Tax Credits

Lord Clarke of Nottingham Excerpts

Tuesday 15th September 2015 Commons Chamber

[Seema Malhotra]

I will make a little progress, and then I will give way.

Far from increasing work incentives, these measures will reduce them. Reducing the work allowances or thresholds and increasing the taper rates mean families will have their incomes reduced earlier and more quickly than would otherwise have been the case.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does the hon. Lady accept that the vast majority of Members in this Chamber probably agree that we would like to see Britain move away from being a low pay, low productivity economy to a more advanced, higher productivity, better paid one? Can she explain how she thinks we can possibly move in that direction, even now the economy is recovering, if we do not tackle the absurd level of taxpayer subsidy to low pay from the tax credit system?

[Seema Malhotra]

I—[Interruption.]

Greece

Lord Clarke of Nottingham Excerpts

Monday 6th July 2015 Commons Chamber

[Mr Speaker]

Order. In belatedly congratulating the right hon. and learned Member for Rushcliffe (Mr Clarke) on his birthday last Thursday, I express the hope that he was able to celebrate with something more than mineral water and muesli.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I am glad to say I was, Mr Speaker. I was not going to ask my right hon. Friend about my birthday, but thank you very much for your kind remarks.

Will my right hon. Friend continue to give support to those of our sensible European allies who insist that the Greek Government cannot just expect a third bailout and a second restructuring of their debts, so that Irish, Portuguese, Spanish and other taxpayers can continue to pay for untenable levels of public expenditure, including generous early retirement schemes, bloated public sector payrolls and so on? Does he also accept that if in the next week or two the Greek Government just print a new currency, called the new drachma, it will be a quite worthless means of exchange that will probably not be used by the Greek population or by foreign suppliers of commodities? There is therefore no alternative to the Greek Government eventually agreeing structural reform, to give them a competitive economy for the future and to rejoin the European community of nations.

[Mr Osborne]

First, let me join in congratulating my right hon. and learned Friend on his birthday. The points he makes are echoed by many eurozone Governments that we speak to. There are countries in the European Union with lower GDP per capita incomes and there are Governments in the eurozone who have undertaken incredibly difficult structural reforms—he names our close neighbours in Ireland—so these points are regularly made. It is clear that there needs to be major structural reform of the Greek economy and certain conditions set on eurozone membership, and that is why the eurozone is waiting for the latest proposal from the Greek Government. Equally, we urge all parties in this, including those other eurozone Governments, to be open to new offers and to be ready to sit round the table.

Greece

Lord Clarke of Nottingham Excerpts

Monday 29th June 2015 Commons Chamber

[Mr Speaker]

I call Mr—sorry. The right hon. and learned Gentleman took me by surprise. I call Mr Kenneth Clarke.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I am always quietly inconspicuous in this Chamber, Mr Speaker.

Will my right hon. Friend confirm that the IMF has always made advances to countries in financial crises conditional on a programme of reform aimed at minimising the effect on creditors and, above all, on restoring a competitive and effective economy to prepare for a healthier future? It would be quite irresponsible for the IMF or the European Central Bank to abandon that approach at the moment. The best outcome would be for the Greeks to vote yes in the referendum. The one thing my right hon. Friend has not touched on is the great hardship that could be caused to the Greek people if they vote no and their economy goes into total collapse. Are there any discussions going on about the way in which the friends of Greece can mitigate those consequence for the ordinary Greek population? There is no quarrel in this House with Greece or the ordinary people of Greece who are not responsible for the mismanagement by their Government.

[Mr Osborne]

My right hon. and learned Friend is right to remind us that the people of Greece have paid a very high price for the mismanagement of their economy by previous Greek politicians and Greek Governments. Of course it is now a matter for the Greek people to decide their future, and we should respect that. I made it clear in my statement that most people now consider this referendum as one on whether Greece leaves the euro. Of course there are considerable consequences of taking that step, but I do not think we should be telling the people of Greece how to vote. It is for the people of Greece to make that decision, but they should be aware of the consequences. That is the broad approach that we shall take. The discussion of what would happen if Greece were to leave the euro should probably happen at a later date, but there will clearly be issues over the support that the family of western nations can provide to that country.

European Union Referendum Bill

Lord Clarke of Nottingham Excerpts

Tuesday 16th June 2015 Commons Chamber

[Alex Salmond]

I was merely pointing out that there are a number of international examples. As I said, my hon. Friend the Member for Ochil and South Perthshire will go through some of those in some great detail. This is not unusual in matters of constitutional import.

There is no doubt that a constitutional referendum on whether the United Kingdom should be part of the European Union carries constitutional implications. It is not unusual internationally, even in a federal or confederal state, to have more than a simple majority on such matters, and also reference to the various component parts of that state. If that is the case for a confederal or federal state, surely it should be so much more the case for a United Kingdom of four component nations.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

The right hon. Gentleman is being generous in giving way. Will he confirm my suspicion that his secret wish—the perfect result, from his point of view—is for Scotland to vote yes and England to vote no? Personally, I would regard that as a disaster. Does he agree that if Scotland voted to stay in the European Union and England voted to leave, the end of the United Kingdom would probably be quite imminent?

--- Later in debate ---

[Sir William Cash]

I very much agree, and it may be of interest to Members, if they have not already noticed, that the Electoral Commission has examined not only the Bill but my amendments, and has stated:

“The Commission is therefore generally supportive of proposals to reinstate restrictions on the publication of promotional material by central and local government in the run-up to the poll.”

Even after Second Reading, the Electoral Commission—which is, after all, charged with these duties—has concluded it would be important to retain these restrictions. Some adjustments may need to be made in due course, but we should secure the status quo, then have the discussions, and then have the vote on Report. That would be the right way round.

[Mr Kenneth Clarke]

How far does my hon. Friend want to take this? In a general election, the whole government machinery closes down for four weeks and studies the potential future of alternative political masters and waits to see what the political policy of the new Government will be. In this case, however, the Government at the time of the referendum will be the Government for the next several years, and the Government, as a Government, will have been involved in producing the terms that are part of the referendum. Does my hon. Friend intend that no Minister can act as a Minister, as could be the case if we strictly applied purdah, or take advice for all those weeks on anything that might pertain to an issue in the referendum? Is the Prime Minister going to be prevented from expressing a view? Surely some compromise that is a modification of purdah is required—

[The Chairman of Ways and Means (Mr Lindsay Hoyle)]

Order. The right hon. and learned Gentleman has been here longer than most Members, and he should know that interventions must be short, especially if he wants to make a speech later.

--- Later in debate ---

[The Temporary Chair (Sir Roger Gale)]

As the right hon. Gentleman knows, Ministers are responsible for making available their own documentation. It may be a courtesy, but it is not a matter for the Chair.

