Economy: Credit Easing Policy

Lord Myners Excerpts

Thursday 26th April 2012 Lords Chamber

[Lord Sassoon]

My Lords, I think that we are straying a little bit but my noble friend has, of course, ultimately tied it back to the Question. Of course, if lots of other things were changed in government policy then we could free up money for all sorts of other good things. The Government have no intention—notwithstanding the excellent report from your Lordships’ committee—of changing their policy on development aid.

[Lord Myners]

My Lords—

[Baroness Kramer]

My Lords—

--- Later in debate ---

[Lord Myners]

My Lords, the Minister is no doubt aware that earlier this week the Bank of England reported another very substantial drop in bank lending. Quite clearly Project Merlin did not work; otherwise it would have been repeated. There is very little evidence that the banks are particularly interested or enthusiastic about credit easing—which, of course, as funding support, is to the advantage of the banks rather than the borrowers. Is not the truth about why companies and businesses are not borrowing is that they have no confidence in the Government’s ability to steer the economy back towards growth?

[Lord Sassoon]

My Lords, as I have already explained, the pattern we are seeing in business investment is one that has largely been replicated from previous recessions. Since, on the top of this recession, we also have the enormous burden imposed by the previous Government of an unsustainable fiscal position, businesses are putting in a remarkable amount of investment. They have created over 600,000 new private sector jobs since the last election.