Economy: The Growth Plan 2022

Debate between Lord Forsyth of Drumlean and Lord Liddle

Monday 10th October 2022 Lords Chamber

[Lord Forsyth of Drumlean (Con)]

Fine, I will give way.

[Lord Liddle (Lab)]

How does the noble Lord explain away the fact that the Government introduced the largest set of tax cuts and the biggest increase in the budget deficit since the time of Anthony Barber in 1972?

[Lord Forsyth of Drumlean (Con)]

How does the noble Lord explain away the fact that his Front Bench supported all of it, including the reductions in national insurance and the basic rate of income tax? They did not support the corporation tax cut but that is presumably because they do not recognise the importance of having investment in our country. Where does investment come from? It comes from retained profits after tax; that is how I would explain it. It is actually to the credit of the Opposition that they supported the populist things. But they concentrated on the cut to the top rate of tax, which the Government have since decided not to go ahead with.

Inflation is the enemy. Jim Callaghan, a great Labour Prime Minister, warned us that

“inflation is the father and mother of unemployment”.

That is why the Government are determined to try to get growth, and why we need to recognise that continuing with QE on the present scale will result in inflation and a disaster for both unemployment and our country’s prosperity. The era of free money is over. We need to concentrate on wealth creation, not wealth consumption. We need to save every penny; we could start with our own front door in this place, which is costing £2.5 million. Use the candle ends. Look at programmes and decide on priorities. Personally, I think that increasing universal credit should be a priority. However, if that is to be funded, people must recognise that it will mean cuts elsewhere.

So I say this: all support to the Prime Minister. Stop the personal attacks and look at the reality, because if we get this wrong people’s mortgages and costs will go through the roof—and they will not be able to blame the Government.