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House of Lords Official Report Vol. 738 Thursday No. 24 28 June 2012 PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT ORDER OF BUSINESS Questions Economy: Deficit Reduction Armed Forces Day Small and Medium-sized Enterprises: Foreign Languages Taxation: Avoidance Electoral Registration and Administration Bill First Reading Business of the House Motion to Approve Draft Communications Data Bill Membership Motion English Cathedrals Motion to Take Note FSA Investigation into LIBOR Statement Education and Training: People with Hidden Disabilities Motion to Take Note Dementia Question for Short Debate Grand Committee Groceries Code Adjudicator Bill [HL] Committee (2nd Day) Written Statements Written Answers For column numbers see back page £3·50 Lords wishing to be supplied with these Daily Reports should give notice to this effect to the Printed Paper Office. The bound volumes also will be sent to those Peers who similarly notify their wish to receive them. No proofs of Daily Reports are provided. Corrections for the bound volume which Lords wish to suggest to the report of their speeches should be clearly indicated in a copy of the Daily Report, which, with the column numbers concerned shown on the front cover, should be sent to the Editor of Debates, House of Lords, within 14 days of the date of the Daily Report. This issue of the Official Report is also available on the Internet at www.publications.parliament.uk/pa/ld201213/ldhansrd/index/120628.html PRICES AND SUBSCRIPTION RATES DAILY PARTS Single copies: Commons, £5; Lords £3·50 Annual subscriptions: Commons, £865; Lords £525 WEEKLY HANSARD Single copies: Commons, £12; Lords £6 Annual subscriptions: Commons, £440; Lords £255 Index: Annual subscriptions: Commons, £125; Lords, £65. LORDS VOLUME INDEX obtainable on standing order only. Details available on request. BOUND VOLUMES OF DEBATES are issued periodically during the session. Single copies: Commons, £105; Lords, £40. Standing orders will be accepted. THE INDEX to each Bound Volume of House of Commons Debates is published separately at £9·00 and can be supplied to standing order. All prices are inclusive of postage. © Parliamentary Copyright House of Lords 2012, this publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through The National Archives website at www.nationalarchives.gov.uk/information-management/our-services/parliamentary-licence-information.htm Enquiries to The National Archives, Kew, Richmond, Surrey, TW9 4DU; email: [email protected] 317 Economy: Deficit Reduction[28 JUNE 2012] Economy: Deficit Reduction 318 Lord Sassoon: My Lords, I can assure my noble House of Lords friend that the Government are committed both through the changes that we are making to the income tax Thursday, 28 June 2012. system and to other public expenditure decisions to protect the vulnerable and reward those who choose to 11 am work, particularly at the lower income levels. So we have, for example, the uprating of benefits by Prayers—read by the Lord Bishop of Birmingham. 5.2% more than average earnings growth to protect people from rising prices; reforms to the tax credit system, so that we are tackling the deficit in a fair Economy: Deficit Reduction way; uprating the child tax credits, so that families Question see an increase of £135 per child this year as well as £180 over inflation last year; changes to personal 11.05 am allowances, which will benefit 25 million people, taking 260,000 people out of income tax altogether; Asked by Lord Barnett and the fairness premium at £7.2 billion—I could go To ask Her Majesty’s Government whether they on. My noble friend is right, and I can confirm that remain of the opinion that their deficit reduction this will be very much at the forefront of the Government’s plan has been the right policy for the United Kingdom; thinking. and, if so, why. Lord Peston: My Lords, bearing in mind that the The Commercial Secretary to the Treasury (Lord Lords reform Bill is predicated on the Government’s Sassoon): My Lords, tackling the large deficit that this view that your Lordships’ House lacks legitimacy, I Government inherited was, and is, necessary to restore congratulate the Minister on his willingness—at least public finances to a sustainable path. Reversing the on this occasion—to answer our questions, albeit not historic rise in public debt will strengthen the UK’s very satisfactorily. I hope he continues with that. medium-term growth prospects. On the substantive issue, has the Minister seen the Governor of the Bank of England’s latest, extraordinarily Lord Barnett: My Lords, has the Minister seen the pessimistic forecast about the likely status of what OECD’s latest figures, which show that when the one would have called the real economy—as opposed Government took office in 2010 our net debt in that to the financial economy? Bearing in mind that most year was 53.9% of GDP, while in Germany it was of the Government’s expenditure cuts have not yet 52.2%? By 2013, next year, they say that UK debt will been made, surely the governor in his pessimism is be 74%, although it is likely to be higher now in the actually not being pessimistic enough. Does the noble light of the latest figures, while Germany’s will still be Lord agree? 