Page last updated at 19:13 GMT, Wednesday, 24 March 2010

Treasury committee chairman warns on spending cuts

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Labour MP and chairman of the Treasury Select Committee John McFall has warned against cutting public spending too quickly despite pressure from "deficit hawks".

On 24 March 2010, as MPs embarked on four days of debate on the Budget, he said: "Of course, tackling the deficit is going to have to happen and, perhaps more importantly, it has to be seen to be happening.

"We must satisfy the markets, and more importantly the people, that the deficit is in hand, regardless of our political affiliations."

The next government would have to tread a "careful path" in order to balance the need for taxpayer-backed support for the fragile recovery with reducing spending, he argued.

Making his final Commons speech before standing down at the next election, he said banking reform was vital in the future.

Tory former cabinet minister Peter Lilley said action to reduce the deficit now would ease pain in the long term and said waste in the public sector allowed the prospect of cutting spending without reducing services.

He said Labour was wedded to tax rises as the best way of balancing the books.

"Raising taxes may be unavoidable but this side of the House will do all we can to avoid raising taxes.

"Raising taxes, by contrast, is the first choice of this government," he asserted.

WATCH: Budget statement in full plus response from Cameron and Clegg WATCH: MPs conclude first day of debate on the Budget

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