Pre-Budget Report

I am going to make a bit of progress before I give way. At the time of the pre-Budget report, the Chancellor told us:""For as long as extraordinary uncertainties remain in the world economy, this is not a time for a spending review."—[Official Report, 9 December 2009; Vol. 502, c. 368.]" However, to be credible the pre-Budget report needed to be accompanied by a comprehensive spending review or at least by a clear allocation of departmental spending totals for 2011-12 and 2012-13. Having told us that he could not provide that, he went on to tell us that he was guaranteeing most of the NHS budget, the schools budget and the police budget. The Chief Secretary to the Treasury has recently refined this argument, with the proposition that the Government can confidently predict that we will come out of recession at the turn of the year and that economic growth will be 1.25 per cent. in 2010 and 3.5 per cent. in 2011 and every year thereafter, and can set an overall envelope of public spending in specific budgets for health, for schools and for the police—that is about 40 per cent. of resource departmental expenditure limits—but cannot allocate spending totals to the remaining Departments because they do not know what the level of unemployment will be. Yesterday, the Labour-dominated Treasury Committee said the following about that astonishingly selective forecasting capability:""It may be difficult for any current consolidation plan to command universal support. It will therefore be very important to add greater detail and clarity to the plan sooner rather than later."" It went on to say:""There is a sense that the Treasury are using uncertainty to suit themselves"—" by producing some forecasts as far as 2017-18 but no spending details beyond 2011. The Committee Chairman, the right hon. Member for West Dunbartonshire (John McFall), from whom we will hear later, added his thoughts in the covering press release, saying:""We consider clarity, even if it is clarity about the degree of uncertainty surrounding the forecasts, as essential to strengthening this crucial credibility."" In addition, the Committee stated that it could""see no good reason for the Treasury failing to produce"—" more detailed—""illustrative figures for future expenditure"." We are being asked to accept that the Treasury can forecast growth, set spending totals and allocate funding to Departments that will grow, but that there are compelling and overriding reasons why the Government cannot allocate funding to the Departments that will shrink—and shrink they certainly will. It has been widely reported that there is an internal Treasury analysis showing that those Departments not fortunate enough to enjoy the political patronage of the Prime Minister will face a 17 per cent. real-terms spending cut over three years. That would confirm Institute for Fiscal Studies analysis suggesting a 16 per cent. cut—or 19 per cent. if the ring-fencing is extended for a third year. That contrasts sharply with the Chancellor's words on the "Today" programme on 10 December, when he said:""Spending is going to be pretty much flat...Broadly speaking…we're assuming for the non-protected services it's going to be pretty much flat"." That was in nominal terms, but even after allowing for inflation, it is a long way from a 17 per cent. real-terms cut. He was asked on Monday to deny the existence of that Treasury paper setting out the reality of 17 per cent. cuts in all other Departments, and I asked the Chief Secretary twice on Tuesday to deny the existence of that internal paper, but neither of them could do so. Instead, they got their civil servants to engage in producing costings of a bunch of fantasy policies, which Labour party officials then worked into a dodgy dossier—that fell apart even more quickly than the pre-Budget report did. So let me ask the Chief Secretary now—I will happily give way to him—whether the Government are going to address the biggest gap in their credibility by publishing a comprehensive spending review or departmental spending allocations for 2011-12 and 2012-13 before the general election. Will the electorate be told how the Government plan to deliver the fiscal consolidation that they have set out in aggregate in this pre-Budget report and that they claim is the proof of their commitment to restoring fiscal discipline? Or will we have to guess?