Pre-Budget Report

The right hon. Gentleman has, in fact, very neatly made my point for me, because in both cases the problem was an increase in interest rates too early in the cycle, which then choked off the recovery. What I have been arguing and what the Conservatives have been consistently arguing is that the most important determinant of the strength of the recovery will be the level of interest rates and the looseness of monetary policy. Whatever Labour Members might think, it is clear to Conservative Members that the credibility and creditworthiness of Britain requires a plan to deliver what the Governor of the Bank of England has called""a really significant reduction in the deficit…over the lifetime of a Parliament"," which is the period for which a Government are elected. Surely the point is that common sense tells us that for as long as the Chancellor is publicly failing to propose something that meets the minimum requirements set out publicly by the Governor of the Bank of England, markets will be unsettled and they will mark the Government down. Demonstrating political commitment to fiscal consolidation means starting work on the task, not talking about it; it means putting one's money where one's mouth is.