It was strange enough to see the Chancellor out and about on the media yesterday seeking to condemn my Economic Policy Report, when we are in the throes of a very serious financial crisis. You might have expected him to be working behind the scenes with the FSA and the Bank of England to assess the damage to banks and financial institutions and to keep in touch with the ECB, the Fed, the US Treasury Secretary and the Japanese authorities, rather than preoccupied by old fashioned party politics.

It was another important day in the markets, and the US change of stance had an immediate and dramatic impact on London as well as Wall Street. It is,however, unlikely to be the end of the problems caused by the move from lax monetary policy to a credit squeeze.

It was even stranger to hear him revealing his economic ignorance, when he told the nation of the damage that taking ??21 billion (his assessment of the costs of all the tax proposals in the Report) out of the economy would do. What ever does he mean by that? The ?21 billion stays firmly in the economy it is just that the government does not get its hands on it. The whole point of reductions in tax rates is to stimulate more growth and jobs, as the private sector is usually more creative and successful at spending such money well.

He is quite entitled to ask how the tax cuts we propose should be paid for. The Report makes that clear they would be phased in as the natural growth of revenues in the economy allows. He should remember that his own government announced some tax cuts in the last budget. These were paid for by extra borrowing. Presumably he does not think that will take this money out of the economy!

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