Greece
Bernard Jenkin Excerpts(10 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Osborne
I make the broad observation that ultimately countries have to live within their means; we see what happens if they do not. On the Greek debt situation and the burden of Greek debt, eurozone members were in discussions about the terms of debt repayments and the like, but those negotiations were broken off on Saturday because of the unexpected announcement by the Greek Prime Minister on Friday.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does not the eurozone states effectively endorsing a plan for fiscal and banking union, as proposed by the five eurozone Presidents, regardless of the treaty that the Prime Minister vetoed in December 2012, underline the urgency for the Chancellor to deliver on the dilemma that he outlined in a speech on 15 January 2014, when he said:
“The…Treaties are not fit for purpose.”
He also said:
“If we cannot protect the collective interests of non-eurozone member states then they”—
meaning we—
“will have to choose between joining the euro, which the UK will not do, or leaving the EU.”
Can he explain why those words have been taken down from the Downing Street website?
Mr Osborne
I have absolutely no idea; I thought it was one of the better speeches I gave over the past five years. My hon. Friend will be glad to know that I repeated exactly those arguments, including the phrase about the challenge of Britain having to choose, in the Mansion House speech that I gave just a couple of weeks ago. That is certainly up on the Treasury website.
European Union Referendum Bill
Bernard Jenkin Excerpts(10 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr McFadden
We know the costs of being in. The point of the amendments is to assess the costs of being out. Amendment 5 calls for each Secretary of State to produce a report at least 10 weeks before polling day on the possible consequences of exit for their area of responsibility. I will resist the temptation to get back into the issues of collective responsibility by saying that a report from each Department might test that. That is not the point of the amendment; the point is that EU membership touches many parts of what the Government do, and the public have a right to know about them.
Most obviously, there are the trade issues. What would exit mean for exports, inward investment and some of our great companies that operate across borders? For example, Airbus president Paul Kahn has said:
“If after an exit from the European Union, economic conditions in Britain were less favourable for business than in other parts of Europe, or beyond, would Airbus reconsider future investment in the United Kingdom? Yes, absolutely.”
Vodafone chief executive Vittorio Colao said recently:
“As a company we think it is in the interests of our shareholders and our customers that Britain does not leave the EU.”
ManpowerGroup Solutions UK managing director James Hick said last week:
“Our position on Europe is clear: leaving the EU would threaten jobs and harm Britain’s prospects”.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On a point of order, Mr Hoyle. Excuse me, but I thought we were discussing amendments, not the views of certain businessmen about the EU. Surely we should stick to the amendments.
The Chairman of Ways and Means (Mr Lindsay Hoyle)
The Chair can decide what is in order and what is out of order, but I thank the hon. Gentleman for his intervention.
The Chairman
Thank you, Mr Jenkin. We do not need any applause. We can save that for another occasion.
I was giving the right hon. Gentleman some time, but we now need to get on to the amendments. As important as Wolverhampton is to him and me, I am sure that discussion of the amendments would be more welcome in the Chamber.
Mr McFadden
I am not aware of any other occasions.
When my right hon. and learned Friend the Member for Camberwell and Peckham asked the Prime Minister, he gave two justifications. First, he said that,
“because the European issue is so pervasive, I do not want a situation where, in the four weeks before a referendum, Ministers cannot talk about the European budget, make statements about European Court judgments, respond to European Councils and all the rest of it.”
He then said the second issue was a bigger one:
“When the negotiation is complete and the Government have taken a clear view, I do not want us to be neutral on this issue; I want us to speak clearly and frankly.”—[Official Report, 10 June 2015; Vol. 596, c. 1179.]
On Second Reading, my right hon. Friend the Member for Leeds Central (Hilary Benn) said:
“Everybody in the House would agree that the referendum must be fair and must be seen to be fair, but at the same time the Government—any Government—are entitled to argue their case.”
He had said a few moments earlier:
“It would not be sensible for any Government to find themselves constrained from explaining to the people the Government’s view, because the people are entitled to hear from the Government of the day”.—[Official Report, 9 June 2015; Vol. 596, c. 1059.]
The Foreign Secretary sought to reassure the House, telling a fellow Member that if his concern
“is that the Government are thinking of spending public money to deliver doorstep mailshots in the last four weeks of the campaign, I can assure him that the Government have no such intention. The Government will exercise proper restraint”.—[Official Report, 9 June 2015; Vol. 596, c. 1055.]
We read overnight that the Government would have more to say on the issue, and we wait with interest to hear it. How will they reassure the House that there will not be abuse of the lifting of the purdah provisions, and that there should be the legal framework that has been called for by the Leader of the Opposition? Our amendment does not seek to reinstate the purdah provisions in full, but it does seek clarity on what exactly the Government intend to do or to publish during the referendum period. More clarity is needed than has so far been made available in ministerial statements. What form will expressing a view take, and what form will it not take? The Government need to provide more information, more clarity and more reassurance.
