails to stay the course on fiscal consolidation.”

Does my right hon. Friend agree?

[Danny Alexander]

Yes, I very much agree with that. As my hon. Friend will know, the need to tackle the enormous economic problems that we inherited from the previous Government, including the enormous budget deficit, was the founding purpose of this Government. It is a purpose that we intend to see through, and he can be reassured that we will stick to our plans.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Given the Government’s poor performance on growth, lower tax receipts and higher welfare spending, will the Chief Secretary repeat—a simple yes or no answer will do—whether the Government are still committed to their target of falling public debt as a percentage of GDP by 2015? Yes or no?

[Danny Alexander]

Yes.

[Mr David Nuttall (Bury North) (Con)]

5. What recent assessment he has made of the financial crisis in the eurozone.

--- Later in debate ---

[John Robertson (Glasgow North West) (Lab)]

10. What his policy is on the pay of public sector workers earning less than £20,000.

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

At the June Budget in 2010, we announced that public sector workers earning £21,000 or less would be protected from the two-year pay freeze and receive at least £250 in each year.

[John Robertson]

I hear what the right hon. Gentleman is saying, but not giving those workers a pay rise of £250 as the Government said they would is tantamount to their not getting it. Freezing pay is not an increase. What is he going to do about this? Is he going to honour the undertaking in the Budget last year to give those hundreds of thousands of workers £250 or not?

[Danny Alexander]

The £250 increase applies to all work forces under ministerial control, and it was introduced this year. It will be carried through again next year to ensure that people on low incomes in the public sector continue to receive a pay rise.

[Sajid Javid (Bromsgrove) (Con)]

Will the Chief Secretary to the Treasury assure us that, in drawing up plans on public sector pay, the Treasury has not been impeded by a brutal regime in No. 10 Downing street?

[Danny Alexander]

I can certainly assure my hon. Friend of that. Unlike under the previous Government, No. 10 Downing street and the Treasury work very well together on these issues.

[Mr Gareth Thomas (Harrow West) (Lab/Co-op)]

11. What recent assessment he has made of the level of economic growth.

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[Andrew Selous (South West Bedfordshire) (Con)]

13. What recent assessment he has made of the effects on the economy of the public sector borrowing requirement.

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

Sound public finances are essential for sustainable economic growth. The action that the Government have taken to reduce public sector borrowing will help to mitigate the risks to the recovery, underpin private sector confidence and help to keep interest rates low, which will help families and businesses.

[Andrew Selous]

Was it because of a high public sector net cash requirement that forces up interest rates, makes it more difficult for businesses to borrow, increases taxes and means that money spent on debt interest cannot be spent on public services that the outgoing director general of the British Chambers of Commerce said when he left on Friday that, in order to keep the economy going, it is essential that we stick to the Chancellor’s economic plan?

[Danny Alexander]

I am sure that that was part of his reasoning and I very much welcome his endorsement, alongside that of all the other business organisations in the UK that continue to back the deficit reduction plan we have set out. It is worth observing that the proposals put forward by the outgoing director of the British Chambers of Commerce and other proposals are also being taken forward by this Government. There is very strong alignment between small businesses and this Government.

[Tony Lloyd (Manchester Central) (Lab)]

At what point, though, will Treasury Ministers realise that this austerity programme is damaging growth and that what the Government should be doing is beating a track round the world to make sure that there is an international commitment to putting growth back into the economy? That is the way we will get rid of the deficit in our economy.

[Danny Alexander]

This deficit reduction plan is essential to restoring credibility to British public finances, which is critical to keeping interest rates low, as low interest rates help to keep people in their jobs and in their homes. That is the argument for the plan.

[Michael Fallon (Sevenoaks) (Con)]

Will my right hon. Friend confirm that the borrowing and revenue figures are now completely independently audited by the independent Office for Budget Responsibility and are no longer the completely unreliable and overtly political forecasts that, as we now know, were forced on the previous Chancellor by the previous Prime Minister?

[Danny Alexander]

I can certainly confirm that the Office for Budget Responsibility is responsible for these matters and is independent. We certainly do not go in for the political fiddling of the figures that my hon. Friend described.

[Rushanara Ali (Bethnal Green and Bow) (Lab)]

14. What recent assessment he has made of the potential effects on the rate of inflation of recent trends in domestic energy prices.

--- Later in debate ---

[Margaret Curran (Glasgow East) (Lab)]

16. What assessment he has made of the potential implications for the economy of the most recent figures for economic growth.

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

Our economic policy is designed to achieve strong, sustainable and balanced growth that is shared more evenly across the country and between industries. The independent Office for Budget Responsibility has predicted that the economy will grow throughout 2011 and in every year of the forecast, and it will publish a fully updated forecast in the autumn.

[Margaret Curran]

Is the Chief Secretary aware of a survey produced this week by the Chartered Institute of Purchasing and Supply? It shows the sharpest slow-down in growth in the services sector for well over a decade. If Britain is such a safe haven, why is that happening?

[Danny Alexander]

I am aware of the survey, and of course many businesses are experiencing difficulties, not least owing to the headwinds in the global economy that we—along with other countries—are encountering. That is why we are taking measures to help businesses such as those to which the hon. Lady has referred, through our plan for growth and in relation to regulation, the planning system and investment in the transport infrastructure. I am sure she agrees that constitutional uncertainty about independence in Scotland is causing serious damage to businesses and business investment there.

[Charlie Elphicke (Dover) (Con)]

Is not the most important contribution that the Government can make to economic growth to be “united at the top” and to have “a credible economic policy”?

[Danny Alexander]

I agree very much with that. I believe that it is a quotation from the former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling). We are united at the top and we have a credible economic policy, while the Opposition—if I may use the former Chancellor’s phrase—are “not at the races”.

[Mr Denis MacShane (Rotherham) (Lab)]

Does the Chief Secretary—whom I fondly recall from the days when he was known as “Danny the euro”—agree that a big problem that we all face is the fact that the purchasing power of the pound internationally has sunk to an all-time low? Do we not have a real problem with the Osborne pound, which is now importing inflation, and do we not need to separate the two? We cannot get rid of the pound, because they will not let us, so do we not have to get rid of the Chancellor?

[Danny Alexander]

The right hon. Gentleman—I shall not tell the House what he was known as—should be aware that the reduction in the value of the pound took place under the previous Government, so he might direct his comments to them. He might also recognise, if he were being balanced, that that is having a beneficial effect on British exporters who are trying to sell into the eurozone, where the difficulties are, of course, affecting us as well.

[Tracey Crouch (Chatham and Aylesford) (Con)]

T1. If he will make a statement on his departmental responsibilities.