Pre-Budget Report

No, I cannot, because I have a time limit; I am sorry. Fiscal stimulus was not used on either of those occasions, and we successfully recovered from a recession—and the current Government benefited from that. The long track of figures that the Chancellor recited today were part of the process of getting the level of public debt back under control and getting the budget surplus steadily reduced so that the new Government could merely say that they would stick to the Major Government's figures. They then found that they were restored to balance in fairly rapid order; indeed, they began to accumulate very large Budget surpluses once we had the dotcom boom. This crisis is different—it is at heart a banking and a credit crisis. I agree with the several speakers who have said in interventions or speeches that that is the main point that we must keep our eye on. Unless and until we get back to the normal functioning of the banking system, we will not have restored the British economy to health. Although it is very important to debate the public finances and the tax and spending proposals, as we are today, because they are part of the picture, to some extent we are addressing a symptom, not the root cause. I want to emphasise that the big gap in Government policy, which was not really referred to in the PBR and was only hinted at by the Chancellor in his speech, is that they still have not produced a credible package to get the banking system functioning properly again—by which I mean resuming lending on a sound and commercial basis to households and businesses that can properly afford to take on the debt under a proper system of risk management. We are a million miles from that at the moment, and for as long as we remain so we will not have recovery; indeed, we are only at the beginning of recession that will almost certainly worsen well into 2009.