[Mr Kenneth Clarke]

I think I am fairly confident in saying that the starting point of this debate is that every Member of the House—from the Prime Minister and Ministers to the acting Leader of the Opposition and shadow Ministers to the most newly elected Back Bencher—agrees that if we are to have a referendum it must be perceived to be fair. The most balanced position possible must be taken vis à vis those who wish to advocate yes or no, for a variety of reasons, so that the public hear the broadest possible range of views and can make a reasonably objective judgment.

I have never known a referendum settle any question. It certainly has not settled questions of Scottish independence, elected mayors, proportional representation or AV, and does not seem to have settled the European question either. However, I think that those who believe that a referendum is a valuable way forward agree with me that we should bend over backwards to make sure that all those who feel strongly either way on this subject are treated as fairly as possible.

[Mr Steve Baker (Wycombe) (Con)]

Most of what my right hon. and learned Friend has just said could be applied to democracy itself, yet still we trouble ourselves with it.

[Mr Clarke]

Which is why I believe that the parliamentary system of democracy is so very good. A representative body of people elected from time to time have continuous responsibility for step-by-step decisions, and eventually they have to face the consequences of their decisions and can be removed. But we are already going wide of the amendments.

[Sir William Cash]

Will my right hon. and learned Friend give way?

[Mr Clarke]

I am delighted to see that my hon. Friend the Member for Stone (Sir William Cash) is able to stand when he feels passionately on the subject. I am sympathetic to the problems he has had, and I am glad that he was able to speak from a sedentary position, which I had never seen before. I will finish making my point before I give way.

I hold my hon. Friend and those who agree with him in the highest possible regard. We in the Conservative party have to be careful that we do not repeat the folly of Harold Wilson and tear our party apart in the course of a referendum campaign. After quite a few decades of this battle, I continue to be on excellent personal terms with those of my hon. Friends with whom I disagree. It is best that we proceed by putting forward our respective views of the public interest. We must certainly not divide the strong purpose of the Government, who have been so recently elected with the support of the whole Conservative party.

[Sir William Cash]

Will my right hon. and learned Friend allow me?

[Mr Clarke]

Let me make a little more progress. I hope that my hon. Friend’s constraint will stop him leaping up too frequently; I will give way in due course.

I do not believe that there is any bad faith anywhere. Everyone wants those who campaign and the public to feel that the referendum has been conducted with absolute fairness. I am surprised, therefore, that, in these opening days of the European referendum process, so much passion is being excited by procedural issues. I will not describe them as footnotes, but, although they are important, none of them will make the faintest difference to the result on the day of the referendum. If we asked most of our masters—the public—whether purdah was followed properly during the campaign, they would not have the first idea what we were talking about. So my first plea is for a sense of proportion.

My plea to my right hon. Friend the Minister—I do not think I need to make it because I have seen the letter, which did not get to me either; I have just been shown it—is to live up to his undertakings. It is right to bend over backwards to reassure my right hon. and hon. Friends that there is no conspiracy, that they must not leap into paranoia, and that the intention is to hold a referendum in which the British public will be able to reach a view on balanced presentations. It seems to me that Ministers have started doing this straight away. I got the impression from the Second Reading debate that my right hon. Friends on the Front Bench were as surprised as I was at the sudden excitement about the rules in what should have been a fairly routine Bill paving the way for the referendum.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Will my right hon. and learned Friend give way?

[Mr Clarke]

I will give way in a moment.

The Prime Minister has announced that he will suspend the rules of collective responsibility and that members of the Government will be able to campaign on whichever side they choose. We now have the letter giving an undertaking that the Government will depart from section 129. People seem to think that there is something magic about 5 May 2016, so we will not hold the referendum on that date. I have sympathy with Ministers; they are being derided. The moment they make concessions to all these impassioned pleas, they suffer the fate of all Ministers and are immediately accused of a humiliating U-turn and held up for ridicule.

Some of my right hon. and hon. Friends and perhaps others in the Scottish National party are difficult to calm down and reassure. I ask them to accept, as I accept, that every effort is being and should be made to satisfy fears about the propriety of the campaigning period.

[Sir William Cash]

My right hon. and learned Friend’s rather Hush Puppy approach—saying that there is really nothing much that we need worry about, and that Parliament is far better at doing this than the people—seems somewhat dangerous and disrespectful of the voters. We have had a lot of referendums over the years. He says that purdah would not make a difference anyway. Does he think that the Electoral Commission is wrong when it says that disapplying section 125 of the 2000 Act would enable the Government to spend unlimited sums of money?

[Mr Clarke]

I once gave evidence to an inquiry chaired by Sir Nigel Wicks into the workings of the Electoral Commission, and my recommendation was that it should be abolished as a useless quango, but that is a wider issue.

Of course we have had referendums, but my hon. Friend has never accepted the result of any referendum if he disagreed with it—for the sound reason, for which I respect him, that he has strong personal principles and convictions. I took part in the referendum 40 years ago. No serious Member of Parliament on either side of the argument changed their beliefs one jot the day after the result of the poll was announced. Tony Benn, who was personally responsible for floating this innovation in British politics, was one of the first to start demanding that we left the European Community within a few weeks of the announcement of the result. The Labour party was committed to leaving the EU by the time we got to the 1983 election, having shed a high proportion of its members to the Social Democratic party. My hon. Friend the Member for Stone and I agree that we must not repeat the mistakes of the past.

[Sir William Cash]

Will my right hon. and learned Friend give way?

--- Later in debate ---

[Mr Clarke]

Let me move on a little and perhaps reassure my hon. Friend. I am prepared to be persuaded that, despite my bewilderment that so much importance is being given to the procedure, we should bend over backwards to reassure my right hon. and hon. Friends that the Government are acting in good faith and will hold the campaign in a serious way. So I accept that 5 May 2016 is verboten—absolutely ruled out. It is a sacred day in the next two years on which it is not possible to put an additional question on the Scottish referendum—[Hon. Members: “European.”]—on membership of the European Union. So it has been decided not to hold it on 5 May.

I could not care less on which precise date the referendum is held, as long as it is held properly. I do not think that 5 May is a remotely important subject. I might have argued that it would have been a good idea to raise the turnout in our electoral process. There is an argument that if elections for various things are held on the same day, the turnout for some elections might go up from its current pathetic level. Apparently, however, it is thought that the poor electorate would be puzzled and confused—that they would vote in their local council election thinking that the Germans were playing a key role in the whole thing and that the questions would be too complicated and they would muddle up the documents.

--- Later in debate ---

[Mr Nuttall]

The point is that Members of the same political party may well campaign on different sides of the referendum question while at the same time being on the same side for the local elections. That is the key reason we need to have them on separate days.