Mr Jenkin
I thank the right hon. Gentleman for giving way, and for the pertinent questions that he is putting to Ministers. They and I have been engaged in similar discussions. May I ask, however, why his party has decided not to support amendment 11, which would reinstate purdah, until he has received those assurances? Why is he letting the Government off the hook—or is it part of a Euro-stitch-up to rig the referendum?
Mr McFadden
As my right hon. Friend the Member for Leeds Central said on Second Reading, we do not object to the Government’s taking a view, but we want to see a fair referendum.
Will the Government agree to publish a report, a document or a code of conduct, or to provide the clarity that we seek in some other way? If so, what form will that information take? Will it set out clearly what kind of reports or statements the Government think they may need to make? What assurances will the Minister be able to give us about the use of taxpayer funds, beyond the funds that are channelled to the official yes and no campaigns in the normal way, through the Electoral Commission?
Mr Jenkin
The Government argue—I think we have to accept their argument—that these detailed and broad restrictions are too prescriptive and that they would not be able to carry on with the normal course of government, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) has explained. Does my hon. Friend not agree that there would be too much interference in the normal conduct of government?
Sir William Cash
I just do not think that makes sense. The bottom line is that we are now so invading the ability of the voters in the referendum to make a free and fair choice, by canting the process and taking all the things to which I have just referred out of the equation, that we could seriously undermine the whole democratic process with respect to referendums. This is simply not a tenable position. If it was good enough for the Scottish and the Welsh, why is it not good enough for the referendum on the EU, which will go even further towards infringing—as we would put it—the role of this Parliament and our democratic freedoms?
I also want to discuss what publishing means. Section 125 of the 2000 Act is very general on this point, and this is what hon. Members are being asked to repeal this afternoon. It states:
“‘publish’ means make available to the public at large, or any section of the public, in whatever form and by whatever means”,
and the relevant period
“means the period of 28 days ending with the date of the poll.”
There are profound reasons for maintaining the status quo at this stage and for retaining the restriction, because once it has been repealed, we would then have to reinvent the wheel, as it were, on Report. That could open a huge can of worms for the Government. The question is: what would the Government not be restrained from doing, compared with some of the things that it is currently stated they would be restrained from doing?
The Minister for Europe has sent us a letter today, 16 June, in which he says:
“It is our clear intention, through the Bill, to provide a straightforward, fair and effective framework for the referendum.”
I have to say to him that I must cast some doubt on that in relation to the questions that are being raised. He goes on to say that it would be “inappropriate” to
“prevent Ministers from effectively conducting the significant amounts of ordinary day-to-day business between the Government and the EU that will necessarily continue during the pre-poll period.”
I have been Chairman of the European Scrutiny Committee for five years, and I just do not recognise this at all. There are things that go on in the monumental amount of material that comes in from the European Union, but in my judgment there is no suggestion that anything of this nature would be affected by retaining section 125. The section was applied during the Scottish referendum, which had a European dimension. The same applied to the Welsh Assembly. If it was all right for Ministers to continue to make statements in those circumstances, we should keep section 125 and do as the Foreign Secretary suggested during the Second Reading debate. The Minister for Europe’s letter states:
“The Foreign Secretary said during the debate that the Government will exercise proper restraint to ensure a balanced debate during the campaign.”
This is the moment to ensure that we get this right by keeping the restriction for the time being, having discussions and coming back with specific proposals on Report, on which we can then vote.
I acknowledge that the Minister for Europe has conceded that we have more than a reasonable case. His letter goes on:
“Working out a system that will reassure colleagues and voters that the referendum is a fair fight, yet will preserve the Government’s ability to act in the national interest is not straightforward.”
Well, it would be very straightforward if we kept section 125. He adds:
“It is important that it is legally clear and robust.”
It would make things very unclear and very unrobust if we were to remove the provisions in section 125, which are based on common sense and fairness and on giving voters a proper opportunity to make a fair choice.
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.
Mr Jenkin
I will endeavour to be as brief as possible in order to allow other Members to speak. I will speak primarily to amendments (a) and (b) to amendment 11, which stand in my name, but also in support of amendment 11, which stands in the name of my hon. Friend the Member for Stone (Sir William Cash). I thank my right hon. Friends the Minister and the Foreign Secretary for the positive way in which they have engaged with the entire party on these questions. We are grateful for that dialogue. I think that absolutely proves that we are not in some re-run of previous grief. This debate is not even about Europe; it is, in fact, about how to conduct a fair referendum.
