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Finance (No. 3) Bill

My Lords, I thank the noble Lord, Lord Sassoon, for his personal apology to me for saying that I was wrong when I quoted the Chancellor as saying that flexibility was built into his plan. I am bound to tell the noble Lord, for whom I have a lot of respect, that it was wrong not to make a personal statement at an early time, apologising to the House for misleading the House, quite clearly, in his reply to me. I know what happened. He took personal advice from a leading source—I think I know the source—who must have told him that this was a major political difference of opinion so he did not need to give a personal apology. I can only advise the noble Lord that in future he should not take any advice from that particular noble friend. I readily admit that there was a political difference between us because clearly a major political difference was at the heart of my question and there needed to be some flexibility of a kind that was not enumerated by the noble Lord. Indeed, when I asked him whether the flexibility related to the Treasury’s special reserve, he said, ““Definitely not””. On the other hand, could he tell us, as he did not tell me at the time, how much of the Treasury special reserve has already been used for the MoD, for unexpected expenditure in Libya, and for other departmental budgets that have been overstepped? Could he tell us what is left in that reserve to allow any flexibility to decide what should happen to the Chancellor’s plan? There cannot be any doubt that it was misleading. To say to the House, ““What I was telling them was wrong””, is misleading the House. It was a major matter, and he refused to make a personal statement, and he was wrong in that. But I leave that alone. My question had at its centre this political disagreement, a crucial disagreement between us. I do not for a moment regret having gone into that political difference, because political difference does not mean you cannot mislead the House. What it does mean is that the Government are ignoring this central problem of whether there should be some flexibility that could amount to a Plan B. I have always said that no chancellor could ever announce that he is introducing a Plan B, because it immediately kills Plan A. However, there may be other means of slowing down the cuts, which would help to introduce a sort of secret Plan B. But the noble Lord, Lord Sassoon, denied all of that, and said that he was not misleading the House. Indeed, he nearly went as far as maligning that distinguished Business Editor of the BBC, Robert Peston, the son of my even more distinguished noble friend Lord Peston, by suggesting that it might have been in his mind or in that of the interviewer that there were some special flexibility built into the plan. While I have had to read some difficult briefs in my time, listening to the noble Lord this evening and his degree of optimism about everything in the Finance Bill and the economic situation, I cannot believe that he could have believed what was in his brief. He should have deleted it. How can there be any degree of optimism about the economy and economic prospects at the moment? I would not propose to quote many of the numerous comments from truly independent forecasters about what is likely to happen to the economy in the next few months, let alone years. However, I would not mind just quoting one, before the noble Lord encounters what my dear old friend Denis Healey always said: the advice that, ““If you’re in a hole, stop digging””. The noble Lord is digging deeper and deeper. If he is not careful, he will have to apologise not only to me—which I do not mind—but also to Robert Peston and many others for pretending that one can have any degree of optimism at the present time. The flexibility that should exist is not. I will refer that one particular statement from an authority that may not be as independent as some, but it is certainly independent of the Labour Party. I refer to Deloitte, the well-known, major accountancy firm, which audit many large companies. It stated that finance directors in Britain’s largest companies say that business optimism has fallen at a faster rate since the collapse of Lehman Brothers in 2008, and that one in three thinks there is a chance of a double-dip recession. I do not believe there is a chance of a double-dip recession; it seems unlikely, but certainly there are no grounds for optimism about what is happening in the economy. It is pretty clear that we can look forward, as my noble friend Lord Myners said, to many periods yet to come of low levels of economic growth, if not an actual downturn. I do not doubt that there would have been some flexibility, but to compare it with the automatic stabilisers I find incredible. Surely the noble Lord, who is a very clever fellow, must have checked the Oxford English Dictionary and found that ““stabilise”” is somewhat different from ““flexibility””, to put it mildly. I will not read the summary of the long points made about the two words in that dictionary that I received from the Library, but to say that there is no difference and that he was therefore answering my question is ludicrous. Answering my question is not important. What is important is that the economy should truly move forward, and that we should be a little more optimistic about the likely outcome for the economy in the coming year, let alone in the coming years. If this means that the Chancellor has in mind in his plan to slow down the cuts, I am very glad to hear it. If he does not want to call it a Plan B, I do not mind that either. He can call it anything he likes, as long as he has it in mind to do it, because that is the one way that he can truly make us all a little more optimistic.