Finance Bill

I assure my hon. Friend that this Government are determined to raise as much as possible from the banking sector. He makes the very good point that it is right that those who got us into this mess should contribute significantly to getting us out of it. However, we need to move quickly to provide reassurance to international investors that the UK is a safe place in which to do business and that we will not be caught up in a sovereign debt contagion. His point is well made, but we still have no choice in needing to raise substantial sums of revenue in a certain way. We were left with a very difficult choice as to whether to fill the black hole with yet more spending cuts or increase taxes. Further spending cuts would have made it impossible for the Government to protect the country's most essential services in the spending review. It is notable that, in the past couple of days, two of the candidates for the leadership of the Labour party have suggested that the previous Government's own plans on cutting spending went too far. The shadow Education Secretary has questioned whether they were seeking to cut the deficit too much by cutting taxes, while the shadow Health Secretary has said that they should have looked more at raising taxes. I see no appetite on the Labour Benches for more spending cuts. The only other option would have been to raise taxes on corporate profits or on personal income, reducing the rewards for work at a time when hard work and endeavour must lead the recovery and ensure that we have a private sector-led recovery. We need to reduce the deficit in a sustainable way that does least damage to growth. While the bulk of the deficit reduction will come from spending, tax also has an important part to play. We increased VAT rather than increasing income tax or national insurance contributions, which are probably the only other sources of revenue with the capacity to raise the necessary sums, because that was the least economically damaging way of doing this. Of course, we are not alone—[Interruption.]