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Fiscal Rules

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 10th May 2007.

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Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport 10:30 am, 10th May 2007

What assessment he has made of the effect of his fiscal rules on the economy.

Photo of John Healey John Healey The Financial Secretary to the Treasury

During the last decade the introduction of strict fiscal rules has been an important part of the United Kingdom's macro-economic policy framework, which has delivered higher growth, lower inflation, more jobs and greater stability than existed in the years before Britain had a Labour Government.

Photo of Andrew Slaughter Andrew Slaughter PPS (Dr Stephen Ladyman, Minister of State), Department for Transport

I am grateful for that answer. I am also grateful for the consequences of the Government's policy, which include the hundreds of millions of pounds being invested in my constituency. Two examples are the building schools for the future investment and the investment in Hammersmith hospital, which is bidding to become the first academic health science centre in the country. What, however, is my hon. Friend's estimate of the prospect of that investment continuing if a third fiscal rule is adopted?

Photo of John Healey John Healey The Financial Secretary to the Treasury

We have two central fiscal rules which have played a big part in the fact that the level of stability, growth and jobs has been higher over the past decade than ever before. The third fiscal rule that some have proposed would inevitably lead to deep public service investment cuts, amounting to more than £20 billion in the current year alone.

Photo of Peter Tapsell Peter Tapsell Conservative, Louth and Horncastle

If, as he hopes, the Minister's right hon. Friend the Chancellor becomes First Lord of the Treasury, will the Minister—who, I am sure, will remain a member of his right hon. Friend's team—urge on him that when helping to determine the Government's future fiscal policies, he should agree with President-elect Sarkozy's strong belief in the importance of retaining large national gold reserves, and with his fierce criticisms of the incompetent behaviour of the independent European Central Bank?

Photo of John Healey John Healey The Financial Secretary to the Treasury

We will continue to make such decisions in the very best interests of the United Kingdom, as we have done in the past.