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Mortgage Interest Payments

Part of Orders of the Day — Finance Bill – in the House of Commons at 8:15 pm on 15th July 1997.

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The shadow Chancellor has no idea of financial management, in that he has no idea whether interest rates should or should not have gone up in recent days. He will say nothing, one way or the other. Why? Is he worried about the view of the financial markets, or about the view of Back Benchers—or is he worried that he does not really know the answer? It is probably a combination of all three.
As we know, the amendment is about increases in interest rates after the election. We also know about the meetings between the Governor of the Bank of England and the last Chancellor of the Exchequer, who called the shots in terms of political interest, but held back interest rates against the long-term interests of the economy so that they would surge back after election day. The amendment suggests that the legacy of the last Government's political interference should interfere with the purity and elegance of the Government's proposals.
Incidentally, the amendment and the former Chancellor's behaviour in the past show that monetary and fiscal policy were governed by political considerations and were not designed to meet the country's long-term economic interests. That is why the Tories presided over the old boom-and-bust economy.
Many of us will remember the time when interest rates were at 15 per cent. We remember when we marched boldly into the exchange rate mechanism, and we remember arguments about the rate at which we entered. We did not know what we were doing. Then, suddenly, George Soros did a bit of manoeuvring, and everything collapsed. That was how we ended up, thanks to the politics and economics of the short term, and it is why we do not need any lessons from the wine bar about how to run an economy in the short term. I am beginning to dwell on specific statistics here, but it is preposterous that the hon. Member for Daventry (Mr. Boswell) can sit there and suggest that figures taken from the House of Commons Library today are wrong, although that is typical of the arrogance of the former Government.
I note that no one has bothered to look up the figures given some time ago by the hon. Gentleman. I may as well give them now. In November 1993, the interest rate was 5.5 per cent. It was in the Budget produced at that time that the Conservative Government decided to reduce MIRAS. By January 1996, the interest rate had risen to 6.25 per cent. By that time, we had seen two reductions, from 25 to 20 per cent. and from 20 to 15 per cent.
The behaviour and policy of the last Government were in direct contradiction to the amendment that we are discussing now. The Conservatives do not even remember what they did. Anything that is easy will be cobbled together in an attempt to mount some ludicrous opposition. There is a ragbag of hon. Members complaining about the guillotine. It is pitiful, is it not?