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Comprehensive Spending Review

My Lords, I have to confess an interest in this subject, although it is rather a reminiscent one. As I listened to the noble Lord, Lord Eatwell, my mind went back about 30 years to when I introduced my third Budget to deal with the economic legacy of the Labour Government whom we had displaced. Today, the noble Lord, Lord Eatwell, has not begun to offer anything by way of alternative policy that can be considered by the Chancellor of the Exchequer. I wonder whether he was one of the 364 economists who wrote to the Times after my Budget to say that everything that we were proposing was wholly wrong, without offering any alternative. I know that the noble Lord, Lord Peston, who is not in his place, was one of the leading signature seekers in that exercise. This is not just a frivolous point. They were no doubt sincere in their enunciation but, almost on the day following that and for the next eight years, we had steady, sustained economic growth, inflation came down from the huge figure that we had inherited from the preceding Labour Government and, in the end, unemployment also began to come down. It is worth reflecting on those points. The central defect with which the Government are grappling is comparable. The Government are borrowing £1 pound for every £4 that they spend and the rate of interest that they are paying is costing £120 million a day more than would otherwise be the case. There is no doubt whatever about the necessity of a comprehensive spending review. No one has challenged that. The review has been undertaken with a wide range of sophisticated skills. It has addressed not simply that central problem but a wide range of other policy questions—almost the complete government programme.