Economy: Update

Baroness Altmann Excerpts

Tuesday 28th April 2020 Lords Chamber

[Lord Agnew of Oulton]

I thank the noble Baroness. On insurance, I did not hear my noble friend Lord Callanan’s response, so I do not want to conflict with what he may have said, but the key thing here is that when one takes out a general business policy, one has the option of an extension for pandemic cover. The problem is that I think most businesses did not elect to do that, so it would not be right then to impose that cover on insurers retrospectively through the route suggested by the noble Baroness.

On paying council tax rather than business rates, as I have mentioned before, we have put together a package of some 11 types of support for businesses, ranging from the very smallest to the largest, including such things as the deferral of tax liabilities. I believe that there are 1.3 million self-employed people on self-assessment. Deferring will provide that whole cohort with some £13 billion in cash flow. So a range of measures is there. It is important for noble Lords to look in the round at the support that we are offering.

[Baroness Altmann (Con)]

In light of my noble friend stating that record levels of debt will result from this virus, and in light of the Bank of England purchasing significant amounts of conventional gilts, might he ask his colleagues whether they are considering liaising with the DMO to issue specific gilts for pension funds which have more than £1 trillion? That could be invested in mortality or longevity gilts, CPI-linked gilts and LPI-linked gilts to assist those defined benefit schemes that have significant problems in light of the current circumstances, to match their liabilities more accurately.

[Lord Agnew of Oulton]

My noble friend makes a very good point. It is certainly an idea that I will take back to the Treasury for further discussion. We issued war loans in both of the last world wars and it took a long time to pay them off, but it is a way of ring-fencing the efforts that we will have to deploy to bring the country back from this awful business. So I thank my noble friend for her very sound suggestion.