Tuesday Volume 511 8 June 2010 No. 11 HOUSE OF COMMONS OFFICIAL REPORT PARLIAMENTARY DEBATES (HANSARD) Tuesday 8 June 2010 £5·00 © Parliamentary Copyright House of Commons 2010 This publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ Enquiries to the Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU; e-mail: [email protected] 159 8 JUNE 2010 160 Mr Osborne: My hon. Friend has my absolute assurance House of Commons that I would not sign up to that. Indeed, I have made that position clear to ECOFIN, and my hon. Friend the Financial Secretary to the Treasury, who is taking my Tuesday 8 June 2010 place at today’s ECOFIN meeting, has also done so. It is absolutely certain that future Budgets will be presented The House met at half-past Two o’clock first to the House of Commons. Mr Liam Byrne (Birmingham, Hodge Hill) (Lab): I, PRAYERS too, welcome the Chancellor to his first Treasury questions. I know that he prefers the safety of the Treasury courtyard, but I am sure that the House will be on its best behaviour [MR SPEAKER in the Chair] with him this afternoon. Since the 1970s, almost no country has cut its deficit significantly without increasing inequality. Will he make it a central goal of his deficit Oral Answers to Questions reduction plan to ensure that inequality does not rise? Mr Osborne: I thank the right hon. Gentleman for his welcome. He is Labour’s “man of letters”, and it is good to see him still on the Front Bench. The point that TREASURY I make to him is that Labour had 13 years in government, and inequality increased during its time in office. What we will do is deal with the very large budget deficit The Chancellor of the Exchequer was asked— bequeathed to us by him and his colleagues in a way that is fair and reasonable, and protects people across Economic Growth the country. Mr Andrew Tyrie (Chichester) (Con): It is clear that 1. Tony Lloyd (Manchester Central) (Lab): What in the past few days a new system of public expenditure assessment he has made of the effect on economic control has been put in place. What will the Chancellor growth of the programme of expenditure reductions do to ensure that Parliament is fully informed about the announced on 24 May 2010. [918] new system? Will he publish a full explanation of exactly how it works? The Chancellor of the Exchequer (Mr George Osborne): The Treasury’s assessment is that the effect will be Mr Osborne: I think that we have the two candidates positive. The in-year reductions in spending are part of for the chairmanship of the Treasury Committee here the Government’s efforts to bring down the budget today. [Interruption.] Idohaveavote,butIamnot deficit, the level of which threatens the recovery. This going to exercise it on that matter. The point that I weekend the G20 stated: should make to my hon. Friend—I shall speak about “Those countries with serious fiscal challenges need to accelerate this a bit more in our debate on the Queen’s Speech the pace of consolidation. We welcome the recent announcements later— is that we are publishing today details of the by some countries”— framework that we will adopt in conducting the spending including Britain— review. I will say more about that at the time of the “to reduce their deficits in 2010”. Budget—and I will, of course, answer questions about it in detail before the Treasury Committee, whoever is in Tony Lloyd: I welcome the Chancellor to his place, the chair. Parliament will also have a number of but will he have the candour to admit that his strategy is opportunities to discuss it, and when the spending very risky, because it risks putting this country back review is finally produced in the autumn it will, of into a double-dip recession? In any case there will be course, be presented to this House. I want all Members losers, so will he say who they will be? of this House, from all parts of it, to engage in the big national challenge of resolving how we get this country Mr Osborne: Let us be clear about who the losers to live within its means. would be if we did not deal with this record budget Tax (Pensioners) deficit. The whole country would lose out, because there would be higher interest rates, more businesses 2. John Robertson (Glasgow North West) (Lab): If he would go bust and international investor confidence will assess the merits of increasing the level of financial would be lost. The hon. Gentleman needs to examine assistance to pensioners through the tax system. [919] what is happening in the rest of the world, and realise that because Britain has the largest budget deficit of The Economic Secretary to the Treasury (Justine any advanced economy, we have to get on and deal Greening): This Government are committed to supporting with it. pensioners to ensure that they can live with the respect and dignity they deserve. We have already said that we Michael Fallon (Sevenoaks) (Con): I welcome the will restore the earnings link, protect key pensioner Chancellor to his position. Will he give an absolute benefits and ensure that the retirement age can rise if assurance that the coming Budget, and future Budgets, pensioners want to continue working in order to support will always be presented first to Parliament, and that themselves. We think that, despite the fiscal deficit left they will not have to be pre-notified to, or approved by, to us by the former Government, that is the fairest way Brussels? to proceed. 161 Oral Answers8 JUNE 2010 Oral Answers 162 John Robertson: I thank the hon. Lady, and welcome part, in that countries with significant budget deficits her to her position—but I am somewhat disappointed need to get on and reduce them. I am afraid that the in her answer, because she has not identified exactly Labour party, as it continues to oppose what we are how she will support our elderly people at a time when doing, finds itself outside the international mainstream. cuts will be made all over the country and will affect everyone, including pensioners. What priority will she Nadhim Zahawi: Has my right hon. Friend the Chancellor give to pensioners? What kind of increased payments read yesterday’s International Monetary Fund report, will be made to cover some of the cuts, which will hit which warns that the current crisis management was no pensioners harder than anyone else? alternative to fundamental economic restructuring? Does Justine Greening: The hon. Gentleman seems to have he agree that the previous Government either naively or missed the fact that this Government are having to tidy deliberately chose to mislead the nation? up a huge financial mess left to us by the previous one. We have made it clear that, despite that mess, we want, Mr Osborne: My hon. Friend is absolutely right. I first, to protect key pensioner benefits—the benefits have, of course, seen the IMF report, and the lesson we that Labour Members claimed we would take away—such learned is that you have to fix the roof when the sun is as free bus passes, free prescriptions, free eye tests and shining. That is what the previous Government completely the winter fuel allowance. That is a range of benefits failed to do. They had 13 years to fix the national that the Labour party said we would remove, but we are finances, and now it is up to us to clear up the mess that going to keep them. I can assure him on that, so he can they left behind. go back to the pensioners in his constituency and explain why he was telling them mistruths during the Karen Lumley: Has the Chancellor received any apologies last election. from the previous Government for the mismanagement Budget Deficit of the economy over the past 13 years? 3. Neil Carmichael (Stroud) (Con): What steps his Mr Osborne: No, but we did receive a letter from the Department is taking to reduce the level of the budget former Chief Secretary to the Treasury, the right hon. deficit. [920] Member for Birmingham, Hodge Hill (Mr Byrne), apologising for the fact that there was no money left. 6. Nadhim Zahawi (Stratford-on-Avon) (Con): What We will discuss this issue in the debate on the Queen’s recent representations he has received on the level of Speech. I note that the Labour party has tabled a the budget deficit. [923] motion, which it is asking us all to vote for, noting 12. Karen Lumley (Redditch) (Con): What steps his “the need for a clear plan to bring down the deficit”. Department is taking to reduce the level of the budget I look forward to hearing that clear plan in the shadow deficit. [929] Chancellor’s speech. 13. Mr Kwasi Kwarteng (Spelthorne) (Con): What steps his Department is taking to reduce the level of the Mr Kwarteng: Has the Chancellor received any more budget deficit. [930] correspondence from the former Chief Secretary? 14. Chris Skidmore (Kingswood) (Con): What steps Mr Osborne: No, sadly I have not, but I discovered his Department is taking to reduce the level of the that he had a large bust of Oliver Cromwell sitting budget deficit. [931] behind his desk, and that when the Irish peace negotiations The Chancellor of the Exchequer (Mr George Osborne): were being conducted they had to be held in another In the past month, we have created an independent room.