Economy Update

Lord Brooke of Alverthorpe Excerpts

Thursday 26th May 2022 Lords Chamber

[Baroness Penn (Con)]

My Lords, on my noble friend’s first point, she tempts me to comment on the operation of monetary policy by the independent Bank of England. The only comment I will give is this: since control of monetary policy was taken out of the hands of politicians 25 years ago, inflation has averaged precisely 2%. On my noble friend’s second point, I do not have those figures. I am not sure that they would necessarily be available, but I am happy to find out. If they are, I can write to her and supply them.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I would like to follow up on the latter point about the tight labour market. Estimates are that we have between 400,000 and 1 million illegal workers in this country. None of them is paying tax, national insurance or into the Exchequer. Could the Government spend a little time looking at that? One solution would be to have an amnesty in the next six months for everyone who is an illegal worker to register. It would make their lives safer. They are here and would come into the system, and it would increase the flow of revenue and national insurance. I hope the noble Baroness will be prepared to take that away. Secondly, we look again at flows of income on page 5, with the “excess savings” we have in the country and what people are doing with them. I suggest we have a look again at what we did at the end of the Second World War, when we introduced post-war credits and raised substantial money as a country for investment. That was of great benefit to the country, and I am sure that people would be prepared to participate in an event of that kind if the Government were prepared to stimulate one.

[Baroness Penn (Con)]

On the noble Lord’s second point, the Government always welcome new or revisited ideas and I will certainly pass that back to the Treasury. On people who may be working in the black economy or working without paying tax and national insurance, the noble Lord is right that this is an issue. The Government have taken significant steps over recent years to ensure proper minimum wage enforcement. We also have a Director of Labour Market Enforcement because, as well as ensuring that people pay proper taxes, we need to ensure that they are not vulnerable to exploitation and that the proper rights they should have at work are also offered to them.