Fiscal Responsibility Bill

That is set out right at the beginning of clause 1, which clearly states that""for each of the financial years ending in 2011 to 2016"—" a five-year period—""public sector net borrowing expressed as a percentage of gross domestic product is less than it was for the preceding financial year."" Unless growth suddenly takes off at a rate that no one is forecasting or expecting, that means, in effect, that every year there will have to be cuts. That is how most people read the clause, and that is why we object to it. It imposes a very long and substantial straitjacket that may be difficult to implement in individual years, and it sets too relaxed a timetable for the immediate task. Why have some of us been growing hoarse saying to the Government that they need to cut this deficit more rapidly than they are proposing? It is not because we are masochists who came to this place to cut public spending, but because we are deeply afraid that the Government are losing the confidence of the financial markets, and that if they do not take this issue more seriously, more quickly, they could lose that confidence in a very big way. Why does that matter? It matters because it means higher mortgage rates and higher loan rates for small and big business, and because it will lead to lost jobs and lost dreams for people who want to make a living or make a go of something in this difficult economic situation. We are thinking ahead. The Government need not take my word for it. All that they need do is follow the financial markets. If they examine what has been happening even during this extraordinary period of over-borrowing and money printing to offset it, they will see that the cost of credit has been rising. Small businesses are having to pay many times the 0.5 per cent. minimum lending rate. The Government themselves are now having to pay eight to nine times their preferred short-term interest rate if they wish to borrow for 10, 20 or 30 years. The Government should heed the warnings. They do not need to believe the Opposition or the commentators; they should just examine what is going on. Clause 1 is lamentably too little, too late to deal with what has already happened. Once their quantitative easing stops and they stop printing money to pay wages in the public sector, which looks as though it will happen within a few weeks, they may well find that there is another surge in the cost of borrowing, which will be another direct hit against the productive economy, people's aspirations, small businesses and those who wish to gain a mortgage and own their own home. I hope that the Economic Secretary will accept the amendment that my hon. Friend the Member for South-West Hertfordshire moved, because it is a necessary correction to this ill-begotten clause. I hope that he will also reflect further on the wording of subsection (1), which states that the process should take place at a fairly relaxed pace but very mechanically, and see that what we need is a Government who know how to govern and craft a budget for the economic circumstances of the day. We need a Government who know that sometimes we need to go faster in reducing the deficit—now is one of those times—and that sometimes we cannot follow the formula in the Bill because of economic circumstances. All the Prime Minister's previous rhetoric points in the direction of accepting the amendments, so I hope that the Economic Secretary will do so.