---

Comprehensive Spending Review

We were, as the hon. Gentleman know, hit by the large—[ Interruption. ] I shall answer the question. We had a particularly large financial sector, and as a result of the global banking crisis we were harder hit. Everybody understands that. Even GCSE economic students understand that that is why we were badly affected. The extra public spending that I was describing, coupled with the loss of tax revenue as output profits and employment fell, led to much higher Government borrowing. Of course it did. It is that extra borrowing—that much maligned deficit—that has kept the economy afloat in the face of the worst downturn since the 1930s. Without the borrowing that is so strongly criticised by the Conservatives and the Liberal Democrats, the financial crisis could have become a financial collapse and the recession could have turned into a depression. The IMF has acknowledged that the worldwide increase in Government borrowing since the 2008 credit crunch staved off an economic catastrophe. It certainly did, as a result of our then Government’s actions.