Autumn Budget Forecast

Lord Radice Excerpts

Tuesday 29th November 2011 Lords Chamber

[Lord Sassoon]

My Lords, I dread to think what would happen to interest rates. The interest rates on our 10-year money have stayed rock solid. They are slightly down today, at below 2.3 per cent. Where is Italy? It is north of 7 per cent. Every 1 per cent increase in our interest rates would cost this country £21 billion or £22 billion. To look at it another way, by keeping our interest rates below the levels which were forecast by the OBR only in March this year at the time of the Budget, we have saved £21 billion or £22 billion on our interest bill, money that can be much better spent on our public services. I dread to think where we would be, but it would be in horrendous territory.

[Lord Radice]

I welcome the Government’s infrastructure schemes, but what impact will the measures announced in the Autumn Statement today have on output and jobs?

[Lord Sassoon]

My Lords, I can only refer again to the numbers in the OBR’s document. I do not want to detain the House by repeating them all, but they show the cumulative effect of all these measures, including the infrastructure measures. I am grateful to the noble Lord for drawing attention to those measures because they are now more central. The economic infrastructure in particular has become central to the Government’s thinking and planning in a way that it has never been under previous Governments.