EU: Euro Area Crisis

Debate between Lord Sassoon and Lord Soley

Thursday 24th May 2012 Lords Chamber

[Lord Sassoon]

My Lords, many people have been painting scenarios of which my noble friend sketches out one. This is not the time to talk about different scenarios. We want to see an early resolution of the Greek uncertainty, the ring-fencing of other vulnerable economies, the recapitalisation of the banks and work on European growth. That has to be the priority for the moment.

[Lord Soley]

The Government say that the eurozone countries must take decisive action. What decisive action do the Government have in mind?

[Lord Sassoon]

Again, my Lords, I will not speculate on the range of scenarios. Plenty of advice has been given to the UK Government, to each of the individual Governments in the eurozone and to the eurozone collectively. The important thing is to get on with it. The next major milestone will be what the Greek people decide at their forthcoming election.

Budget Deficit

Debate between Lord Sassoon and Lord Soley

Wednesday 15th February 2012 Lords Chamber

[Lord Sassoon]

My Lords, it is indeed the case. If my noble friend had such a short cut, I am sure he would have told the House what it was.

[Lord Soley]

Is the Minister not missing the key answer, which he keeps ducking? The Chancellor has frequently said that the debt burden must be reduced and the Government will reduce it quickly. It is actually increasing. The economy contracted by 0.2 per cent in the previous quarter and will go on reducing for the foreseeable future. What has gone wrong? Never mind what other people say, what has gone wrong with the Government’s plans?

[Lord Sassoon]

My Lords, economic growth has been weaker for reasons that include, particularly at the moment, the ongoing eurozone crisis. Inflation has been high but is now coming down significantly from its peak last September. In those circumstances, the automatic stabilisers apply and expenditure goes up. However, we are getting two very different messages from the party opposite, one implicitly urging faster consolidation and the other asking for more expenditure. Which is it to be? This Government will get borrowing down by £147 billion a year by 2016-17. That is what is important.

Child Trust Fund

Debate between Lord Sassoon and Lord Soley

Monday 28th February 2011 Lords Chamber

[Lord Sassoon]

My Lords, I very much appreciate that the noble Earl, Lord Listowel, keeps these important issues under discussion and alive in our thinking. It is important for all children to understand how to handle money, to be able to make the decisions that they need to start making as soon as they leave school and move on. This is not just a matter of amounts of money that are put aside, but of making sure that the mechanisms are there for all children to learn how to handle their finances as they progress through life.

As to the question of a statutory basis, as and when we come up with the detailed plans for the junior ISA, of course draft regulations will be issued for comment. I cannot confirm that there will be special provision other than in the terms that I mentioned whereby accounts can be set up for children in care to which local authorities and others can contribute.

[Lord Soley]

Does the Minister accept that one reason for having the child trust fund was to encourage the culture of saving? It affects not just children in care but children from families which are poor or where the parents are not that competent, and who may leave school without any savings or culture of savings. Will the Minister get all the Ministers who are dealing with this to think how much money they have given to their own children to make sure that they survive in future life, and then to ask themselves how a child coming from such a background as described is expected to survive without the help of the child trust fund or the savings culture that it inspired?

[Lord Sassoon]

My Lords, very difficult choices have to be made at a time when we have been left with the biggest deficit in our peacetime history.

Autumn Forecast

Debate between Lord Sassoon and Lord Soley

Monday 29th November 2010 Lords Chamber

[Lord Sassoon]

I am grateful to my noble friend for pointing out that growth is expected by the OBR to continue to be above 2 per cent in every year of the forecast from next year onwards. I am happy to confirm this. Indeed, the OBR forecasts that employment will rise and unemployment will fall throughout the period.

In respect of Ireland and the eurozone, I can confirm that the UK will not be part of the permanent bail-out mechanism that the eurozone will put in place. Having said that, I do not wish to speculate about the future of the eurozone, which is very important to the UK. Europe accounts for 40 per cent of our trade and it is in the interests of this country to do what it can to support the stability of the eurozone. That does not mean that, with the exception of Ireland and its particular circumstances, we will directly support any bail-out operation.

[Lord Soley]

The noble Lord might consider recommending to the Chancellor of the Exchequer that this Statement be submitted for the Booker Prize for creative literature. It really is rather strange. In repeating the Statement, the Minister said that some people said that these growth figures would not happen. That is not true. They said that they would happen as long as we did not cut too deeply or too fast. That is what the previous Government said. The growth figures in the first seven months of this Government are down to the previous Government’s policies and the general policies within industry. The Minister might care to remember—as I pointed out a number of times when I was sat on that side of the House—that British manufacturing output was growing and that we were the sixth largest manufacturing country in the world. At the same time, French manufacturing was in decline. At the same time, President Sarkozy has expressed concern that the French might have trouble with their triple A rating.

It is also not true to say that this is the largest deficit in peacetime history. Simply typing “history of the national debt” into any search engine, or going to the library, will tell him that national debt in peacetime, as a percentage of GDP, was significantly higher through most of the 19th century—it was the way we financed the Empire—and much of the 20th century. Indeed, it was only the previous Labour Government who paid off the final debt from the Napoleonic wars and the Second World War. Can the Minister now tell us why he thinks that cutting faster and deeper in the coming year will help when we are already recovering? In a year’s time he will not be able to carry on the political, or party propaganda, line that somehow or other in seven months the Government have turned it round. They have not. That was already happening. What matters is the next 12 months.

[Lord Sassoon]

My Lords, earlier on I thought I heard the noble Lord, Lord Eatwell, describe 2010 as the year of Labour policies, but he said it so sotto voce that I left it there. The noble Lord, Lord Soley, now talks about the strength of the economy this year as being down to the previous Government’s policies. I remind noble Lords of what the OBR says about the reason why growth is now forecast by it to be much stronger in 2010 than had been previously forecast. It is principally down to the confidence of industry in restocking. That position has changed in its forecasts since June. I wonder where that confidence comes from. It comes from the fact that we came in in May and took immediate and decisive action to get the economy under control, which has resulted in British business restocking because it knows that sustained growth is coming. Let us stop going on about this and celebrate the fact that the growth is there and that industry has the confidence to understand precisely that.

Finance: Fiscal and Monetary Policy

Debate between Lord Sassoon and Lord Soley

Tuesday 2nd November 2010 Lords Chamber

[Lord Sassoon]

I completely agree and am grateful to my noble friend for drawing our attention to that. Indeed, only 10 days ago, after the spending review, Standard and Poor’s, one of the leading rating agencies, moved our rating from negative to stable. It is that confidence that keeps interest rates low and enables businesses to invest.

[Lord Soley]

First, I thank the Minister for what I think was the first open acknowledgement, and the clearest indication yet, that the last three quarters’ growth has been down to the previous Government, not this Government. Secondly, going back to his first Answer, how much importance do the Government attach to the growth of the economy? After all, on many occasions over the past 200 years national debt in the United Kingdom has been far higher than it is now, and it has always been primarily growth that has got us out of it. Therefore, should we not put growth at the very top of the agenda and should not the Government start saying that?

[Lord Sassoon]

My Lords, first, I made no admission. I do not think that we have time today to apportion credit and blame but I merely note that I look forward to seeing when the party opposite decides that something relating to the economy is its fault. As to the size of the debt, as a Government we inherited the largest peacetime deficit in our history—indeed, the largest deficit in Europe—and there are all sorts of measures of this. We have needed to engage in an £81 billion consolidation of the fiscal situation in order to retain, as we have done, the confidence of the market to enable growth policies to be underpinned.