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Finance Bill

The hon. Gentleman's memory is short. During the 10 years that my right hon. Friend the Prime Minister was in post as Chancellor, there were a number of pauses in the global economy, to say the least: the dotcom collapse, the Asian collapse and American problems in the early 2000s. One of the only economies that survived and prospered was this one. The Chancellor was entitled to take some credit for the stability and growth that this Government brought forward from 1997. The hon. Member for Tatton, having said that the credit crunch could not have been foreseen, and having claimed that we should have foreseen it, said that we cannot rush to judgment and that not every problem"““needs a new law or piece of regulation.””" He went on to say that to survive the credit crunch, we must change the rules. Which is it? Does he say that all is well, or does he think that there ought to be intervention of the sort mentioned earlier by my right hon. Friend the Chief Secretary? Following that article, the hon. Member for Tatton made a speech at the Policy Exchange on 14 April attacking my right hon. Friend the Prime Minister, saying that his economic legacy had collapsed. He referred to the ““three pillars”” of my right hon. Friend's economic policy collapsing. That would be a damning indictment if it were accepted by serious commentators in the economic field. When I heard the hon. Gentleman make his speech, I asked myself where this idea of three pillars collapsing came from. Lo and behold, the day before, Lord Lamont had also written an article, for The Daily Telegraph. No doubt the right hon. Member for Witney—who advised Lord Lamont at a particular time in the life of the previous Government—and the hon. Member for Tatton had got their heads together on the Policy Exchange speech because Lord Lamont said in his piece of 13 April:"““Contrary to what the Government have been saying, the UK is not well positioned to withstand this crisis. Whether it be the rise in house prices, mortgage debt…or personal indebtedness””." That is the line that many papers have run, probably for a month or more. If those were the facts, they would be quite worrying to my constituents. I have set out how what the Opposition are saying is opportunistic and contradictory, but it is also wrong. The case made by Lord Lamont is simply wrong. Why do I say that? Ruth Lea, a well-respected economist, but no friend of the Labour party—she never has been and never will be—used to be the finance director for the Institute of Directors, and she contradicted Lord Lamont and the hon. Member for Tatton when she said, very recently, that the British economy was very well placed to withstand the credit crunch in terms of stability. She said that that was the case for three reasons: low interest rates, in contradistinction to circumstances when other credit crunches caused severe recession, pain, negative equity and so on; low inflation; and high and improving levels of employment, a point made earlier by my hon. Friend the Member for Middlesbrough (Sir Stuart Bell)—we now have record employment. Those three factors were completely absent in 1991, 1992 and previous recessions. As for other economic commentators, in case there were any doubt about whether the economy is in good shape to withstand the credit crunch, David Smith said last week in The Sunday Times:"““If you are in America, with barely any growth, or Italy, with today's election being fought in an economy predicted to grow by only 0.3 per cent., things feel grim…As for Britain, the IMF's forecast of 1.6 per cent. growth for this year and next is stronger than America, plainly, but also outstrips Germany, France, Italy and Japan.””" He went on:"““It may not be a great prize to win, but over the next two years Britain will vie with Canada to be the strongest-growing economy in the G7.””" That does not fit the description of a country that is acutely vulnerable to the credit crisis. David Smith's final point shoots the fox that some newspapers and Opposition Members have been trailing for the past month or so. He comments on the circumstances of credit crunches and squeezes in the past, and analyses three or four previous examples. In summary, he says that, on each and every one of those occasions, the credit crunch lasted for a certain period and was then over, with the economy back on an even keel. He measured three previous credit squeezes as lasting between six and 18 months. He said that we are already seven months into the current credit squeeze, which began roughly in August last year, and, unless those previous historical circumstances—I am talking not about pre-history but about events in the 1990s, 1980s and 1970s—are completely different from our position now, he guesstimates that we will get through it very soon or a little later. David Smith therefore says that there are two sets of circumstances. First, the economy is in good enough shape to withstand whatever the credit crunch throws at us, contrary to what Opposition Members argue. Secondly, even if we are more vulnerable, only some months are left, hopefully. [Interruption.] The hon. Member for Northampton, South laughs. Does he wish to intervene?