Frank Field MP
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The Budget - A view from the benches

At a few minutes to one o'clock today the country's fate passed from the Chancellor and was cast on the waters of the money markets. Public borrowing will be £175bn this year and £173bn the following year.

From the very start of the crisis the Government has consistently underrated its severity. Even so, Britain will proportionately be borrowing more than any other G8 country.

Are the funds out there to meet the colossal requirements of G8 countries? Where do we rate in the international league tables as to whom colossal sums should be lent?

In these very early stages the Government is finding the gilts market sticky when it comes to issuing its endless new tranches of debt. What happens if the gilt market proves itself even more difficult in coming up with the funds for the gilt floatations? At some stage, maybe soon, gilts will be sold at lower prices, thereby pushing up long-term interest rates and damaging the recovery.

Even worse is the outlook if significant increases in the long term rate of interest still do not attract the necessary loans to balance this year's books. That could lead to a run on sterling.

If the Government has to revise soon its borrowing requirement for this year it would be well advised to accompany that statement with the announcement of either an increase in taxes or real cuts in public expenditure.

Panic in the money markets will lead to a much more deadly confrontation than the one seen of depositors peacefully lining up outside Northern Rock to lift their savings. Investors in gilts will act much more ruthlessly.
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Showing comments 1 to 4 of 4

Everyone can see this except Mr Brown. He is just destroying our future.
Comment by Anonymous on 15 Jul 2011
Frank,Neither you, nor I, nor your other readers will fail to notice that this article is written from the perspective of a member of another party entirely. The Conservative Party.I am confused and bemused why your views (being absolutely correct in my view) are entirely at odds with your own party.Yet you remain there. WHY ? Your skills are considerable, so rather than lose them, why don't you cross the floor. I'm sure your constituents will support you, but if not then I am equally sure that another safer seat will be found on your behalf. Birkenhead's loss if that's the case.You may feel a responsibility or loyalty to your present party (as I once did) but those days are long gone. The people who control and in power within the labour party deserve neither support or sympathy. They are, generally, incompetent and/or corrupt.If you believe you can assist the party for fighting within the ranks then why do so for 5-10 years (min) in the wilderness when you would be better advised to fight within the Conservative party in keeping it true and proper when in power.
Comment by Anonymous on 15 Jul 2011
Frank, You can help end this relentless journey into penury. It is clear that you are totally disillusioned with Brown's leadership. Leave the sinking Labour ship. You still have a contribution to make in Parliament but not with Labour. They don't want to listen to your sensible views anyway. Don't you agree that the time has come to allow the people a say in a general election? Take action and help free us all from this economic tyranny.
Comment by Anonymous on 15 Jul 2011
Thank you for your honesty in telling it like it is.
Comment by Anonymous on 15 Jul 2011

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