Eurozone Crisis

My Lords, no, I was not doing that. I was merely describing the route under which this proposal was brought in. It was as simple as that. I would rather not have any interruptions but it is up to noble Lords what they want to do. I would rather answer some of the points that have been made, particularly by noble Lords opposite. They are important points on the UK economy. Let me start to address some of those. The first critical point, which was initially brought up by the noble Lord, Lord Desai, is the question of the pace of fiscal retrenchment and the approach that the Government are taking to eliminating the deficit over a five-year period. I am grateful to him for recognising, as he said in terms, that there is no realistic alternative, as the OBR confirms. On this, I can only disagree with the analysis of the noble Lords, Lord Liddle and Lord Skidelsky, and others. The OBR analysis is clear. To be fair to the noble Lord, Lord Skidelsky, he did not fall into the trap of accepting the OBR’s figures and then not accepting its explanation; he does not accept its figures either. I respect the position that he takes but, of course, I disagree with it. What flows from a lot of the analysis that we heard from the noble Lords, Lord Hollick, Lord Liddle and Lord Eatwell, is that they apparently want to borrow more. They want more borrowing and more debt. I simply do not understand where this will lead, other than saddling future generations with an insupportable burden and, in the meanwhile, entailing a very severe risk that our interest rates will quickly go the way of Italy’s. The Government will not go down that path. I come to the reforms that we are putting in place and the point made by the noble Lords, Lord Hollick and Lord Eatwell. First, many of the supply-side reforms that we have put forward are in direct response to what British industry is asking us for. We consulted 500 businesses and our measures largely respond to what the CBI and individual businesses want. If we are tackling fundamental reform of the planning system in this country, putting a renewed boost on economic infrastructure at the heart of government and challenging the skill base of this country, of course that will not show a return this year or next. It would be naïve to say that it will. On this, I very much take the point that was well made by the noble Lord, Lord Monks, who rightly stressed that this is all about the long-term approach. I agree with him about that and the lessons that are to be learnt about manufacturing and from Germany specifically. That is why we have initiatives such as the university technical colleges and so on. We were reminded by my noble friend Lord Ashdown about the importance of manufacturing. I would remind him and other noble Lords that our manufacturing sector is of course still as large as that of France. I am grateful, in this context, to the noble Baroness, Lady Valentine, for stressing the importance of our plans on infrastructure. To bring it back to where we started, in brief conclusion, as my noble friend Lord Lamont of Lerwick made clear at the start of this debate, the ongoing instability in the euro area is vindication of this Government’s decision to get ahead of the curve, cut our own deficit and improve our own economic competitiveness. The Autumn Statement on Tuesday this week reinforced that commitment and, as forecast by the OBR, we remain on course to meet our fiscal mandate and debt target. It also reinforced our commitment to increasing competitiveness and embedding a recovery through private sector enterprise and investment. It is those decisions that have kept us out of the current sovereign debt storm, and which lay the foundations to rebalancing our economy to a sustainable future. We will encourage our euro area counterparts to take similar and determined action to bring a decisive end to that crisis—one that continues to undermine us all.