Government Spending
Debate between Baroness Fall and Lord Bethell
Lord Bethell
My Lords, the situation described is not one that I recognise. A thousand extra people are in work every day since 2010. The deficit is down by four-fifths from its peak of 10% in 2009-10 to 1.9% in 2018-19, and wages currently outpace inflation. Productivity is a challenge. It is not performing as we would like—it has stalled since the financial crisis—which is of deep concern to the Government. Historic low interest rates for borrowing costs are a big opportunity. That is why the Chancellor has made it clear that the fiscal rules are under review and, when we have a chance to have a Budget, those will be made clearer.
Baroness Fall (Con)
My Lords, can we not agree that it was disappointing that the former Labour Prime Minister was not able to get rid of boom and bust? With that in mind, will my noble friend agree that, when the economy is doing well, we must be careful not to ratchet up debt so that when we hit more difficult times we are resilient?
Lord Bethell
My noble friend puts it very well. Debt is central to the Government’s plans. We will maintain a clear set of rules to anchor our fiscal policy and keep control of our debt. But we have to face up to the challenge of productivity to invest in education, skills, and the physical and public service infrastructure of the country, and the opportunity presented by low rates of interest is one that we should review and take seriously.