Philip Hammond accuses Labour of selling the family silver

Phillip Hammond MP, Shadow Chief Secretary to the Treasury: "How telling that at the end of the Prime Minister’s summer of denial, instead of following the Conservative lead and taking the tough decisions required to get the deficit under control, this morning he has ducked the issue and chosen to peddle the illusion that asset sales can somehow avoid the pain of fiscal adjustment—taking people for fools again. Can the Chief Secretary confirm that he, at least, understands that asset sales, however necessary they may be to reduce debt, do not reduce the deficit, and that they can only ever be a supplement to, not a substitute for, proper fiscal discipline? Can the Chief Secretary confirm also that the package of central Government assets mentioned this morning amounts in value to little less than a week’s worth of borrowing at the current levels, and that it is not the Government’s intention to seize the proceeds of sales of local authority assets? Can he tell the House why anyone should believe a word the Government say on asset sales when they have announced every single one before? The Tate in 1999— [Interruption.] No doubt it is coming. The Tote announcement was made in 1999 and was in the Labour party’s 2001 election manifesto. The announcement on the student loan book was made in 1997 and again in 2007, on URENCO in 2005 and on the channel tunnel rail link in 2007. Not a penny piece has been achieved from any of them. Will the Chief Secretary confirm that the value of all those assets is now significantly lower than when their sale was first announced? Indeed, did not the comprehensive spending review 2007 pencil in a £6 billion receipt for the student loan book alone—twice what the Government now expect to get from flogging off the entire package? Selling the family silver will not solve the crisis in the public finances. The country has had enough of denial, dither and delusion. The Government need to start taking the tough decisions, not ducking them, or call an election and let someone else get on with the job."

Liam Byrne MP, Chief Secretary to the Treasury: "I enjoyed the remark about tough decisions. I have made a mental note of the Tate. The hon. Gentleman presumably refers to tough decisions such as proposals on state pension plans—I understand that the National Institute of Economic and Social Research, having looked at his plans, has discovered that he is £3 billion short and five years out in his sums. So I will not take lessons in tough decisions from him. The hon. Gentleman knows that bringing public spending within the bounds of what is possible in the years to come will take a mixture of things: growth coming back, investing in new industries and jobs, the right decisions on tax—decisions that he has opposed consistently; I think that the Conservative party has voted against something like £20 billion of necessary tax increases for the years to come. It requires tougher decisions on spending in the years to come, but where there are things that the Government should not hold on to, we should sell them off. Yes, we should allow local authorities to keep receipts to invest in local priorities, but business or financial assets, such as those that the Prime Minister talked about today, can be sold off and the proceeds used to pay debt."