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Comprehensive Spending Review

Volume 712: debated on Thursday 2 July 2009


Asked By

To ask Her Majesty’s Government when the next comprehensive spending review will be published.

My Lords, departmental budgets are set until April 2011. As the Chancellor has said, given the degree of economic uncertainty, now would be the wrong time to set departmental budgets through to 2014. The Chancellor will return to these issues at the PBR.

My Lords, I thank the Minister for that reply. The Prime Minister has spent weeks denying the fact that the Budget’s spending projections to 2014 contain real terms cuts in total public spending. Indeed, if you strip out debt interest and social security payments, there are real terms cuts of 7 per cent to public service spending. However, instead of being straight with the public, the Prime Minister sent the First Secretary of State out to tell the media that the Comprehensive Spending Review, which could not have concealed the truth, was cancelled.

I know that the Minister will want to be honest with the House. Does the Chancellor really believe that forecasting uncertainty is a good reason for not being up front with the public about the need to control public expenditure and set priorities? Does he agree with the director-general of the CBI who said yesterday that the Government are creating damaging uncertainty for business?

My Lords, I always wish to give forthright and honest answers to the noble Baroness’s questions. The answer is yes to the question about the Chancellor’s views.

My Lords, does my noble friend recognise that the noble Baroness, Lady Noakes, is not at her best playing party political games? However, will he confirm that the Government have in mind not to start to cut public expenditure, and possibly increase taxation, until the recession is clearly over and we are into positive growth, but that then major cuts in public expenditure and/or tax increases will be needed?

My Lords, I thank my noble friend Lord Barnett for his always perceptive questioning. The outline for government expenditure and taxation through to 2013-14, as set out in the Budget, follows precisely the pattern that he suggests. We will maintain public expenditure to support the economy during a period of global recession, but thereafter we will—we are committed to do this—reduce progressively public sector borrowing as a percentage of GDP to take it back to a level which we regard as more sustainable. In the interim period, real expenditure from now to 2013-14 will increase at 0.7 per cent per annum.

My Lords, does the Minister accept that we heard the Prime Minister say yesterday that the only action that would be required in the years ahead to bring public expenditure under control was a combination of asset sales and efficiency savings? Does he accept that that is a completely inadequate response? If the Government bring forward specific programmes in the Pre-Budget Report which can no longer be afforded, will he urge his ministerial colleagues in the Treasury to cut them?

My Lords, expenditure must always be targeted at the points where it can be most helpful to the economy and society. Politics and Treasury management are about making difficult choices. We will, through our efficiency programme and prioritisation, ensure that public expenditure is used effectively to deliver value for money and to support the economy, British jobs, British companies and British families during this global recession.

My Lords, does the Minister really think that we are so naive to believe that by reducing public borrowing we are not going to cut public services or public expenditure? That is my first point. Secondly, it is all very well to say that we have got to wait until things work out and see whether the recession is going to end on whatever date at whatever hour, but the reality out there is that there are elderly people in care homes that are subsidised by local authorities, and local authority expenditure will be cut; what do those people think? There are young people at the other end—the “NEETs”—who do not even know if they will have jobs. Yet we are told that there will be public expenditure. This does not add up. When will the Government come clean? This is not party-political playing.

My Lords, let my try to be clear. Public expenditure will increase from today, through to 2013-14, at 0.7 per cent per annum. Public capital expenditure is being front-loaded. There is that dreadful phrase, which our soon-to-be noble friend Lord Sugar would like to use, of things being “shovel ready”, whereby projects which can be implemented rapidly are being brought forward. What I can be sure about is that we will continue to support the provision of public health and public education, and that the country can rely upon a Labour Government to ensure that public provision is something which we support, honour and respect.

My Lords, does my noble friend share my view that the public view with some distaste the likelihood of having a Punch and Judy show between now and the next general election on the issue of costs, expenditure and cuts? I welcome his statement on when the Comprehensive Spending Review will appear. In the mean time, will the Government, given their desire to try to increase democratic renewal with the public, see whether we can devise a system whereby when the public expenditure review comes out and we can see what the Government intend to do, we could introduce a programme whereby both manifestos are put to the public before the election, including the costs and savings that will arise, so that the public in turn can be treated seriously in an adult fashion, and make a proper decision on which party they should support?

My Lords, the Comprehensive Spending Review introduced by this Government sets out a medium-term planning horizon and priorities for departmental expenditure and is a distinct improvement on the previous annual budgeting exercises which led to far too much short-term decision making. How the electorate form their views on the proposals put forward by the party opposite must be for the party opposite, which must be more precise about its plans. From my perspective, we can be pretty confident that the party opposite would spend less than we would spend on education, less than we would spend on health, less than we would spend on infrastructure, and less than we would spend on security. That will be the clear and stark choice that the electorate will confront when there is an election. I have no doubt that the electorate will evidence their continuing support for significant investment in public provision.

My Lords, I respectfully remind your Lordships that Oral Questions is a time for questions, not for statements. I quote from the Companion:

“Supplementary questions may be asked but they should be short and confined to not more than two points … The essential purpose of supplementaries is to elicit information, and they should not incorporate statements of opinion”.