Economy Update

Baroness Altmann Excerpts

Tuesday 10th November 2020 Lords Chamber

[Lord Agnew of Oulton (Con)]

I agree with the noble Viscount that we face an unprecedented storm of events, and I share his concern. On the role of the Treasury and, indeed, my other department, the Cabinet Office, we are doing a great deal to try to ameliorate some of this. For example, project speed, on which I deputise for the Chancellor, has brought together a number of initiatives to pump prime the economy—and we have published our first initiatives on that. We have a further possible 80 projects, which will be used to pump prime the economy, dealing with blockages to infrastructure, speeding up infrastructure, the commitment to building additional schools and accelerating the building of 40-odd hospitals. We have announced through the IPA some £37 billion of infrastructure, and I hope that we will announce around the time of the spending review the national infrastructure strategy, which will show further the investment that the Government are making.

[Baroness Altmann (Con) [V]]

My Lords, I welcome the extension of the economic and job support schemes and congratulate the Chancellor on his willingness to adopt flexibility and have the courage to change tack when the economy and public health winds changed. However, I have to say that I regret that a new lockdown was deemed necessary and believe that the damage caused to public health and the economy as a result needs to be much more thoroughly analysed.

Does my noble friend agree that the job support measures that have been introduced have been facilitated by the Bank of England’s quantitative easing policy? In combination with the job support measures, it is rather like helicopter money or people’s QE. What impact do Her Majesty’s Government expect it to have on UK defined benefit pension schemes? Would not it be better for the economy to encourage companies and pension schemes to invest directly in the economy to boost growth rather than encouraging them to buy more fixed income, as interest rates continually fall?

[Lord Agnew of Oulton (Con)]

The noble Baroness is right that QE is providing a level of financing for the interventions that the Government are taking at the moment. I think that she will understand that those interventions are having to be made extremely quickly to protect lives and livelihoods across the whole country. Long term, I absolutely agree with her that we need to get businesses to invest more in the economy. One initiative that I am exploring is to try to encourage local government pension funds to allocate a greater proportion of their investments to infrastructure; at the moment, it is a very low figure. I am sure that there is more we can do to loosen the rules without, of course, putting those pension assets at undue risk.