Economy: Monetary and Fiscal Policy

Lord Howarth of Newport Excerpts

Tuesday 8th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, I know that it is not for me to ask the questions this afternoon, but I wonder how much more expenditure and deficit the noble Lord, Lord Kinnock, would advocate before we risk getting into interest rates that are at the level of France, let alone of Italy. Last night the UK had 2.3 per cent 10-year interest rates, and Italy had 6.6 per cent heading for 6.7 per cent. Which would the noble Lords opposite like? We will stick to our deficit reduction plan, because that is what keeps interest rates low, and that is what our households and our businesses need.

[Lord Howarth of Newport]

My Lords, if the Minister insists that there is no case for altering the configuration of monetary and fiscal policy, may I draw to his attention another suggestion? Will the Government respond positively and energetically to the proposal put forward by the Society of Pension Consultants that a proportion of the vast resources held under management by pension funds could safely and sensibly be mobilised to lift investment in infrastructure and, through appropriate provision for early access to pension lump sums, to lift personal spending?

[Lord Sassoon]

I certainly agree with the noble Lord that infrastructure is one of the themes and priorities of the forthcoming growth review. The Government are looking at encouraging anything that encourages a further source of investment into our infrastructure from pension funds and others, so I certainly take his suggestions on board.