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Finance Bill

The hon. Gentleman has just read out a completely irrelevant quotation. I asked why the Government missed so badly the forecast for this year’s deficit, and the hon. Gentleman proceeded to read out a passage about the deficit for the financial year 2003–04 having been greater than that for 2004–05. I shall not make the mistake of giving way to him again, because that has not advanced the argument at all. He was clearly engaged in an exercise of obfuscation, perhaps in order to defend his right hon. Friend the Paymaster General. There is a third big question-mark over the direction in which the Government’s management of the country’s finances is going; indeed, it has been discussed quite a lot recently. Is the Chancellor about to face the dilemma of breaching his golden rule? Will he have to put up taxes or cut spending? The jury is still out on this issue, and I shall not go into it in detail as it has been well aired in recent public debate. All independent forecasters are considerably pessimistic about the Government’s chances of meeting the golden rule and balancing the current budget through the cycle, given that it is supposed to finish at the end of next year, without recourse to further taxes. This is an important issue not so much because of the potentially severe economic impact of breaching the golden rule or of increasing taxes—we would all very much regret such increases—but because the damage to the Government’s credibility would be enormous. We would realise not only that the Chancellor had missed a whole series of forecasts, but that at the end of the cycle, he had failed to observe his own rule. He started out with the immensely ambitious plan of more than meeting the golden rule—of having a surplus over the whole cycle of more than £100 billion.