Sterling: Rise in Yields on 30-year Gilts

Baroness Redfern Excerpts

Tuesday 14th January 2025 Lords Chamber

[Lord Livermore (Lab)]

I agree that the Conservative Party owes the country an explanation—it also owes the country an apology. There was no bigger failure of the previous Government than their failure on growth. First, they introduced austerity, which choked off investment. Then, their Brexit deal created new trade barriers equivalent to a 13% increase in tariffs for our manufacturing sector, permanently reducing GDP by 4%. Finally, their disastrous mini-Budget crashed the economy and set inflation and interest rates soaring. Of course, they left us with the £22 billion black hole in the public finances.

[Baroness Redfern (Con)]

My Lords, after this Government inherited the second-lowest debt in the G7, we now see business confidence ever diminishing—and the public, too, are rightly concerned. We are also witnessing gilt levels at a 30-year high. Does the Minister agree that the gilt markets are in turmoil and therefore technically not functioning in an ordinary way? Does he stand by his Chancellor, who said that there will be no further tax rises?

[Lord Livermore (Lab)]

If I may, I will correct the noble Baroness: UK gilt markets continue to function in an orderly way. Underlying demand for the UK’s debt remains strong, with a generally well-diversified investor base. The Debt Management Office’s gilt sales operations continue to see strong demand, with the latest auction, held earlier today, receiving three times as many bids as the amount on offer. The noble Baroness mentioned what we inherited, so she will be very aware that we inherited a £22 billion black hole in the public finances. We have taken very difficult decisions to deal with that, every single one of which has been opposed by her party.