Question: Critics have highlighted the high levels of household debt do you think this is something that the Chancellor should be worried about?

John McFall: There are imbalances in the economy; that's taken as read. We have to correct them over time but we have to keep in mind that our economy is performing very well compared with the eurozone economies.

I notice growth figures for next year have been talked up by industry as more optimistic than they were a month or so back. We have to keep that in mind but if we allow the level of debt to get out of hand then there are consequences.

We have to rebalance the economy but we will have to do it in a judicious way.

Question: Consumer spending is part of the problem. Should the government consider bringing back credit controls?

John McFall: I don't think so, no. We should be glad that the economy has been relatively buoyant and because of the consumer. But people have to be aware of their own levels of debt, particularly in an environment where there is low interest rates and low inflation.

That means the debt will be with them for a quite a long period of time. If you bought a house in the 70s, inflation gobbled up a lot of the debt that was outstanding. Now that is not the case. It's a new economic environment that we're in and people need to be educated about that.

Question: Is the economy going to be the "big" issue for the general election?

John McFall: It's always been the economy. That's been proved in elections both here and in America from the 80s onwards. If people feel that they have become more prosperous that is a very important consideration when it comes to a general election.

Question: Union leader Mark Serwotka has claimed the Treasury's imposed a public sector pay cap. Is this something the committee might look at?

John McFall: No. We're not involved in that area. It wouldn't be the Treasury that's doing that. If we're talking about the Department of Work and Pensions, that's a negotiation between the unions and officials.

Question: Should the families that didn't get their tax credit be paid compensation?

John McFall: Our report said that if there was genuine hardship then compensation should be considered.

Question: Won't this be just as problematic given the organisations involved couldn't deliver on something relatively straightforward?

John McFall: We're talking about hardship here. I know that the Inland Revenue have already given out many emergency payments. If people have been clearly affected by this then compensation should be considered.

Question: Doubts have been raised about the government's relations with the unions. At the TUC and Labour Party conferences are you expecting the government to move more to the Left?

John McFall: Well there's always tension in such a relationship. We have to remember that in terms of public spending the last few years have seen record levels of money going in. And there'll be record levels of spending in both education and health right up to 2007. It has to be seen against that background.

Question: Can that public spending really be sustained against an uncertain economic background?

John McFall: The commitment has been given to spend up to 2007 but that all depends on the state of the economy is and the situation the chancellor finds himself in. But it cannot be taken for granted that this record spending can continue.

Question: No euro campaigning over the summer by ministers?

John McFall: I have not seen any evidence of great activity by the government on this. The euro roadshow was promised by the chancellor and the prime minister on June 11.

I look forward to the autumn and them getting out to make the case. It's very important and it has to be very public. It has to be very up front.

Question: Do you think the Iraq dossier row has had an impact?

John McFall: I think it has been overshadowed by the political events of the last few months but it's important that the government get a hold on the political agenda in the autumn and ensure this roadshow takes place with as many Cabinet ministers and ministers making the case.