Economy, Pensions and Welfare

Part of Debate on the Address – in the House of Commons at 5:48 pm on 15 December 2008.

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Photo of Vincent Cable Vincent Cable Shadow Chancellor of the Exchequer, Liberal Democrat Spokesperson (Treasury) 5:48, 15 December 2008

The European Commission is not always right, and on this occasion I think it is wrong, for two reasons. The first is that although the British economy undoubtedly has problems—the British fiscal deficit is one of the largest in the western world—British public debt in relation to the economy is not exceptionally large. It is lower than in the United States or in Germany, which puts Mr. Steinbrück's comments in context—but I do not totally disregard what the Conservative spokesman said; we have to be careful. We are already beginning to see that highly indebted countries such as Italy are finding it increasingly difficult and costly to borrow in international markets. If we reached that point, we would be in some difficulty. What he says is not completely wrong, but there is much scope for the Government to act, and they should act.