Pre-Budget Report

I was not trying to make an absurd party political point like the hon. Gentleman: I was quoting the European Central Bank and the European Commission studies of the experience of other countries. They have shown that when other countries have tried to launch a fiscal expansion on the back of a high level of borrowing or deficit—and the hon. Gentleman knows the difference between a deficit and the inherited debt of previous Governments—there is a danger that it actually leads to contraction. Why does it do so? There are three reasons. First, it undermines confidence. People think, ““Gosh, the Government's finances are already pretty shot through. If they are going to borrow even more, we had better get out of here.””