Debt Management Office

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 10th May 2001.

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Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

The Debt Management Office supports the Government's policies of minimising debt financing costs over the long term, taking account of risk and managing the cash needs of the Exchequer in the most cost-effective way.

Photo of Geoffrey Clifton-Brown Geoffrey Clifton-Brown Shadow Spokesperson (Environment, Food and Rural Affairs)

I thank the Minister for that answer. The management of the Debt Management Office is a vital part of managing the economy. Now that the Institute of Fiscal Studies has identified a massive gap of £5 billion a year by 2004, will the Labour party cut its disastrously unsustainable expenditure plans, will it disastrously increase taxation or will it unsustainably increase debt? To fill the gap, should the British people mind the gap and vote Conservative at the election?

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

That was an extraordinary question for the hon. Gentleman to ask. In the year before the last general election, the Conservatives ran up borrowing of £28 billion. In the year before the impending election, we have a net repayment of £15 billion. The DMO is operating within a very different environment, in which the Government have sound public finances and sound money, as opposed to the spendthrift millstone of debt that the Conservatives put round our necks, and would do so again if they had the chance.

As for the performance of the DMO, the hon. Gentleman would have done well to read the Select Committee report that was published in May 2000, which stated:

"We were pleased to note that several witnesses who have regular contacts with the DMO, particularly in relation to debt management, praised the agency's performance and transparency."

There is a better financial situation that is being better managed with Labour.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours Labour, Workington

Are not the general public entitled to one more statistic? How many thousands of millions of pounds of Government debt that we inherited from the previous Tory Government have the Labour Government paid off since 1997?

Photo of Andrew Smith Andrew Smith The Chief Secretary to the Treasury

First, I thank my hon. Friend for his distinguished service and contribution to the House--[Hon. Members: "Hear, hear."]--which he will notice is applauded on both sides of the Chamber. I thank him also for the principled, energetic, good-natured, friendly and supportive way in which he goes about his work, which was reflected in his question. The answer is that we are reducing debt from the 44 per cent. of gross domestic product under the Conservative Government to 31 per cent., and a sustainable 30 per cent. for the years ahead.

Those are not merely statistics. The numbers reflect the money that is taken from working people's pockets. It was taken in the past to pay for the boom-and-bust instability of a Conservative Government, who ran up debts because they could not manage the economy effectively. In the coming weeks, our case will be built on the tough decisions that we have taken and the platform of stability that we have put in place. We can invest and grow, and generate further jobs for the future. All that would be at risk with the Conservatives.