Economy: Gross Domestic Product

– in the House of Lords at 2:46 pm on 8th October 2007.

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Photo of Lord Sheldon Lord Sheldon Labour 2:46 pm, 8th October 2007

asked Her Majesty's Government:

What estimate has been made of the gross domestic product for the years 2007-08 and 2008-09.

Photo of Lord Sheldon Lord Sheldon Labour

My Lords, I thank my noble friend for that reply, but is he aware that the gross domestic product increased by 0.8 per cent in the second quarter of 2007 and that that level was higher than in the previous year? Is he also aware that there was sustained growth in all industries in the second quarter of this year? For some years now, a number of economists have been pessimistic, with little justification for their forecasts. However, as Alan Greenspan said in the Guildhall last Tuesday, although such forecasts are made, governments, quite rightly, do not base their economic decisions on them. Does the Minister agree with that?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am grateful to my noble friend, with his long experience in these matters, for his salient points on the economy. I cannot pre-empt tomorrow's Statement, but the two quarters of 2007 to which my noble friend referred have seen conspicuous growth. Such growth has projected Britain during the past decade from the lowest position in terms of per capita income in the OECD to the second highest. It is internationally recognised that we are in a strong position to face any economic vicissitudes which may occur in the future.

Photo of Lord Roberts of Conwy Lord Roberts of Conwy Conservative

My Lords, the Chancellor is already reported in the press as anticipating a decline in the rate of growth next year. Was that one of the considerations that led the Prime Minister to contemplating an election?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, both aspects of the noble Lord's question seem to revolve around press comment and conjecture. The Prime Minister made it quite clear at lunchtime today why he intended to continue with his Administration; that is, to establish the confidence of the country in his ability to lead it successfully during the next few years.

Photo of Lord Newby Lord Newby Spokesperson in the Lords, Treasury

My Lords, does the Minister agree with the managing director of the IMF who said at the weekend that the credit squeeze was a "serious crisis" that would curtail growth internationally? Will he assure the House that, in tomorrow's Statement, which we are delighted is being brought forward, given the exigencies of the economy, a full analysis will be made of the Government's view of the effect of the credit squeeze on future prospects for growth in the UK?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, we can trust the Liberals to pick out the more pessimistic and pejorative of the IMF's comments. The IMF indicated how strong the British economy is. It indicates that, in all ways in which the economy is managed, we are able to face the future with great confidence, against a background where, as the noble Lord rightly observed, aspects of the international economy will cause greater difficulty than in the immediate past. However, the economy and the Government are in the safest of hands.

Photo of Lord Forsyth of Drumlean Lord Forsyth of Drumlean Conservative

My Lords, do the Government accept the OECD view that a rising tax burden results in a slower rate of growth in the economy? Therefore, given how the tax burden has gone up spectacularly under this Government, can we expect that the Chancellor will forecast lower growth than he anticipated?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, we are all delighted to see the Conservative Party returning to type and putting before the nation an agenda consisting solely of tax cutting, which is likely to be exposed as not producing sufficient revenues to sustain the programmes that it wishes to implement.

The noble Lord referred to the OECD. What did the OECD say about the British economy? In fact, it said that its good economic performance,

"over the past decade has been underpinned by a willingness to embrace the opportunities offered by globalisation, together with regulatory policies that promote efficiency and economic resilience".

Could we have a better element of support than that?

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, will my noble friend—

Noble Lords:

Oh!

Photo of Lord Foulkes of Cumnock Lord Foulkes of Cumnock Labour

My Lords, thank you for that warm welcome back. Noble Lords may actually agree with me, in a few moments. Will my noble friend confirm that when Alex Salmond comes predictably gurning and whining after tomorrow's Statement that Scotland has not got enough, he will point out robustly that Scotland is getting its fair share if not a generous share?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, I am delighted to see my noble friend back. I am enjoined today not in any way to pre-empt or predict the Statement that will be made by the Chancellor tomorrow. However, I think that I can stray into agreeing with my noble friend about his criticism of the leader of the Scottish National Party.

Photo of Baroness Noakes Baroness Noakes Shadow Minister, Treasury

My Lords, when he was Chancellor, the Prime Minister was wont to brag about the 10 years of unbroken economic growth—which, of course, started even earlier than that. However, a report this morning showed that in the past 10 years disposable income as a proportion has fallen to its lowest level since 1997. What is the point of economic growth for ordinary people if they just keep getting poorer?

Photo of Lord Davies of Oldham Lord Davies of Oldham Deputy Chief Whip (House of Lords), HM Household, Captain of the Queen's Bodyguard of the Yeomen of the Guard (HM Household) (Deputy Chief Whip, House of Lords)

My Lords, they do not keep getting poorer. The noble Baroness will recognise the extraordinary acceleration of the British economy and therefore the British people in terms of per capita income over the past 10 years.

Photo of Lord Davies of Coity Lord Davies of Coity Labour

My Lords, I wonder whether my noble friend—

Photo of Baroness Ashton of Upholland Baroness Ashton of Upholland President of the Council, Privy Council Office, Leader of the House of Lords and Lord President of the Council (Privy Council Office)

My Lords, I am sorry but we are into the 15th minute, and I am conscious that we have two full Questions to go.