Oral Answers to Questions

Philip Davies Excerpts

Tuesday 16th November 2010 Commons Chamber

[Mr Hoban]

My hon. Friend is absolutely right, and it just goes to show that credit rating agencies do not get it wrong all the time. In May, Standard & Poor’s put the UK’s credit rating on a “negative outlook”, as a consequence of the previous Government’s policies. However, in October it said that

“the coalition parties have shown a high degree of cohesion in putting the U.K.’s public finances onto what we view to be a more sustainable footing.”

We welcome those comments.

[Philip Davies (Shipley) (Con)]

9. What recent assessment he has made of the effectiveness of the outcome of the comprehensive spending review in reducing the budget deficit.

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

The Office for Budget Responsibility will update its forecast of the deficit on 29 November, taking into account the spending review. Other assessments have backed the Government’s plans, with the International Monetary Fund, for example, stating that our consolidation plan

“greatly reduces the risk of a costly loss of confidence in fiscal sustainability and will help rebalance the economy”.

That backs our view that the spending review was fair and supports growth.

[Philip Davies]

One of the big winners from the comprehensive spending review was, of course, the European Union. The EU has not had its accounts signed off by auditors for 16 years running, so if the Government are looking for a popular way to reduce the deficit, may I suggest that they go to the EU and say that it will not get another penny-piece out of the UK until it has had its accounts signed off?

[Danny Alexander]

Of course, the European Court of Auditors report, which fails to qualify the accounts for the 16th year in succession, is disappointing, as my hon. Friend observes. We will continue to champion reform through engagement with European institutions and other member states. It is worth him bearing in mind that the Government’s most important priority for the forthcoming budget negotiations is to reduce and to keep under control the EU budget, not just next year, but in subsequent years, in recognition of the fact that many EU countries are facing tough financial circumstances, as we are.