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Vol. 715 Tuesday No. 17 15 December 2009 PARLIAMENTARY DEBATES (HANSARD) HOUSE OF LORDS OFFICIAL REPORT ORDER OF BUSINESS Leave of Absence Questions Public Finances Visas: Non-EU Visitors Barnett Formula Prisoners: Voting Business of the House Motion on Standing Orders Immigration (Biometric Registration) (Amendment No. 2) Regulations Crime (International Co-operation) Act 2003 (Designation of Participating Countries) (England, Wales and Northern Ireland) (No. 3) Order 2009 Environmental Permitting (England and Wales) (Amendment) (No. 2) Regulations 2009 National Assembly for Wales (Legislative Competence) (Welsh Language) Order 2009 Health Professions (Hearing Aid Dispensers) Order 2009 Motions to Approve Bribery Bill [HL] Order of Consideration Motion Procedure Committee: Second Report of Session 2008–09 Procedure Committee: First Report Motions to Agree Consolidated Fund Bill First Reading Equality Bill Second Reading Future Defence Programme Statement Equality Bill Second Reading (continued) Grand Committee Non-Domestic Rating (Chargeable Amounts) (England) Regulations 2009 European Communities (Definition of Treaties) (1996 Hague Convention on Protection of Children etc.) Order 2009 Legislative Reform (Revocation of Prescribed Form of Penalty Notice for Disorderly Behaviour) Order 2009 Community Radio (Amendment) Order 2010 Legislative Reform (Insolvency) (Miscellaneous Provisions) Order 2009 Debated 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. 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All prices are inclusive of postage. © Parliamentary Copyright House of Lords 2009, this publication may be reproduced under the terms of the Parliamentary Click-Use Licence, available online through the Office of Public Sector Information website at www.opsi.gov.uk/click-use/ 1385 Leave of Absence[15 DECEMBER 2009] Public Finances 1386 Lord Newby: The terms of the Fiscal Responsibility House of Lords Bill would mean that, if there were a recession in five years’ time, it would be illegal for the Government to Tuesday, 15 December 2009. increase public expenditure to combat unemployment. Does the Minister agree that this proves that the Bill is 2.30 pm just a case of political posturing and that it is not worth the paper it is written on? Prayers—read by the Lord Bishop of Chester. Lord Davies of Oldham: No,myLords,itisa reinforcement of the Government’s intent with regard Leave of Absence to their public borrowing plans for the future as we emerge from this deep recession. If the noble Lord is suggesting that we are likely to see in the near future 2.36 pm anything like the recession that we have had over the The Lord Speaker (Baroness Hayman): My Lords, past two years, his judgment is very different from that the Conference of Speakers and Presiding Officers of of everyone else concerned with the British economy the Commonwealth will be held in New Delhi from and the international economy in terms of recovery 4 to 8 January 2010. Accordingly, I seek leave of absence from this recession. The Bill makes clear the Government’s from your Lordships’ House from 5 to 7 January. strategy for emergence. Lord Campbell of Alloway: Is it right that we are the Public Finances only country in the European Community not moving Question out of recession? If so, why is that? 2.36 pm Lord Davies of Oldham: Like all other countries in Asked By Baroness O’Cathain the European Community, we are moving out of recession and the indications are that we will resume growth To ask Her Majesty’s Government what assessment next year. they have made of whether the levels of public debt and deficits in the public finances are due to the lack of a law preventing the Chancellor of the Lord Lawson of Blaby: Is the Minister aware that—in Exchequer from pursuing such policies. addition to a deficit that is getting on for £200 billion this year and is projected by the Treasury, somewhat optimistically, to be another £200 billion next year—if Lord Davies of Oldham: My Lords, the financial the £200 billion of quantitative easing that has occurred crisis and global downturn have had a profound impact is going to be neutralised and not turned into inflation on the public finances, particularly tax receipts, in the in the future, another £200 billion of gilts will have to UK and in other countries. Discretionary fiscal stimulus be sold to mop it up? Has he made any judgment as to was introduced to provide support when the economy whether the financial markets are prepared to buy gilts was weakest, limiting the severity of the downturn. As on that scale and, if so, at what price? the economy is forecast to emerge from recession, borrowing in the medium term is projected to fall markedly through government consolidation measures Lord Davies of Oldham: My Lords, of course the announced in and since the 2008 Pre-Budget Report. Government are concerned about the market response The Fiscal Responsibility Bill will enshrine these to government projections, but the noble Lord will consolidation plans in legislation. have rejoiced that the market looks very calm, if not supportive, as far as the decisions taken last week are concerned. The noble Lord is right: of course we Baroness O’Cathain: I am very grateful to the noble face challenges with regard to the future. No one Lord for that reply, but I am afraid that I do not really underestimates the problems of reducing this substantial believe it. Will the Fiscal Responsibility Bill contain a debt, but it is quite clear that the Government are schedule to show us exactly where the public debt will determined to do so and will be increasingly answerable be reduced and what public spending will be taken to Parliament to guarantee that they do. from what departments and when? Baroness Noakes: My Lords, the Minister referred Lord Davies of Oldham: My Lords, the Bill is quite to a code when he responded to my noble friend Lady clear in what it intends to do. It will make these O’Cathain. The code to which he is referring under measures taken by the Government directly answerable the Fiscal Responsibility Bill is in fact the code for to Parliament. That is the way in which we will consolidate fiscal stability, which has been required ever since the the decisions that have been taken in the past year and 1998 Finance Act and did not stop the Government a half, which have a long-running perspective to them wrecking the economy of this country. The Minister in terms of government borrowing. A code related to then said that the Bill would make the Government the Bill will spell things out in more detail, but the Bill answerable to Parliament. In what way will being is clear about the responsibility of the Government to answerable to Parliament under this Bill help to avoid report and to stick to these measures. the mess that we are now in? 1387 Public Finances[LORDS] Visas: Non-EU Visitors 1388 Lord Davies of Oldham: I wonder whether the successful and well received. Where there have been noble Baroness is broadening her geographical perspective teething problems, we have addressed them and we in suggesting that the decisions taken by this Government continue to fine-tune to ensure that we are delivering a wrecked the economies of the United States, Germany system which is robust, objective, responsive and fair. and all other advanced countries over this recent recession. It is quite clear that we have been facing a worldwide Lord Clement-Jones: My Lords, I thank the Minister phenomenon of crisis in all the significant economies. for that reply. He spoke about “teething problems”. What is interesting is that we approached this crisis The current visa arrangements for artists and entertainers with a lower level of debt than most other countries. have had an appalling effect on arts and cultural exchange in this country. They have affected music, Lord Soley: Given the seriousness of this economic theatre, literature, dance, opera and the visual arts, crisis and its impact on Britain, would it not be logical and education. While there have been some minor for the opposition parties to sign up to this legislation? improvements, they have not been fundamental.