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Preparing Britain's Economy for the Future

My hon. Friend makes an important point. It is perhaps because the Government cannot get support on their own Benches that this debate has been tabled for the fag-end of the parliamentary week when many Members have dispersed to their constituencies. This debate should be held in prime parliamentary time and be given a full day's hearing, so that all Members can represent their constituencies and voice their concerns. Instead the Chamber is almost empty; we could, in fact, hold this discussion in a taxi cab. That is an embarrassment, and I am dismayed that so few Members are present. That does not take away from the quality of the speeches made, however, which I am sure will make up for the lack of numbers. We are living in extraordinary times. We have just had some astonishing local election results, which left this dilapidated Labour party representing not one single county. We had EU elections in which the governing party scored only 15 per cent.—a score Labour last saw under Michael Foot. We have also witnessed 11 Ministers resign from the Government, and, as my right hon. Friend the Member for Richmond, Yorks (Mr. Hague) teased out in the recent debate on Europe, even the Foreign Secretary considered resigning. I do not know why he felt the need to tell everyone he had considered resigning, and I am not sure how helpful that was to the Prime Minister; the Foreign Secretary must answer that for himself. We should bear in mind the fact that the backdrop to all this is one of the worst economic downturns we have ever seen, and it is understandable why the nation is losing its patience with the Government. There is an increasing need for a general election to be called, rather than having a Government limping on towards the final date—the endgame—next May. It is sad that we cannot muster many Members to come here to debate properly issues such as the obscene sums that the Government are throwing in such a reckless way at the economy. Their approach will encumber every newborn child with a debt to the tune of £22,500. The reason why the Government are able to cling on, and why the Prime Minister has not been ousted, is because his weakness is overshadowed only by the weakness of those who tried to oust him. Again and again we hear the call, which I am sure the Minister will repeat, that this is a global economic downturn, so many of the problems are not vested in Britain. It is a global economic downturn, but each country is having to manage the effects in different ways, and the cause of that is the rules and regulations that are or are not in place in each country. What happened when this Government came to power? They made the Bank of England independent, and straight away the Bank lost crucial powers to regulate the banks. That was the first schoolboy error made by this Government, and it led to the level of borrowing getting out of control; banks were lending people sums that they could not afford, in ways that they did not understand. We hear again and again from the Prime Minister that the situation in the United States is to blame for the downturn in our economy. Perhaps some aspects of the situation there can be blamed—what happened to Fannie Mae, Freddie Mac and the sub-prime market—but it was not the Americans who were allowing Bradford & Bingley to offer 125 per cent. mortgages. That was very much a British issue, which happened under the tutelage of this Government. It went unrectified, and that is why we have the current levels of debt. The Government then say that they have the answers and that other countries are copying them. Perhaps the hon. Member for Twickenham (Dr. Cable), who speaks for the Lib Dems, will wish to expand on that. The coupon rate at which we lent to our banks was about 12 per cent. How can the Government, the lender of last resort, possibly expect to lend money to banks in that way and then expect those banks to pass the lending on to small and medium-sized businesses at the going rate of about 1 or 2 per cent? Banks will not do that, which is why small and medium-sized businesses up and down the country are suffering because they cannot get the loans they need to see them through this very difficult period. Another Government initiative was to reduce VAT to 15 per cent. at a time when businesses up and down the country were slicing the cost of their products—the discounts were already 10 or 15 per cent. How was 2.5 per cent. off VAT going to help? That was a gimmick, but it is not over yet, because VAT will go back up to 17.5 per cent. Guess on which day that is due to happen? VAT will go back up when Big Ben chimes midnight on 31 December. The industry that I represent as a Front Bencher—the tourism industry—is up in arms, because that is one of its busiest days. Businesses will have to run two tills that evening; they will run one up to midnight and another from midnight onwards.