50.5%. The budget deficit was serious, of course, but it cannot be blamed for those figures. Does the Minister Lord Sassoon: My Lords, I think that the Governor not agree that those figures show that the real reason of the Bank of England is, as always, being very behind this is that Germany had growth, whereas the realistic and clear about the nature of the dangers that Chancellor’s deficit reduction plan deliberately had no we continue to face particularly because of the eurozone growth? In those circumstances, can we now expect crisis. This is precisely why we will stick to the fiscal another U-turn, shortly I hope, to provide some capital course that we have charted; why it is supported by the for structural expenditure, which might just help to IMF, the OECD and business organisations here; and kick-start a bit of a revival? why it is that we have 10-year interests at 1.7 per cent. We will do nothing to jeopardise that position in the Lord Sassoon: My Lords, the debt figures that the face of the very real dangers that the governor points noble Lord, Lord Barnett, recited precisely illustrate out. the structural deficit challenge that we inherited from the previous Government. We have already reduced Lord Ryder of Wensum: My Lords, leaving aside the the current budget deficit from 11% to 8% of GDP in welcome reductions in corporation tax, will my noble two years, but there is much more to do, and we will friend please remind your Lordships of the three main do it. We will be reducing borrowing by £155 billion a supply-side measures promoted by the Treasury to year by 2016-7, compared to what it otherwise might encourage growth? have been under another Government. We will keep on with that task. Lord Sassoon: My Lords, the first thing that we need to do to support growth is to continue to have Lord Sharkey: My Lords, the Oxfam report, The companies and individuals confident that we will stick Perfect Storm, published two weeks ago, says: to a responsible course and keep interest rates low. It is “The combination in the UK of economic stagnation and from this that all else flows. As well as tight fiscal public spending cuts is causing substantial hardship to people discipline, it is important that we have a loose monetary living in poverty”. discipline. That is the right policy prescription. We will In view of this, could the Minister tell the House what target our other efforts into making sure that education, plans the Government have in place to mitigate the infrastructure and each of the key drivers of medium-term effects of their deficit reduction programme on our sustainable growth are supported in all that we do as a most deprived groups and communities? Government. 319 Economy: Deficit Reduction[LORDS] Armed Forces Day 320 Lord Low of Dalston: My Lords, the Minister has morning. Earlier this week, we saw Ben Parkinson referred to the reduction of the deficit from 11% to 8% carrying the Olympic torch through Doncaster. He of GDP. However, is it not the case that the deficit on suffered appalling injuries in Afghanistan in 2006—the current spending has hardly changed over the course loss of both legs, and brain and back injuries, which of the last year and that almost all the reduction in the are euphemistically described as life-changing injuries. total deficit has come from cuts in investment spending? Ben Parkinson carried the torch for 300 metres. It took him 25 minutes to complete the walk. It was an Lord Sassoon: No, my Lords, that is not correct. act of great determination, guts and, yes, courage. Last year, Government departments came in with It is so that we can express our thanks, gratitude underspends of some £6 billion—and that was certainly and support to our Armed Forces and veterans, and not all capital spending. What my right honourable the enormous sacrifices that so many have made on friend the Chancellor was able to do this week by our behalf, including giving their lives, that we have cutting fuel duty, putting £550 million back into the Armed Forces Day. In thanking the Minister for his pockets of hard-working families, illustrates how we comprehensive reply, may I ask whether the Government are able to use underspends and put them to very good will review the levels of future support that we as a use where they are most valuable to our people.
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