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Government Budget Deficits

Oral Answers to Questions — Treasury – in the House of Commons at 2:30 pm on 6th September 2011.

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Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys 2:30 pm, 6th September 2011

What recent discussions he has had with his international counterparts on steps to reduce Government budget deficits.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

At the last G20 summit, advanced countries committed to implementing clear, credible, ambitious and growth-friendly medium-term fiscal consolidation plans, differentiated according to national circumstances. I will further discuss fiscal consolidation plans in the G7, G20 and IMF meetings later this month.

Photo of Paul Maynard Paul Maynard Conservative, Blackpool North and Cleveleys

Does the Chancellor agree with the IMF’s most recent assessment that strong fiscal consolidation remains essential?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

That is, of course, absolutely what the IMF said in its recent article IV assessment—and we remember the article IV assessments at the end of the previous Labour Government. It asks explicitly whether the UK Government should change their policy, and it says no. That is the advice from the IMF. Last July, the Labour party voted against Britain paying its subscriptions to the IMF. Frankly, I do not think that Labour Members should talk about the IMF in Treasury questions until they agree with paying the subs.

Photo of Rachel Reeves Rachel Reeves Shadow Minister (Work and Pensions)

If the Office for Budget Responsibility downgrades its forecast for growth for the fourth time when it reports later in the autumn, and revises up its forecast for Government borrowing, would the Chancellor regard that as a success or failure of this Government’s economic policy?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

Of course, the Government want economic growth and prosperity. We want a stable international situation in which we can trade. We have to take account of the fact that major trading partners, such as Germany, France and the United States, have seen either no growth or very limited growth as well. That is the challenge we face. As Mr Darling reminded us at the weekend, we can either have a credible economic policy that takes note of what is going on in the world or, as he put it, we cannot even be at the races.