[Mr Clarke]

If, on the day of the referendum poll, a member of the electorate does not realise that different Members of both the Conservative and the Labour parties—at the very least—are campaigning on different sides of the campaign, I regret to say that we will all have failed, because that member of the public will have been singularly uninformed about the progress of about 20 years of debate, during which that has always been the case. But there we are: the issue of the date has been determined. The Government have given way and have been derided for doing so, and I will spend no more time on the subject.

The more serious point—although I do not think this is a serious problem—is the suggestion that the absolute statutory rigour of purdah should be applied to the Government as a whole acting as a Government throughout the final four weeks of the referendum campaign. I have already made this point during an intervention, but it is important.

People are suggesting that the whole Government machine should be switched off for those four weeks on a whole list of issues. They say it would be improper that any public body, the Government machinery or any Minister purporting to speak as a Minister should be allowed to engage in anything that might be designed to encourage voting in the referendum or to express a Government view on any issue that might be germane and regarded by people on either side of the argument as relevant to the outcome. I ask my hon. and right hon. Friends at least to pause—as I am personally prepared to do—until Report, which, as I have discovered from this mysterious message on Twitter, is when the Government will make proposals that might reassure people but that might fall short of the full rigour of the rather odd referendum legislation that we passed a few years ago. Obviously, that legislation did not exist when we last had a referendum on Europe, when the Government were deeply divided and very odd messages came out.

Given that everybody is going to concede to my hon. and right hon. Friends anything that can reasonably be seen to put any legitimate fears to rest and to reassure them that this is a sensible approach, we cannot ignore the risk that one might, rather oddly, be closing down the whole machinery of Government for some time. I have already cautioned against conspiracy theories and paranoia. We all know that individual members of the Government will go out and give their own personal views on one side or the other—they are allowed to do that.

[Sir Alan Duncan (Rutland and Melton) (Con)]

Will my right hon. and learned Friend give way?

[Mr Clarke]

In a moment. Why on earth should a Minister not be allowed, as a Minister, to advocate that people might be encouraged to vote? As the hon. Member for Ilford South (Mike Gapes) rightly asked, would a Minister who goes to Brussels for a difficult meeting on an aspect of agricultural policy or of the research and development budget be told by his officials that they would melt away the moment he expressed a view on an issue that might have been raised by my hon. Friend the Member for Stone or me in the referendum campaign?

I think we have received genuine undertakings. Everybody wants a fair referendum, so let us not resort to the legalism of section 129—[Hon. Members: “Section 125!”] That shows my regard for legalisms, despite my being a lawyer: section 125 is very important! When we get to Report, let us take a considered look at what would happen if we threw the whole weight of the law at this issue and had one of Her Majesty’s judges adjudicating on whether the pronouncements of some Parliamentary Secretary in Brussels had broken the statutory injunctions and he should have been reduced to silence.

[Mr Richard Bacon (South Norfolk) (Con)]

May I say how much we are enjoying my right hon. and learned Friend’s speech? His casual wafting around of various sections, whether they are the right ones or not, reminds me of one of those lovely days when he said that he had not bothered to read the Maastricht treaty. Will he clarify something that seems to be a bit of a caricature? He says that the whole of Government would have to be closed down and that Ministers would not be able to engage in any business at all, but surely that could only possibly be true if the European Union was so involved in every nook and cranny of this country’s affairs that it could not possibly function without those relationships. Is not that the whole point?

[The Temporary Chair (Sir Roger Gale)]

Order. Before we proceed, in case there was any implied criticism, I have to say that, although the right hon. and learned Member for Rushcliffe (Mr Clarke) might be rambling around the European Union, this is a broad-ranging set of amendments. I have listened to him very carefully and he is, in fact, in order.

[Mr Clarke]

I hope I am not being too light-hearted, but this has been a long debate. I have already confessed that the issues have not engaged me as passionate issues of great principle to the same extent as they have engaged others. I was genuinely surprised to hear Eurosceptics take off and pronounce that there was a monstrous conspiracy in all the details. I am trying to reassure them that if there was any risk of a conspiracy, it could be laid to one side. I will treat the arguments with every due solemnity.

I am not saying that every Minister in the Department of Energy and Climate Change—although this might apply to them—or the Scotland Office would necessarily find that they could not do anything. It is not like during an election, when they would not be allowed to go into the office or take any decision of any kind, but the proposal could be very wide-embracing indeed. It is all very well for people to dismiss light-heartedly—though perhaps they are not speaking in the same tone as I am—the Prime Minister’s warnings that there would be a serious impact on the conduct of business, but I think that that is what would happen.

To repeat the point I made earlier: strict purdah stems from long before the statute was passed. It stems from the rules for a general election, and they are right. Once we get into the campaigning stage of a general election, the Minister is the Minister only if he or she is required to sign something that has to be signed. When an election comes, the party political Minister is prevented from taking any decisions. Nothing can be changed. The civil service goes into its totally non-political mode because the whole point of that election is to decide which political masters are going to return to the Department, so that eventually we again have a Government who are able to act.

What we are discussing is a referendum being held by a Government. It is part of the Government’s policy to hold the referendum. The Government have been negotiating a deal as part of their policy on reform to supplement the arguments in the referendum. The Government will continue to be the Government for the next three or four years and will have to live with the consequences of the referendum, so what is being argued is that these men and women and the civil servants who support them should all switch off for four weeks, stop having an opinion on these issues and, unlike my hon. Friend the Member for Stone and myself, the day after the election pretend that they now agree with the enlightened view of the electorate and that they are going ahead and taking all the decisions on whatever is now the position.

I am sure there is a balance to be struck. I would deplore it if the Government were to spend taxpayers’ money on sending out ridiculous pamphlets and so on. That would misfire. I expect the Government to be in favour of a yes vote. I will be campaigning for a yes vote. I do not want the Government to squander taxpayers’ money and plainly abusing their position by putting out material that I might not wholly agree with anyway. The electorate would react if it was obvious that the Government were resorting to using the machinery of government for campaigning. But the statute is too severe. I hope we will not all get carried away and that we will allow my right hon. and hon. Friends the chance to come back with a sensible compromise.

Let me move on. I am sure the Whips will be very happy, but I am taking rather longer than I intended. I am attracted by the Opposition amendments, although I am not going to support them, as I shall explain in a moment. The shadow Minister, with unusual naiveté, seems to believe in evidence-based politics. He obviously believes that the more rational information is produced objectively and placed before the public, the more certain one can be that the correct result will be arrived at.

But this is politics. This is the European issue. Nothing of that sort has intruded into the debate on the European Union for the past 30 or 40 years, and it will not do so now. The Government have tried to move in that direction. The Foreign Office carried out the most objective study of the division of powers—the division of competences, in the jargon—[Interruption.] Precisely. I hear colleagues behind me shouting out, “Whitewash!”, by which they mean that the study came to the wrong conclusion, in their opinion. Evidence-based politics was rejected the moment it emerged. It could not find that the balance of competences, as negotiated by successive Ministers of all political persuasions over the previous 40 years, contained anything that was to the disadvantage of the British public.

