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The Budget

The hon. Gentleman has an important point. I accept his charge to an extent, although I do not remember Plaid Cymru making many points about it at the time. Our view was common to all parties. The financial system was expanding and financial services were booming in Britain. Yes, a lot of our growth—at least 40%, I recall, around the 2007-08 period—came from the financial sector and everyone was benefiting from that. In retrospect, however, the previous Government placed too much emphasis and reliance on the financial sector, and insufficient emphasis on manufacturing, which is why we changed course in the latter part of our time in office. However, nobody was criticising us at the time for the strength of our financial sector. We come again to one of the essential foundations used by the Government to argue for this Budget. What is the truth about the annual deficit? Before the financial crisis, borrowing was far lower than in the Tories’ final year in office. It shot up after 2008 due to the recession, but the deficit was never out of control under Labour. The Office for Budget Responsibility reckoned that borrowing last year would come out more than £10 billion lower than we forecast. Blaming the Labour Government for the extra borrowing caused by the global credit crunch is like blaming the coalition Government for the increase in the world price of oil. What is the truth about public investment? Yes, Labour increased investment in public services that the Tories had starved of funds for years and years. We built more schools and hospitals. We opened Sure Start children’s centres. We developed the road and rail networks. We built more houses. After the financial crisis struck, Labour also boosted public investment. We brought forward £30 billion of investment planned for future years, raising public investment to record levels. We invested for growth in the good times, we invested to stave off collapse in the bad times, and we invested for growth to secure the recovery. That is the true story about public investment.