Alistair Darling: I shall give way to the hon. Lady first.
Alistair Darling: First, I said on many occasions that the right thing to do was to hold a spending review this year, before the end of the current review period ran out. There is still a lot of uncertainty, as I shall explain later, and the hon. Lady would do well to remember that at present, while we are coming out of recovery, our growth is modest. I hope we will see recovery secured, but what is happening...
Alistair Darling: I will give way to my hon. Friend the Member for Huddersfield (Mr Sheerman), and then I shall make some progress.
Alistair Darling: I think it is necessary for anyone charged with responsibility for the British economy to take a measured approach. If things are difficult, they have a duty to speak out, even when that causes them some problems, as I found out myself a couple of years ago. I think it is better that we do that, than not. Equally, however, it does no good to go running around saying the situation is...
Alistair Darling: No, I do not agree with that. I think the hon. Gentleman will find that an awful lot of things that went wrong in 2007 were a result of what went wrong in the banking system, not just here but in other parts of the world as well.
Alistair Darling: The Governor was making a very fair point, as he does on many occasions. It is interesting that even in the past couple of days Government members-the Prime Minister yesterday, and one or two of his ministerial colleagues-are rowing back from direct comparisons with Greece because that may have been very convenient to them in opposition, but it might not be such a good idea now that they hold...
Alistair Darling: I am grateful to the hon. Gentleman for accepting what is obvious: the fact that during a recession Governments do have to borrow in order to support their economies. However, I should remind him that during the earlier part of the previous decade the Conservative party supported our spending programmes, saying that they would stick to our spending levels. The Prime Minister, when he was...
Alistair Darling: I agree with my hon. Friend. The new Government will find that for every industrialist or manufacturer who says that public spending needs to be cut, in areas that benefit from such spending people take a rather different view. The car scrappage scheme is an example of that, and it made a huge difference to the car industry and the motor vehicle industry in general. As the hon. Member for...
Alistair Darling: What economists call the "automatic stabilisers" are still operating and are still supporting the economy. I have always been clear about this, and I believe that the deficit has to be reduced. One of the reasons why I wanted to halve it within a four-year period was that I wanted to get it down in a way that did not damage the economic or, indeed, the social fabric of the country while that...
Alistair Darling: Before I leave this point I should say something further because a number of hon. Members mentioned our spending in the earlier part of our Government. It is not just about what we did during the recession; it is about the fact that over the relevant 10-year period, there was an unprecedented decade of growth such as this country had not seen before, as well as low interest rates, low...
Alistair Darling: My right hon. Friend is right. No doubt there will be another occasion to revisit the lend-lease arrangements that the then Government entered into in the 1940s, although I commend to the House Lord Robert Skidelsky's excellent third volume on Keynes, which deals with this matter quite extensively. Some people thought that we got a pretty bad deal in 1943, but there you are.
Alistair Darling: I shall give way to the hon. Gentleman who I think used to advise the Chancellor at one point.
Alistair Darling: No, I do not think that was the main problem. The system of regulation that we introduced in 1998 brought together about eight or nine different regulators-self-regulators, as the Conservative party used to be very keen on self-regulation. The problem in relation to the Financial Services Authority, the American regulators and most other regulators was that they simply did not understand the...
Alistair Darling: I shall give way to the hon. Lady. It might be a mistake, but I will.
Alistair Darling: I am glad that I gave way to the hon. Lady for at least the first part of her intervention. I do not agree with her on the second part, but I should like to address that point now. It is true that our borrowing has risen very substantially-
Alistair Darling: I shall not give way. I want to make some progress, because I know that many hon. Members want to make their maiden speeches, and I do not want to be blamed for not allowing them to do so. I might give way before I finish, but not just now. As I was saying, borrowing has clearly increased, but that has to be put into perspective. Our deficit for this year is broadly similar to that of the US....
Alistair Darling: That is indeed right, and many people in the construction industry say that an already difficult situation would have become much worse if we had not done what we did in 2008-09. Not many Conservatives or Liberals-we must include the two together-now stand up and say, "Actually, in retrospect, we shouldn't have been supporting the construction industry." I rather get the impression that they...
Alistair Darling: I will give way, for the last time, to the hon. Lady, whom I last met in a BBC studio. I got the distinct impression that she did not like Scottish accents, so I cannot resist.
Alistair Darling: I agree with that. If the hon. Lady is worried about spending cuts, she is going to have an interesting time over the next few months. I look forward to the exchanges that she has at future Question Times. As I draw to a close-
Alistair Darling: No, I am not going to give way. I want to draw attention to one of the biggest problems that I see in the future. I know that Governments in countries right across the world have to get their borrowing down and reduce their deficits. However, I am particularly worried that, if we do not have some countervailing pressure to support growth and measures to get growth in our economy, we run the...