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AMENDMENT OF THE LAW

All I could understand from what the hon. Lady said was that apparently the roof fell in at that time. The right hon. Member for Fylde made some interesting points about inflation, and the high interest rates in this country. My answer is that if he wants lower interest rates we should join the euro; the interest rate for the eurozone is much lower. He talked about the cost of commodities in what is a global marketplace. That is one of the reasons why we are experiencing price inflation. The Leader of the Opposition said that it was running at 7 per cent. The price of wheat has gone up, and there is a shortage of wheat in the world. We are living in a world marketplace—a global economy—so that is affecting our country, and creating price inflation here. Commodity prices are going up. The prices of gas and oil are increasing. That is having an impact on inflation. That is why it is to the Chancellor’s credit that he put low inflation, growth and stability at the centre of today’s Budget. Instructing the Bank of England to keep inflation at 2 per cent.—not 2.5 per cent.—shows that the Government have a firm determination to keep inflation down, to keep our growth rate steady if possible, and to maintain stability in our economy. Interestingly, the right hon. Member for Fylde also mentioned Merrill Lynch. Because of the nature of the global marketplace, Merrill Lynch is being sued by Adelaide city council over bonds it sold to the council which included some sub-prime mortgage elements. He also mentioned BCCI—the Bank of Credit and Commerce International—but I will not go down the historical road, as you have told me not to, Mr. Deputy Speaker. However, the fact is that all the current perturbations in the financial markets are being dealt with by a pool of banks, which did not exist back then. I accept that we have strayed somewhat from the subject of the Budget over the past three hours, and I intend now to return to some of its specific points. The former Chancellor—now the Prime Minister—has been criticised for his last Budget. All I remember about it is that he said that we would remove the 10 per cent. rate of income tax, which we will now do; instead of specifically targeting support on pensioners, families and low-income workers, we will move to a simpler two-rate system. Pensioners have been mentioned—for example, by the hon. Member for Dundee, East. We are raising the personal allowances for pensioners by £1,180, taking the allowance for anyone over 65 to about £9,810 by 2011, and with a further increase to £10,000 for anyone over 75. That seems to me a reasonable record for the former Chancellor to have had as he moved on to become Prime Minister. Early in the debate, much was said about our child poverty programme—for example, by my right hon. Friends the Members for West Dunbartonshire (John McFall) and for Oxford, East (Mr. Smith) and by the hon. Member for Dundee, East. The Budget will increase child benefit to £20 a week from April 2009. We will disregard child benefit in calculating income for housing and council tax benefit purposes from October 2009, and we will increase the child element of the child tax credit by £50 a year above indexation from April 2009. That is not a bad beginning for an attack on child poverty. The essence of the Budget is stability, growth and low inflation. I am glad that the hon. Member for Beckenham is present, because she talked about the current crisis. The financial turbulence is linked with rising commodity prices. She also mentioned the financial move of the pool of £10 billion being made available through the Bank of England and the $200 billion coming from the United States, and she wondered whether it was printed money. It is not printed money; it is a circulation of money. That is a difficult concept to explain, but it is not about money being printed. When the Bank of England got its act together on 12 December—when it allied itself with the Bank of Canada, the European Central Bank and the Swiss National Bank, and expanded the total amount of reserves offered at three-month maturity against a wider range of collateral—it laid the foundations for maintaining stability in the financial markets. That stability is the cushion on which the rest of our economy will grow. Our growth rates will fall to about 1.25 per cent. but we will not fall into a recession. We will not talk ourselves into a recession, either. We will support the Budget with its emphasis on stability, low inflation and growth, and we will steer our way through the difficulties in the financial markets. That is why I congratulate the Chancellor on his Budget. I wish him well—as will the rest of the House, if it has any sense.