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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 5:24 pm on 20th April 2004.

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Photo of Mr Howard Flight Mr Howard Flight Shadow Chief Secretary to the Treasury 5:24 pm, 20th April 2004

The Keynesian theory does indeed advise borrowing when an economy is below capacity, but it also advises being in surplus or at least in balance when an economy has moved to capacity. What we have criticised is not the possible use of Keynesian measures when an economy is operating below capacity, but the fact that we are now at full capacity and, rather than borrowing trailing off, it stands at £30 billion or £35 billion and possibly £13 billion more than that. That is our essential point. We have not been saying that it is wrong to borrow when an economy is underperforming.