You’re quite right that there’s a lot of hardship. When the present government came to power just over eighteen months ago, we were faced with a spiraling parcel of debt. We had an annual deficit of above 11 percent following the financial meltdown of 2008/2009 which was triggered by the collapse of Lehman Brothers, and various other problems that arose from there.
The government felt it had no choice but to address the issue of spiraling debt and a very large deficit. We didn’t have the luxury of being a reserve currency, and we aren’t member members of a eurozone, where some of the weaker economies are protected by the stronger economies. We’re on our own. And therefore, we have to assume our responsibilities.
If we had not done that, then the cost of the British government borrowing, which is very considerable because we do have a lot of debt, would have continued to increase. The rating agencies would have marked down the value of our national credit, our creditworthiness, and investors would have had less confidence in the determination of the government to address our structural problems.
All that is, however, balanced with a series of measures which are designed to boost economic activity, to create a more business-friendly environment. In the budget just this week the Chancellor of the Exchequer has further cut corporation tax to make it more attractive for businesses to come to Britain. And we have some very good, new stories in the aerospace and automobile sectors where there is real growth, where large numbers of jobs are being created more rapidly in the private sector than in the public sector—a sign of a healthy recovery.
We’re not where we want to be. Our growth is still very weak. Last year it was minimal, though this year we hope it’ll be about 0.8 percent. Next year we’re looking at economic growth of 2 percent. It’s about striking a balance. And the judgment of our government, which is after all a coalition government of Liberal Democrats and of course Conservatives, is that this is the right strategy, painful though it is and even though it involves a number of difficult choices being taken at all times.