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Lord McIntosh of Haringey: My Lords, of course there is a risk of a sharp correction. In its November inflation report the Bank of England specifically made that point and we agree with it. Clearly people should not borrow above the level for which their total household income will provide. The crucial factor for most families is how much it costs them to service that debt. Household wealth is more than five times greater than household debt and it would be difficult to persuade people that they should be concerned with the gross amount of debt rather than what it costs them.

Lord Vinson: My Lords, is the noble Lord aware that the land value of a house in 1952 was approximately 15 per cent and that today it is more than 50 per cent? If we really want to solve the problem

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of household debt and high levels of borrowing, more land has to be released. That is the basic cause of the problem.

Lord McIntosh of Haringey: My Lords, whatever the cause may be, whether it is the availability of land or any other cause, the level of housing starts—and I have figures only for the past 10 years—is grossly inadequate to meet not so much the rise in population but the rise in household formation. Clearly if that situation is to be improved, more sites have to be found. That is why the Government are concentrating so heavily on finding more brownfield sites.

Lord Newby: My Lords, does the Minister accept that many people with absolute levels of debt will find the Answer complacent in that they are extremely vulnerable to either increases in interest rates or unemployment? Will he go back to his colleagues in the Treasury and suggest that they, the FSA and the Bank of England should consider taking concerted action to warn people about the dangers of accumulating high levels of debt? Many of the ways in which these warnings are currently issued—for example, in the inflation report—simply do not filter down to ordinary people.

Lord McIntosh of Haringey: My Lords, I do not think that we are complacent and I certainly do not think that the Monetary Policy Committee is complacent. This is clearly one of the important issues that it takes into account. I shall not attempt to guess what conclusion the committee will reach this week. If the noble Lord is concerned with the individual pain of high levels of debt, I hope that he is slightly reassured to think that repossession levels are at an historic low and are falling. They are only a quarter of the level that they were at their peak in 1991.

Lord Saatchi: My Lords, how would the Minister describe a household which, like the Government, has five times more money going out every month than it has coming in?

Lord McIntosh of Haringey: My Lords, that is not what I said. I said that household wealth was over five times the household debt. That is not the same as income.

The Lord Bishop of Chester: My Lords, is the Minister aware that, within households, particular problems arise with young people? Is not the way in which debt is made available to young people a particular problem within the overall scope of debt management?

Lord McIntosh of Haringey: Yes, my Lords, of course that is right. The availability of credit to those who are not in circumstances to service it has been a matter of concern over many years. Again, I am not seeking to be complacent; I am merely looking to put both sides of the argument. There is an increase in the use, for example, of credit cards, including by young

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people. But a very large proportion of that is in the form of debit cards, which are, of course, paid off immediately.

Lord Barnett: My Lords, will my noble friend give an assurance that he will not support what the noble Lord, Lord Saatchi, implied; namely, that the Government will not ask the Monetary Policy Committee to increase interest rates in order to do anything about it?

Lord McIntosh of Haringey: My Lords, I shall certainly not give any advice to the Monetary Policy Committee. We took the decision in May 1997 to devolve these matters to the committee. If I were under any circumstances to give advice, I should not give it on the basis of not being able to make a distinction between wealth and income.

Viscount Falkland: My Lords, is not the high level of spending and borrowing due in part to a general lack of confidence in the future? People are faced with the prospects of germ warfare and alarmist reports in the newspaper. Is it not normal when people are insecure for them often to go shopping or to turn to the bottle?

Lord McIntosh of Haringey: Retail therapy, my Lords! You could argue the contrary. You could argue that people's willingness to borrow comes from a certain amount of confidence in the future. After all, we have historically high levels of employment and historically low levels of unemployment. We have historically low interest rates and historically low inflation. There is a great deal more security among the population than there was in the 1980s and 1990s.

Central London: Congestion Charging

2.53 p.m.

Lord Renton of Mount Harry ask Her Majesty's Government:

    What plans they have to deal with emergencies arising from a breakdown of the central London congestion charging scheme.

Lord McIntosh of Haringey: My Lords, the decision to set up the scheme was entirely the mayor's. Similarly, it is the mayor's responsibility to deal with any problems that arise. The mayor has gone on record as saying that the scheme could be switched off if it does not work.

Lord Renton of Mount Harry: My Lords, will the Minister tell us honestly whether he thinks the scheme will work? Is not the trouble at present that it seems to be mind-blowingly complex? Have not the rules for those living in central London to claim exemption and discounts been unflatteringly compared to the self-assessment tax papers? Will it not be dangerously easy

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for a visitor to London to stray unwittingly into the central London area without knowing it, and to find at the end of the day that he has an 80 fine to pay?

Lord McIntosh of Haringey: My Lords, I am certainly not going to express a view on whether or not the scheme will work. That would put me in the worst of all possible positions, would it not? The mayor would get the credit if it did work, and we should get the blame if it did not. We are not going to have that.

The Secretary of State has made it clear that any congestion charging scheme (I refer not only to London) has to be workable technically—I hear what the noble Lord says about the complexity for residents of inner London; it must be supported by adequate public transport alternatives—the mayor has given us assurances on that point; and it must have broad public acceptance.

Viscount Astor: My Lords, the Minister is responsible for the emergency services in London, and my noble friend's Question refers to emergencies. If the scheme means that emergency services will not be able get through the centre of London, will the Government look at the matter again? What is more, if the introduction of the scheme means that the centre of London becomes empty but the surrounding boroughs become totally congested, that will be the Government's responsibility. Will they then repeal the legislation that they brought in allowing congestion charging to happen in the first place?

Lord McIntosh of Haringey: My Lords, there are a lot of extreme suppositions there. There are full exemptions from the congestion charge for fire, police and ambulance services. Therefore, there is no extra cost to the emergency services. They will clearly have free access to central London. According to the objectives of the scheme as I understand them, it is hoped that there will be less traffic in central London. Presumably, their response times will therefore be faster. As to the effects on congestion in outer London, these are exactly the things that will have to be seen when the scheme comes into force.

Baroness Hamwee: My Lords, will the Minister continue to resist calls for central government to interfere in matters which are properly, as he has said, those for devolved government? If he agrees, will he make the same point to his colleague, the Secretary of State for Transport, who appears to have the new idea of a so-called "holes tsar" to deal with holes in the road? These are admittedly a major issue, but would it not be better for the powers to be given to the devolved government to deal with the matter, and so contribute to the reduction in congestion?

Lord McIntosh of Haringey: My Lords, I hope that the noble Baroness will agree that I have always resisted invitations to intervene in the responsibilities of the mayor and the Greater London Assembly. I do not think that the Secretary of State has talked about

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a "holes tsar", even if he used the word "tsar". What he has been talking about is the idea, particularly outside London, of having traffic managers who would take responsibility for all aspects of roads. The noble Baroness cannot deny that there is divided responsibility between the mayor and the Greater London government and the 32 boroughs in London. That has sometimes caused problems. It would be better, as the Secretary of State says, if these matters were under one central control.

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