Public Spending: Inheritance

Mark Francois Excerpts

Monday 29th July 2024 Commons Chamber

[Rachel Reeves]

This country is owed a £22 billion apology by the Conservative party, and my hon. Friend is right to highlight the overspends, including on the hospitals programme; there is a £4 billion gap between what was announced and what is needed for those hospitals. There is also a £6.4 billion overspend on the asylum system. That was all unfunded and undisclosed until I disclosed it today.

[Mr Mark Francois (Rayleigh and Wickford) (Con)]

I welcome the affirmation of the funding for Ukraine, which I presume was already fully allocated from the Treasury reserve, in the usual way.

On the mainstream defence budget, the Chancellor has announced that all departmental spending will now be reviewed every two years. Given the speed at which Whitehall works, this means that the minute one review is finished, work will start on the next. All public spending, particularly capital spending, will effectively be under permanent review. This will not work. How can we commit to 10-year defence programmes, such as the vital new Tempest fighter, if all departmental budgets are up in the air every two years?

[Rachel Reeves]

First, there is a £9 billion reserve for departmental expenditure, and it was spent three times over before I arrived in the Treasury. That is why we face these problems today.

Secondly, yes, we fully intend to set longer-term budgets for capital expenditure, but we will have three-year spending reviews every two years for day-to-day departmental expenditure, which is really important for giving certainty, so that Government Departments can plan for the future. Today, no Department or local authority knows its budget beyond next March. That is no position to put Departments in, including the Ministry of Defence.