Debt

Lord Barnett Excerpts

Tuesday 29th May 2012 Lords Chamber

Asked by

[Lord Barnett]

To ask Her Majesty’s Government, further to their proposals in the Queen’s Speech “to reduce the deficit”, in which year they expect the national debt to start to be reduced.

[The Commercial Secretary to the Treasury (Lord Sassoon)]

My Lords, the Office for Budget Responsibility’s March 2012 forecast shows public sector net debt falling as a share of gross domestic product in 2015-16. The Government are therefore on course to meet the target for debt set at the June 2010 Budget.

[Lord Barnett]

My Lords, I am grateful for that Answer, but since then the Bank of England has forecast that growth will be even lower and it could be lower still according to other independent forecasters. In those circumstances, the debt is likely to go on much longer. Despite that, I am happy to congratulate the Government on being willing to find up to £1 billion to help the European growth fund if needed, if asked—which I hope they are. Will the Government therefore be willing to find—because it is petty cash in the context of £1 trillion or more of national debt—the same amount or more petty cash for what the CBI is asking for: a UK growth fund for infrastructure expenditure?

[Lord Sassoon]

My Lords, there are all sorts of good ideas and lobbying that come from all sorts of quarters, but if the Government were to treat £1 billion here or there as petty cash, the British public would be absolutely appalled with what we were doing with public expenditure. As for business investment, yes, we talk to the CBI—it comes up with a lot of good ideas—but what is important is that the provisional data for the second quarter of 2012 indicate that business investment is showing a stronger recovery than forecast by the Office for Budget Responsibility. The OBR did not expect business investment to reach the level that we have seen in the second quarter until 2013. It is good that business investment is rising.