The reaction was not to try to challenge any of these arguments with any new facts, but to try to bury the document, which most members of the public were never allowed to hear about. I suspect that it has not been picked up—it is pretty voluminous stuff—by very many Members of this House, let alone people outside, but it is a noble aspiration.

I have one serious reservation about what the right hon. Member for Wolverhampton South East (Mr McFadden) proposes. He suggests that those pre-eminently independent bodies, the Bank of England and the Office for Budget Responsibility, should be, as it were, enjoined by this Bill to produce those reports, which is quite attractive. I have the highest regard for the Bank of England and the Office for Budget Responsibility. We should all vigorously continue to ensure that their independence is maintained in every possible way, but there is a danger of politicising them. The Bank gives its opinions all the time, as most central Banks do, about the outlook for the economy, the latest statistics and the way things are unfolding. Central bank governors become notorious for talking a kind of obscure, slightly ambiguous mandarin language. That is precisely to try to avoid getting themselves immersed, which the Bank and the OBR would do if they seemed to be leaping into something that is a partisan opinion or appears to be a position of strong partisan support for one question or another.

--- Later in debate ---

[Mr McFadden]

Briefly, on the issue of the Bank of England, we know that it is preparing such a report anyway. The issue is whether people will see it or not.

[Mr Clarke]

Precisely. If I were the Governor of the Bank of England—some might say thank the Lord I am not, though it is quite an interesting job—I would not feel I wanted to publish such a document because I would suddenly find myself in the middle of the most emotional political debate going on in the country, and that is not where the Bank of England should be. On that serious ground, I think the amendments are interesting and I hope I discover what the views of the Bank of England are. They will probably be leaked, although central banks should not leak. I do not think we should enjoin the Bank to produce what would inevitably be ferociously controversial documents.

I conclude as I began. I find all these debates a little bewildering. I have not the slightest doubt that the British public will not allow this referendum to be run on any basis other than that of reasonably fair objectivity on both sides, and we should beware of making the mistake of slipping into the Bill rigidities which, if we are not careful, will start causing totally undesirable results when the reality of the referendum takes place.

[Hywel Williams (Arfon) (PC)]

I support amendment 16 and new clauses 3 and 4 in the name of my right hon. Friend the Member for Gordon (Alex Salmond) and other hon. Members.

I hope I can welcome some clarification from the Government later on the question of holding the referendum on the same day as the elections in Scotland and the elections for the Assemblies in Northern Ireland and Wales. An aspect that has not received much attention is that of the effects of the franchise. EU citizens have the right to vote in our general elections in Wales and in Scotland. The Government here in London propose to exclude them from the referendum. If the referendum and the election were held at the same time, one can picture the spectacle in Northern Ireland, Scotland and Wales when EU citizens turn up to vote, cast a vote and then are cast out. They are being prevented from voting on our future in the EU. That spectacle would cheer the hearts of despots throughout the world, from Moscow to Damascus to Pyongyang.

On the declaration of the results and the so-called quad lock, there are particular EU issues pertaining to Wales. I would say that these are national issues. On Second Reading I referred to the value that we as a multilingual society derive from membership of a multilingual and multicultural European Union. This may not figure as largely elsewhere in the UK as it does in Wales—it is a particular Welsh issue.

Wales is one of the poorest parts of Europe—it is at the same level as some former Soviet bloc countries—and we have derived much benefit from EU regional policy. Again, that is of national significance to Wales. We are also very dependent on EU agricultural support. There are other issues relating to manufacturing and demography, but I will not go into those now. All those factors might or might not decide the result in Wales—I cannot say whether they will—but they are legitimate national interests and should be respected as such.

We have a particular national interest. It might be different from the national interest of our neighbours. As the Government intend, their national interest will trump ours. I think that there are only two ways to go on the respect issue: either to respect or not to respect. The current proposals potentially will not respect, which is why we will support amendment 16.

The Economy

Lord Clarke of Nottingham Excerpts

Thursday 4th June 2015 Commons Chamber

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I congratulate the right hon. Member for Doncaster North (Edward Miliband) on his forceful and good speech, and on his resilience in coming here and facing the House with such dignity and distinction. I, too, pay tribute to the way in which he fought for his principles and his cause in the election. Indeed, it causes me slight annoyance that in the leadership election that has broken out in the Labour party, some of the people who a month ago were his greatest admirers, his most loyal colleagues and those closest to his cause are now busily detaching themselves and attempting to scapegoat him for the problems that the Labour movement experienced.

In my opinion, for what it is worth, the right hon. Gentleman fought a very good election campaign. It was much better than anybody expected, because of the expectations that the tabloid press had raised. I thought he put the message across very well. I thought the message was wrong, and that was the judgment of the majority of constituents in my constituency and my part of the world. It is not the case that his performance had anything to do with the result. Apart from the great events in Scotland—[Hon. Members: “Hear, hear!”] Apart from the remarkable, almost bizarre, events in Scotland—the SNP is equalled only by Syriza in Greece on economic policy—and the very welcome events in the south-west, which were also very unkind because I lost many good colleagues in government as a result, the underlying basis of the majority that we won, to most people’s surprise, was the judgment of sensible people on economic competence and our record on the economy.

I do not think the election campaign made very much difference to the result one way or the other. My part of the country, the east midlands, is thick with marginal seats. We won all of them and added gains by taking back Derby North. In the end, people saw what we had inherited economically and what we had done over the previous five years. They recognised our economic competence and accepted the message that the job had to be completed. When listening to the Labour party’s message, however it was presented, they simply decided that they could not take the risk of changing the Government. When the problem arose that the SNP would apparently be able to hold a Labour Government to ransom in what was bound, because of the tsunami in Scotland, to be a hung Parliament if Labour won, that made a little bit of difference, but the result was mainly down to economic competence.

[Tom Brake (Carshalton and Wallington) (LD)]

Does the right hon. and learned Gentleman feel that in individual constituencies, particularly Liberal Democrat-Conservative marginals, the fact that his party was often outspending my party by a factor of perhaps five to one made any difference to the election result?

[Mr Clarke]

I look forward to a little party political debate with the right hon. Gentleman again. As I have said, what decided the election was the coalition Government’s extraordinary record. It was a particular tribute to my right hon. Friend the Chancellor, closely assisted, as he said, by Danny Alexander, the former Member for Inverness, Nairn, Badenoch and Strathspey, who was an excellent Chief Secretary, in getting the affairs of the nation back in order and steering us to some of the most successful economic results in the western developed world, which is what we have now.

