Public Expenditure: Deficit Reduction

Lord Newby Excerpts

Tuesday 6th September 2011 Lords Chamber

[Lord Sassoon]

I am not quite sure who should admit what they got wrong, but the former Chancellor, Alistair Darling, made a complete mea culpa when he said, “We got it totally wrong, raising national insurance and putting a tax on jobs”. He said that there was no credible economic policy at the last election, which is why Labour lost.

We have introduced a policy that is on track to get the economy growing. It is the underpinning of the economy by a clear fiscal plan on which we can build. The Chancellor and the Prime Minister are working very hard on the growth of the economy, which is founded on the stabilisation of the deficit that we inherited.

[Lord Newby]

My Lords—

[Lord Bilimoria]

My Lords—

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[Lord Sassoon]

To generate growth the Government are, first—in answer to the charge on tax—lowering tax in critical areas, such as corporation tax, by increasing the tax allowances for those starting new businesses through, for example, the EIS scheme. We are insisting on a much cheaper and simpler planning system than the one which has been holding back business investment in this country for the past 50 years. We are also significantly increasing the number of apprenticeships—by 250,000 places compared to the previous Government’s plans over the spending review period. I could go on but we need time for other questions. We are working fundamentally on the growth agenda.

[Lord Newby]

My Lords, does the Minister agree that one of the keys to growth will be increased expenditure on infrastructure? It does not bring growth of itself but in the short term it brings many more jobs. When do the Government intend to bring forward the legislation to introduce the green investment bank, and when does the Minister expect that bank to make its first loans?

[Lord Sassoon]

I completely agree with my noble friend that capital and infrastructure expenditure is one of the keys to growth, which is why we were able in the spending review last year to increase the plans that we inherited—to increase, I say again, the spending plans that we inherited from the previous Government —by up to £2.3 billion a year. That is an additional £8.5 billion on capital expenditure in the review period. I therefore agree with my noble friend. As for the green investment bank, it is on course to start the first phase of operation in April 2012. Legislation will be brought forward as soon as the state aid approvals have been forthcoming from Brussels.