My Lords, I thank my noble friend for his Question, with which I know for a fact that my noble friend Lord Barnett was in total agreement. I also thank the Minister for his kind remarks, because he might be forgiven for thinking that one of Lord Barnett’s missions in life was to make his life a total misery. Lord Barnett will be remembered for his formula, but those of us in this House will surely remember that he contributed to a vast number of other topics and therefore deserves to be remembered for all that as well. I think we all agree that he will be missed much more than, perhaps, some of us when our time comes.

My Lords, I thank my noble friend for his Question, with which I know for a fact that my noble friend Lord Barnett was in total agreement. I also thank the Minister for his kind remarks, because he might be forgiven for thinking that one of Lord Barnett’s missions in life was to make his life a total misery. Lord Barnett will be remembered for his formula, but those of us in this House will surely remember that he contributed to a vast number of other topics and therefore deserves to be remembered for all that as well. I think we all agree that he will be missed much more than, perhaps, some of us when our time comes.

I congratulate my noble friend for raising this Question, but I am sorry to say that I disagree with him. Changing the name of the Bank of England would be economically very damaging to our country. Is the Minister aware that there is a lesson to be drawn from this? It is mainly that making constitutional changes on the hoof is not the right way to do this sort of thing. The next time he sees his right honourable

friend the Prime Minister, will he tell him that the way to go on in this area is to think before you speak and not the other way round?

I congratulate my noble friend for raising this Question, but I am sorry to say that I disagree with him. Changing the name of the Bank of England would be economically very damaging to our country. Is the Minister aware that there is a lesson to be drawn from this? It is mainly that making constitutional changes on the hoof is not the right way to do this sort of thing. The next time he sees his right honourable

friend the Prime Minister, will he tell him that the way to go on in this area is to think before you speak and not the other way round?

My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

My Lords, on behalf of my noble friend Lord Barnett, and at his request, I beg leave to ask the Question standing in his name on the Order Paper.

My Lords, the reason that your Lordships are stuck with me and not my noble friend is that he is very ill indeed, and I know that all noble Lords will wish to send wishes that he recovers quickly.

My Lords, the reason that your Lordships are stuck with me and not my noble friend is that he is very ill indeed, and I know that all noble Lords will wish to send wishes that he recovers quickly.

In particular so that he can occupy his usual place and ask some really difficult questions.

In so far as I understand this subject at all, is it not the case that aggressive tax avoidance leaves companies making enormous sums of money and millionaires paying lower rates of tax than those with average or around average incomes? Does this not bring the whole tax system in our country into disrepute? How urgently are the Government trying to deal with aggressive tax avoidance, with a view to punishing those who do it?

In particular so that he can occupy his usual place and ask some really difficult questions.

In so far as I understand this subject at all, is it not the case that aggressive tax avoidance leaves companies making enormous sums of money and millionaires paying lower rates of tax than those with average or around average incomes? Does this not bring the whole tax system in our country into disrepute? How urgently are the Government trying to deal with aggressive tax avoidance, with a view to punishing those who do it?

My Lords, to place this important Question in context, is it the Government’s view that there are two possible aims of economic policy: the first is that we should maintain as high a rate of real, sustainable growth as is feasible, and the second is that we should maintain a stable, low inflation rate? Bearing in mind that those two objectives are not always compatible, what is the Government’s view of what the policymakers ought to be doing at the moment?

My Lords, to place this important Question in context, is it the Government’s view that there are two possible aims of economic policy: the first is that we should maintain as high a rate of real, sustainable growth as is feasible, and the second is that we should maintain a stable, low inflation rate? Bearing in mind that those two objectives are not always compatible, what is the Government’s view of what the policymakers ought to be doing at the moment?

My Lords, as background to this Question, we should remember that when we were debating the 1998 Act the Minister went to great lengths to emphasise that the activities of the Monetary Policy Committee would be scrutinised not only by other place but also by this House. Certainly, when I was chairman of the Economic Affairs Committee—a committee I invented, as the Minister is well aware—we used to see the Governor of the Bank of England regularly. All that is background to a very simple question: when was the last time that the Governor of the Bank of England went to the Economic Affairs Committee and was scrutinised by it?

My Lords, as background to this Question, we should remember that when we were debating the 1998 Act the Minister went to great lengths to emphasise that the activities of the Monetary Policy Committee would be scrutinised not only by other place but also by this House. Certainly, when I was chairman of the Economic Affairs Committee—a committee I invented, as the Minister is well aware—we used to see the Governor of the Bank of England regularly. All that is background to a very simple question: when was the last time that the Governor of the Bank of England went to the Economic Affairs Committee and was scrutinised by it?

