Public Expenditure: Deficit Reduction

Lord Howarth of Newport Excerpts

Tuesday 6th September 2011 Lords Chamber

[Lord Sassoon]

My Lords, I remind noble Lords, lest they forget it, that we have introduced an independent Office for Budget Responsibility so that we can no longer keep fiddling the numbers and restating the cycle like the previous Government did. The Office for Budget Responsibility’s latest numbers, produced at the Budget, confirmed that we are on track to meet the Chancellor’s fiscal mandate on the rolling five-year period.

[Lord Howarth of Newport]

My Lords, does the Minister really believe that the automatic stabilisers will do the trick? Is it not a mark of leadership to be able to admit that you have got it wrong? Is it not now time for the Chancellor and the Prime Minister to acknowledge that their strategy of drastically reducing public expenditure cannot enable the UK economy to revive when there is no sign anywhere else on the skyline of demand for what the UK economy is able to offer?

[Lord Sassoon]

I am not quite sure who should admit what they got wrong, but the former Chancellor, Alistair Darling, made a complete mea culpa when he said, “We got it totally wrong, raising national insurance and putting a tax on jobs”. He said that there was no credible economic policy at the last election, which is why Labour lost.

We have introduced a policy that is on track to get the economy growing. It is the underpinning of the economy by a clear fiscal plan on which we can build. The Chancellor and the Prime Minister are working very hard on the growth of the economy, which is founded on the stabilisation of the deficit that we inherited.