Budget: Economic and Fiscal Outlook

Baroness Bennett of Manor Castle Excerpts

Tuesday 5th May 2020 Lords Chamber

[Baroness Bennett of Manor Castle (GP)]

My Lords, the noble Lord, Lord Howard of Rising, commented that, given the context of this debate, it was surprising to see 22 speakers for it. However, as the noble Baroness, Lady Falkner of Margravine, and the noble Viscount, Lord Trenchard, said, there is a great hunger to make a democratic contribution to the nation’s discussion now, and that is why we are taking this opportunity.

The historical framework in which we are conducting this debate is both useful and informative. There is an EU requirement for member states to avoid excessive government deficits. Of course, in the age of Covid-19, what is considered excessive is changing very significantly. Behind this is something that is certainly often wheeled out in British political debate. It is known as the household fallacy—the idea that the national budget has to be managed as though it were a household budget, so that the pennies in and the pennies out have to match up. That was used to justify the ideological approach and the philosophy of austerity, which the noble Lord, Lord Hain, said was doing so much damage not only to our society in terms of poverty and inequality, but also to our preparedness to deal with the awful shock of the coronavirus. Does the Minister agree that the fallacy of household management being equivalent to national economic management is now dead, and can he assure me that the Government will not revive it?

As many noble Lords have said, we are in a huge phase of restructuring. I would like to quote from a letter to the Financial Times from Church Action for Tax Justice. It stated:

“The social contract is now being renegotiated.”


In a press conference on 30 April, the Prime Minister said that he has never liked the term “austerity”. Can the Minister tell me that it is not just the term that the Government do not like, but that they have abandoned the whole approach? Will they use their financial position to rebuild a better world, rather than going back to where we were?

As many noble Lords have said, this debate has to be considered in the context of Brexit. I want to congratulate the Government on an issue that I was pushing on at the beginning of March and was rebuffed about. I said that I believed that we are now signing up to something akin to membership of the early warning and response system for health in Europe. On this, it would seem that the Government agree that co-operation and working together makes sense. However, we are fast approaching an enormous challenge as regards the environment, agriculture, aviation and fisheries. In the context of Brexit, we have to set up whole new systems. Coming back to where I started, how can we do that democratically when it is so difficult for full democratic debate to take place in your Lordships’ House and elsewhere?