Pre-Budget Report

Yes, I do. The scale of the debt should dominate the debate, because it is the main substance of the pre-Budget report, so I will turn to it in a moment. I am not going to go back to past recessions, although the Government always refer to the two that we had previously, which we shared to a certain extent with the rest of the globe and which, I remind them, we successfully exited. Obviously we looked at the usual monetary and fiscal weapons; indeed, we used them in a new way. We used monetary policy to target inflation, because they were inflationary recessions, and we went for sound fiscal policy to restore confidence in the public finances and provide the background of stability that was required to get back to growth in the economy. Of course we looked at all the options, including fiscal stimulus. However, I remind the House of my right hon. Friend Lord Howe's Budget in 1981. When he imposed very stiff increases in taxation and reductions in public spending in order to get back to fiscal stability, he was berated by all the so-called Keynesians—it was a bit of an insult to John Maynard Keynes—for doing so, but it was successful. I will not dilate on my own Budget of 1993, but I also had a fiscal problem, to a modest extent—it was not as bad as the one faced by Geoffrey Howe—and I did the same thing. Fiscal stimulus can be considered, but there are often good reasons for rejecting it.