What concerns us now, in this Parliament, is what judgment the public and history will make of this Government when they look back in five years’ time, or whenever. That will crucially depend on whether we finish the job and deliver the modern, more balanced, competitive economy that will give our children and grandchildren greater security and a better quality of life. That is the task we have set ourselves, and it is not going to be easy.

At the moment we are all enjoying the hubris of victory, as far as my party is concerned, or the relief of being back here just opposing, as far as the Opposition parties are concerned. On the surface the task looks easy, because at the moment our economy is growing more strongly than almost any other in the western world, employment is soaring because of our flexible labour market, which we should keep that way, our inflation is low, and real pay is at last beginning to rise as the benefits of recovery get through to every level of society. However, it would be a false assumption to think that it is plain sailing from now on, that everything will continue in that way and that the risks have vanished domestically and abroad, so we can take easy measures to reward those who voted for us. The world is not like that.

I take encouragement from what I took to be the Chancellor’s message. He has announced a July Budget, because he wants to take the opportunity while the economy is growing to take some of the tough and difficult decisions that the Government still have to take. I certainly encourage him to do so. In my part of the world—Nottinghamshire, Derbyshire, the east midlands—the people who voted for us knew that there were still tough and difficult decisions to take. They were not seduced by the speeches of those whose only examples of what they intended to do were ways of spending money or rather short-term popular things. The sooner we get on with tackling the underlying problems—including, as my right hon. Friend the Chancellor has reassuringly just confirmed, the debt and the deficit—the better we will be able to get on with all the other things that need to be done, which will enable our economy steadily to get back on to a stronger and more secure footing.

[Neil Carmichael (Stroud) (Con)]

Will my right hon. and learned Friend give way?

[Mr Clarke]

I will, but this is the last time I will do so, because a lot of other Members want to speak.

[Neil Carmichael]

I thank my right hon. and learned Friend. Does he agree that one of the key tasks is to keep up the pressure to improve our skills agenda, so that we can ensure that our young people continue to contribute to a productive economy and increase our capacity to develop, innovate, research and develop and manufacture?

[Mr Clarke]

My hon. Friend anticipates some of the points I wish to make. I agree with everything he has just said. Tackling the deficit and debt, together with what he has just described and the other measures that we have committed ourselves to, is a genuinely one nation Conservative approach. Ever since I became active in politics, I have declared myself a one nation Conservative. The phrase has moved in and out of fashion a little in my time, but I have remained boringly consistent. In my view, it means free market economics combined with a social conscience, as well as a forceful internationalism that looks after Britain’s interests in the world and helps to spread our values.

On the economic front, the combination of fiscal discipline and economic competence, with measures such as taking the very lowest-paid out of tax altogether, easing the tax burden on the lower-paid, not taking people on ordinary incomes into higher rates of tax that should affect only the very wealthy, and the right to buy from those giant landlords the housing associations, which should be unlocking their resources to invest in more new social housing, gives the right one nation balance to the proposals we have put forward. As I have said, it is important that we get on with it, because this Session of Parliament is probably the best time to get some of the most formidable challenges out of the way and under our belt.

If I am sounding a little foreboding about what could go wrong, I should say that I do not foresee anything going wrong, but we will be lucky if no global shocks hit us. We have had five years of growth since 2010, with only a minor blip—not a recession—in 2012, and 10 years of uninterrupted growth would be pretty well a post-war miracle. It does not happen in the real world. We are doing better than any other western European nation, but that is based on the fact that we devalued by 25% when we had the crash—that has done us a bit of good, but not a great deal—and on a US recovery that is now looking rather feeble, as it was stimulated by quantitative easing, which is a dangerous thing. Our own recovery is not forcefully strong, and it was based on quantitative easing when that was necessary. Of course, we rely on interest rates, and they are the lowest they have been for 300 years, which is good for indebted countries.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I will not, because other Members want to speak. I enjoyed what the hon. Gentleman said yesterday, and I would like to give way to him, but not at the moment.

It will be surprising if we do not face difficult times. My right hon. Friend the Chancellor has taken the deficit down to a little under 5% of GDP—far too high, and quite unsustainable, but practically half what we inherited. He paced it pragmatically, because five-year forecasts of where we will be are a complete waste of time, although people always produce them. So long as we have growth, we should press on with taking the deficit down now, because if we ever have a slowdown we will have no weapons to do anything about it. If the Chinese turn out not to have a soft landing, or if America goes wrong, we will not be able to help ourselves by having a fiscal stimulus when we have a 5% deficit. We will not be able to ease monetary policy with interest rates at practically zero. Now is the time to get on the with the task.

There is much more that I would like to say along the lines of the intervention by my hon. Friend the Member for Stroud (Neil Carmichael), because cutting the debt and deficit is not in itself a complete economic policy. It is the essential precondition for all the structural reforms that we still have to make so that we can make our economy modern and competitive. We have a long way to go, because as Members have said, our productivity performance is dreadful, our investment performance is recovering but remains rather poor, our trade and export performance is pretty dismal and we have an appalling current account deficit. In this modern, balanced economy, we have a long way to go.

We therefore require the right kind of European reform. The European Union has been the essential basis on which we have established our voice in the world and our current economic base. In my lifetime, it has had the most beneficial effect on both those things, which were in a pretty dreadful state until we joined, but it does require changes.

When the Prime Minister announced his referendum, in a very pro-European speech at Bloomberg, he set out an economic agenda for change. That remains the most essential reform that we require and desire, and it would benefit the rest of Europe, as well as us. That means completing the single market, which we have talked about and never done. It means an EU-US trade treaty, which we have an opportunity to get and which would boost investment, trade, jobs and activity on both sides of the Atlantic.

It means deregulation. The Barroso Commission talked about deregulation and got no support whatever from member states. The Governments of all member states, including Britain, tend to send people to Councils from various Departments who advocate more regulation—on transport, road safety, food safety, environmental standards, pollution and all the rest of it. Vice-President Timmermans wants to deregulate. We should compete with deregulating there by deregulating here to stimulate our economy.

Of course we can stop people coming here just to claim benefit—we have always been able to do so. There are other things we can do. The economic reforms, however, were the basis on which we started the negotiations and they remain the most important to us.

Beyond that, skills training and education reforms are still required. We have immigrants because we have to go Romania to recruit nurses—we do not train enough nurses of our own. Our construction industry would come to an end if Poles did not come here in the numbers they do. Skills training, education and higher education—every innovative business I know complains they cannot recruit people with the necessary skills to expand their business. It is one of their major constraints. We do not train and produce enough engineers. We need to get somewhere with giving STEM subjects a higher priority and so on.

I could go on. [Hon. Members: “Go on.”] No, no. This is an agenda for a Parliament. It is tough agenda. Now that we have been re-elected, we have the ability to deliver it. The precondition is that we start well, and we start with getting rid of the deficit and debt restraints while we can. In July, we need an iron Chancellor. We need a bold and radical Government. We need a Government who are going to repeat the success of the past five years, measuring up to these enormous international challenges, to show that the United Kingdom can again have one of the strongest global economies in a totally changed globalised economy and a new world.

