Budget Resolutions - Amendment of the Law

Part of the debate – in the House of Commons at 3:35 pm on 14th March 2017.

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Photo of Iain Wright Iain Wright Chair, Education, Skills and the Economy Sub-Committee, Chair, Business, Energy and Industrial Strategy Committee 3:35 pm, 14th March 2017

It is a pleasure to follow Sir Edward Leigh; he made a thoughtful and forward-looking speech, although I have to say that I could not disagree with him more on the matters of insurance-based payments to fund our NHS and selective education; those are the wrong approaches for this country to take.

I want to mention three key points. The first is the position of the national debt. This year’s “Economic and fiscal outlook” document from the Office for Budget Responsibility states that

“the fiscal mandate has targeted different measures of the deficit at different horizons”,

which is a beautifully diplomatic way of saying that the Government keep moving the goalposts and still fail to score the goal. The OBR goes on to state that

“the Government does not appear to be on track to meet its stated fiscal objective to ‘return the public finances to balance at the earliest possible date in the next Parliament’.”

So the Government have failed on the deficit, but they are failing catastrophically on the debt.

In 2010, the Government expected public sector net debt to be falling as a share of GDP; it was forecast to reach a high of 70.3% in 2013-14, falling to 67.4% by 2015-16. However, in every single year that the Tories have been in No. 11 net debt has risen in actual and relative terms, reaching 83.7% of GDP last year, and it is going to rise through this Parliament, with the Red Book forecasting that it will reach 88.9% this year.

When the coalition took office, public sector net debt was £771 billion. This year it reached £1.6 trillion, and the Red Book forecasts it is to rise again throughout this Parliament to £1.9 trillion. This is my first key point: in little over a decade, the Tories will have increased public sector debt by 146%, with it rising by over £1 trillion.

In his statement, the Chancellor said that they

“will not saddle our children with ever-increasing debts.”—[Official Report, 8 March 2017;
Vol. 622, c. 811.]

However, when Tory Chancellors have increased the public debt by almost 150% in a decade, saddling our children with ever-increasing debts seems to be precisely what this Government are doing.