Finance Bill

Sajid Javid Excerpts

Tuesday 6th July 2010 Commons Chamber

[Mr Jones]

I am grateful to my hon. Friend for raising that point. A Bank of International Settlements report that I looked at this morning—it is worth looking at, and I suggest that anyone who has a spare half hour, or who suffers from insomnia later tonight, read it—contains an interesting graph showing exactly where debts are: 70% of Greek debt and 50% of US debt is held by non-residents, but for the UK the proportion is 30%. That makes my hon. Friend’s point well.

Ministers increasingly raise the spectre of Greece. For example, last week the Secretary of State for Energy and Climate Change said that the Chancellor had said that the Budget was necessary because otherwise Britain would be in danger of not being able to pay its way in the world. Public debt in Greece is the highest in the euro area at about 120% of GDP. It also has one of the highest fiscal deficits in the OECD, with 14% of GDP. I do not seek to minimise the UK’s debt—it needs to be dealt with, and we set out a clear plan to tackle it—but it rose 20% in the last couple of years for a very good reason. We faced a massive economic downturn, and investing the money was the correct thing to do to ensure that we did not go into not only a recession, but a long-term depression. I remind new Conservative Members that when those who are now in government were in opposition, they got it wrong on Northern Rock and wrong on how to deal with the banking crisis. Did they ever oppose anything that we did on that? No, they did not; they supported our measures. Their approach would have got us into a complete mess.

The UK debt is 68% of GDP, which is much lower than the euro area average of 79%. Our fiscal deficit is 11%. However much people try to portray our borrowings as on a par with those of Greece or some of the other basket cases—as the press call them—that is just not so. It is the same with the return on bonds. In the US it is 3.58% and in Germany 2.5%. In addition, we have to recognise what type of debt we have. Those who are following the war plan to frighten everyone might fall for the suggestion that somehow our debt has to be repaid tomorrow. We are even hearing some of the nonsense that we heard in the Thatcher era about the idea that the UK economy—or a business—should be run like a personal bank account. That is complete nonsense. If people look at the chart on page 68 of the Bank for International Settlements report, on the maturity of debt, they will see that for the UK it is 14 years. In the US and Germany it is under nine years, and Greece has some debt on short-term loans of two years, with an immediate requirement to repay. The idea that we are in such a mess that we have to repay debt now, and so need this emergency Budget—with all the damage that the VAT increase and everything else will do—is utter nonsense.

[Sajid Javid (Bromsgrove) (Con)]

While what the hon. Gentleman says about the duration of the Government’s debt is correct, what is of more importance now is the amount of borrowing that the Government have to do on a weekly basis because of the size of the deficit, which is—at 13% of GDP—the largest in Europe. We are borrowing roughly £3 billion a week, and that has nothing to do with the duration of the debt. Regardless of the duration, if the deficit is not addressed we will still be in the market trying to borrow £3 billion a week. That is one of the reasons why the auction that my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) mentioned earlier failed in the markets.

Budget Resolutions and Economic Situation

Sajid Javid Excerpts

Thursday 24th June 2010 Commons Chamber

[Sajid Javid (Bromsgrove) (Con)]

I pay tribute to those hon. Members who have made their maiden speeches today. My hon. Friends the Members for Staffordshire Moorlands (Karen Bradley), for Hendon (Mr Offord) and for Camborne and Redruth (George Eustice), and the hon. Member for Kingston upon Hull East (Karl Turner), all made excellent maiden speeches.

After 13 years of Budgets that were predicated on the mistaken notion that boom and bust had ended, it is hugely reassuring to see a Budget that restores some fiscal sanity. This Budget puts at the heart of our economic policy the restoration of our nation’s finances and the laying of foundations for stronger economic growth. In response to the hon. Member for Walsall South (Valerie Vaz), however, I must add that we do not know what the previous Government’s legacy is, because some costs of the past two or three years’ actions have yet to be borne—but will be unless this Government take preventive steps.

I shall not dwell on what has been bequeathed to us, but I must mention a few statistics that speak for themselves. The budget deficit is more than 11% of GDP, and the largest of all advanced nations; the visible national debt is 68% of GDP; and a record 28% of the adult working population—8 million people—are currently described as “economically inactive”. Despite all Labour’s efforts, no amount of spin can hide the truth of the abysmal inheritance that we have been given. Once again, it has been left to a Conservative-led Administration to clean up the mess of a former Labour Administration. As it says in the Budget, we have to start doing that by addressing this record peace-time deficit.

