NICKY MORGAN – Paying off debt
Jeff Randall Live, Sky News
Wednesday 19th March 2014
Speakers: Jeff Randall
Nicky Morgan
JR: The Chancellor said today, and I am quoting, “We’re getting on top of our debts”. That is not true, is it?
NM: Well it is true overall, in the sense that we want to see the debt falling by 2016, but the point is actually it is part of the whole long-term economic plan …
JR: Debt won’t be falling by 2016?
NM: Well it is going to peak and then it will come down …
JR: No, no, no. Debt goes up every year between now and 2018/19?
NM: But then it’ll come down after that.
JR: That’s five years away, we are not getting on top of our debts?
NM: Well we are getting on top …we are getting on top of the debt and we are getting on top of the deficit. This is about building a resilient economy, a sustainable recovery. And the point is that actually it has taken longer to sort things out, but we’ve had the Eurozone crisis, we’ve had the biggest recession for 100 years.
JR: Debt as a percentage of GDP goes up this year to nearly 75%, it goes up next year to 77%, and up the year after to 78%. That is not getting on top of our debts?
NM: Well, it’s done in a sort of planned way. This is not sort of emergency …
JR: What a planned rise?
NM: Well because actually what it is saying is this is a government who ultimately wants to borrow less, to spend less, and to get on top of the economy. And that’s what we are doing. It’s a sustainable building of our economy.
JR: Let me give you the debt numbers as predicted by the OBR: current year £1.2trn, next year £1.3trn, year after that £1.4trn, the year after that nearly £1.5trn and the year after that nearly £1.55trn. So, in the next six years, our total debt will go up by more than £300bn. That is not getting on top of our debts, the Chancellor was dissembling?
NM: I don’t think he was dissembling at all, what he was basically …what he was saying, as we said in previous Budgets, is that actually we have been through a huge recession, we have got an economy to get back on track – that is exactly what we are doing; we are delivering. You know, if we wanted to go further and not borrow anything at all, and we sometimes hear from the opposition they can’t make up their mind whether they don’t want us to borrow or if they want to end austerity. We set out a very clear economic plan, that is what we are sticking to.
JR: The Chancellor today was inviting us to infer that our debts are going down and they are not? They are going up by any measure … look if you went into your bank manager and you said I am getting on top of my debt and then you showed him these numbers, he’d laugh you out of the office.
NM: If my bank manager could see that I had a plan for paying the debt off, a very credible plan, which is exactly what all the international forecasters …
JR: Paying the debt …
NM: …the OBR are saying that actually …
JR: Nicky, Nicky, paying the debt off?! We are not going to pay off our debts, we owe £1.3trn. We are not going to pay that off?
NM: Well we are going to and actually …
JR: By when?
NM: One of the things the Chancellor said today is we are going to spending less on debt interest, that’s £42bn less …
JR: That’s not paying off our debt; our debt is going up?
NM: Well that actually …there’s an impact on the economy that our debt is having. We are paying less in debt interest which means we can pay more on public services …
JR: But you’ve done it again, you’ve said we’re paying off our debts. We are simply not paying off our debts, our debts are going up?
NM: We will be paying off the debt, there is a plan there that is set out, the forecasts … you just said yourself that actually the figure going to go up and then go down.
JR: No, in cash terms the debt goes up every year between now and 2018/19 which is the extent of the OBR’s forecast. We are not paying off our debt.
NM: But as our economy grows that’s why the debt peaks at a certain level and then goes down again. It is that we have a long-term plan to get this under control, we can see that and today’s Budget was further confirmation of that.
JR: Seems to me you are deliberately conflating two issues, deficit and debt?
NM: No, not at all, not at all. No, I mean the …the …the …we’re very clear about that and actually that is a charge that you might want to level at the opposition. But no, we’re very clear about this; there is a plan, a credible plan that has been signed off by the OBR, by other international forecasters who say that actually we are doing the right thing, we are getting economy in a resilient place.