Global Economy

Matt Hancock Excerpts

Thursday 11th August 2011 Commons Chamber

[Matthew Hancock (West Suffolk) (Con)]

In terms of the stimulus to the British economy, what does the Chancellor think would be the effect of increased borrowing, which would then have an impact on increased mortgage rates for millions of people up and down the country? What would be the aggregate impact, say, of a VAT cut?

[Mr Osborne]

My hon. Friend is right that there is a significant monetary stimulus in place through the very low market interest rates and of course the official rate. Both of those would go up, almost certainly in the case of the markets and probably in the case of the Monetary Policy Committee, although it is independent, and that is why all this talk of more fiscal stimulus is a debate that is happening only in the Labour party of the United Kingdom, alone in the world. It is very difficult to find an opposition anywhere in Europe arguing for less deficit reduction coming off the published plans of a Government. As I say, if the shadow Chancellor turned up at one of these meetings and put forward his proposal, he would be laughed out of the meeting.