I am somewhat surprised that Labour Members continue to act as though we can keep living beyond our means, when only £3 in every £4 of Government spending is raised through general taxation. Only eight weeks or so ago, even the Labour leadership admitted during the election campaign that if they won the election they would have to carry out severe cuts as well. There were various estimates, but they averaged about 20% of real cuts in unprotected Departments over the course of the next Parliament. Notably, the then Chancellor of the Exchequer said in an interview that if he were re-elected he would have to make bigger and deeper cuts than Margaret Thatcher did in her time. Now, however, Labour Members act as though those cuts are not necessary and we are able to make a choice.

[Jonathan Reynolds (Stalybridge and Hyde) (Lab/Co-op)]

It is not the reduction of the deficit that is the point of conflict between us but the scale and the speed of doing it. Doing it in the way that has been proposed risks pushing the economy back away from growth and into recession. In that situation, the deficit will increase, not decrease. Does the hon. Gentleman accept that point?

[Sajid Javid]

The hon. Gentleman’s own party said before the election that it expected to make very large, severe cuts, in the order of about 20% in real terms. Our Budget proposes cuts of about 25% in real terms in unprotected Departments. Is he really saying that the only thing bothering him is a difference of 5%? I have not heard anything from Labour Members in the past two or three days that remotely suggests how they would achieve the 20% cut that they have talked about.

James Carville, who was President Clinton’s political adviser, once famously said:

“I used to think if there was reincarnation, I wanted to come back as the President or the Pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everyone.”

Soon after that, President Clinton abandoned his plans to increase borrowing, recognising instead that, even at that time, he had no choice but to balance the budget. I have traded in the international bond markets for many years, and working on a trading floor I saw for myself just how severe the financial crisis was. There is no question but that we would have faced economic problems regardless of the actions that were taken by the previous Government, but their actions made things worse, and that is the key. The situation has been made worse by the huge amount of borrowing that we have taken on since that time.

[Mr Tom Harris]

Does the hon. Gentleman believe that it was right for the Government to bail out Northern Rock?

[Sajid Javid]

Personally speaking, on my own behalf, I would not have carried out the bail-out in such a way. I think that the true consequences and costs of that bail-out are yet to be borne out.

I know from my own experience of the bond markets that they take no hostages. We now depend on them utterly for the nation’s finances. My right hon. Friend the Secretary of State was absolutely right to point out that we face a major sovereign crisis unless we take serious action. Some Labour Members have said that it does not look as though we have had problems with financing our budget deficit to date. We borrowed about £225 billion in gilts in the last financial year, but at the same time, the previous Government, through the process of quantitative easing, printed about £225 billion of new money. It is therefore not difficult to work out how, in effect, much of that borrowing was paid for.

The United States was the only other major economy that went through a process of quantitative easing, and we cannot use it as an example to compare with ourselves because, as we know, it has a reserve currency and we do not. That makes its situation entirely different when it comes to such an economic policy. The only other country in the world that I can think of without a reserve currency that went ahead and printed money at about the same time as us—indeed, before—was Zimbabwe. It is rumoured that the Finance Minister of Zimbabwe sent a note in 2008 to the then Chancellor of the Exchequer offering him his economic advice in exchange for lifting visa restrictions on him and his family. I think the then Chancellor took the advice but did not give anything in return.

The bond markets are picking off grossly indebted nations one by one with rising bond yields and falling prices. We have heard today about Greece, and we have seen what has happened in Ireland, Portugal, Spain and Italy. Those who observe the markets carefully need only look at what has happened, to a lesser extent, in France in recent weeks, where problems have started. That is why France, too, recently announced an austerity package. We have no choice but to reduce the record budget deficit, or else we will face an economic crisis of cataclysmic proportions.

[Chris Williamson (Derby North) (Lab)]

I would be interested to hear what the hon. Gentleman has to say about Professor David Blanchflower’s comments yesterday. He said that the Budget made him more certain that there would now be a double-dip recession, with no room for manoeuvre because interest rates are already so low. Would the hon. Gentleman comment on that?

[Sajid Javid]

Yes; Professor Blanchflower has been consistently wrong for the past three years since the crisis started, and he was wrong in what he said yesterday.

