Economy: Monetary and Fiscal Policy

Lord Forsyth of Drumlean Excerpts

Tuesday 8th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am sorry that the noble Lord, Lord Barnett, is not here, because we have not had anything from his quote book for quite a time. I offer the noble Lord, Lord Myners, this from another place on 23 November 1978, when the noble Lord, Lord Barnett, was asking for cross-party support on inflation. He said:

“I had hoped to have the support of the Opposition instead of the carping criticism that we receive constantly … We intend to make our counter-inflation policy work”.—[Official Report, Commons, 23/11/78; col. 1468.]

Well, as it was in 1978, it is now. We should let the Bank of England get on with it.

[Lord Forsyth of Drumlean]

My Lords, will my noble friend confirm that opinion polls show that a vast majority of voters believe that the deficit is the same as the debt? Can I suggest to him that, in order to get across the difficulties which the Government are facing because of the size of the debt, which is still growing, he should consider putting on the Treasury building a large screen that shows how the deficit is going up every day?

[Lord Sassoon]

The debt is going up. Far be it from me to criticise my noble friend, who quite rightly makes this point. If the deficit was running at the level that we inherited from the previous Government, of 11.1 per cent a year—the highest deficit level in our history—it would not take very many years before our debt got up to the level of the Italian and the Greek debt. That is why we will continue to keep our deficit policy on track and keep our interest rates low. I entirely agree with my noble friend that we must be reminded about the level of debt as well.