That is the first opinion that I have heard expressed on interest rates from any Opposition Member, so it is a start. With the greatest respect to the hon. Gentleman, I will not take his advice on monetary policy. We have achieved an inflation rate of below 4 per cent. for more than four years, which is the best performance this country has seen for almost 50 years. The OECD survey said
Inflation performance over the past 4 years has been remarkably good.
I am determined that it will remain as good for the next four years, once we get this Government back in office.
Will my right hon. and learned Friend explain what the impact on the public sector borrowing requirement would be if local authorities were allowed to spend all their capital receipts? What implications would that policy have for the overall level of interest rates?
The best estimate that I can give is about £2½ billion per year. It is clear that the Opposition are committed to such a policy, but they will not say how they would finance it. If they return to borrowing, which must be one of the methods that they are contemplating to fill the obvious gaps in their public spending plans, that will put upward pressure on interest rates, as my hon. Friend said. That is an irresponsible approach to an area of policy in which the Government are achieving remarkable success.
The Chancellor cannot get away with this snapshot of the past two years. People want to know why the Government have not, in the past 18 years, kept long-term interest rates low. We have had the highest long-term interest rates in Europe, which has meant low investment and poor prospects for working people throughout this land.
With the greatest respect, the latest authoritative figures for European Union inflation show that we are below the average. Our record has been sustained throughout the recovery. I was the first Chancellor to publish this year the International Monetary Fund's article 4 annual report, which says:
The inflation targeting framework for monetary policy has delivered impressive results.
High inflation used to be an endemic weakness of the British economy, and tended to destroy our recoveries. The Government have tackled that problem successfully, which is why this recovery is so healthy.