Bank of England: Interest Rate Policy
Debate between Lord Londesborough and Baroness Penn(1 year, 4 months ago)
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Baroness Penn (Con)
While the Government do not recognise the picture that the noble Baroness has painted, we are looking carefully at the data and ensuring that competition is working properly. That is why my right honourable friend the Chancellor met the major regulators last week or the week before, I believe, and agreed a plan of action in each of those areas to ensure that consumers are getting a fair deal.
Lord Londesborough (CB)
My Lords, on the subject of talking too much, as the noble Lord, Lord Rooker, has just raised, how helpful was it when the Prime Minister at the beginning of this year set a personal pledge to halve inflation from 10% to 5% when the Bank of England was forecasting 3.9% and holding a target of 2%? What does that do for the credibility and independence of the central bank?
Baroness Penn (Con)
My Lords, the Government have always been clear that we want to halve inflation by the end of this year on the path to delivering the 2% target to which the noble Lord referred. The primary driver for that is action by the MPC, which the Government support, but it is also important that the Government make sure that fiscal policy acts in support of monetary policy and that we take action in the short term to bring down inflation; for example, through the energy price guarantee. It is important too that we take action on some of the longer-term drivers of inflation; for example, through improving energy security and supply and tackling things, such as labour supply, which are part of the drivers of where we are today.
Economic Downturn
Debate between Lord Londesborough and Baroness Penn
Baroness Penn (Con)
My Lords, I was doing some other things this weekend, such as celebrating my daughter’s first birthday, and I will not comment on the leadership race. The noble Lord raised the need to have greater hybrid working, for example, and to look for other opportunities for efficiency in our economy and I absolutely agree with him on that.
Lord Londesborough (CB)
My Lords, does the Minister agree that real economic growth will prove almost impossible in the long term while our workforce remains more than 1 million short? Given the current leadership debate, how long will we have to wait until the Government take action to address this growing labour crisis?
Baroness Penn (Con)
I reassure noble Lords that they will not have to wait at all. We are investing in skills across the range of our workforce to ensure that those who are out of work, or in work where they could be making better use of their skills, can find those opportunities. We need to encourage people back into the workforce—for example, older workers who moved out of the workforce during the pandemic—and we need to use migration in a targeted way to ensure that we get the right skills that this country needs.
Enterprise Investment Schemes
Debate between Lord Londesborough and Baroness Penn
Baroness Penn (Con)
My Lords, the Government are confident that the Enterprise Investment Scheme and Seed Enterprise Investment Scheme we are talking about today are effective schemes that have proven to give much-needed support to many British businesses over many years.
Lord Londesborough (CB)
My Lords, I declare my interest as an EIS investor in start-up companies. Do the Government plan to conduct an impact assessment in relation to EIS and SEIS-invested companies? I ask this question because these companies show a very high failure rate, and we should be clear about the cost-benefit in the long term of granting such tax subsidies.
Baroness Penn (Con)
The Government are always keen to ensure value for money in those tax benefits or subsidies that they give. As my noble friend noted earlier, there is a sunset on these schemes, and I am sure that, as part of any process around that, we want to ensure that their impact is appropriate and value for money for the taxpayer.