Lord Howell of Guildford
Main Page: Lord Howell of Guildford (Conservative - Life peer)Department Debates - View all Lord Howell of Guildford's debates with the HM Treasury
(2 days ago)
Lords ChamberMy noble friend is obviously right to draw attention to the previous Government’s disastrous economic policies. He knows that, as I have said, the Government do not comment on specific financial market moves, but he will also know that current conditions in gilt markets are completely different from those experienced at the time of the Liz Truss mini-Budget. Then, severe volatility in gilt yields caused instability in the pension fund sector and dysfunction in gilt markets. This led the Bank of England to have to intervene on financial stability grounds to restore market functioning. Recently, gilt yields have risen in line with global peers, mainly driven by global factors, and these market moves have been orderly.
As my noble friend draws attention to, when Liz Truss crashed the economy, long-dated bonds were most significantly impacted due to market dysfunction caused by unfunded tax cuts, unrealistic spending plans and the undermining of institutions that are crucial to economic stability, namely the Treasury, the OBR and the Bank of England. This pushed up mortgage costs by £300 a month, for which working people are still paying the price.
My Lords, bond markets obviously charge for their lending to certain countries, on the basis of differing judgments on the health of the borrower, on the prospects and on the signs of coherent strategy and direction. Could we interpret the movement of the Chief Secretary to the Treasury over to a new role, senior Minister inside Downing Street under the Prime Minister, as a first step—an attempt—to recreate a coherent strategy, which is so obviously lacking?
I disagree with the noble Lord’s interpretation of this Government’s strategy. We have a very clear strategy to grow the economy and maintain fiscal stability. It is incredibly welcome that my right honourable friend is now working inside No. 10 and will help to drive forward the Government’s agenda.