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The Economy

I will not give way again—we have only 12 minutes and I want to concentrate on the one policy that the Conservative party has presented. They have clung to it and been almost mesmerised by it, but we know almost nothing about it except that it would encounter the same difficulties of implementation as our policies. The Opposition propose to guarantee £50 billion to industry—that is a big number. They claim that they will rely entirely on the banks’ commercial judgment to administer it. Who in their right mind would go to the country at this time and say, "We’re taking £50 billion off you taxpayers, on top of everything else you had to put into the banks, and we’re going to trust the banks unconditionally to administer it"? It would not carry any element of credibility. The Opposition must do better. [Interruption.] If the hon. Member for Runnymede and Weybridge (Mr. Hammond) listened, he would learn that the Opposition must establish criteria and get whatever collateral and the best security they can. I underline the latter point to my right hon. Friend the Chief Secretary. One cannot dole out public money without taking whatever collateral one can get. I agree with my right hon. Friend the Chief Secretary that we will not get the best collateral in the current climate. We are in that position because assets are wobbly, cash flows are uncertain, unemployment is rising and it is difficult for companies to borrow in the normal way through bank lending. Banks have been smashed by their irresponsibility in the duff loans that they have made. Yet the Opposition ask us to trust those very people to administer a scheme of £50 billion. That does not stack up. The Opposition have the further brazen cheek to say, "This won’t be Government spending." So not one pound of the billions of pounds that the Opposition propose to spend, administered by banks, will be lost. Who could believe that? It is incredible that the Tories are pushing the Government to deliver on promises that mean spending billions of pounds while simultaneously claiming that they would not spend that money, but give some quango £50 billion to give to the banks to give to any old industry they think fit. The House must soon confront the problem, which is all over the papers, of LDV in the west midlands, where I am happy to represent a constituency. I do not want to prejudge the outcome of the case, but the company has been closed since December and had made losses in recent years. By its own account, its forward projections were entirely dependent on producing an electric van. It started off by saying that it needed £30 million or £40 million. Let us imagine that we took the Opposition’s £50 billion, gave it to a bank and said, "Go ahead—save this company for us". It would be the height of irresponsibility. I do not know how the Government will come out of the case, but it shows the sort of difficulty that huge Government schemes pose. We must consider the balance of risk. Are we to risk taxpayers’ money in a case, which one knows in one’s head will not work a few years down the road, but will get through the next 18 months—after that, the money will be eaten up and the company has to close anyway—or are we to stand up in a recession and say that we cannot help? I do not want to prejudge the LDV case, but it shows the difficulties that can arise with Government-guaranteed funds. Such money should be counted as expenditure and a large element of public accountability must be built into the process. Difficulties are arising with that.