Inflation

Lord Bates Excerpts

Wednesday 19th January 2011 Lords Chamber

[Lord Sassoon]

My Lords, I could not agree more with the starting premise of the noble Lord, Lord Davies of Oldham. The Government are concerned about the hard-pressed, hard-saving, hard-working low earners in this country. That is why, in April this year, 880,000 people will be taken out of taxation altogether. That is also why 23 million taxpayers will each receive back £170 compared with the plans of the previous Government. That is an absolute recognition of the fact that the Government understand how low-income families are suffering and are doing something about it.

[Lord Bates]

My Lords, will my noble friend also comment on the consequences for inflation of the reductions in corporation tax, the reductions in national insurance contributions, the freezing of council tax and business rates and, most importantly, the tackling of the deficit that have all been announced?

[Lord Sassoon]

I agree absolutely with my noble friend that these are all critical policies to ensure that growth gets going again. It is precisely by the Government both reducing the deficit and ensuring growth that the Monetary Policy Committee of the Bank of England will have a firm policy background against which to make its decisions that bear on the inflation target.