Economy: GDP Forecast

Lord Howell of Guildford Excerpts

Monday 29th July 2013 Lords Chamber

[Lord Newby]

My Lords, I disagree with virtually all of that. As I pointed out earlier, during the five years of this Government we will have borrowed very significantly more to shore up the economy. That is why debt is higher. I am not sure whether the noble Lord is suggesting that we should have borrowed even more.

[Lord Howell of Guildford]

Is not the noble Lord, Lord Peston, leading us all into a bit of a false dichotomy? Of course we want economic growth, and we are getting a little now. The growth is coming back, as the noble Lord will have seen from the newspapers. Although we would obviously like more of it, growth depends on getting the debt curbed and on getting public expenditure under control. These things are not opposites or choices but all have to go together. Surely the noble Lord, who is a very good teacher and an expert, should be teaching us that. That is what he should be telling your Lordships.

[Lord Newby]

My Lords, the noble Lord, Lord Peston, is an extremely eminent economist and he knows, as a good Keynesian, that the key at this point of the cycle is the change in animal spirits—the sense to which people have confidence to invest. Animal spirits have been very significantly subdued over recent years. There is a suggestion in every single figure that we now see that they are returning to the positive. That, more than any single thing that the Government now do, will be what drives growth forward.