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Finance (No. 3) Bill

My noble friend has consistently warned about the dangers of inflation over the past 30 to 40 years. As I recall, in his maiden speech last year he highlighted this threat. I agreed with him then, and I agree with him now, because inflation, as he knows, has been above target for more than four of the past five years. We can feel very thankful that the MPC members are not paid performance bonuses. The Business Secretary gently chided me for complaining about inflation in a debate a year ago, implying that it had little to do with the Treasury. Up to a point, Lord Copper, only up to a point. I confess to acting as a foot soldier, like my noble friend Lord Spicer, in the battles against inflation during the 1970s and 1980, sharing Milton Friedman’s belief that, "““inflation is one form of taxation that can be imposed without legislation””." I wager that inflation is built into every economic calculation made by the Treasury. The suppression of inflation may not be the Treasury’s responsibility but it is, I say to the Minister, its lasting burden. A week after the general election, the Prime Minister, eager to encourage economic growth, implored the Foreign Office to play a livelier role in helping our export drive, though it later took him seven months to put a trade Minister in post. How can the Prime Minister’s wishes be achieved when the Foreign Office budget has been slashed with severity? DfID’s budget will soon exceed that of the Foreign Office by a factor of five. We donate in this country twice as much as Japan and nearly twice as much as Germany. Our Government raise the equivalent of £300 per household for overseas aid. Surely a segment of that figure would be better deployed in the Foreign Office to promote British exports? The late Lord Bauer, who I know worked closely over many years with the noble Lord, Lord Desai, at the London School of Economics, argued about overseas aid transfers cash from poor people in rich countries to rich people in poor countries. Indeed, the DfID Permanent Secretary admitted earlier this month that the department had no idea how much British aid is being lost to fraud and corruption, thus underlining a recent World Bank investigation unearthing massive corruption in the aid field. Rumours still persist about the Karzai clan’s links with new blocks of flats in Dubai, partly through the collapsed Kabul Bank. Yet we continue to pour aid into Afghanistan. Parents of dead soldiers must rue the extravagance of the aid budget when compared with the lack of military equipment given to their sons and daughters. I would prefer my donations to be voluntary. In other words, I opt, even if the Prime Minister does not, for the free-will offerings of the big society over the compulsion of big government. I am pleased that the Prime Minister went to Africa to preach the gospel of free trade. I hope that on his journey he found time to read Dambisa Moyo’s book, Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa, in which the leading Zambian economist argues that aid fosters poor government, dependency, corruption and poverty. To paraphrase Bill Clinton, economic success is not a matter of chance but of choice. Let chance be the road not taken and choice of the economic road taken, with belief and without fear.