Pre-Budget Report

It is a pleasure to follow the former Chancellor, the right hon. and learned Member for Rushcliffe (Mr. Clarke), although I cannot I agree with everything he said. He started off well by setting a grave tone for the debate, because there is a danger that we in the House—and, indeed, the country—underestimate exactly the size of the problem that confronts us as a result of this international crisis. Perhaps remarkably, I was in the Labour party's research department in 1967 when we had the financial crisis of devaluation, which I remember well, and I was in the House in 1976 when the International Monetary Fund came in. I remember even more vividly, however, the recession of the early 1980s and what it did to the west midlands, which was nothing to laugh at. It devastated the manufacturing base in my constituency. The 1990s were not much better. The hon. Member for Twickenham (Dr. Cable), with his usual omniscience in these matters, which accompanies his gift for prescience, pointed out that borrowing as a percentage of GDP in the early 1990s was about where we are now. That is probably a good parallel. Although the right hon. and learned Member for Rushcliffe did a lot to correct that in his years in the chancellorship, he did not bring it back into balance. The current situation is graver than those events, and we must have unprecedented measures that are commensurate with it. We are looking at an unprecedented level of borrowing and an unprecedented combination of the credit crunch, the banking failure and a prospective economic downturn.