Fiscal Responsibility Bill

In my view, if we do not cut enough and soon enough, we will not have a currency. The debate about whether we should have taxation or cuts is to some extent academic. The plea about tax evasion and avoidance that my hon. Friend has made ever since he has been in the House—ever since I have enjoyed listening to him—is one that I was pleased to hear the Chancellor pick up in such a positive way, but that alone is not enough. I return to the central issue of whether we are going to see ourselves through to the general election. We have been living in a cloud cuckoo land partly because all the political parties have been saying that they are going to spend more, so that nobody would think that things will be all that tough. The economic crisis was said to be the most serious since the 1930s, but when improvements in programmes are announced, people think, "Well, it can't be all that bad, can it?" What has added to that illusion is the fact that the Government have been printing money, between 98 and 99 per cent. of which has been buying the Government debt. What we do not know is what the markets will do when there is no more funny money to use to buy that debt. We know that there is £25 billion more; presumably, that money is being spent now and will, one hopes, take us up to February—but then things will hit the fan. Of course, the Government are taking proper actions such as saying to the banks, which behaved so irresponsibly in that earlier period, that they need to restructure their liabilities and assets so that they have a more stable basis from which to carry out their trade. Surprise, surprise, one of the assets that the Government say that the banks should have more of are Government gilts. The danger is that if the international markets do not believe us, those gilts might not be much better than the American mortgage bonds that were floated a few years ago and that got us directly into this mess. I want to make a plea to the Government. The point of maximum danger will certainly come when we cannot, or are not going to, print any more money to buy our own debt. Earlier, I made a comparison between the current situation and the phoney war—the lead-up to the war. The comparisons are chilling. In 1938, people came to the House and to the Dispatch Box and told us that there was no real threat from the international situation and certainly not from Germany. Recently, there has been an unwillingness across the whole House to get to grips with the size and extent of the debt. That unwillingness has been equivalent to the denials about the dangers of Nazi Germany. Back then, when the Government started to lose support, they were forced to give a pledge to Poland. An equivalent pledge today is the Bill before us, which the Government would not have introduced willingly, but they know that they need to introduce it if they are to increase the confidence of the markets. In 1939, the then Prime Minister said to Montgomery when visiting the British Expeditionary Force, "I don't think the Germans have any intention of attacking us. Do you?" Montgomery soon put him straight on that. The bizarre denial of that time culminated in the Norway situation, when we all learned just how grave and perilous the position of this country was. I want to end by making a plea to the Government. The Conservative party did not have a terribly good record on Munich, so I am not trying to make party political points here; it is far more serious than that. It is a big regret of mine that in the lead-up to the Iraq war—and I am probably the only person in Christendom who still believes that the Iraqis did have weapons of mass destruction—I did not ask the then Prime Minister an obvious question about the plan for day two. I did not ask about the plan for ensuring that the country did not descend into chaos after the Government had been toppled. I therefore make a plea to the Chancellor, knowing that no one will be able to stand up and say that they have taken the relevant precautions. What defences have the Government thought through for if long-term interest rates do not rise in the way that the shadow Chancellor has described, but start to gather pace? What will our response be? What will be our defence to prevent further deterioration if we lose our credit rating? What do the Government have in the cupboard to ensure that we do not face a gilt strike when the Debt Management Office at the Treasury reports to the Prime Minister that it has not been able to garner enough funds that week to buy up the Government debt? Margery Allingham wrote a brilliant diary on the horrendous drift into war from 1938 to 1939. When the Norway disaster engulfed the country, she wrote of the then Prime Minister, Chamberlain, that he was a "vain old man with nothing up his sleeve." Please, God, I hope that this Government have a lot up their sleeve.