Autumn Statement

Lord Myners Excerpts

Wednesday 5th December 2012 Lords Chamber

[Lord Sassoon]

My Lords, I am very grateful to my noble friend for her generous remarks and for her support since she has been her party’s spokesperson on the economy. The two parties are joined at the hip when it comes to the key economic work and all the other work of the Government. Importantly, she reminds us of a critical part of the Autumn Statement: raising the tax threshold to the benefit of 25 million people. That is very important.

On credit and access to credit, I draw the attention of the House and my noble friend to the comments of the OBR today. Its judgment is that the funding for lending scheme will lower rates for credit but increase availability. I very much share my noble friend’s concern to see a more competitive banking landscape emerge. In that context, it is interesting to note that the funding for lending facility is being taken up and having a disproportionate effect on some of the new challenger banks. I hope that that continues and that they continue to be able to increase their lending responsibly off the back of that scheme.

[Lord Myners]

My Lords, perhaps I may add my personal congratulations to the Minister. He has always brought great skill, tact, humour and optimism to his role on the Front Bench. It is a shame that that optimism has not seen the prize delivered because today’s economic Statement is a lamentable one. Against the two principal, navigating stars that the Chancellor of the Exchequer set—the fiscal mandate and a supplementary objective—he has missed, and missed by a country mile. On the first, he has been required to push austerity even further into the next Parliament and, on the second one, he makes only a modest reduction in debt as a percentage of GDP in the year 2017-18, but it is still 3% higher than in the current year. The policy of austerity-led expansion is clearly not working. An extra 1% of GDP growth during the lifetime of this Parliament would have reduced by five percentage points the proportion of debt to GDP. Growth is the key to reducing the deficit.

There are things in the Chancellor’s Statement that I find very commendable, particularly the extension of the dual carriageway of the A30 in my beloved Cornwall. Whether the right honourable Michael Gove will appreciate the use of the word “dualling” as a verb in the Chancellor’s Statement is questionable and I wonder whether Mr Gove would appreciate the arithmetic error in the Chancellor’s Statement on the increase in the inheritance tax nil band.

The Chancellor makes some very good points about attacking tax havens. So my question relates to suggesting to the Minister that, when we chair the G8, we should seriously consider saying that no G8 bank can operate in an offshore centre with a subsidiary or a branch. If, in the future, the banks of the Channel Islands—Guernsey and Jersey—were domestic banks rather than branches of subsidiaries of the world’s leading banks, most of the attraction of using despicable offshore tax havens would fall away.

[Lord Sassoon]

My Lords, that seemed to be a speech rather than a question. However, I am grateful for some of what the noble Lord, Lord Myners, had to say and I shall miss sparring with him. I remain an optimist. In less than three years since the previous election, the private sector in this country has created 1.8 million new jobs, which is twice what the OBR projected, and the OBR’s projection today for the period up to 2018 is that 2.4 million further new private sector jobs will be created at a time when it estimates that public sector employment will be reduced by 1.1 million. Times are difficult, but I remain optimistic about the underlying strength and vibrancy of the private sector in this economy.

As to the observations of the noble Lord, Lord Myners, about offshore centres, some of the issues that he raises are certainly on the agenda, but it is inappropriate to talk about offshore centres and others. The key thing is to make sure that the so-called offshore centres are brought up to the standards of the best. Some of them have made huge strides; others need to. I take his points.