My Lords, I must apologise to your Lordships for being an economist and for allowing some economics to get into an economics question. Is the Minister aware of the research evidence on these matters, which is that we need some inequality in our society in order to provide a proper incentive system? However, it is possible—and it is almost certainly the case in our country—that we have far too much inequality, which is a disincentive to economic growth. The Government do not seem to understand that, but when the Labour Government take over next year they will understand it and will deal with the matter.

My Lords, I must apologise to your Lordships for being an economist and for allowing some economics to get into an economics question. Is the Minister aware of the research evidence on these matters, which is that we need some inequality in our society in order to provide a proper incentive system? However, it is possible—and it is almost certainly the case in our country—that we have far too much inequality, which is a disincentive to economic growth. The Government do not seem to understand that, but when the Labour Government take over next year they will understand it and will deal with the matter.

My Lords, is the Minister aware that quite a few people in full-time employment are in jobs below their qualifications and abilities, so the figures need to be looked at more carefully? Much more to the point, is he aware that if we look at the present state of the British economy, to cite that great liberal economist John Maynard Keynes, it is nowhere near full employment and the Government’s policies will never get us there?

My Lords, is the Minister aware that quite a few people in full-time employment are in jobs below their qualifications and abilities, so the figures need to be looked at more carefully? Much more to the point, is he aware that if we look at the present state of the British economy, to cite that great liberal economist John Maynard Keynes, it is nowhere near full employment and the Government’s policies will never get us there?

My Lords, the noble Lord, Lord Forsyth, referred to raising standards for all children. If the schools that the Minister is talking about are so good, why do not any noble Lords opposite send their own children—or more likely, their grandchildren—to those schools, as many of us did, because we felt it was our responsibility to be supportive of local schools?

My Lords, the noble Lord, Lord Forsyth, referred to raising standards for all children. If the schools that the Minister is talking about are so good, why do not any noble Lords opposite send their own children—or more likely, their grandchildren—to those schools, as many of us did, because we felt it was our responsibility to be supportive of local schools?

My Lords, first, I congratulate my noble friend on asking this important Question, although I hope he would agree that it is not only small firms that suffer from the late payment problem. All firms tend to find that the problem arises. Does the Minister agree that there are two aspects to this Question? One is an ethical aspect: namely, businesses simply should not, as a matter of course, use late payment as their method of financing themselves temporarily. Do the Government agree that this is a serious ethical problem and that businesses ought to start to behave better? The second aspect is an economic one. Does the Minister agree that, rather like the parable of the fleas, if a big firm does not pay the next firm down, it in turn will not pay the next firm down and it will go on ad infinitum until eventually someone will go broke? When they go broke, lots of firms will go broke and the system will become destabilised. Does the Minister agree that the last thing this country needs is any new form of destabilisation?

My Lords, first, I congratulate my noble friend on asking this important Question, although I hope he would agree that it is not only small firms that suffer from the late payment problem. All firms tend to find that the problem arises. Does the Minister agree that there are two aspects to this Question? One is an ethical aspect: namely, businesses simply should not, as a matter of course, use late payment as their method of financing themselves temporarily. Do the Government agree that this is a serious ethical problem and that businesses ought to start to behave better? The second aspect is an economic one. Does the Minister agree that, rather like the parable of the fleas, if a big firm does not pay the next firm down, it in turn will not pay the next firm down and it will go on ad infinitum until eventually someone will go broke? When they go broke, lots of firms will go broke and the system will become destabilised. Does the Minister agree that the last thing this country needs is any new form of destabilisation?

My Lords, will the Minister cast his mind back to when your Lordships debated what is now the Bank of England Act? My noble friend Lord Barnett and I put down an amendment precisely to achieve the flexibility which is in this command paper. We were not told that the flexibility was already there, which is what the command paper says. We were told that we were idiots, and that the remit of the Monetary Policy Committee was to hit the inflation target—only after that could it look at anything else. The Government have produced a sleight of hand here. I favour it, let me add, but it is a sleight of hand.

Will the noble Lord consider the central question which arises in this context, bearing in mind that the two greatest liberal thinkers of the 20th century, Lord Beveridge and Maynard Keynes, both placed the attainment of full employment at the centre of government macroeconomic policy? Can the noble Lord tell us whether under the new regimen that we are now offered, there is any hope within my lifetime—younger Members may have something more to look forward to—that we shall at last get back to what those two great thinkers said: full employment is a must?

My Lords, will the Minister cast his mind back to when your Lordships debated what is now the Bank of England Act? My noble friend Lord Barnett and I put down an amendment precisely to achieve the flexibility which is in this command paper. We were not told that the flexibility was already there, which is what the command paper says. We were told that we were idiots, and that the remit of the Monetary Policy Committee was to hit the inflation target—only after that could it look at anything else. The Government have produced a sleight of hand here. I favour it, let me add, but it is a sleight of hand.

