Lord Skidelsky
Main Page: Lord Skidelsky (Crossbench - Life peer)
Lord Sassoon
My Lords, it is not very productive to reduce everything to trying to find chinks of light between different parts of the coalition. It would be more helpful to have a substantive discussion about the Green Paper. It was published under the joint signatures of the Secretary of State for Business, Innovation and Skills and the Chancellor of the Exchequer and sets out a wide-ranging agenda of possible measures to increase lending to business. As I said, I encourage anybody with views on it to contribute to the debate over the summer.
Lord Skidelsky
My Lords, the noble Lords, Lord Roberts of Conwy and Lord Higgins, raised an important question about the effectiveness of monetary policy which requires an answer from the government Front Bench. Given that the growth of M4, which is the best measure of bank lending, has fallen from 16 per cent to 3 per cent over the past two years, what confidence can the Government have that further quantitative easing will be able to offset the deflationary impact of the planned cuts in public spending? This is not a matter for the MPC; it is a matter for the Government.
Lord Sassoon
My Lords, I will be brief. I would say that the best indicator of the state of bank lending is to be found in the Bank of England’s July Trends in Lending document, which shows that in 2009 bank lending decreased by £45.6 billion and in January to May this year by £11.1 billion. I suggest that the proof of the pudding is in the eating.