Amendment of the Law

Lord Clarke of Nottingham Excerpts

Thursday 19th March 2015 Commons Chamber

[Vince Cable]

We have always made a clear distinction between the basic recommendation on the minimum wage, which every Minister in my position has accepted, and some of the second-order questions. We have changed the recommendation on apprenticeships, and indeed others, but the recommendation on the basic minimum wage is fundamental and something that Ministers of both Governments have honoured. The Leader of the Opposition—for reasons that are unclear beyond anything other than political populism—now proposes to destroy that tradition, and that is very retrograde.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

I share the right hon. Gentleman’s experience of having opposed the minimum wage when it was proposed by the previous Government, although I now realise that was a mistake and have been converted to the value of it, given how it has worked. Does he agree that if the political debate follows what the shadow Chancellor wants, and each of the parties—all seven of them, no doubt—says what it would tell employers to pay as a minimum wage, we go back to the danger that I initially feared of unemployment being caused by bidding up, for vote-catching reasons, the basic pay of people trying to get into work?

[Madam Deputy Speaker (Dame Dawn Primarolo)]

Order. Before the Secretary of State replies, may I gently say that 23 Members wish to take part in this debate, and he has been speaking for nearly 35 minutes. I understand that he has generously taken lots of interventions, but will he perhaps think about all his colleagues who still wish to speak?

Charter for Budget Responsibility

Lord Clarke of Nottingham Excerpts

Tuesday 13th January 2015 Commons Chamber

[Ed Balls]

I shall provide an analysis of the new charter and why it is different from the old charter in a moment, but my hon. Friend is quite right. The Chancellor did not explain either that he had failed to meet the requirements of his charter in the current Parliament, or that he has now changed it for the next Parliament for reasons that are surprising and a bit confusing.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does the shadow Chancellor agree that all these fiscal forecasts are based on a forecast of spending reductions and growth in tax revenues and the economy? Does he agree that in 2010, no one on either side of the House, including him and including me, realised just how persistent the global problems were going to be and how grave the banking crisis was, and that therefore the growth that everyone—including him—expected to see was not achieved? The Government stuck to their spending plans, but could not achieve the growth forecast. Is the shadow Chancellor saying that in the middle of that grave crisis, when it was still persisting, a Labour Government would have cut our spending plans more dramatically in order to hit what he is now praising as our target?

[Ed Balls]

As ever, the right hon. and learned Gentleman has got to the heart of the issue. Three factors can bring the deficit down: spending cuts, decisions to raise taxes, and what happens to the underlying growth of the economy and the tax revenues which flow from that. The Chancellor did not talk about the third factor, for understandable reasons.

--- Later in debate ---

[Ed Balls]

I will give way in a second, but I want to develop a point that the former Chancellor has helped me to make, about the relationship between receipts, growth and the deficit. Before the autumn statement, the OBR said that

“weaker-than-expected wage growth so far in 2014-15”

was

“depressing PAYE and NIC receipts.”

Then, in the autumn statement, it said, “We expect earnings growth to remain subdued for longer than in March. This is the key driver in the lower forecast for PAYE and NIC receipts.”

The Chancellor had to revise up borrowing this year because real wage growth has been revised down for this year, next year and the year after. In table 4.10 of its document, the OBR forecasts a cumulative loss even in relation to the Budget, and predicts that lost income tax and national insurance revenues alone will rise to £9 billion a year. The Chancellor does not understand that unless he can bring in receipts from income tax and NICs, from growth and wage growth, he will not succeed in meeting his targets without “colossal”—that is not my word, but the word used by the Institute for Fiscal Studies—cuts in public spending. The Chancellor has never really “got” the economy, and therefore he does not understand that point.

[Mr Kenneth Clarke]

The shadow Chancellor is claiming to have a grip on economic reality which, with great respect, I do not think he had when he was in office, but on the point, which we are getting dangerously near to agreeing on, presumably he is not saying that when we had the growth forecasts not being met in those dark days three or four years ago we should have put up income tax, any more than he is saying we should have done anything other than stick to our spending reductions. Until conditions improve, we have to attack the structural problems. Has the right hon. Gentleman not noticed the banking reform, the banking regulation, the skills training, the education reforms, the support for small business, the introduction of research and development in technology? That is the real job, but fiscal responsibility is the essential precondition before any of those things work.

[Ed Balls]

I agree with the right hon. and learned Gentleman. I am not going to pick over past debates, but when he led his party through the Lobby opposing Bank of England independence, well, that was then; and when he advocated Britain joining the single currency in 2003, well, that was then. We probably agree on other things these days.

Let me take the right hon. and learned Gentleman to the most recent OBR forecasts. He makes an important point about trend, and in 2010 the OBR forecast that the underlying growth in our economy—trend growth—would in this Parliament, in 2014, be 2.1%, but in its most recent document it has revised down the underlying trend in 2014 from 2.1% to 1.7%, so, despite the reforms he talks about, we have been going backwards in terms of trend growth and productivity.

On the other hand, if we can raise through reform—I will come to this in a moment—the underlying trend growth of the economy, we can turn this around. These are not my numbers; they are the OBR numbers. The numbers show that if we were able to increase the underlying trend growth of the economy by just 1%, so it was 1% higher by 2019, which is the equivalent of about 0.2%—

--- Later in debate ---

[Ed Balls]

The hon. Gentleman did not mention the quote from the TaxPayers Alliance, which also said it was a complete gimmick. That simply exposes the fact that the Chancellor has failed to meet his targets. Now let me come on to our fiscal position—

[Mr Kenneth Clarke]

rose—

[Ed Balls]

I will give way to the former Chancellor one more time.

[Mr Clarke]

The shadow Chancellor is very generous, and I assure him that this is my last intervention. I am afraid I am not quite following this rambling textual analysis, so let me take him back to where I thought we were near to agreeing. He agrees that we were right to stick to our spending reductions and that further fiscal consolidation of the kind the Chancellor is describing is required. The shadow Chancellor’s case appears to be that he has some great plans that will increase our underlying growth rate in future, on top of those the Government already have. Is he going to set out these startling new plans in the remainder of his speech?

[Ed Balls]

I will do so. Let me just say, for the interest of the former Chancellor, because it was not like this in his day or when I was in the Treasury, that our trend rate of growth in 2014—1.17%—puts us 19th out of 34 countries in the OECD. We have a lower underlying trend than Chile, Israel, South Korea, Australia, Mexico and Poland—and the list goes on. The right hon. and learned Gentleman is completely right: we have to find a way to strengthen the underlying growth of the economy.

