Economy: Fiscal Framework

Lord Vinson Excerpts

Tuesday 4th June 2013 Lords Chamber

[Lord Newby]

My Lords, I know that the noble Lord is a great reader of IMF reports and that he will, therefore, have read the following from its recent report:

“The commitment to a medium-term plan has earned the government credibility … While adhering to the medium-term framework, the government has shown welcome flexibility in its fiscal program”.

We agree.

[Lord Vinson]

My Lords, does the Minister agree that this country currently has to borrow over £50 billion a year to meet its obligations, largely due to our inability to export? That £50 billion comes after selling some of our prime assets like our water companies and utilities which, for some reason, pension funds abroad think better of investing in than our own pension funds do. Leaving that aside, we have a floating pound and the only way that we can actually make ourselves more competitive is to let the pound float down. I hope that the Government and the new governor will encourage this.

[Lord Newby]

My Lords, as the noble Lord said, we have a floating exchange rate. The Government do not set a target for the exchange rate; it responds to economic circumstances, including the decisions taken by the independent Bank of England.