Will the Chancellor consider undertaking a comprehensive analysis of the number of small businesses and their employees who have fallen victim to the Government's high interest rate policy? Because of the importance of small businesses to the Scottish economy and to the rural economy in general, will he ensure that interest rates are taken into consideration combined with the importance of the business rate, which in Scotland runs at 58p in the pound as opposed to 38·5p in the pound in England?
Insolvencies in 1990 were under 1½ per cent. of the total stock of businesses. That should be kept in context, because there has been a dramatic rise in the number of new businesses formed in recent years. What really matters to businesses is getting inflation down. It is clear from the figures that the Government's strategy against inflation is succeeding month by month. We must not let up because it is most important for businesses.
The people will have noted the Chancellor's view that the economic damage suffered because of high interest rates has been so slight. Is not the truth that the damage has been not only severe, but wholly futile, because the Scottish economy has been dragged into an unnecessary recession by an interest rate policy designed for the economic conditions of the south-east of England? Whatever combination of the Chancellor's predecessors he chooses to blame, what responsibility will he accept for the economic blunders of the past few years?
The hon. Gentleman will recall that my right hon. and learned Friend the Chief Secretary to the Treasury drew attention to how well the Scottish economy has withstood the recession that has affected the rest of the country. As I said to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), there is no gain for business in policies designed to accommodate inflation which is what the hon. Gentleman appears to want. He talks about the recession here as though there were not also a recession in the United States, in Canada and in several other countries.
I welcome my right hon. Friend's comments on interest rate policy, but does he agree that businesses are anxious to know that the progressive nature of the half percentage cuts month by month is also part of that policy? Will he comment on the extent to which we shall be able to maintain such a policy for the United Kingdom and not have it deflected by European requirements?
My hon. Friend will understand that I cannot anticipate or reveal the future trend of interest rates as I see it. I have made it clear that further reductions in interest rates must depend on progress month by month against inflation. Business and the House very much welcome the fact that, far from our being boxed in by membership of the exchange rate mechanism, we have reduced interest rates by three points since we joined the ERM and by two points since December.