Fiscal Responsibility Bill

The hon. Gentleman makes an interesting point. It is not particularly relevant to the argument that I am trying to make, but I shall respond by making two comments. He presumably supported the withdrawal of the VAT cut at the beginning of the year. That cut was the big part of the Government's discretionary fiscal stimulus and they consider that withdrawing it was the right thing to do. We did not support the cut in the first place, as he knows. I simply make that point to him before he expresses too much certainty on the issue of the withdrawal of fiscal stimulus measures. My second point relates to where the real risk lies. The Conservatives' view is in line with what a number of commentators have said and what the spokesman for one of the credit rating agencies, Fitch, said this morning. We think the real risk is that if this country does not have credible fiscal policies, it runs the risk of its credit rating being downgraded—that is clearly being looked at—and of paying more for its debt. If we pay more for our debt, we will end up with interest rates rising, and that will choke off the economy. So, there is a relationship between fiscal policy and monetary policy—this is exactly the point that the Governor of the Bank of England was making last night—and a judgment has to be made as to when one withdraws the fiscal stimulus and when one tightens these things. Our view is that we need to get on with it.