Government: Economic Policies

Lord Tomlinson Excerpts

Wednesday 30th January 2013 Lords Chamber

[Lord Deighton]

I thank my noble friend for that excellent contribution. I will not comment on the timing of selling the gold. Hitting a market high is tough to do. I will refer to what I would call the “scissors of doom”, which is the graph I was first shown when I entered the Treasury, which shows that between 2008 and 2010 spending was heading north at a rapid rate while receipts were heading south at an equally rapid rate, a situation that we are now trying to recover through this period of fiscal consolidation.

[Lord Tomlinson]

Does the Minister agree that confidence in the United Kingdom is being illustrated by the way sterling is devaluing against the euro—the much derided euro on which we blame so many of our economic ills? If the medicine is so good, why is the patient looking so ill?

[Lord Deighton]

There are many positive signs. I do not think that the patient does look so ill. I refer to the extraordinary employment levels—the biggest increase in employment for the past 20 years. On the question of the exchange rate, the noble Lord is absolutely correct that sterling has recently weakened against the euro. The exchange rate has two sides: the strength of the eurozone versus the UK economy. What that exchange rate reflects is that many of the risks that have been confronted by the eurozone over the past two or three years are perceived by the market to be diminishing.