The question for governments all over Europe is whether you have a credible plan to deal with high deficits at a time when market concerns about debt levels are rising. The Chancellor has made clear that we will meet our fiscal mandate and our target to get debt falling as a percentage of GDP by the end of the Parliament. We will do whatever it takes to maintain the hard won credibility we have earned that is keeping Britain safe in the debt storm and keeping interest rates low for families and businesses.
With concerns about sovereign debt growing every day, the Government's plan to deal with our debts is even more important than ever, and Labour's plan for more spending, more borrowing and more debt is even less credible. Labour's claim that more spending and more borrowing will actually lead to lower debt is the kind of something for nothing economics that got us into this mess in the first place.
We also understand that the cost of living is a real problem for people, especially those on low incomes. That's why we will make savings in other spending in order to put a cap on rail fare increases next year.
Credit Easing
The Chancellor has announced a £20 billion National Loan Guarantee Scheme to help reduce the cost of credit for small businesses. This is using the credibility and low market interest rates that we have earned from our deficit reduction plan to deliver direct help to small businesses to help them invest and create jobs. These guarantees will not add to the deficit or to debt, and the government will not be deciding which businesses get loans. The credit risk of individual businesses will remain with the banks. We are also announcing a £1 billion Business Finance Partnership which will invest alongside private investors in new funds that will provide a new source of finance for small and mid-sized businesses.