Oral Answers to Questions

Lord Lancaster of Kimbolton Excerpts

Tuesday 22nd March 2011 Commons Chamber

[Mr Gauke]

To be fair, if we wanted to reduce tax on fuel through the VAT rate that is exactly what we would have to do, so perhaps that is not the best way of doing it.

[Mark Lancaster (Milton Keynes North) (Con)]

14. What recent representations he has received on measures to reduce the budget deficit.

[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.