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Government Capital Expenditure

Part of Opposition Day — [3rd Allotted Day] – in the House of Commons at 5:30 pm on 2nd February 2009.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 5:30 pm, 2nd February 2009

The hon. Gentleman always cautions gently. I say to him that there are different circumstances in different countries. I return to the Institute for Fiscal Studies quotation that I cited earlier to the Minister:

"Labour entered the current crisis with one of the largest structural budget deficits in the industrial world and a bigger debt than most OECD countries, having done less to reduce debt and—in particular—borrowing than most since 1997."

Our position is precarious and difficult. According to the IFS, our debt as a percentage of GDP will go up to 62.1 per cent.—even the Government acknowledge that it will be 57.4 per cent. According to the IFS, debt will not reach 40 per cent. of GDP for another 20 years. It will double over the next few years, with the danger that the cost of borrowing will go up. That puts us in an extremely difficult position. It would be splendid to be able to afford to cut taxes or fund public expenditure, but the fact is that over many years the Government have failed to put the country in the strongest fiscal position.

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