Oral Answers to Questions

Stephen Timms Excerpts

Tuesday 4th November 2014 Commons Chamber

[Priti Patel]

I welcome the hon. Lady’s support for the package, which is substantial. The priority must be its implementation and delivery, and we look forward to working with all parties to make sure that it is a success.

[Stephen Timms (East Ham) (Lab)]

11. What recent forecast he has made of the change in the deficit between May 2010 and May 2015.

[The Economic Secretary to the Treasury (Andrea Leadsom)]

In 2010 the Government inherited the largest deficit since the second world war at 10.2% of GDP. We have made substantial progress in reducing the deficit since 2010. By the end of the last financial year 2013-14, the deficit had fallen from £149 billion to £95.6 billion, estimated at Budget 2014. As a share of GDP that is a fall of more than a third from its peak.

[Stephen Timms]

The Chancellor’s promise to eradicate the deficit in this Parliament has long since been abandoned, but with the deficit going up in the first half of this financial year, the scaled-back aim of halving the deficit by the end of this Parliament looks in serious trouble as well. The Chief Secretary has just attacked the unfunded tax cuts that the Chancellor announced. Does the Minister still think that the tax deficit will even be halved by the end of the current financial year?

[Andrea Leadsom]

The right hon. Gentleman is possibly being a little mischievous. As a veteran Chief Secretary to the Treasury from the previous Government, he should well understand that, according to the OBR’s comments and looking at its 2010 forecast errors over time, the biggest difference between 2013 and earlier was the lack of external shock. In 2011, high commodity prices ate into disposable incomes and the euro area crisis damaged credit and confidence. He should well understand why the deficit reduction was impacted by external shocks.