Global Economy

Mark Spencer Excerpts

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

It might surprise the hon. Gentleman to learn that I agree with at least part of what he says: we do have concerns about how the credit rating agencies have operated. That is why we have been part of the European discussions to get some European rules on credit rating agencies put in place, and I think they are appropriate. I disagree with the hon. Gentleman, however, on blaming all of what is happening on credit rating agencies. However imperfect they might be, credit rating agencies are trying to give market investors some idea of the credit worthiness of countries and companies. The truth is that they have not led to the spending cuts. The reason why we have had to undertake spending cuts is that this country is currently spending close to 50% of GDP on public expenditure, which is far higher than the historical average under Conservative and Labour Governments. That is why we are having to act. We are doing so because we have a record budget deficit—the highest in our peacetime history and the highest in the G20.

[Mr Mark Spencer (Sherwood) (Con)]

The Chancellor referred to Merlin and the agreement with the banks, but is he aware that these banks are double-counting their lending by forcing businesses to convert overdrafts into long-term loans? A business in my constituency wants to expand. It has full order books and wants to take on more staff, but it cannot do so because not only are the banks not being helpful, but they are actually being obstructive.

[Mr Osborne]

I would be very happy to look at that specific constituency case. Let me look into the details and get back to my hon. Friend with an answer, or meet him in person to discuss it.