Oral question asked in the House of Lords, by Lord Barnett (Labour). It was answered on Tuesday, 7 December 2010.

Bankruptcy

Question: My Lords, I should declare a professional interest; perhaps I should also declare that I have had free tuition in economics from my noble friend Professor Lord Peston. Despite the Minister’s Answer, does he not agree that on any definition this country never has been, and is not, anywhere near bankrupt? The plain fact is—and the ONS confirms this—that the net asset position of this country at the end of last year, just before the noble Lord took office, was £6.7 trillion. On top of that, there is no problem in paying debts, because the average length of debt repayment is 14.2 years. We recently lost the services of a distinguished noble Lord in this House. I would not like to see another one go so soon from the Prime Minister’s services. Will the Minister withdraw the word ““bankrupt”” and apologise to the House for using it?

Answer: My Lords, I know that the noble Lord, Lord Barnett, is a man who likes precision, so I thought that I would do a little research and see how he has used the term ““bankrupt”” in this and another place. The first time that the noble Lord used that word in another place was very interesting. It was on 8 April 1965 in the Budget debate. The then Member for Heywood and Royton was defending the then Labour Government’s cuts to our Armed Forces east of Suez. He asked: "““Have we discussed this with our Commonwealth friends in the area and told them … that … it would not help them or us if we bankrupted ourselves by having a force in the area of a size which we could not afford?””.—[Official Report, Commons 8/4/1965; col. 737.]" That was in 1965 when public sector net borrowing was 1.6 per cent of GDP. On that basis, does the noble Lord think that I was a little moderate in my language when I talked about the brink of bankruptcy?

Secondary information