The beginning of this week was marked by an intense controversy over the timing of the reduction in Government spending which is bound to come up after the election whoever wins. This is a matter of great importance which will have a considerable bearing on our economic future.

At present the Government is borrowing £178 billion; 13% of our national income. Everyone agrees that his is something that can’t continue. The Government proposes to spend and borrow more next year but to reduce both spending and borrowing thereafter.

The Conservative position is that a start, at least, must be made in reducing spending and borrowing sooner.

The reason for the Conservative position is this. If those who lend us the money we borrow have confidence in our financial future they are likely to be prepared to continue to lend us – at reasonably low interest rates.

If, on the other hand, they have no confidence that spending and borrowing are to be brought under control they will demand higher interest rates if they are to continue to lend to us. And if interest rates start to rise the outlook for us all becomes even more difficult than it now is. Mortgages would become more expensive as would the borrowing which business must undertake if firms are to grow or, in some cases, survive. So perhaps the worst thing that could happen to imperil our recovery from recession would be a rise in interest rates.

Unfortunately this is not an academic argument. Many financial institutions – credit rating agencies and large investors in Government bonds – have warned that the British Government’s credit rating is at risk of being downgraded. That would inevitably trigger an increase in interest rates.

That is why I believe that it is essential that a start be made on restoring our financial standing as soon as possible. As David Cameron has said this does not necessarily mean swingeing cuts in the short term. It does mean setting the country on a path to stability which everyone could see and understand. The sooner we can all see that path, the better our future will be.