Interest Rates
Debate between Baroness Penn and Lord Trimble(4 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text
Baroness Penn (Con)
I assure my noble friend that that is still government policy, but I disagree with him on the fact that the changes to NS&I’s interest rates take it below competitive rates in the market. As I have pointed out, on premium bonds, a 1% prize fund rate is extremely competitive while on a number of other tax-free instant access products, the rates remain in line with the rest of the market.
Lord Trimble (Con)
My Lords, I must start with a disclosure. Many years ago, I invested what to me was a substantial sum of money in NS&I. We are now seeing the rates go down to well below 1%—indeed, to a fraction of 1%. Is it going to stop there? Will the Government look at negative rates? If not, will they make a clear commitment to move away from them? How much of that target of £35 billion has been achieved? Is there likely to be more than just that target? If so, will there be any return to those people who are dependent on National Savings?
Baroness Penn (Con)
In response to my noble friend’s question about whether the net financing target is due to be exceeded, I can tell him that in quarter 1 of the 2020-21 financial year, NS&I saw an inflow of £19.9 billion and delivered £14.5 billion of net financing. Demand for NS&I products has remained at similarly high levels during Q2. If the current trajectory continues, it will be on track vastly to exceed that net financing target.
Covid-19: Economic Costs
Debate between Baroness Penn and Lord Trimble
Baroness Penn
My Lords, I will not anticipate the spending review at this stage, but I can reassure noble Lords that analysis done of action taken by the Government until the end of May has shown that those interventions, alongside the existing tax and welfare system, have helped to reduce the loss of income of working households by up to two-thirds. The poorest households have received the most support as a proportion of their income. These measures have included, as noble Lords will know, the increase in the standard allowance of universal credit by £1,400 a year on top of existing uprating measures.
Lord Trimble (Con)
My Lords, I thank the noble Baroness for having the paper circulated to us. I briefly refer to the last paragraph, which talks about measures targeted specifically at groups most at risk but goes on to say:
“Such a policy should probably have been started before the end of June”.
I fear that the authors are not being realistic about the date for the targets and have not taken account of the difficulties for Ministers who wish to make a change but find that making changes is extremely difficult under our processes. I recall that, when Matt Hancock talked about increasing the targets for testing, he was met with derision. I hope that that will not happen here.
Baroness Penn
My Lords, I agree that the Government are in a different position in their response to the target now than they were at the start of the outbreak. We now know a lot more about the virus and we have developed in our research institutions the first effective therapeutic response to it. The test and trace system has been going for around seven weeks and has shown an increase in its efficacy week on week. We want to build on that so that we can have a more targeted and localised response to any future outbreaks.