Will the noble Lord consider the central question which arises in this context, bearing in mind that the two greatest liberal thinkers of the 20th century, Lord Beveridge and Maynard Keynes, both placed the attainment of full employment at the centre of government macroeconomic policy? Can the noble Lord tell us whether under the new regimen that we are now offered, there is any hope within my lifetime—younger Members may have something more to look forward to—that we shall at last get back to what those two great thinkers said: full employment is a must?

My Lords, is the noble Lord aware that research evidence shows categorically that if you want to get the debt to GDP ratio down, the vital ingredient is to increase the rate of growth of GDP? That is the way to do it. Measures such as raising taxes or cutting the deficit by cutting large chunks of public expenditure simply do not work. Overall, the lesson

we have to learn is that an austerity package is not required; a package concentrating on raising GDP is the correct policy.

My Lords, is the noble Lord aware that research evidence shows categorically that if you want to get the debt to GDP ratio down, the vital ingredient is to increase the rate of growth of GDP? That is the way to do it. Measures such as raising taxes or cutting the deficit by cutting large chunks of public expenditure simply do not work. Overall, the lesson

we have to learn is that an austerity package is not required; a package concentrating on raising GDP is the correct policy.

My Lords—

My Lords—

The noble Baroness has spoken.

The noble Baroness has spoken.

My Lords, I reluctantly totally oppose this amendment. Those who are totally opposed to same-sex marriage have day in and day out taken up an enormous amount of your Lordships’ time in making their case. This is the dying embers of their attempts to go on making their case. It...

My Lords, I reluctantly totally oppose this amendment. Those who are totally opposed to same-sex marriage have day in and day out taken up an enormous amount of your Lordships’ time in making their case. This is the dying embers of their attempts to go on making their case. It...

I know I do not have to tell the noble Lord not to count chickens, and I know I do not have to remind him that good news may be good news but let us wait for things actually to happen. However, to be serious about this subject, surely what is needed is for Britain to get back on to its long-term sustainable rate of growth and, better still, to raise that long-term sustainable rate of growth. Neither of those things can possibly happen for the next three years, despite what the noble Lord opposite said about supporting current policies. Would it not be a good thing if, instead of the individual countries of Europe all going their own separate ways, we at long last had, as was intended when we set up the Common Market, a joint European economic policy? I think that that would lead to major growth throughout this continent.

I know I do not have to tell the noble Lord not to count chickens, and I know I do not have to remind him that good news may be good news but let us wait for things actually to happen. However, to be serious about this subject, surely what is needed is for Britain to get back on to its long-term sustainable rate of growth and, better still, to raise that long-term sustainable rate of growth. Neither of those things can possibly happen for the next three years, despite what the noble Lord opposite said about supporting current policies. Would it not be a good thing if, instead of the individual countries of Europe all going their own separate ways, we at long last had, as was intended when we set up the Common Market, a joint European economic policy? I think that that would lead to major growth throughout this continent.

I congratulate the noble Lord on his answer, which seems to me for once to be entirely right. The exchange rate did collapse but it had no noticeable effect on improving the balance of payments, as he said, because the supply side of our economy has not been able to respond. Apart from that—theoretically—we do not know whether it is the balance of payments that affects the exchange rate, the exchange rate that affects the balance of payments, or whether it is the two interacting. In other words, we do not know very much about this at all. A sensible Government will therefore concentrate on trying to improve the supply side of the economy and leave the exchange rate to go where it will.

I congratulate the noble Lord on his answer, which seems to me for once to be entirely right. The exchange rate did collapse but it had no noticeable effect on improving the balance of payments, as he said, because the supply side of our economy has not been able to respond. Apart from that—theoretically—we do not know whether it is the balance of payments that affects the exchange rate, the exchange rate that affects the balance of payments, or whether it is the two interacting. In other words, we do not know very much about this at all. A sensible Government will therefore concentrate on trying to improve the supply side of the economy and leave the exchange rate to go where it will.

My Lords, according to this bit of paper the original Question asked “what assessment” the Government have made. As far as I can see, they have made no assessment. Does the noble Lord remember, from whenever he learnt some economics, that economic theory does not tell us anything at all about the optimum rate of tax? This is because people with a greater preference for leisure will work less and pay less tax, if you cut the tax. That is why economics and economists are such a pain in the neck.

My Lords, according to this bit of paper the original Question asked “what assessment” the Government have made. As far as I can see, they have made no assessment. Does the noble Lord remember, from whenever he learnt some economics, that economic theory does not tell us anything at all about the optimum rate of tax? This is because people with a greater preference for leisure will work less and pay less tax, if you cut the tax. That is why economics and economists are such a pain in the neck.

My Lords, given the economic mess that the Government’s policies have got the whole country into…

My Lords, given the economic mess that the Government’s policies have got the whole country into…