Sterling

Debate between Earl of Courtown and Lord Haskel

Tuesday 3rd September 2019 Lords Chamber

[Lord Haskel]

To ask Her Majesty's Government what action they plan to take to boost investment and productivity and to stop any decline in the value of sterling.

[The Earl of Courtown (Con)]

My Lords, we have worked hard to build a stronger, fairer economy, dealing with the deficit, helping people into work and cutting taxes for individuals, families and businesses. We have created the £37 billion national productivity investment fund and have provided £600 billion in capital investment, including in infrastructure and skills. On sterling, it is important to note that the UK does not have an exchange rate target. The price of sterling is set by the market.

[Lord Haskel (Lab)]

Minister, how can we believe your words about growing the economy when last week the Bank of England told us that the Government’s recent actions—yes, actions not words—had reduced the level of UK productivity by 2% to 5% and caused many British companies to significantly cut investments plans? With the decline in the value of sterling, there has been a sharp drop in factory output. What will the Government do to put this right?

[The Earl of Courtown]

My Lords, the noble Lord mentioned a number of issues, one of which was factory output. I remind him that manufacturing now accounts for almost half of total UK exports—49% in 2017, with a value of just over £300 million. The manufacturing sector has seen productivity increase over three times faster than the UK economy as a whole over the past 10 years. I cannot add anything more relating to sterling but I reiterate that we have provided over half a trillion pounds in capital investment. We are cutting taxes to support business investment, we have improved access to finance through the British Business Bank, and we have improved skills through investment in apprenticeships and the introduction of T-levels.