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The Economy

I certainly accept that growth and the protection of the economy will be difficult because we are escaping from a debt crisis in which we had the biggest boom and the biggest bust. Certainly there are some very important domestic causes of our problems. The massive boom was funded by borrowing—both by the Government and in the banking sector. I also accept that inflation, and especially commodity price inflation, has had a negative impact on the economy as set out by the OBR. Moreover, the Greek crisis broke in the weekend after Labour had lost the election, but before the coalition was formed. The then Chancellor set out that Britain should participate in bail-outs, a position from which this Government have extricated themselves. The euro crisis certainly has had an impact and it broke in May 2010. My first specific point is that I have not yet had an answer to a question that I have been posing on TV, on the radio and in this House, which is how can spending more money lead to lower borrowing?