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Sterling and Foreign Exchange Markets
Lord Sudeley asked Her Majesty's Government:
- Taking into account the powers of the European Central Bank in relation to a single European currency, what measures they are taking to strengthen sterling, especially after having given greater autonomy to the Bank of England.[HL3454]
Lord McIntosh of Haringey: While the UK remains outside EMU, sterling will continue to float freely on the foreign exchange markets. The Government do not have a target for sterling, but a stable and competitive exchange rate is sought over the medium term, consistent with the objective of price stability. The only way to ensure long-term exchange rate stability is through the pursuit of sound macroeconomic policies aimed at achieving sustained growth and low inflation. The independence of the Bank of England in setting interest rates to achieve the Government's inflation target plays an integral part in achieving these objectives.
Budget Surplus/Deficit
Lord Blackwell asked Her Majesty's Government:
- What are the Treasury's estimates of the impact of the lower economic growth rates recently predicted by the Chancellor of the Exchquer on projections for the current budget surplus or deficit and the Public Sector Borrowing Requirement for 1999-2000; what assumptions on changes in unemployment levels are included; and what increase in the basic rate of income tax would raise sufficient revenue to restore
- the current budget surplus for 1999-2000 to the level set out in the Chancellor's July 1998 Statement or restore the Public Sector Borrowing Requirement to the level set out in the Financial Statement and Budget Report published in March 1998.[HL3408]
Lord McIntosh of Haringey: A new forecast of the public finances will be published in the Pre-Budget Report on 3 November.
Government Systems: Millennium Compliance
Lord Haskel asked Her Majesty's Government:
- What progress has been made in ensuring millennium compliance in central government's systems and equipment.[HL3552]
Lord McIntosh of Haringey: The results of the last quarterly review, which the Government announced on 9 September, showed that good progress is being made by departments and agencies in tackling the year 2000 problem. Work on correcting priority, business-critical, systems is particularly well advanced. Over half of the returns reported that 50 per cent. or more of the correction work has been completed and in a fifth of cases this figure was as high as 90 per cent. Departments and agencies are also seeking assurances from suppliers that they will be able to continue to provide key products and services into the next century.
The individual returns from the last quarterly review are available in the Libraries of both Houses together with the text of the announcement made by the President of the Council, the right honourable Margaret Beckett MP, on 9 September.
Fifty Pound Banknote
Lord Marlesford asked Her Majesty's Government:
- On what measure they have calculated that the £50 note introduced in March 1981 would have to be adjusted to £190 to have the equivalent purchasing power today, as indicated in the Written Answer by the Lord McIntosh of Haringey on 3 September
(WA 35); and what adjustment would be needed if the Retail Prices Index were used to measure the change in purchasing power over the same period.[HL3309]
Lord McIntosh of Haringey: The change in Retail Prices Index between March 1981, when the £50 note was introduced, and June 1998, the latest date for which data were then available, was used as the basis for calculating the change in the purchasing power of the banknote over that period. On this basis the adjustment necessary for the £50 note to have the equivalent purchasing power is £113 and not £190 as quoted in my earlier answer. I very much regret that the statisticians miscalculated this figure.
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