We have no choice but to cut the deficit, and that requires both cuts in spending and the raising of taxes. As we have heard today, we have to a strike a balance between the two, and the burden must fall on public spending. We have no choice about that, because if we raise taxes too much we will destroy the very incentives that we need to create the growth that will get us out of this economic mess.

As we go through that process, we must naturally try to protect the most vulnerable as much as we possibly can. Opposition Members have accused us of being ideological about the matter, but how can we be anything else? They are absolutely right, and there is no shame in it, because there is an ideological difference between what they believe and what we believe about how to get our country back on track and our economy going.

The Opposition believe in some kind of Alice in Wonderland economics in which we can go on living beyond our means year after year. We believe in the real world, where we have to pay our way. They believe that the state has the answer to all society’s problems, but we believe that individuals, helped by the state, have the answers. They believe in an ever increasing welfare state, in which people are tied down and not allowed to profit from their own industry, and we believe in helping the most vulnerable in society—those who cannot help themselves—but freeing those who can work for themselves and earn an income, and giving them the incentives to do just that. Because of that, we believe that we can get more out of our constrained budget, repair our economy and create a fairer and more responsible society.

[Mr Tom Harris]

Will the hon. Gentleman give way?

[Sajid Javid]

I should like to plough on for a bit, but I will give way in a moment.

The size of our national debt cannot be ignored, either. It has not been mentioned much—we have all talked about the deficit, but let us not forget the enormity of the problem caused by the national debt. Any Government will have to address it at some point. Benjamin Disraeli once said:

“Debt is the prolific mother of folly and of crime.”

He should have known, because there was not just public debt at the time; I believe he had some personal debt, and he was probably referring to that as well.

After 13 years in office, Labour took our visible national debt from £350 billion to more than £900 billion—an almost threefold increase. That does not include the invisible national debt, public sector pension liabilities, which reputable organisations estimate to be more than £2 trillion, and all the private finance initiative liabilities, which grew from approximately £20 billion to £150 billion. We have a huge debt problem, which must be addressed, otherwise not only will this generation and our children pay for it, but our children’s children will inherit it. Let us not forget the changing demographics in our country, where we have a growing elderly population and fewer people of working age. That means that there are fewer people to tax and fewer who are able to fund the state’s activities, including repayment of debt.

The Budget addressed how to start promoting growth, which will help us get out of the mess. The Government are reducing corporation tax, the tax on small companies and on entrepreneurs’ relief, and addressing some of the problems of bank lending Many banks have been held back from increasing lending since the onset of the crisis because of the uncertainty of the future economy. The Budget gives banks much more certainty about the future of our economy, and that gives them more confidence to lend.

The securitisation market has not been mentioned often in the debate. More than the equivalent of £5 trillion has been issued in the past 10 years. Many banks used that to provide funding to small and medium-sized companies and to fund mortgages throughout the world. Securitisation unquestionably caused some of the problems of the credit crisis, but we must consider that market if we are serious about getting banks to lend again. So far this year, European banks have issued €30 billion of securitised bonds, against €500 billion in the same period last year. Last year, 95% was purchased by the private sector; so far this year, 95% has been purchased by the public sector central banks throughout Europe, including ours.

We are considering a bold Budget to redress a dire situation. Its measures are thoughtful and disciplined and it aims to spread the economising process throughout the nation. No group is spared and none is favoured.

Capital Gains Tax (Rates)

Sajid Javid Excerpts

Wednesday 23rd June 2010 Commons Chamber

[Mr Darling]

My hon. Friend’s point about Canada is an important one. Yes, Canada reduced its deficit quite dramatically. As a result of that country’s provincial set-up, a lot of the action was taken by the provincial governments rather than the national Government. It was taken, however, an the back of a growing US economy. Given the relative size of the Canadian economy compared with the US economy—it is much smaller than the Californian economy alone, for example—there is no doubt that the Canadians could do things on the back of their next-door neighbour’s rising prosperity. Our problem is that our next-door neighbours, the EU, are not in the same position at all—indeed, quite the reverse. Equally, when Sweden was going through a similar exercise, it was helped by the fact that the economy of much of Europe was growing at the time.

