UK: International Competitiveness

Lord Howarth of Newport Excerpts

Wednesday 23rd June 2010 Lords Chamber

[Baroness Wilcox]

The Office for Budgetary Responsibility was established to form independent judgments on the overall shape of government finances, not to provide policy advice on different taxes. Beyond a technocratic assessment of the methodology and central assumptions of measures, including tax, the OBR has no remit on tax policy.

[Lord Howarth of Newport]

Will the noble Baroness explain to the House how reducing capital allowances, imposing a levy on the banks, increasing VAT and shrinking domestic economic demand at a time when demand in some of our most important export areas—notably the eurozone—is contracting, will assist the international competitiveness of UK firms?

[Baroness Wilcox]

I am afraid that noble Lords have heard this answer before and will hear it again. We are where we are. Given the fiscal plans that this Government inherited, I am afraid that we would put the recovery at risk if we did it any other way. Threatening higher tax and interest rates would affect not just the Government but families and businesses. The noble Lord could have answered that question himself a few months ago.