Let me come on to Labour’s position. We will cut the deficit every year. We will get the current budget into surplus. We will get the national debt falling as soon as possible in the next Parliament, fully consistent with this fiscal charter. How fast we can do this will depend on what happens to growth, wages, the housing benefit bill and events around the world. But our approach will be very different from that of the Conservatives, on the following fronts. We believe, unlike the one-club Chancellor, that three different things need to be done to properly and fairly balance the books in the next Parliament.

First, as we have said, because we will cut the deficit every year, there will be sensible spending cuts in non-protected areas. We will cut the winter allowance, taking it away from the richest 5% of pensioners. We will cap child benefit at 1% for two years, and our zero-based review is examining every pound the Government spend in order to find savings. Secondly, we will make different and fairer choices, including reversing this Government’s £3 billion-a-year top-rate tax cut for people earning more than £150,000. Thirdly, our plan will deliver the rising living standards and stronger—

--- Later in debate ---

[Mr Kenneth Clarke (Rushcliffe) (Con)]

That last speech clarified the fact that the shadow Chancellor admits that fiscal consolidation of the kind we are describing will be necessary for whoever comes into office after May and that getting back to a balanced economy depends on continuing efforts to improve the underlying growth rate of the economy. He was not able to produce any specific ideas at all. The only things on to which I could latch were that he was going to put up the minimum wage and restore the completely pointless 50% tax rate on the very highest earners. If he thinks that that is an economic growth plan to stimulate our underlying trend in growth to the levels of Chile and Mexico, he is showing the same levels of competence that he displayed when he was the main economic adviser to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in the previous Government.

What we are talking about and what I hope we will get agreement on—I hope that the reality of this will dawn on the Labour party as a whole eventually—is that the essential pre-condition of any economic policy that will get this country back to healthy balanced growth is fiscal consolidation by eliminating the deficit, controlling the overall level of debt and, at the top of the cycle, running a surplus on the budget to get the stock of debt back to a manageable level. That is a message that the present Chancellor has been trying to get across in the four years that it has taken to get us to the position that we are in at the moment, which is much more successful than that of almost every other western democracy in similar troubles. If the Labour party has really taken that on board, at least it is beginning to be fit for office. But as far as I can see, it has no other policy.

[Kelvin Hopkins (Luton North) (Lab)]

The former Chancellor may remember that, in the 1920s, similar policies were followed and that, at the end of the 1920s, the debt was larger and we had a decade of unemployment and poverty. After the second world war precisely the opposite policy was adopted, and we had rapid growth, full employment and the debt came down.

--- Later in debate ---

[Mr Clarke]

No two crises are the same. The causes of the problems in the 1920s were quite different. The steps taken to stimulate demand then were too late. We have been running a deficit throughout these difficult times. We are not going into surplus until the next Parliament. As I have said, the circumstances in which the United Kingdom found itself trading are much more difficult than anybody predicted in 2010, but the idea that what we have done so far resembles anything that was done by the less successful Government in the 1930s is absolute nonsense. The idea that we are going back to the 1930s is also nonsense. The Labour Front Bench has just accepted that what has been proposed by the Chancellor is an essential pre-condition to any lasting success for the benefit of our children.

There are all kinds of other things, but I have no time to go into them. The structural changes that we, like many other Europeans with damaged economies, have got to go in for, and that we are going in for, include: bank regulation; skills training; education reform; and stimulating modern technological industry and businesses in this country. All of those are absolutely essential and include sensible infrastructure spending, which we are sustaining. Unless we get the deficit under control, we have no prospect of getting back to the kind of levels of growth to which we used to aspire. In fact, the debts we are running are rather easier to sustain with interest rates down to a 300 year-low. Once we go back to ordinary levels of interest, all those countries that have failed to tackle their underlying problems of fiscal discipline will find themselves in terrible, terrible trouble. This is a challenge for every western democracy, and it is a difficult message to get across in a democracy. The Greeks may be the latest population in danger of being seduced into not doing difficult things and living on other people’s money. That is very dangerous indeed. The next time that we have another crisis will be difficult because, with the present level of debt, we will have so little in reserve to draw upon to help us through.

The last Labour Government completely failed to foresee what happened, and I think that even now they do not quite understand where they went wrong. They ran a massive surplus during the dotcom bubble, because they stuck to my fiscal figures, and found their tax revenues were inflated for a time. Then, when the next South Sea bubble came around and we had the credit bubble and the credit crunch, they were still—at the top of crazy levels of growth—running a fiscal deficit. They borrowed, but claimed they did not have a deficit. Well, they did not have much of one in 2006, but once the crazy tax revenues from the City collapsed, they were left high and dry, with the full extent of their irresponsibility exposed. They had failed to regulate the mad borrowing and lending in the City of London just as the Americans had failed in Wall Street. It was free money, which their last Chancellor indulged in, and when the bubble burst they were caught.

[Mr George Osborne]

The former Chancellor is making a strong speech. He might remember that the Labour Government increased the trend growth rate—a decision that at the time was in the hands of the Treasury, rather than an independent OBR. That led them to spend more money and run a structural deficit—the highest, according to the IMF—during that period. Now, we have come full circle and the shadow Chancellor, who was an economic adviser at the time, is proposing exactly the same assumption to underlie his economic policy, so that he can spend and borrow more.

[Mr Clarke]

I entirely agree. The shadow Chancellor has done just the same today. In his way of looking at things, the future trend rate of growth will be what he says the future trend rate of growth has to be to justify his plans. I used to envy the Ministers in China, who did not have to worry about a national statistical office: what the Minister said the growth rate was now was what the statisticians told him his growth rate was.

[Ed Balls]

Will the right hon. and learned Gentleman give way?

[Mr Clarke]

I really do not have time, but the right hon. Gentleman gave way a lot to me, so I will give way to him.

[Ed Balls]

I am sure the former Chancellor knows that decisions on the trend rate of growth in previous Parliaments were not made by the Treasury; they were audited by the National Audit Office. They are now a matter for the OBR, not for the Treasury, but he agrees with me that that is what we should do.

[Mr Clarke]

A lot of people did not—I did not—foresee the full extent of the catastrophic crash that resulted from the combination of problems in both the regulation of banks and the credit markets and in fiscal policy that occurred under what, with hindsight, were the most irresponsible Government we have had since the war. I will not mention the invasion of Iraq—another matter they presided over.

Everybody has to have their targets and ambitions. My stated target when I was Chancellor was to balance the budget over the cycle, which is really where we are going back to and which I think is essential prudence. I also said we should not spend more than 40% of GDP—Conservatives before me had allowed spending to get above that. The Maastricht criteria were quite useful—the right hon. Member for Kirkcaldy and Cowdenbeath used to agree with them—but we have to have targets, and the new ones, in a more globalised economy, cannot return to where we were. The Chancellor has to respond to events, but I congratulate my right hon. Friend on what he has achieved so far, and what he will achieve if he sticks to the charter.