[Sajid Javid (Bromsgrove) (Con)]

Does the right hon. Gentleman agree that he should also consider the example of Spain, of which I am sure he is more than aware, when talking about our EU neighbours? Despite having a lower debt-to-GDP ratio than us and a lower budget deficit, it is on the verge of a sovereign debt crisis. Its banks have been frozen out of the borrowing markets for the past three weeks, and it has reportedly held emergency meetings with the International Monetary Fund, the EU and others to try to arrange a bail-out package. Does that not make what we had to do yesterday even more critical?

[Mr Darling]

There is another difference, of course. Official unemployment in Spain is more than 20%. The Spanish construction industry is in dire straits. A lot of Spain’s smaller banks, which are heavily tied to that industry, are finding things difficult. There is a world of difference between the Spanish economy and our own, just as there is a world of difference between the Greek economy and our own.

Just about every day in the run-up to the election, the hon. Gentleman’s party was anxious—desperate even—to compare our economy with the Greek economy. To his credit, the Secretary of State for Transport—he is not here today, but I made this point to him when we were debating on the television last night—said that Britain was nothing like Greece. The idea that we are in the same position as Greece or Spain is complete nonsense. Our economy is much larger and much stronger, and our ability to service our debt is much greater. The average maturity of our debt—as the hon. Gentleman knows, I assume—is 14 years, whereas in Greece the average maturity is three years and in continental Europe it is about five years.

Of course we have to get our borrowing down and ensure that we can get debt down as well. No one would disagree with that. The question for us is how do we do that in a way that maintains growth, so that we can ensure not only that we get growth in our economy and that we do not damage our future prospects, but that we do so in a way that is socially and politically fair? That is the difference, but to compare us with those smaller countries is, frankly, ludicrous, as many in the hon. Gentleman’s party realise.

--- Later in debate ---

[Caroline Lucas (Brighton, Pavilion) (Green)]

Thank you for calling me to speak, Mr Deputy Speaker, and it is good to see you in your new position.

The Government’s mantra is that this Budget is both unavoidable and fair, yet more and more evidence demonstrates that exactly the opposite is true. In reality, this Budget is neither unavoidable nor fair: instead, it is a massively failed opportunity to shift the economy into the greener, fairer direction that we need.

Devastating public spending cuts of the kind announced yesterday are not unavoidable. They are not some kind of economic inevitability, but an ideological choice. The reality is that there has been no public debate about the choice between tackling the deficit through cuts or through progressive and radical tax reform. Quite simply, that case has not been put.

That is hugely significant, because the fact that these cuts will have an enormous impact on generations to come means there needs to be a national consensus that they are the right way forward. There is not that national consensus; there is a growing sense of anger and disbelief about the scale of the cuts proposed, as well as a growing sense that the Government have been economical with the truth.

Let us be clear: we are not in the same position as Greece. Our cumulative national debt is not large by international standards. The structure of our debt is very long term—about 14 years. Much of this year’s debt will be sold to British-domiciled individuals and companies, so the international sovereign debt crisis has much less impact on us. Those are the truths of the situation.

[Sajid Javid]

The hon. Lady said that our sovereign debt situation is not as bad as that of Greece. We do not just have to use Greece as an example; other countries have faced drastic situations and austerity measures. It is not reasonable to look at the size of the debt as a proportion of GDP; we also have to look at the amount of debt we have been issuing, borrowing £3 billion a week to help fund it. I am sure the hon. Lady is aware that last year the former Government printed about £200 billion in cash and borrowed about £225 billion on the gilts market. The only other country with a similar policy was probably Zimbabwe, so I am sure she is not advocating that we continue in that way.

[Caroline Lucas]

I thank the hon. Gentleman for his contribution, but if the then Government had not done that our situation would have been an awful lot worse. Many commentators are saying that this is a time to be investing, not taking money out of the economy. Our current situation would have been much worse if we had not had that stimulus at that time.

Despite what the Government say, we are not all in this together. Some people had more responsibility for the crisis than others and some benefited more from the boom that preceded it. It seems to me that those who enjoyed the largest benefits should pay the highest price. We need progressive tax reform. Increasing the tax take from those most able to pay it and helping lower earners by reintroducing the 10% tax band now would be a good start, both in raising revenue and in addressing inequality.

If we are looking for ways to find more revenue, let us bear in mind the huge extent of tax avoidance, tax evasion and unpaid tax in the UK. The figures are truly staggering. Her Majesty’s Revenue and Customs admits that tax evasion and avoidance together come to almost £40 billion a year, and in November 2009 it admitted that £28 billion of unpaid tax was owing. Shocking as those figures are, some experts out there suggest that the total target for necessary action to collect tax due and owing could be more than £100 billion a year. Why do we not see more efforts to go after that kind of money?

