Autumn Statement

Lord Razzall Excerpts

Thursday 5th December 2013 Lords Chamber

[Lord Deighton]

I thank my noble friend for those incisive observations. He is absolutely right to say that the deficit was reduced in a measured fashion, which is part of the reason why the economy has been able to recover so quickly. He is also absolutely right that there is still a structural deficit, so we cannot simply allow for the natural recovery through the economic cycle to take care of our borrowing problem; we must continue to drive savings through the system. On the fall in consumer savings, again, my noble friend is absolutely right that it is a sign of a healthy economy to have a strong savings rate. On consumer behaviour, it is not surprising that, after a few years of belt-tightening, there has been a desire to begin spending again.

On the overall economy, as I mentioned, the recovery in business investment is the single most important change in the recovery of the economy over the next year. We anticipate that the recovery in consumer demand will give business the confidence it needs to increase its level of investment, which is what should sustain the recovery.

On infrastructure, my noble friend is correct. Essentially, there are two ways to finance it: directly from taxpayers or indirectly through the private sector and into the utilities, which then recover the investment through consumers paying. Of course, that is governed by independent regulators, who set the prices in those industries. It is absolutely part of our national infrastructure plan continually to assess the balance between the interests of the investing institutions and consumers’ affordability over the longer term.

[Lord Razzall (LD)]

My Lords, notwithstanding the verbal fisticuffs in another place, I am sure that no one in your Lordships’ House thinks that the Autumn Statement does not contain a lot of good news. Perhaps I could ask the Minister one or two, or three or four questions.

I assume that the Minister will agree that our two parties going into coalition government in 2010 was essential to restore the economy to the point where we could have the Autumn Statement today, and that, without that coalition being formed, that would not have happened. Touching on the coalition, I am well aware, as are all noble Lords, that coalitions mean trade-offs. One of them is the married tax allowance. It is obviously above the Minister’s pay grade to say whether it is time to change it, but if the object is to save marriages, would it not have been better to spend the money on organisations that help them, rather than to introduce that to satisfy the Tory right-wing?

Has there been any progress on the tax fairness proposals that David Cameron announced at the G8, with negotiations on international co-operation? The Minister touched on tax avoidance. How much have tax evasion and aggressive avoidance been affected? How much is currently raised annually from the Government’s measures? Does he agree that, although the plan announced yesterday indicates that only 1% of our GDP will be spent on infrastructure—much less than our colleagues—there is an opportunity to increase that as the economy recovers?

Finally, on a cheekier point to which I think I know the answer, bearing in mind that, as the Minister rightly says, more jobs have been created here in this country than before, have he or his colleagues had an apology from the Labour Party for saying that this would not work?

[Lord Deighton]

On the effectiveness of the coalition partnership, I launched the national infrastructure plan yesterday with my right honourable friend Danny Alexander, and I can say that the harmony in the Treasury could not be stronger. My noble friend is correct to say that the marriage tax allowance question is way beyond my pay grade. On the G8, I can confirm that the initiatives outlined by the Prime Minister, where we have taken global leadership to address issues of tax information exchange and publicising beneficial ownership, continued to be followed through very effectively, with us setting an example.

On the national infrastructure plan, it is clear to me that infrastructure is a very important driver of growth, and the bigger proportion of public spending we can devote to it, the healthier the long-term outcome. The measure, therefore, that my honourable friend the Chancellor of the Exchequer has put in place to keep the proportion of capital expenditure to national income at a constant level is absolutely to be welcomed as a protection in that respect.