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Amendment of the law

The hon. Gentleman has put his finger on it. There is a structural demand gap and an output gap in the British economy, and the loss of the financial services sector means a once-and-for-all loss of about 2 per cent. of non-inflationary economic output, which will certainly have repercussions for many years to come. It is absolutely right that the public sector was a major driver, but that will not be there either. One feasible scenario is that we could face a double-dip recession, which is what happened in America in the 1980s. There was a recovery in 1980-81, but the effect of the fiscal stimulus America had embarked upon fell off, taking the country back into recession in 1982. A double-dip recession is as likely as any other scenario, because the growth in public-sector spending is falling.