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Public Sector Borrowing Requirement

Vat – in the House of Commons at 2:30 pm on 6th September 2011.

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Photo of Andrew Selous Andrew Selous Conservative, South West Bedfordshire 2:30 pm, 6th September 2011

What recent assessment he has made of the effects on the economy of the public sector borrowing requirement.

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

Sound public finances are essential for sustainable economic growth. The action that the Government have taken to reduce public sector borrowing will help to mitigate the risks to the recovery, underpin private sector confidence and help to keep interest rates low, which will help families and businesses.

Photo of Andrew Selous Andrew Selous Conservative, South West Bedfordshire

Was it because of a high public sector net cash requirement that forces up interest rates, makes it more difficult for businesses to borrow, increases taxes and means that money spent on debt interest cannot be spent on public services that the outgoing director general of the British Chambers of Commerce said when he left on Friday that, in order to keep the economy going, it is essential that we stick to the Chancellor’s economic plan?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I am sure that that was part of his reasoning and I very much welcome his endorsement, alongside that of all the other business organisations in the UK that continue to back the deficit reduction plan we have set out. It is worth observing that the proposals put forward by the outgoing director of the British Chambers of Commerce and other proposals are also being taken forward by this Government. There is very strong alignment between small businesses and this Government.

Photo of Tony Lloyd Tony Lloyd Labour, Manchester Central

At what point, though, will Treasury Ministers realise that this austerity programme is damaging growth and that what the Government should be doing is beating a track round the world to make sure that there is an international commitment to putting growth back into the economy? That is the way we will get rid of the deficit in our economy.

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

This deficit reduction plan is essential to restoring credibility to British public finances, which is critical to keeping interest rates low, as low interest rates help to keep people in their jobs and in their homes. That is the argument for the plan.

Photo of Michael Fallon Michael Fallon Deputy Chair, Conservative Party

Will my right hon. Friend confirm that the borrowing and revenue figures are now completely independently audited by the independent Office for Budget Responsibility and are no longer the completely unreliable and overtly political forecasts that, as we now know, were forced on the previous Chancellor by the previous Prime Minister?

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

I can certainly confirm that the Office for Budget Responsibility is responsible for these matters and is independent. We certainly do not go in for the political fiddling of the figures that my hon. Friend described.