The Office for Budget Responsibility will update its forecast of the deficit on 29 November, taking into account the spending review. Other assessments have backed the Government’s plans, with the International Monetary Fund, for example, stating that our consolidation plan
“greatly reduces the risk of a costly loss of confidence in fiscal sustainability and will help rebalance the economy”.
That backs our view that the spending review was fair and supports growth.
One of the big winners from the comprehensive spending review was, of course, the European Union. The EU has not had its accounts signed off by auditors for 16 years running, so if the Government are looking for a popular way to reduce the deficit, may I suggest that they go to the EU and say that it will not get another penny-piece out of the UK until it has had its accounts signed off?
Of course, the European Court of Auditors report, which fails to qualify the accounts for the 16th year in succession, is disappointing, as my hon. Friend observes. We will continue to champion reform through engagement with European institutions and other member states. It is worth him bearing in mind that the Government’s most important priority for the forthcoming budget negotiations is to reduce and to keep under control the EU budget, not just next year, but in subsequent years, in recognition of the fact that many EU countries are facing tough financial circumstances, as we are.
The Chancellor’s reckless choice to cut deep and fast at home means that UK jobs and growth are now reliant on achieving booming exports on a scale not seen for more than 60 years. We know that Europe is our single largest export market. Will the Minister share with the House the latest evidence of the growth of demand in that market?
There is evidence of export growth in many sectors of the economy, and the Government have played a significant role in promoting exports, as the recent trade delegation to China showed. The hon. Lady has a poor record of predicting the economy. In April 2008, she was engaged in a debate that observed that there was an extreme bubble in the housing market. She described that as a “colourful and lurid fiction” that
“has no bearing on the macro-economic reality.”—[Official Report, 2 April 2008; Vol. 474, c. 825.]
I would rather take the forecast of the Office for Budget Responsibility than hers.
The CSR is virtually silent on privatisation’s contribution to reducing the deficit. Will the Chief Secretary confirm that those receipts, which normally score in the accounts as negative spending, as he knows, will, when they come, be additional to and not a substitute for the spending reductions already announced in the CSR?
The Chartered Institute of Personnel and Development has revised upwards its forecast of the number of jobs lost in the public sector. It also suggests that the VAT increase will raise unemployment in the private sector. Reputable forecasting organisations, including the CBI, suggest that there will be an increase in unemployment overall in the next year. Does the Chief Secretary now accept that unemployment will increase as a result of the CSR, and is that why the Government have bumped off the autumn forecast of the OBR to the end of this month?
I am content to rely on the forecast of the independent Office for Budget Responsibility, which forecasts a reduction of 490,000 over the next four years in the head count in the public sector, but a net increase of jobs in the private sector of 1.6 million, leading to additional jobs being created in the economy. Of course, the hon. Gentleman will look forward, as I do, to its forecast on 29 November.