Global Economy

Lord Sewel Excerpts

Thursday 11th August 2011 Lords Chamber

[Lord Pearson of Rannoch]

My Lords, my questions come against the background of the cuts generally and our perilous economic condition. They also feed in to our previous debate. My first question to the Minister is very simple. Do the Government accept their own figure of £9 billion a year, net cash, which we pay to Brussels, with no conceivable benefit to us? If they agree their own figure of £9 billion a year net, will they agree that that comes to some £25 million every day? The sum of £25 million a day would pay the salaries of 833 policemen every day, or 304,045 policemen per annum. I emphasise that that is net cash. I do not mention the costs of over-regulation of 6 per cent of GDP per annum in food and so on.

My second question is: do the Government admit that there would be no crisis in the eurozone without the euro? Do they also admit that there would be no eurozone without the ill-fated project of European integration? On the Statement, when they accepted the remorseless logic of a federal budget, which they appear to have done, are they convinced that the German people, the Dutch people and so on will put up with this? I think they may be mistaken.

Finally, how can they possibly say that the breakup of the euro would be economically disastrous, including for Britain? Could the noble Lord at least justify that because if we face the reality that the thing is going to break up—and the quicker we face it and the quicker it breaks up, the better—we would all be very much more comfortable?

[Lord Sewel]

My Lords, the Minister has rightly drawn attention to the weaknesses, indeed the failures, of the European political institutions in responding to the crisis. Would he care to reflect on the contribution of the political institutions of the United States to the present crisis? Could it possibly have something to do with the fact that they have a political structure based on two elected Chambers, one in which the Executive have a majority and one in which they do not? We have heard that somewhere before.

[Baroness Kramer]

My Lords, these dark glasses are not for glamour but to prevent me sharing an eye infection. I very much agree with the Minister that the Government, and individuals, have no choice but to deleverage. Many of our large companies are not anxious at this time to invest or borrow significantly because they are doubtful about both the domestic and international economy. Surely, however, one sector has significant capacity to absorb new investment in the form of equity and debt: that of the micro-businesses and very small businesses, because they have been in large part neglected by our banking sector and our financial institutions for years. Would the Minister be willing to look at a programme that specifically targets those kinds of businesses which, culturally, our current institutions usually fail to serve, perhaps building off some of the schemes which are being looked at now to revitalise the high streets which were so badly damaged earlier this week?