Debt Management Office

Lord Newby Excerpts

Tuesday 20th July 2010 Lords Chamber

[Lord Sassoon]

My Lords, there are some big questions. I will try to bring the question asked by the noble Lord, Lord Bilimoria, back to the Debt Management Office and the Bank of England, which will make it more manageable. In the context of a fragile banking system, it is very important that the objectives on monetary policy of the Bank of England, including its ability which it exercised up to £200 billion to use quantitative easing as a way of fulfilling its monetary policy objective, are kept separated from the equally critical role of the Debt Management Office. Thanks to the deficit left to us by the previous Government, it had to issue more than £200 billion of debt last year, which compares with £8 billion in 1998-99. They both have challenging objectives and separation in that sense is very important.

[Lord Newby]

My Lords, given the decision yesterday by National Savings & Investments to withdraw its index-linked bond, have the Government any plans to review the strategy of NS&I and, in particular, its scope for generating funds to help meet the Government’s overall funding target?

[Lord Sassoon]

My Lords, we consider carefully each year and publish transparently the mandates for the Debt Management Office, but consider in that context the remit that we give to NS&I. Its essential task is to contribute in a cost-effective manner to debt raising. It has to look against the targets for debt raising, which we give it, at the appropriate product set that it offers to the public. It is in that context that it periodically withdraws or introduces new products.