Pre-Budget Report

Although I do not agree with a lot of what the hon. Gentleman said, his response was a great deal more thoughtful than the shadow Chancellor's. I appreciate the hon. Gentleman's welcome for some of the measures that we have taken, particularly in relation to repossessions, but our announcements on both VAT reduction and the extension and increase of the amount of money that will go to basic rate taxpayers will help people on low incomes through what are undoubtedly difficult times. The hon. Gentleman's proposal for reducing income tax also comes with a promise to cut public spending very substantially—by about £20 billion—which would impact on the living standards of the very people he is concerned about. On lending to businesses, I agree with the hon. Gentleman that we need to make sure that we hold to account those banks in which we have shares. The Royal Bank of Scotland group has now agreed to take the Government money, and its announcement this weekend was extremely helpful. Assuming the Lloyds-HBOS merger goes ahead, that transaction will be completed in January, and we will need to make sure that they, too, are held to account. The additional Government help I have announced today of £1 billion being made available to small businesses is also important and will also make a difference. The hon. Gentleman said that he wanted banks to do more, but although I agree with him on that, he does not seem to agree with us on the action we are taking to spend more to encourage businesses and to give them the money they need to get through this difficult time, including the measures I announced this afternoon to help them pay their tax bills and to help those small businesses that are exporting. On housing, we are providing substantial sums to enable the building of more social housing, as well as to ensure the renovation of homes. Whenever anything is announced, the Liberals always call for more, yet it is not entirely clear how on earth they would be able to fund any of it given the fact that their tax and spending policies simply do not add up. I understand what the hon. Gentleman says, but I simply do not agree with him. I think that what we have announced today will go a long way. We are putting about £18 billion into the economy between now and April 2010. Such action is supported not just by a wide range of people in this country, but, increasingly, by countries across the world as absolutely essential, and the hon. Gentleman at least understands what the shadow Chancellor does not: many of the problems all of us face today are truly international.