National Debt

Lord Bilimoria Excerpts

Wednesday 14th March 2018 Lords Chamber

[Lord Bird]

To ask Her Majesty’s Government what investments they will make in order to reduce the national debt.

[Lord Bilimoria (CB)]

My Lords, in the absence of my noble friend Lord Bird, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

[The Minister of State, Department for International Development (Lord Bates) (Con)]

My Lords, the Government’s fiscal policy takes a balanced approach, getting debt as a share of GDP falling but also investing in key public services and in areas that are critical for productivity and growth. The latest forecast for public finances shows that we are on target to start reducing debt as a share of GDP next year.

[Lord Bilimoria]

I thank the Minister for his response. I am sure your Lordships will wish my noble friend Lord Bird a speedy recovery. As we all know, he is famous for launching the Big Issue and looking at matters through the prism of poverty. The Chancellor has said the age of austerity is all but over. Given that the day-to-day deficit has now been eliminated, will the Minister outline which new long-term and preventive investments Her Majesty’s Government will now make? Further debt reduction should not merely be the extension of the age of austerity. Will the Minister agree that, as we have learned from today’s Equality and Human Rights Commission report entitled The Cumulative Impact of Tax and Welfare Reforms, austerity has hit the poorest and most vulnerable the hardest, with those with disabilities, certain ethnic groups, women and lone parents all bearing the brunt? Is there light at the end of the tunnel?

[Lord Bates]

I believe there is. First, I join the noble Lord in wishing a speedy recovery to the noble Lord, Lord Bird, who has done so much for alleviating poverty and giving people hope, a chance and a future in this country. Of course it is welcome that the OBR forecasts are now showing that debt will begin to fall from next year as a percentage of GDP, but it is still at the very high level of 85%. The interest we have to spend on that debt represents the combined amount combined on police and defence services. It is critical that we improve our productivity, which is why we have the £31 billion National Productivity Investment Fund, which is designed to do that by investing in R&D, housing and technology. But perhaps the best thing we can do for the poorest in our country is what we have been doing. We have seen an increase in employment to near-record levels, with 3 million new jobs, and the pay of the lowest paid has been driven up so that they are now experiencing, as a result of the national living wage, the fastest growth in real income that they have had for 20 years.