Comprehensive Spending Review

Lord Forsyth of Drumlean Excerpts

Wednesday 20th October 2010 Lords Chamber

[Lord Sassoon]

We need to look at it in the overall context of what the Government have done for elderly people, because this is important. The critical decision is that the Government, as announced before, will meet their commitment to uprate the basic state pension by whichever is the highest—earnings, prices or 2.5 per cent—from April 2011, as well as preserving other key pensioner benefits, which people have questioned, including the winter fuel payments, the free TV licences, the bus travel, the eye tests and the prescriptions. I am grateful for the question on the detail but I think that it gives me the opportunity to emphasise the overall deal for pensioners, which we think is important in this spending review.

[Lord Forsyth of Drumlean]

I congratulate my noble friend and the Chancellor on the excellent Statement, which shows great courage as well as great care in taking forward the mess that we inherited from the previous Government. The previous occupier of his office—the noble Lord, Lord Myners—was almost certainly correct when he assured this House that we would end up making a profit and getting our money back from the bank bailouts. Given that, should we not make it absolutely clear to the country that we have had to take these measures, which Members opposite are complaining about, because for years Mr Gordon Brown as Chancellor and Prime Minister made this country live beyond its means and was borrowing at the height of the boom; and that, despite these measures, our debt as a nation will increase? Could my noble friend tell me how much our national debt will have increased by, despite these measures, by the end of this Parliament? Given that number, how on earth can we take seriously Members opposite who are criticising what is a responsible programme from my noble friends and from our coalition partners?

[Lord Sassoon]

My Lords, I think I would probably faint at this moment if I even mentioned the debt number. The critical thing is that the debt will peak and we will bring it down, as we said we would, within this spending review. I am grateful to my noble friend for stressing that it has indeed been a courageous and careful exercise that is enabling us to make sure that the debt tops out and starts to come down within the spending review period. He reminds us that a twin failure of the previous Government caused the mess that we are in: first, as my noble friend points out, the great increase in public expenditure that we could not afford; and, secondly, the complete failure to regulate our banking system properly, which caused the whole house of cards to come down. I can give my noble friend the numbers on the public sector net debt, which will go up from 53.5 per cent of GDP in 2009-10 to a staggering 70.3 per cent in 2013-14 before we bring it down to 69.4 and 67.4 per cent by 2015-16 thanks to the measures that this Government have announced today.