Global Economy

David Miliband Excerpts

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

I completely agree with what the Chair of the Treasury Committee says about the credibility of the deficit reduction plan and how disastrous it would be in the current environment to weaken that plan. We would—within hours, I think—find ourselves sucked into the global debt whirlpool from which other countries are struggling to get out. I also agree with him that we need to do more to improve the supply side of our economy. That is hard work for Governments, and it means taking on difficult vested interests. We have seen the argument in the last few days about planning controls, where we are trying to make it easier to have economic development, and there are plenty of groups that pop up and oppose that. That is an example of some of the battles that we will have to have and win. I can confirm that we will be producing the second phase of our plan for growth at the time of the autumn forecast.

[David Miliband (South Shields) (Lab)]

I would be grateful if the Chancellor confirmed private sector estimates that I have seen that a 0.4% downgrade of the growth forecasts for the next four years means that it will be impossible for him to hit his fiscal target of turning the debt-to-GDP ratio down by the end of this Parliament.

[Mr Osborne]

The most recent independent analysis of the British economy was done by the IMF this month. It made an assessment using lower growth forecasts, and came to the conclusion that we will hit both our fiscal mandate and our target for reducing debt, which the IMF made clear in its article IV assessment. I cannot help but note that if the right hon. Gentleman had given the leader’s speech that he had written, the Labour party would be in a much more credible place than it is today.