Economic Update

Lord O'Neill of Gatley Excerpts

Tuesday 12th January 2021 Lords Chamber

[Lord Agnew of Oulton (Con) [V]]

The noble Lord asks very important questions. I am not in a position to give a date by which we will attempt to rebalance the budget, but I assure the noble Lord it is a very high priority. Indeed, on his second question, we are aware that we are able to borrow large sums of money at the moment because of the very low interest rates that will not necessarily remain, which re-emphasises the need to bring the budget back into balance as soon as possible.

[Lord O’Neill of Gatley (CB) [V]]

My Lords, I would like to, once more—I have done so before—compliment the Chancellor and the Treasury on their general agility in their policy response to this unpredictable, ongoing and, at times, devastating twist in the pandemic. I have two very brief questions. First, in view of the highly appropriate importance being attached to the speed of the vaccination programme, and the high level of personal savings that has built up, as the Chancellor acknowledged yesterday, has the Treasury undertaken—if it has not, perhaps it might consider doing so—exploring research that directly links the speed of vaccine rollout to business and consumer confidence in an effort to encourage more people to take the vaccine and to build confidence across our society? Secondly—this links to what has already been raised—are we to believe that, once more due to the severe complications brought about by the new variant, further specific policies on the crucial levelling-up agenda, which the Prime Minister and his Cabinet frequently refer to, are likely to be delayed again, and that the planned March Budget is likely to be yet another Covid-19 support-based event?

[Lord Agnew of Oulton (Con) [V]]

The first question, on the link between vaccination rate and economic confidence, is absolutely fundamental. I am not aware of specific research being done on that. If there is any, I will make the noble Lord aware of it. From my own interaction with businesses, there seems to be a strong sense that the two are intertwined, which is why we are putting so much emphasis on it.

I reassure my noble friend that the commitment to levelling up remains as strong as ever. We will be making a Statement in the next few days on our progress in moving civil servants out of London and into some of the areas that the noble Lord refers to. My right honourable friend the Chief Secretary has a large fund for levelling up, for which regions can bid, and that is moving forward as well.