There are a range of options for changing the UK tax rules progressively so that more than £40 billion of additional taxes could be raised each year by the end of the life of this Parliament. With tax-collecting efficiency savings, that would deliver more than £60 billion of tax revenues for the UK, thus preventing any need for cuts to public services.

I say that not because I think we should introduce all those tax measures—certainly not straight away—but to prove that we have a choice. Spending cuts are not the only way to address the deficit. Fairer taxation has never even been put to the public as an option. That is a betrayal.

Banking Reform

Sajid Javid Excerpts

Thursday 17th June 2010 Commons Chamber

[Mr Hoban]

I must say that I think that some humility should be shown by the Opposition Front Benchers for landing this country with a system that led to the longest and deepest recession since the 1930s.

[Sajid Javid (Bromsgrove) (Con)]

I welcome the Minister to his new role. Does he agree that these banking reforms will help to boost confidence in the British economy once they are enacted? That will help to keep interest rates lower for longer, boost investment and create jobs.

[Mr Hoban]

I am grateful for my hon. Friend’s question. It is important to ensure that businesses have confidence that where macro-prudential threats arise in future, action will be taken to resolve them. They did not have that confidence in the previous regime and I hope that they will have that confidence following the reforms that we have put forward today.

Financial Services Regulation

Sajid Javid Excerpts

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

The hon. Gentleman is right to draw attention to the role of the credit rating agencies. Of course, all sorts of organisations and products received triple A ratings that they should never have received. That triple A wrapper basically made them immune to investigation by the firms that were buying those products. Certainly, we need to improve the regulation in the domestic sense—here in Britain—but that is also the subject of decision at a European level, and the la Rosière proposals on European supervisory agencies will consider in particular the role and regulation of credit rating agencies.

[Sajid Javid (Bromsgrove) (Con)]

Will my right hon. Friend commit to ensuring far greater scrutiny of EU regulation concerning financial matters than the previous Administration ever did, to make sure that it helps, rather than hinders, our banking system?

[Mr Osborne]

My hon. Friend makes a very good point that we must get the European regulation right, and the United Kingdom has a particular role as the location of most of the wholesale financial services in Europe. We therefore bring some insights to the table, which not all other members of the European Union can do. I am clear that we must do that. It will be under discussion at the European Council later this week and, I suspect, in pretty much every ECOFIN meeting for the rest of the year.

Office for Budget Responsibility

Sajid Javid Excerpts

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

Before I answer the hon. Gentleman, I, too, should welcome you to the Chair, Mr Deputy Speaker. [Hon. Members: “Hear, hear!”] My several visits to Chorley during the general election seem only to have helped you to return to this place. It is good to see you here in the Chair.

In answer to the hon. Member for Luton North (Kelvin Hopkins), of course I want the elected British Government and the elected House of Commons to have complete control over the tax and spending decisions that affect our country. One way of doing that is to ensure that we never give rise to market concerns about our ability as a country to live within our means. That is the way to retain national sovereignty. We have seen what happens when other countries lose that sovereignty to the markets.

The hon. Gentleman asked specifically about the European Union, and I shall make two observations about that. First, the Budget this year and in all future years will of course be presented first to the House of Commons before being presented to anyone else. Secondly, I know that he will be interested in this and, before those in my party who are interested in these subjects get hold of this fact, I should let the House know that, under the deal negotiated by the right hon. Member for Kirkcaldy and Cowdenbeath and the other former Prime Minister, Tony Blair, the British contributions to the EU budget are set to rise from £3 billion in 2008 to £10.3 billion in 2014.

[Sajid Javid (Bromsgrove) (Con)]

My constituents, like millions of people up and down the country, are very concerned about the direction of mortgage interest rates. Does my right hon. Friend agree that unprecedented transparency in our national finances of this kind will increase our credibility in the global financial markets and help to keep interest rates lower for longer?

[Mr Osborne]

My hon. Friend is absolutely right, and it is worth reminding ourselves that the OBR June 2010 pre-Budget report is based not only on the previous Government’s tax and spending measures and decisions, but partly on the lower interest rates earned by the current Government in the decisions and announcements we have made over the previous month or so. That is why Sir Alan says in his forward that

“the fiscal path assumed”

by the previous Government

“would lead to higher interest rates and so lower economic activity ”.

