Oral Answers to Questions

Lord Mann Excerpts

Tuesday 13th July 2010 Commons Chamber

[Mr Gauke]

We have provided more detail of the distributional impact of this VAT rise than the previous Government ever did or would have done had they increased VAT last December. The fact is that this Chancellor—like this Treasury team—has the courage of his convictions to do the right thing, unlike his predecessors, who neither pursued the policies they believed in nor had a leader they believed in.

[John Mann (Bassetlaw) (Lab)]

3. What recent representations he has received on the level of the UK national debt relative to that of other countries; and if he will make a statement.

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

The UK faces one of the largest fiscal challenges of any advanced economy. According to the International Monetary Fund, between 2007 and 2015 the UK is forecast to experience the most rapid increase in net debt of any G7 economy, with the exception of Japan. The Office for Budget Responsibility’s pre-Budget forecast shows that without further action to tackle the deficit, debt would still be rising in 2014-15. As result of the actions set out by the Government in the June Budget, the OBR projects that debt will have declined to 69.4% of gross domestic product in 2014-15— 5% of GDP lower than under the plans the Government inherited.

[John Mann]

That was a lot of words, but the Chief Secretary did not answer the question. Why does the United States have a much higher debt than we have, and why do Canada, Italy, France, Germany and Japan all have, as a percentage of GDP, higher debt than we have? Is it true that the extent of the cuts is driven not by economics but by ideology?

[Danny Alexander]

No, that is not true. The plain fact is that, as I said earlier, we have the fastest growing debt and the largest deficit in the European Union apart from Ireland. In the Budget we have taken action to ensure that we prevent the key risk facing growth in this country, which is a failure to take action and a failure to restore confidence in the economy, potentially causing us the sort of problems that we have seen in other European countries. That is the problem that we need to avoid.