MPs call for clearer plans to reduce deficit
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The Treasury Committee has urged for clarity on the government’s plans to restore the public finances back to health.
Last month MPs questioned chancellor Alistair Darling, Treasury officials and economic experts over the contents of the government’s Pre-Budget Report published on December 9.
The Treasury Committee has now published its findings which call for greater detail and clarity of the government’s plans to reduce the budget deficit, currently at 9% of GDP.
The government is aiming to have cut this down to 3.6% within four years, but experts told MPs the PBR did not provide enough information on how this target would be achieved.
John McFall, chairman of the committee, says: “Witnesses to our inquiry agreed on the need for a fiscal consolidation plan to be credible.
“We consider clarity, even if it is clarity about the degree of uncertainty surrounding the forecasts, as essential to strengthening this crucial credibility.
“That is what our report calls for today.”
The committee has also expressed concerns about the level of youth unemployment, with 952,000 18 to 24 year olds out of work as at December.
MPs also want to chart the progress of Darling’s controversial ‘bonus tax’ to see how effective the policy is in increasing banks’ capital as opposed to making large payouts to bankers.
McFall says: “We very much hope the payroll tax will be successful.
“However, there is scepticism about its effectiveness and we therefore urge the Committee to examine its success in the next parliament.”
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