Oil Prices

Lord Higgins Excerpts

Wednesday 8th June 2011 Lords Chamber

[Lord Sassoon]

My Lords, I completely agree with the figures given by the noble Lord for the very considerable increases in commodity prices over the past year. Those are, of course, driven by global factors, but they impact very severely on consumers and businesses in this country. That much I agree with. He referred to low interest rates. This is absolutely critical. We have almost record low interest rates on our 10-year gilts at the moment—3.33 per cent, I think, last night. That is a recognition of the confidence that the Government have in the underlying fiscal policy but it also reinforces that the Government’s contribution is to make sure that we continue to have a prudent view on public finances and do not deviate from the course that we set for reducing the fiscal deficit that we inherited.

[Lord Higgins]

My Lords, is it not clear that the mechanism set up by Mr Gordon Brown for controlling inflation is not working and that the Monetary Policy Committee of the Bank of England is taking a number of other factors into account in addition to inflation? That being so, would it not be appropriate to revise and improve the remit given to the MPC rather than the Governor of the Bank of England having to write letter after letter after letter to the Chancellor of the Exchequer explaining why inflation is above target?