Pre-Budget Report

My Lords, I add to the comments by the noble Lord, Lord Howard of Rising, in complimenting the quality of contributions to this debate: it has been a high-quality debate in its contributions from all sides of the House and from all parties, rather than being limited to one. I will endeavour in the 20 minutes or so allotted to me to cover as many of the questions asked as I can, although, once again, noble Lords have made that an almost impossible task, unless one-word answers would suffice—I doubt that they would. Copies of the document that we are being invited to submit were placed in the Library on 19 December. I do not believe, as the noble Baroness, Lady Noakes, suggested, that this document will lead to criticism and rebuke from the EU Commission. I believe, on the contrary, that the EU Commission will indicate that the policy stance we have taken is consistent with that which the EU believes to be appropriate in addressing a global recession in which there is a failure at this stage to have an equilibrium between supply and demand and the need for that to be adjusted to by fiscal stimulus. The noble Baroness referred to the New York Times article. I urge those on the Conservative Benches, here and in the other place, not to fall into the trap of appearing to take pleasure in the misfortunes of those suffering in our economy and in economies elsewhere; not to take pleasure from those whose jobs are at risk; and not to take pleasure from those whose homes face repossession. These are global problems, and we are taking appropriate action. Quite frankly, the Conservative Party does its cause a disservice when those who lead it on economics, in their preening arrogance of privilege, born to a better life, abhor the programmes that we are adopting to protect those who are most vulnerable at this time. The noble Baroness refers to Citibank’s data on debt comparators. I am familiar with this work. She elects not to indicate that, not only has there been growth in debt, but also growth in assets. One of the reasons that we have higher private sector borrowing as a percentage of GDP in this country than elsewhere in Europe is high home ownership. Is the Conservative Party opposed to home ownership? Is it opposed to the use of mortgages to finance the purchase of one’s home? If so, that is a new policy to me, which I am sure the country will be interested in hearing more about. Another reason that we have high debt in the private sector is the remarkably well funded pension position which characterises the UK in comparison to many other jurisdictions. The noble Baroness raised questions about the temporary reduction in VAT. She said that it had ““bombed””. With all respect, it is far too soon to pass judgment on the economic impact of something that was only introduced just before Christmas. I take some comfort from the fact that the honourable Member for Rushcliffe in the other place himself proposed the policy before it was announced by the Chancellor of the Exchequer. There was much talk from the noble Baroness about proposals to reduce public expenditure. Well, I hope that if there are proposals to reduce public expenditure through greater efficiency, they are executed with somewhat more success, precision and credibility than David Cameron concluded could be applied to the work done by the noble Lord, Lord James of Blackheath, when conducting such an exercise for the Conservative Party. The noble Lord, Lord Ryder made similar points about the need to cut expenditure. Well, what would he cut? On that we got very little enlightenment.