Oral Answers to Questions

Mark Hoban Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Stephen Phillips (Sleaford and North Hykeham) (Con)]

10. By what date he expects revenue to the Exchequer to match levels of public expenditure.

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

Excluding capital expenditure, the Office for Budget Responsibility forecasts revenue to exceed current expenditure by 2015-16. This is further evidence that this Government believe that the country should live within its means.

[Mr Speaker]

Order. We are asking about current policy, and some of these questions are simply—[Interruption.] Order. We have got the gist.

[Mr Hoban]

My hon. and learned Friend is absolutely right, and a number of organisations, both at home and abroad, have criticised the lack of ambition of the previous Chancellor’s plans. That is why the Obama Administration, the International Monetary Fund, the OECD, the Institute for Fiscal Studies, the CBI, the Governor of the Bank of England, 35 leaders of British businesses, the European Commission, the World Bank, three major credit rating agencies and the world’s biggest bond trader have been backing our plans—the only person the shadow Chancellor can find to back his is The Guardian.

[Tony Lloyd (Manchester Central) (Lab)]

Public expenditure is to be matched by revenue in 2015, but has the Treasury made any estimate of the amount of growth and employment that will have been forgone by these policies of making too-deep cuts too quickly?

[Mr Hoban]

The hon. Gentleman should pay attention to the forecast produced last year by the OBR indicating that the economy would continue to grow in each year of this Parliament.

[Stephen Hammond (Wimbledon) (Con)]

Does my hon. Friend agree that real progress on growth has to be made through not only matching expenditure, but cutting the deficit, and that the OECD says that the only way we will get future growth is by ensuring that the deficit plans are continued and this Government pursue their policy?

[Mr Hoban]

My hon. Friend is absolutely right. The OECD is one of a number of organisations that have supported our plans. The IMF has said:

“The government’s strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability.”

That theme continues to come across from international organisations, which demonstrates that we are on the right track to get this economy growing again and ensure that Britain continues to live within its means after a decade of a Labour Government who maxed out on the nation’s credit cards.

[Helen Goodman (Bishop Auckland) (Lab)]

11. If he will (a) prepare and (b) publish an assessment of the relative effect of his forthcoming budget on women, families and ethnic minorities.

--- Later in debate ---

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

The Government have received a number of representations for the Budget referring to the need to reduce the budget deficit. In addition, the Government’s strategy has been endorsed by a number of organisations, including the OECD, which said in January that the Government should

“stay the course…The fiscal situation in the UK absolutely requires this approach”.

[Mark Lancaster]

The Government’s plan to eliminate the deficit by 2015 is in stark contrast to the Darling plan, which was simply to reduce it by half. What assessment has the Minister made of the likely impact of the Darling plan on the level of debt and the cost of servicing it?

[Mr Hoban]

If we had continued with the previous Government’s deficit reduction plan, debt would still be rising in 2015, not falling, meaning that we would have to spend an extra £3 billion in one year on debt interest while still having to make spending cuts. The lack of ambition in the previous Government’s plan put our credit rating at risk, thus threatening the prospect of higher interest rates and putting a brake on the recovery.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

When such representations were being made, was the Minister conscious of the effect that these cuts might have on young people in our country? Did he look at last week’s level of unemployment among young people? When will his Government do something for young people in this country?

[Mr Hoban]

The legacy left by the previous Government was that youth unemployment was continuing to rise. The other problem with which the Opposition left us was that our children and grandchildren would have to pick up the tab for Labour’s mismanagement of our economy. We need to get the deficit down to create the foundations for economic growth to ensure that more young people are back in work.

[Duncan Hames (Chippenham) (LD)]

The Chief Secretary to the Treasury has certainly received representations from me on such measures, including about the estimated loss to the Exchequer of more than £100 million due to tax avoidance through low value consignment relief on VAT. Will the Minister at least confirm that the Government’s conclusions on that will be shared with us in tomorrow’s Budget?

[Mr Hoban]

I encourage my hon. Friend to be patient.

[Mr Kevan Jones (North Durham) (Lab)]

15. What recent assessment he has made of the effect on economic growth of the spending reductions set out in the June 2010 Budget.

--- Later in debate ---

[Mike Freer (Finchley and Golders Green) (Con)]

T2. The Financial Services Authority’s mortgage market review stated:“Our existing regulatory framework has been shown to be ineffective”and that“regulatory reform is needed to reduce the probability and severity of future financial crises”.Does the Minister agree?

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

My hon. Friend is right. The mortgage market needs reform, but it needs stability as well, which is why I welcome the statement by the FSA today. It says that it will not introduce reforms this year and will take into account overall economic stability before it introduces any further changes. It has also made it clear that lenders should not pre-empt any conclusions from its review.

[Bill Esterson (Sefton Central) (Lab)]

T5. Can the Chancellor confirm that between 1990 and 1997 the proportion of tax paid on a litre of fuel rose from 59% to 75%? Can he also confirm that the proportion of tax paid then fell by more than 10% between 1997 and 2010?