House of Lords
Infrastructure Bill Speech
| Thursday, October 25, 2012
My Lords, as someone who has never been averse to having a go at the Chancellor of the Exchequer, I start by saying how idiotic and puerile it is for newspapers to make a lead story of which ticket he used for his journey from Chester to London. It is George Osborne's stewardship of the economy, not his travel arrangements, which deserves censure. However, we have an infantile press.
Three big mistakes stick out over the past two and a half years. The first was the belief that cutting down government spending would automatically produce recovery. I know the Government now claim that they never believed anything so simple or idiotic, but they did, and there is plenty of evidence to prove it. Austerity is not a recovery policy.
I take it that the question for debate this evening is not whether Britain is on track to meet the Maastricht budget criteria, but why, nearly four years after the economic collapse of 2008, our country finds itself officially back in recession.
Since July 2010, the policy for recovery has been set by the coalition Government. The main plank of that policy has been an accelerated programme of deficit reduction. Since the coalition came to office, recovery has gone into reverse. In 2010, Britain's economy grew by 2.1 per cent. In 2011 it grew by 0.8 per cent. With today's figure showing a fall of 0.2 per cent in the last quarter, the OBR forecast of 0.8 per cent growth this year has been exposed as a fantasy. I feel sorry for theContinue reading...
Queen’s Speech Debate
| Monday, May 21, 2012
My Lords, Sigmund Freud identified a defence mechanism that he called denial, in which a person faced with a fact that is too uncomfortable to accept insists that it is not true, despite overwhelming evidence. A good example of denial is the Chancellor's belief that austerity is a growth policy, despite the fact that the British economy is shrinking. Somewhat better than a state of denial is one that psychologists call cognitive dissonance, a condition of holding two contradictory beliefs at the same time.
People in such a condition have a strong need to reduce the importance of one of the dissonant elements. This is more hopeful. If the Chancellor has moved from denial to cognitive dissonance, he may soon move from cognitive dissonanceContinue reading...
My Lords, it is a sign of the jittery state we are in that a slower-than-expected slowdown in the rate of growth is hailed as strong evidence of recovery. Of course it is nothing of the sort. It marks the end of a period in which the economy has been supported by fiscal policy, with some help from the depreciation of sterling. The direction of fiscal policy has now been reversed. In their recent comprehensive spending review, the coalition Government confirmed that they will embark on cuts that will withdraw between 1.5 per cent and 2.5 per cent of nominal demand from the economy every year for the next four years.
The Government's own independent watchdog, the Office for Budget Responsibility, has estimated that every 1 per centContinue reading...
My Lords, the Finance Bill implements the taxation provisions of the emergency Budget Statement of 22 June. These will come to about 20 per cent of the total fiscal tightening which has been planned in this Parliament. So the Finance Bill as we have it before us is part of the Government's programme for balancing the Budget over the next five years. In his opening speech, the noble Lord, Lord Sassoon, said that a failure to address the deficit is the greatest danger we face. I would say that the failure to address the hole in the economy is the greatest danger we face and that unless the noble Lord is able to demonstrate how cutting the deficit will produce an economic recovery, there is a massive hole in his speech. I listened in vainContinue reading...