Autumn Statement

Lord Clarke of Nottingham Excerpts

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

With that performance, we see why the right hon. Gentleman is totally unfit to be put in charge of the nation’s finances in six months’ time. We have had an object lesson in how not to plan an autumn statement reply before hearing the autumn statement. That was what he expected to hear, as we know because he went round the TV studios over the past few weeks predicting it. He said that the deficit would go up this year. He said it last month, he said it last week, he said it on Sunday. I have his words. He said that the Chancellor is going to have to make an autumn statement where he is

“going to have to say that the economy is weakening, the deficit is getting larger”.

I have just quoted independent forecasts which show that the economy is stronger, the deficit is falling and the debt is lower in every future year. The shadow Chancellor got it completely wrong.

It is hardly surprising that his party has such low economic credibility when the shadow Chancellor repeatedly makes predictions about the British economy that turn out to be completely wrong. No more boom and bust, he said—wrong. A double-dip recession, he predicted—completely wrong. He has spent the past three months betting the entire credibility of the Labour party’s response to the autumn statement on the prediction of a massive deterioration in the public finances and the deficit going up, and he got that completely wrong. People say there is a split in the leadership of the Labour party. They are right. It is between people who get the deficit figures completely wrong and people who forget about the deficit altogether.

The Opposition have no economic credibility and they have policies that show that they are not up to the job. The shadow Chancellor mentioned his homes tax. We still do not know what the Labour party’s view is of the stamp duty reforms. I guess we will find out in the next few days. We do not have a clue what its views are on the postgraduate changes or the infrastructure investments that we have announced. The right hon. Gentleman spoke about his homes tax. This is what the Labour party thinks about his homes tax. The Chair of the Public Accounts Committee says:

“I don’t think it’s the world’s most sensible idea.”

The former Housing Minister, the right hon. Member for Greenwich and Woolwich (Mr Raynsford), says that it hits the “cash poor”. The right hon. Member for Tottenham (Mr Lammy) says it is “a tax on London”, and the right hon. Member for Dulwich and West Norwood (Dame Tessa Jowell) says:

“Let’s stop calling it a ‘mansion tax’…these are family homes”.

One of Labour’s council group leaders summed it up best when they said it was “completely bonkers”. That is the housing policy—to put taxes on housing.

The shadow Chancellor asked about our tax cut on apprentices. His jobs tax policy is to increase national insurance. He talks about pensions. His pensions policy is to tax pensions. He asked me a couple of questions about savings in the public finances. I was hoping that he was going to give me some suggestions for savings that we can make in the public finances. I have had to do a bit of research myself about what his party’s policy is.

The Opposition have conducted what is called a zero-based review for the past year and identified two surplus assets that the Government should sell. The first is the Queen Elizabeth II conference centre. The shadow Chancellor first proposed selling that in 2001 and seems to have forgotten that it is the only bit of Government that pays us an income. The other thing they found to pay down the national debt—it is in the Labour party document—is a restaurant in St James’s park, estimated to be worth £6.7 million. That is 0.005% of the national debt, so their national economic policy is literally out to lunch.

That is the problem that we have seen in the right hon. Gentleman’s reply. He has absolutely no answers to the economic challenges that Britain faces. He has no credibility and no workable policies because Labour has no workable plan. We are five months away from a general election in which people will have to choose their Government. The most serious responsibility incumbent on anyone seeking office is to show that they can provide economic stability to the nation and protect the families who live here. The Opposition do not have a clue how to do that. They do not have a plan. Their whole response today shows that they would take Britain back to square one. Britain has pulled itself out of the economic crisis that the shadow Chancellor created, and we are not going to let him take us back there.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does my right hon. Friend recall, as I do, that the shadow Chancellor was the right-hand man of the Chancellor who presided over the credit crunch, the banking collapse and the incurring of the biggest deficit in the G20, and does he not find his conversion to rigid fiscal discipline and the pursuit of fiscal surpluses absolutely quaint and ridiculous?

On a more serious note, my right hon. Friend is proposing to devolve considerable powers, in a very welcome way and to varying degrees, to the different nations and cities of the United Kingdom. Can he reassure us that he will combine that with firm and enforceable commitments to financial responsibility so that he and the UK Treasury can retain overall responsibility for the stability of sterling and our economy, because not every local government Labour leader can be trusted to follow the clear and effective path that he has followed in getting our debt back under control?

[Mr Osborne]

My right hon. and learned Friend makes a good observation about the shadow Chancellor’s career. I should pay tribute—probably for the first time—to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown), who this week announced his retirement: first, for his commitment to advancing international development and to British aid, which I fully support; and secondly, because when he was shadow Chancellor, as we all remember, he built up a really compelling case for fiscal discipline. That, in part, is why the Labour party won the 1997 general election. That stands in such marked contrast to the shambles we see from the pair sitting opposite me now, who subsequently advised him.

On my right hon. and learned Friend the former Chancellor’s good point about devolution, of course both local government and the different nations of the United Kingdom—the devolution arrangements apply to both—will have in place robust arrangements that protect taxpayers across the United Kingdom. That is certainly an important part of the Smith commission report and how we must take it forward. It is also at the heart of the devolution settlements that we have discussed with English local authorities.

EU Budget (Surcharge)

Lord Clarke of Nottingham Excerpts

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

I completely agree with the hon. Lady, which is why I made the point at the end of my remarks that the whole episode demonstrated why we needed reform in Europe. She, of course, is one of a growing number of Labour MPs who join us in wanting to see that referendum—I hope she can persuade the Labour Front-Bench team.

[Mr Kenneth Clarke (Rushcliffe) (Con)]

Does the Chancellor agree that whatever deal he had obtained last Friday—even if he had come back bearing sackfuls of tribute in gold—it was wholly predictable that hard-line Eurosceptics would immediately say that this was robbery by Brussels and that the shadow Chancellor would immediately claim that, in some mysterious way, he could have produced some superior outcome for this country? Would the Chancellor accept my congratulations on a surprisingly good result that he achieved at that meeting, which I strongly suspect was a friendly discussion between 28 Finance Ministers and a Commissioner on a technical subject, and did not resemble the gunfight at the O. K. Corral, which is how everybody has to present European Council meetings and the debates we have on these subjects in this House?

[Mr Osborne]

I thank my right hon. and learned Friend for his support; he is not always fulsome in his support of our European policies, so that is particularly appreciated. He is right that around the table were other members states that had been hit by this very large payment—the Dutch, the Italians, the Greeks and others—and therefore there was a lot of sympathy for trying to change the rules. In parallel, as he would know, there is a discussion with the Commission about the British rebate, which is properly a matter for the discussion with the Commission rather than ECOFIN.