By Lucy Phillips
6 January 2010
The Treasury must provide more details of future public spending if it is to adequately tackle the country’s financial deficit, a committee of MPs has warned.
A report published today by the Treasury Select Committee criticised the latest Pre-Budget Report for lack of clarity and detail in its proposals to cut the UK’s £178bn deficit. The cross-party group of MPs, which examined experts and government officials on the December 9 report, accused the Treasury of using political and economic uncertainties ‘to suit themselves’.
‘We note that although the Treasury believe the PBR contains sufficient detail about the way in which the structural deficit would be reduced, our expert witnesses all criticised the document for not providing enough information about how this will be achieved,’ the report said.
The PBR set out only vague spending projections beyond 2010/11. Robert Chote, director of the Institute for Fiscal Studies told the committee that the PBR should have provided ‘a clearer picture on what the outlook is for public spending on public services’, setting annual departmental expenditure limits.
Witnesses could not reach a consensus on ‘the right time’ for fiscal consolidation given the economic uncertainties ahead. But they agreed that clarity, even if it was about the degree of uncertainty surrounding the forecasts, was critical to producing a credible plan.
Earlier today Business Secretary Lord Mandelson defended the PBR as ‘bold and tough’. In a speech to the Work Foundation he said: ‘Our social priorities in health, schools and policing are protected. But, as the Prime Minister and the Chancellor have both made clear, the impact on other services cannot be painless.
‘Our plans do not at this stage fix rigid limits for each department, for the good reason that the future uncertainties remain. But the commitment to real reductions is clear.’
6 January 2010
The Treasury must provide more details of future public spending if it is to adequately tackle the country’s financial deficit, a committee of MPs has warned.
A report published today by the Treasury Select Committee criticised the latest Pre-Budget Report for lack of clarity and detail in its proposals to cut the UK’s £178bn deficit. The cross-party group of MPs, which examined experts and government officials on the December 9 report, accused the Treasury of using political and economic uncertainties ‘to suit themselves’.
‘We note that although the Treasury believe the PBR contains sufficient detail about the way in which the structural deficit would be reduced, our expert witnesses all criticised the document for not providing enough information about how this will be achieved,’ the report said.
The PBR set out only vague spending projections beyond 2010/11. Robert Chote, director of the Institute for Fiscal Studies told the committee that the PBR should have provided ‘a clearer picture on what the outlook is for public spending on public services’, setting annual departmental expenditure limits.
Witnesses could not reach a consensus on ‘the right time’ for fiscal consolidation given the economic uncertainties ahead. But they agreed that clarity, even if it was about the degree of uncertainty surrounding the forecasts, was critical to producing a credible plan.
Earlier today Business Secretary Lord Mandelson defended the PBR as ‘bold and tough’. In a speech to the Work Foundation he said: ‘Our social priorities in health, schools and policing are protected. But, as the Prime Minister and the Chancellor have both made clear, the impact on other services cannot be painless.
‘Our plans do not at this stage fix rigid limits for each department, for the good reason that the future uncertainties remain. But the commitment to real reductions is clear.’
