Budget Resolutions and Economic Situation

Debate between Sammy Wilson and Lord Barwell

Tuesday 22nd June 2010 Commons Chamber

[Sammy Wilson]

The right hon. Gentleman quotes the figure for spending, not the figures for taxation or, indeed, those relating to bringing down the deficit. That money was borrowed to be pumped back into the economy, so the amount of money going into the economy will be substantially less.

This is a subjective assessment, because the report does not give us any clear picture of what the likely impact will be. At least we now have an independent body reporting on whether these measures will be effective, but only time will tell as to whether the risk that has been taken today will pay off and will balance the economy quickly.

[Gavin Barwell (Croydon Central) (Con)]

Is the hon. Gentleman aware of the paper published by Goldman Sachs on 14 April, which reviewed every major fiscal correction in the OECD since 1975, and concluded,

“we find that decisive budgetary adjustments that have focused on reducing government expenditure have…typically boosted growth”?

[Sammy Wilson]

The context in which those adjustments take place is important, as is the speed at which they happen. All I am saying is that one way in which this Budget must be judged is on how effective it will be. Neither the report, nor the assurances given by the Chancellor today, offers any firm guarantee, if indeed that can be given, that the Budget will be effective.