Spending Review and Autumn Statement

Lord Woolmer of Leeds Excerpts

Wednesday 25th November 2015 Lords Chamber

[Lord O'Neill of Gatley]

My Lords, I would love to give a very long answer to this question, not least because I had the pleasure of graduating through the comprehensive system, and of course I am very passionate about the northern powerhouse. I will say one or two very quick things. First, the BBC published an interesting poll last week of the views of people in the north about the northern powerhouse. The BBC, predictably, did not highlight what was possibly the most interesting part of the response, which was that nearly 70% of young people in the north believe that the Government could make a difference to their futures. That was very gratifying to see.

The second thing is about the new national funding formula. My strong suspicion is that this will benefit particularly the most disadvantaged parts of the country, including the north, relative to what would have been there before—although, as I said a few minutes ago, the details of that are yet to be provided even to me, never mind to everybody else.

[Lord Woolmer of Leeds (Lab)]

My Lords, before the last election, in the northern powerhouse we were told that the trans-Pennine rail electrification scheme was going to go ahead. Almost immediately after the election, that was abandoned and put on hold. Today in the Commons, the Chancellor said that the trans-Pennine electrification may go ahead. In the detailed document published in support of the spending review and Statement, on page 64, there is no indication at all of any project start or completion other than that of Manchester to Liverpool. The noble Lord will know that that does not take you over the Pennines. Can he tell the House whether the trans-Pennine electrification is going to proceed, when it will start and when it will be completed? Lots of dates are set out for other projects.

[Lord O'Neill of Gatley]

My Lords, I expressed my irritation about the unfortunate pausing of the trans-Pennine project, whenever it was. I am equally pleased that it was unpaused some weeks ago. It is inappropriate for the Chancellor or me to give a specific time when the trans-Pennine link will be completed.

Let me finish with a point I touched on earlier. One of the many highlights of today’s announcements was the further significant commitment to transport for the north. What I would call phase 2 of the northern powerhouse project, beyond giving devolution to areas that want more responsibility, is building a state-of-the-art transport infrastructure between different parts of the northern powerhouse. Today, there has been a substantial announcement to take that further along this very exciting journey.

EUC Report: Economic Governance

Lord Woolmer of Leeds Excerpts

Thursday 16th June 2011 Lords Chamber

[Lord Woolmer of Leeds]

My Lords, I, too, join colleagues on the committee in thanking the noble Lord, Lord Harrison, the staff of the committee and our special adviser for ensuring that an excellent report was produced on these important issues. I recognise the importance of the euro and the eurozone to the United Kingdom. I also recognise the various measures being put in place for strengthening Governments, dealing with short and long-term crises and establishing a new financial regulatory infrastructure are all extremely important institutional developments.

The markets appear to have considerable confidence in the future of the euro. I shall return to that in a moment. But—and there is a but in my mind—there is the position of Greece, certainly, and Ireland. I regard the sovereign debt situation in those countries as ultimately unsustainable. Our report draws attention to the distinction between solvency and liquidity, and there is a fundamental insolvency problem in Greece and probably in Ireland, too. Ultimately, that will have to be dealt with. Having a new institutional strength and institutional structures, and being determined politically to ensure that they work more effectively in future, will be constantly undermined if the markets simply do not believe that one or two countries are going to default. There is a real risk that that continued uncertainty will undermine long-term reform.

Sooner or later, that problem will have to be dealt with. I well understand, politically, why 2013, or a period two or three years hence, has been set, although I, like the markets, doubt whether the certainty of no default can bear fruit. There is an understandable reluctance for Greece to be seen to be getting away with what is seen as profligacy—of course I understand that. Any way in which that is dealt with, ultimately, will have to be seen in the context of major reforms and fiscal probity in Greece. Ireland is in a very different situation, indeed; there were entirely different causes. But ultimately, those countries in one form or another will have to have some of their debt written down, however that takes place.

I pose one or two questions to the Minister. The European Commission is reported to have examined the consequences of various ways in which Greek debt at least might be adjusted—although I have not had the opportunity to read it myself. Were Her Majesty's Government party to any consultation on the production of that document, and have they formed, or are they in the process of forming, any assessment of the possible consequences of the possible adjustments in debt of Greece and Ireland? It would be very helpful to the committee to know that.

I end where I started. The markets appear not to believe that the almost certain default by Greece will undermine the euro. They do not believe the mantra that if Greece defaults, the euro is under serious threat. That is not what they say. They have been wrong before and they may be wrong on this occasion. However, if they are right, ultimately Greece may be able to default in part, in a controlled way, and even Ireland may be able to do so—and I believe that the Irish and Greek politicians will be greatly relieved.