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Public Expenditure: Review of Commitments

My Lords, I thank my noble friend Lord Higgins for that. He is right: there is a considerable time lag on many expenditure decisions. That is why it is so important to send a signal to the markets—we have comprehensively done so in today’s Statement and in the earlier Statement on the £6 billion-worth of cuts—to show that we are getting on with it. As I explained, the cuts today will save close to £500 million on unaffordable and poor value-for-money projects in the current year. As to aggregate demand and the money supply, I take his point that the flow of credit to business is critical. I expect my right honourable friend the Chancellor of the Exchequer to refer to that in the Budget next week and to explain how we are driving our policies forward.