Pre-Budget Report

Perish the thought, my Lords, that I should seek to put words in the mouth of the noble Lord, Lord Ryder, for to do so could be described only as reckless. I never leave this Chamber without an increased admiration for the contributions of the noble Lord, Lord Higgins, to our debates. If it is possible, while on the Government Benches, to look forward to somebody’s contribution when looking to the Opposition Benches, then that is how I feel. Today was another when the noble Lord in no way disappointed me. He described himself as feeling, at times, befuddled with the complexity of monetary targeting; that was certainly an economic fashion of the time, which has now passed into decline. The noble Lord said that there is little in the document about monetary policy; I refer him to paragraphs 2.77 to 2.88 of the PBR, which deal with that, and with objectives and responses to the global shock. As the Chancellor of the Exchequer said in his Statement to the other place on 19 January, the Bank of England’s asset-purchase facility will address liquidity in the system. The Treasury said that this programme, "““also provides a framework for the Monetary Policy Committee of the Bank of England to use asset purchases for monetary policy purposes should the MPC conclude that this would be … useful … for meeting the inflation target. In such circumstances””," as I have previously said, "““a further announcement would be made””." It can be construed from that that the Government and the MPC are considering a range of options that might be appropriate regarding the price and quantity of money.