---

Address in Reply to Her Majesty's Most Gracious Speech

My Lords, the gracious Speech begins with the economy and commits the Government, "to pursue economic policies which entrench stability and promote long-term growth and prosperity". It contains reference to low inflation and sound public finances. That the gracious Speech should begin with the economy should not surprise us, any more than we should be surprised that it is the management of the macro-economic scene to which the three speeches so far devoted their major attention. It is not surprising because, of course, for most people, as was clear during the recent election campaign, the capacity of the Government to manage the economy was one of the principal subjects of debate. At a certain point, I came to the conclusion that the subtext of the election campaign was that it was a principal responsibility of government to maintain a steady rise in the prices of people's houses and that that was their principal task. I find that somewhat depressing. But I want to speak about another economy. With the greatest of respect to the Minister, the noble Baroness, Lady Noakes, and the noble Lord, Lord Newby, for many people the conversation so far in this debate, and in much debate about government economic policy, is a somewhat private conversation, because the prosperity, stability and sound public finances about which we have been talking do not impact very much on their lives. Given that I recognised the voice on the telephone the other day, it was not a great surprise when my interlocutor said that he had spent all of his money on scratch cards and did not know what to do. It did not surprise me because that person has been there before and we have had the same telephone conversation before. It is easy to focus on such a person—his learning difficulties and his difficulties in the management of his life—and say that we have to run an economy that is not around the failings of those who cannot manage. But I am left with a question: does not the word "economy" come from a root meaning "household"? Are we not part of one household together? Do not those who buy scratch cards with impunity because they have enough money have any responsibility for those who buy them with disastrous effects? Do not those who draw profits from the sale of scratch cards also have some responsibility for those who suffer so much as a result? I mention that episode because it happened recently. However, I want to point to the area covered in the Minister's reference to the consumer credit Bill, in which I shall take considerable interest. We have a very interesting view of debt, what it is and what controlling it involves. We speak of debt as public debt and fiscal debt; we speak of debt, expecting the Government to bring it down; and we speak of debt when we consider those persons who are not managing it. The report from the commission chaired by the noble Lord, Lord Griffiths, on personal debt is an extremely important document which I hope will figure greatly in the discussions on the consumer credit Bill. It points to a thundercloud—the thunder we are not yet hearing, but we can see it on the horizon. In the report, the noble Lord and his colleagues point to the vulnerability not just of individuals, but also the vulnerability of the whole economy when it is based on debt as an assumption about the way to live. At the end of the discussions on how to control the instruments of consumer credit, perhaps we shall not be quite as sanguine as the Minister on having the best and most competitive consumer credit market in the world. We shall perhaps be a little more aware, because we need to be, that the setting of an example of indebtedness by those who can afford it is precisely what impacts so negatively on those who cannot and that the longstanding religious tradition that lies behind the prayers with which we begin is a tradition about the control of the activities of creditors whose uncontrolled activities are an extremely grave danger to the spiritual and moral well-being of a society. I am not suggesting that we can change that culture overnight. I am suggesting that yielding to it, expecting it to be our way of life into the future, is an extremely dangerous way to live. We are vulnerable as individuals, as we might be, for example, to a serious collapse in house prices; we are vulnerable as a nation and as an economy; and we are vulnerable as a world. The recent years in which campaigns have been waged quite rightly to write off the unrepayable debts of the poorest and most indebted countries must not allow us to imagine that the behaviour of those who can afford their debts has no part to play in solving the world's economic difficulties. As everyone knows, the most indebted country in the world is not the poorest, but the richest. That indebtedness has major long-term consequences for the lives of the rest of us. Furthermore, debt as an attitude and a way of life has the profoundest effect on our attitude towards the universe that we inhabit. It would appear that the way in which we live is revealed, for example, in climate change and the loss of species. Those kinds of signs show that we regard the universe as an essentially unsecured and never-to-be-repaid floating loan, on which we can draw in our generation at will and expect never to have to repay, hoping that for our children and grandchildren something will turn up. That is the way of debt. Planetary debt follows from national debt follows from personal debt. People who imagine that they are fine because they can afford it need to recognise the damage which follows that pattern of behaviour for those who are unable to afford it—that will appear when we discuss the consumer credit Bill no doubt—the damage it wreaks on the poorest nations and, ultimately, the damage on the resources of the planet that we all have to inhabit. I hope that when we come to discuss the economy, we shall have in our mind its root meaning of household, but also its deep connection with another word that is fashionable but tends to be discussed in a different compartment; namely, ecology. The ecology that we are creating when we allow credit to run out of control is an ecology in which some species will not survive and in which I shall continue to receive the kind of anguished phone call to which I referred earlier