UK Trade

Lord Higgins Excerpts

Wednesday 23rd January 2013 Lords Chamber

[Lord Popat]

My Lords, we are in an open economy and that is why the Government have come forward with a plan for growth. We want to make sure that we create one of the most competitive tax systems in the G20; we want to make sure that we are open for business and that we welcome inward investment into the UK, and so we will be competitive. The only way to grow is to encourage new businesses, to help existing businesses to grow and to create a climate in which our businesses can do well. However, we cannot help internationally. We are positioned in such a way that we have to work and live in an open economy.

[Lord Higgins]

I congratulate my noble friend on moving from this Bench to the Front Bench, and wish him well in his new office. I hope he is more comfortable because this Bench is certainly due for refurbishment.

Does my noble friend agree that in the context of this Question the exchange rate is crucial? Has he seen reports over the past week or so of comments made in Germany that there is a danger of an exchange rate war? Does he agree that this would be disastrous for all countries concerned, and that Her Majesty’s Government should do everything possible to avoid such a thing happening?

[Lord Popat]

I thank my noble friend for those compliments. I am sure there is something that can be done about the Bench. I welcome the noble Lord’s interesting question. We helped to let our pound fluctuate freely in the international market. Although sterling has appreciated by 7% since January 2012, it is still around 23% below the January 2007 peak. All I can say on the exchange rate and the value of sterling is: let the international market decide what the value of our currency should be, rather than it being something we directly influence.