YOUR leader "You can't buck the market" (6 April) misrepresents the Opposition's view. We believe that Chancellors can and do influence markets. The Chancellor's budgets have distorted the economy. By taxing savings he has encouraged consumers to spend instead. By giving control of inflation to the Bank, he has forced them to increase interest rates and sterling.
The Opposition proposes a government policy of promoting savings - reversing the tax increases on pensions, Peps and Tessas, and promoting more second pensions people save for. This would take some of the heat out of the consumer economy and remove the need for ever higher interest rates and sterling.
The Chancellor is threatening good manufacturing companies by his present strategy. An efficient company cannot keep pace with the present speed of revaluation.
JOHN REDWOOD MP
House of Commons
London SW1Reuse content