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The Budget

I am grateful for that question and for the gracious welcome to the Committee. It is worth pointing out in response that of course the UK continued to be able to finance its debt, but credit rating agencies were starting to put that in doubt. The right hon. Gentleman knows that during the last few months of the previous Government credit rating agencies were putting Britain on negative watch in relation to the triple A, gold-standard rating that we continue to enjoy. He knows that investors in the bond market were saying, for example, that we were resting on a bed of nitroglycerine, which suggested that they did not have confidence that the plan—such as it was—that the previous Government had set out was sustainable. The right hon. Gentleman also knows that in the first few months of last year, UK bond yields were tracking with those of countries such as Spain and Italy. Since this Government came into power and since the emergency Budget, they have been tracking much more closely with those of countries such as France and Germany. It is a testament to the credibility of the plan that this Government have put in place that, despite our having a larger deficit than countries such as Portugal, our bond yields are much closer to those of countries such as Germany and France.