Economic Affairs and Work and Pensions

Sajid Javid Excerpts

Tuesday 8th June 2010 Commons Chamber

[Sajid Javid (Bromsgrove) (Con)]

Thank you, Mr Deputy Speaker, for giving me this opportunity to make my maiden speech. I speak with a particular sense of humility after so many hon. Members have given such admirable maiden speeches, including that just made by the hon. Member for Stretford and Urmston (Kate Green).

I have some worthy predecessors. My immediate predecessor was Miss Julie Kirkbride. She was first elected in 1997, and she was a fine constituency MP. I will never forget the spontaneous tributes that people paid to her, when I knocked on their doors during the campaign, for all the work that she had done on their behalf. I should also like to express my gratitude to her two most recent predecessors, Mr Roy Thomason and Sir Hal Miller, who both helped me in my campaign with great advice.

Bromsgrove is a beautiful, traditional beacon of middle England. I know that many hon. Members have described their constituencies as beautiful, but Bromsgrove truly has breathtaking countryside. It is an old market town which was originally a bit of an industrial hub for the west midlands industrial complex. It still has a very active, traditional court-leet, with lovely traditions.

In the east of the constituency we have many beautiful picture-postcard villages, including the glamorously named suburb of Hollywood.

Over the centuries, we have had many heroes from Bromsgrove. I should like to pay tribute on this occasion to two of the most recent—both teenagers, both soldiers in the 2nd Battalion, the Mercian Regiment. The first, Private Robert Laws, was aged 18 when he lost his life fighting for our country in Helmand province last year. He had passed his training only six months previously. The second, Private Alex Kennedy, also aged 18, earlier this year became the youngest soldier since the second world war to receive the military cross. He fought hard to save the life of his commanding officer during a fierce battle with the Taliban. We must never forget the sacrifices that our soldiers—those who have served and those who are currently serving for us—make on our behalf.

A notable person from Bromsgrove was A. E. Housman, whose stirring prose reflected the rural beauty of the heart of England. In Bromsgrove we have a wonderful heritage in the English countryside, and that is why I want to make sure that it is the people who are most affected by planning decisions who make those decisions. That is why I welcome the recent announcements of my right hon. Friend the Secretary of State for Communities and Local Government on that issue. They have been most welcomed by my constituents.

Perhaps at this point I should say something about my own background, as hon. Members may be able to tell from my appearance and my name that I can hardly be of traditional Worcestershire stock. My parents were both born in British India. Although my father was just six years old in 1947, he remembers full well the tragedy that occurred upon the partition of India—12 million people were displaced and almost a million lost their lives. If we need an example of how political failure can lead to great human tragedy, surely that is one of the most heart-wrenching, and an example of how politics can really make a difference. That is what I say to people who ask me why I gave up a lucrative career in finance to enter this House.

To the dismay of the right hon. Member for Holborn and St Pancras (Frank Dobson), I have to tell him that for 19 years I have been an investment banker. In my case, this is one brain that was sucked up by the City and has now come to serve the people in this Parliament. I worked in London, Singapore and New York. I readily admit that being seen as an investment banker was not the most useful thing on the campaign trail, but it helped prepare me for a profession not well liked by the general public. Let us hope that all of us, on both sides of the House, can work together over the coming years to help restore the nation’s respect for our great Parliament.

In view of my background in finance, I am particularly pleased to give my maiden speech during this debate on economic affairs. There are many global economic uncertainties at the moment, and they have potentially grave consequences for our economy. First, the euro is only just beginning to have problems. It was always a political contrivance that had virtually nothing to do with economics. Secondly, the world’s largest emerging market economies, which have buttressed global demand since the onset of the credit crisis, are about to go through a period of monetary tightening, and we can no longer rely on them for global growth.

Thirdly, industrialised nations, including our own, that have issued vast amounts of sovereign debt over the past three years in particular can no longer go on that way. We have to make sure that when we look at these issues, we never forget the traditional disciplines that have stood Britain in good stead—sound public finances, low and simple taxation, and light and flexible regulation. It is when we forget these disciplines that we put our future prosperity at risk.

Thank you, Mr Deputy Speaker, for giving me this opportunity, and thank you to the people of Bromsgrove for allowing me to serve them in this Chamber.