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Public Spending

I am grateful to the shadow Chief Secretary for his response and for welcoming me to my post. He is right that a number of projects have been approved, and Departments will set out details of those projects, or where they are seeking further savings within those approvals, over the next period. They are also, of course, reassessing those approvals given within delegated limits, as I said in my statement, so there will be further announcements to make on that. The right hon. Gentleman's characterisation of the Office for Budget Responsibility's report was surprising, given that the report showed that, in fact, growth was expected to be significantly lower than was forecast by his Government in the last Budget and that the structural deficit—that part of the deficit that can be paid down only by Government policy action—was considerably higher. He set out what he said were Labour's plans. We look forward to hearing more detail about that. If he is committed to a shared deficit reduction plan, I look forward to his party finally setting out in detail what it would take to meet the £50 billion of cuts that it proposed to set out. As for consistency with the approach of the Liberal Democrats, which the right hon. Gentleman asked me about, the position is entirely consistent with the approach that we took during the election campaign, in common with our coalition partners, on ensuring that firm action is taken to reduce the deficit. That must be the overriding priority. He said that end-year flexibility is used year by year to meet commitments, but the volume of commitments that were made under the previous Government is so large that it calls into question the Government's ability to have a reserve at all. Therefore, we have to take action to reduce those claims in early course, and that is what we are going to do in the Budget. The single biggest risk to jobs in this country is not taking action to reduce the deficit. If we fail to take action to reduce the deficit, we will see jobs lost across the country. We need to restore confidence to the economy. What we have learned from today's statement is that the shadow Chief Secretary went on a pre-election spending spree when in office, in the full knowledge that the Government had long since run out of money. The House will be familiar with the shadow Chief Secretary's now infamous letter to his successor, but allow me to contrast that with the letter that I received on my desk from my right hon. Friend the Member for Yeovil (Mr Laws). The right hon. Member for Birmingham, Hodge Hill (Mr Byrne) wrote:""I'm afraid there is no money…good luck!"" However, my right hon. Friend's advice was rather more helpful. On leaving the Treasury, he left me a note saying:""good luck, carry on cutting…with care."" Contrast the previous Government's approach with ours. They raised false hopes by promising the public that they would spend money on local projects that they could never afford to get off the ground, even under their own spending plans. We on the other hand have been candid about the scale of the task. We have made it impossible to fiddle the economic figures to suit our Budgets, and we are taking responsible and measured action on historically unprecedented levels of borrowing.