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Government Capital Expenditure

Part of Opposition Day — [3rd Allotted Day] – in the House of Commons at 5:30 pm on 2nd February 2009.

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Photo of David Gauke David Gauke Shadow Minister (Treasury) 5:30 pm, 2nd February 2009

I will give way, but I shall just make this point. The hon. Member for Twickenham mentioned the structural difficulties created by the collapse of our housing market and financial services, but the problem goes back further than that. Essentially, it goes back to the reckless running of the public finances in the early part of this decade, when during boom years we were still borrowing huge amounts and organisations such as the International Monetary Fund were warning the UK Government that the fiscal position was unsustainable.

My party was making that point; my right hon. Friend Mr. Letwin made it as shadow Chancellor. Indeed, we entered the 2005 general election making that warning—I am not sure that it did us much good, but none the less we made the case. At the time, the Government and the Liberal Democrats dismissed it. The hon. Member for Twickenham said:

"We should not be panicked by the IMF into early tax increases or expenditure cuts, which would be damaging in the short term."

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