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Deficit Reduction

Oral Answers to Questions — Treasury – in the House of Commons at 11:30 am on 21st July 2015.

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Photo of Rishi Sunak Rishi Sunak Conservative, Richmond (Yorks) 11:30 am, 21st July 2015

What progress he has made on his deficit reduction plans.

Photo of Greg Hands Greg Hands The Chief Secretary to the Treasury

Since 2010, the Government’s long-term economic plan has halved the deficit as a share of GDP, but the job is not yet done. At 4.9%, the deficit remains too high. The summer Budget set out the action that the Government will take to eliminate the deficit and run an overall surplus and start paying down debt. The Government will reduce the deficit at the same rate as over the last Parliament, to reach an overall surplus of £10 billion in 2019-20, according to the forecast from the Office for Budget Responsibility.

Photo of Rishi Sunak Rishi Sunak Conservative, Richmond (Yorks)

Future Governments need flexibility to respond to economic shocks. Does my right hon. Friend agree with me that the Charter for Budget Responsibility and plans to run a fiscal surplus are sensible measures that will provide that flexibility?

Photo of Greg Hands Greg Hands The Chief Secretary to the Treasury

I thank my hon. Friend for that question and he is absolutely right. The reliable way to reduce debt effectively over time is to run a surplus in normal time. Public sector net debt as a share of GDP reached 80.8% last year and the Government are committed to getting debt falling as a share of GDP from here on.

Photo of Luciana Berger Luciana Berger Shadow Minister (Public Health)

I note that the hon. Member for Richmond (Yorks) (Rishi Sunak) is a new Member. Perhaps he might have forgotten that before 2015, the Chancellor said that he would eradicate the deficit by this election. May I ask the Minister to confirm that due to the recent fiscal changes in his July Budget, the OBR forecast that an additional £26.8 billion would be borrowed by the public sector between 2016 and 2017, and is it not the case that the Government have missed every single one of their deficit reduction targets?

Photo of Greg Hands Greg Hands The Chief Secretary to the Treasury

What I can confirm is that the surplus will be higher at the end of the Parliament and debt will be lower. But the hon. Lady was a Member in the last Parliament and she voted against every single one of the spending reductions and other measures that we took to deal with the deficit, and all the time she wanted higher deficits, higher debt and higher spending.