Economic Downturn

Lord Haskel Excerpts

Monday 18th July 2022 Lords Chamber

Asked by

[Lord Haskel]

To ask Her Majesty’s Government what assessment they have made of forecasts of an economic downturn later this year, and what steps they are taking in response.

[Baroness Penn (Con)]

Her Majesty’s Government do not prepare forecasts for the UK economy. In March, the independent Office for Budget Responsibility forecast growth of 0.3% and 0.2% for the third and fourth quarters. Recognising that the economic outlook has become more challenging since the OBR produced its forecast, in May the Government pledged a further £15 billion of support to help maintain consumer spending and head off the risk of an economic downturn.

[Lord Haskel (Lab)]

The Minister has not mentioned rising inflation, rising hardship and inequality, low growth and productivity, strikes, a fuel crisis and, especially today, climate change. All tell us that the outlook is dire. What are we going to do about it? Judging by the Tory leadership hustings, we are going to cut taxes and cut public spending, either now or later. No wonder the Conservative-dominated House of Commons Treasury Committee accused Ministers of a

“lack of long-term thinking in economic strategy”.

Those whom we rely on to invest and grow the economy do not make decisions based on headline tax rates and soundbites. Even though we only have a caretaker Government, will the Minister urge her colleagues to start thinking through a proper strategy to deal with this economic crisis, or simply adopt Labour’s strategy?

[Baroness Penn (Con)]

My Lords, there was quite a lot in that question. I am not sure that the noble Lord listened to my initial Answer, where I referenced the support that the Government are providing to help people with the cost of living. That was extended by £15 billion in May, but of course previous support was announced, which takes that to £37 billion. He mentioned a long-term plan for economic growth, which is exactly what the Government have. At spending review 2020-21, we made a landmark investment in capital projects and we are increasing public investment in R&D to £20 billion a year by 2024-25. Those are just two of the measures that we are taking to support our economy.