Finance Bill

My Lords, given that I have just said that I thought it appropriate for the assessment of the total effect of the Budget to include an assessment of those policies proposed by the previous Government which the coalition Government have decided to retain and will legislate to implement, I am at a bit of a loss to understand the premise of the noble Lord’s question. I am not sure that this stage of the Bill is the point to be going into clarifications of this kind, so, if he will permit me, I will move on. I turn to the welfare budget. We have to strike a balance between what is right to do with the welfare budget on the one hand and the depth of cuts to public expenditure on the other. If we fully protected the welfare budget, it would force deeper cuts to public spending, which could affect the services on which the most vulnerable in society depend. Refocusing benefits so that they go to those who need them most helps in turn to relieve pressures on front-line spending. I remind noble Lords that 880,000 people on the lowest incomes are being lifted out of income tax entirely. We also had a certain amount of talk from the noble Lord, Lord Lea of Crondall, about ““private sector good, public sector bad””. I want to refute any suggestion that that is the Government’s view. A much more sophisticated and appropriate way to look at it was the approach of my noble friend Lord Blackwell, who pointed out that a situation in which government spending accounted for 48 per cent of GDP was unsustainable. That is the right way to look at it. Private sector growth is absolutely what we need, but the public sector does a very fine job; it is just that we cannot afford a public sector of the size to which it had grown under the previous Government. Although we probably had enough talk of cake from the noble Lord, Lord McFall, it is a question of the size of the cake, how it is distributed and what we can afford of the cake, not of wholly inappropriate comparisons between one part of it being good and the other part being bad.