As a result of the Government’s action to bring the public finances back under control, the Office for Budget Responsibility has forecast a sustained reduction in debt as a share of GDP from next year onwards. Debt will fall from 86.5% to 79.1% of GDP by 2022-23. That will be the first sustained decline in debt for 17 years.
Is my hon. Friend able to comment on the impact on the economy of increasing debt by £500 billion?
Increasing debt by £500 billion would increase debt interest by £7 billion a year, which would reduce our economic and fiscal resilience, crowd out spending on valuable services, and pass a greater debt burden to future generations.
Further to the answer that the Minister gave a few minutes ago on the sale of RBS shares to deal with Government debt, can he confirm that the Government will abide by the commitment of the Chancellor’s predecessor not to sell below the acquisition price?
As the right hon. Gentleman will have heard from my earlier reply, that bank is in a very different place from where it was in 2008 when the shares were purchased. That reflects the action that has been taken to simplify the balance sheet and to make the bank safer and more streamlined.