Budget: Economic and Fiscal Outlook

Baroness McIntosh of Pickering Excerpts

Tuesday 5th May 2020 Lords Chamber

[Baroness McIntosh of Pickering (Con)]

My Lords, I welcome this debate. I found my noble friend Lord True’s introduction extremely interesting. I hope that the Government will commit to comment annually on their convergence programme in the form of a similar report. I will focus on where we are as measured by government deficit and debt, the long-term interest rate and exchange rate fluctuations. I will also look at—not just in the way that the noble Baroness, Lady Bennett, has done—the extreme challenges coming up, for Defra in particular, of food supply, environmental protection, global warming and climate change.

This week, we are celebrating the third anniversary of delivering competition in the provision of water supplies to business customers. One of the unintended consequences of Covid-19 has been that many businesses are simply not operating and are therefore not in a position to pay for their water supply. It is a matter of great regret and sadness that there will, undoubtedly, be potential for the failure of a number of water companies. The legislation at the time did not tackle the problem of exiting the sector. Ofwat is committed to looking into this, but possibly not before 2021. In addition to the significant economic disruption which has already been identified in the reports to which my noble friend Lord True referred, there are other consequences, unintended and unforeseen, of which the Government might wish to take note.

I will also reference the Financial Times. In an article in early April, the Governor of the Bank of England pledged not to slip into permanent monetary financing of government policy. He went further, stating that the central bank—the Bank of England—would not engage in permanent monetary financing. In his opening remarks, my noble friend specifically outlined the Government’s Covid-19 expenditure, which has continued, and indeed grown, since the Budget earlier this year. What measures have the Government identified, and intend to take, to support businesses and individuals, if—as in relation to business failures in the water sector —they require such support beyond the period to which my noble friend referred?