Bankruptcy

Lord Peston Excerpts

Tuesday 7th December 2010 Lords Chamber

[Lord Peston]

My Lords, as the Minister does not, under any circumstances, believe in answering questions put to him, can I ask him whether he has looked at the latest report of the Office for Budget Responsibility, whose forecasts for the next five years—which is how long this Government are insisting that they are going to stay—state that the balance of payments will be in deficit for every one of those five years? That means that our net assets will decline overseas by the amount we have to borrow to finance that deficit. What a nerve the Minister has to talk about bankruptcy in connection with the previous Government, when the balance of payments forecasts show that if anyone is making us head for bankruptcy—although I do not actually believe that we are—it is the present Government?

[Lord Sassoon]

My Lords, when the Government came into office, we had been put on negative credit watch by one of the main rating agencies, unprecedented for the UK, and were paying interest of £120 million a day. The first or second largest holder of bonds in the world had talked of the UK as a “must to avoid” and described the UK’s gilts as,

“resting on a bed of nitroglycerine”.

The Government have restored confidence in our public finances by setting out a clear plan to restore the budget to balance and that is what enables us to borrow what we need to borrow on the international markets on reasonable terms.