Skip to main content

Economic Policy

Volume 534: debated on Tuesday 1 November 2011

14. What recent representations he has received from the IMF and the OECD on UK economic policy. (77455)

The International Monetary Fund and the OECD regularly hold frank bilateral discussions with each member country. When Christine Lagarde, the managing director of the IMF, visited London in September, she stated:

“In the United Kingdom strong fiscal consolidation is essential to restore debt sustainability, given the UK’s very high structural budget deficit and large financial sector relative to GDP.”

Angel Gurria, secretary-general of the OECD, said yesterday of the UK:

“You were successful. You cleared the markets. The package was credible…The markets never discuss the quality of the rating of the UK.”

That is a consequence of the actions this Government have taken to tackle the mess left behind by the previous Government.

I thank the Minister for that reply, but what advice has he been given on the consequences of our failing to pay our IMF subscription?

My hon. Friend asks a very good question. It is a sad indictment of the state of today’s Labour party that it voted against the increase in the IMF subscription negotiated by the—

Order. The Minister has said enough, and he has said it about another party’s policy. We need to move on.

Is it not accepted now by the international community that the announcement by the Chancellor a year ago that he would cut half a million public sector jobs led directly to a reduction in consumer demand, and that it has reduced private sector investment and growth and led to an increase in deficit predictions?

The hon. Gentleman should recognise that the action that this Government have taken has earned the endorsement of the IMF and the OECD. That is why we have the low interest rates the economy needs. The Opposition talk about a plan B, but that would actually increase the budget deficit and the interest rates that this country would have to pay.