I have some experience of referendums, because I set up the “North East Says No” referendum campaign in 2004, which turned around a two-thirds majority in favour of a north-east Assembly into a 4:1 defeat. We operated under the provisions laid down by the Political Parties, Elections and Referendums Act 2000, which worked pretty well. The purdah provisions restricted what the Government did, although they are probably not tough enough. They did not prevent the then Deputy Prime Minister, John Prescott, changing the Government’s policy on what powers that putative Assembly would have only a few days before the postal votes went out. When we rang up the Cabinet Secretary to complain that the Deputy Prime Minister had breached the purdah rules, we were told, “That’s a matter for the Minister, not for me.”
That underlines the argument that the purdah rules are not tough enough, rather than that we should not have them at all, because they prevented civil servants from becoming embroiled in referendum questions, or being used by Ministers to promulgate the case that the Government wanted them to promulgate, and that is the vital protection. It is principally towards the impartiality of civil servants that I want to address my remarks, particularly given that, I am proud to say, I have been elected unopposed to the Chair of the Public Administration and Constitutional Affairs Committee. I very much hope to persuade my fellow members of the Committee to address some of these issues during this Parliament.
I am disappointed that the Labour party has abandoned the principled position it adopted on purdah when it implemented the 2000 Act, which is quite extraordinary. I ran into Jack Straw, the former Foreign Secretary, this morning, and he was thoroughly disappointed to hear that the Labour party was backing off from supporting the constitutional legislation that it had implemented. Those ideas did not just come out of nowhere; they were ideas for a fair referendum that arose from the unfairness of the conduct of the first Welsh referendum, which were addressed by the Neil committee, which became the Committee on Standards in Public Life—the key is in the name. It was regarded as essential to have a period when the machinery of government cannot be involved in supporting one side or the other in a referendum campaign. The Electoral Commission would like 10 weeks, rather than just four weeks.
There are certain myths about purdah. The Government do not grind to a halt during a general election. Ministers even attend meetings of the Council of Ministers during general elections. However, during a general election a Minister cannot use their Department to promulgate information or to brief the press in a manner that is intended to affect the outcome. We want the same to apply in the referendum.
The letter from my right hon. Friend the Minister for Europe, which the right hon. Member for Gordon (Alex Salmond) has now seen, does not actually provide the reassurance that is required. In fact, by explaining what is contemplated, it confirms precisely the opposite. For example, it states that the Government,
“having taken a position on the outcome of our negotiations with the rest of the EU, will naturally be obliged to account to Parliament and the British people.”
There is absolutely no problem about accounting to Parliament in any purdah period about any matter at all, because it is privileged. There are no purdah rules that apply to anything that any Minister would say on the Floor of the House of Commons.
But are we seriously to believe, as my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke) indicated, that civil servants should be used to put out press releases on matters that are being addressed by the referendum question, because that is what he is saying? That is precisely what should not be allowed. The idea that this will prevent Ministers from saying anything, and that somehow Ministers will not be able to take part in the referendum campaign, is clearly tosh. I seem to recall the Prime Minister being very vociferous in the run-up to the Scottish independence referendum, right to the last day of the campaign. However, he was unable to use his ministerial car, fly at ministerial expense or use the machinery of government to promulgate the messages he wanted to get across. There might have been a rather frustrating moment when he said, “I want to put out a statement”, and the Cabinet Secretary would have had to tell him, “I’m sorry, Prime Minister, but you can’t do that now that we are in purdah. You will have to do that through the no campaign or through your party.” That is exactly right. What is the point of the expenditure limits for the yes and no campaigns if the Government have 80 special advisers and thousands of press officers able to issue press releases, brief the media and organise media tours for Ministers? That is precisely what should not be available to Ministers during the closing stages of a referendum campaign.
Kate Hoey (Vauxhall) (Lab)
I support that amendment, of course. Does the hon. Gentleman agree that it would be even worse if we happened to get to a situation in which the leadership of the two main political parties were campaigning on one side? That is an even more important reason to have a proper purdah, if the referendum is to be seen as a free and fair.
Mr Jenkin
It is a simple matter of principle, which is why I think we would be right to press this to a vote if necessary, unless the Government accept our amendment. I really hope that they will, because it would simply put purdah back into the Bill, where it should be. I commend my right hon. Friend the Minister for saying that he wants dialogue on what the problem actually is and on how it can be addressed by amending the purdah regime, rather than scrapping it altogether and relying on assurances based on advice from civil servants who have clearly got it wrong.
I want to focus in my final remarks on the impartiality of civil servants, because this is really about what they can and cannot do. They must be in a position to protect their impartiality. They must be able to say to a Minister, “No, Minister, we are in purdah, so I cannot do that now. You must do that yourself or through some other organisation.” If they are not subject to purdah, it is the job of civil servants to support the Government of the day by carrying out the instructions of their Ministers, so they will be obliged to put out press releases, to help Ministers make the case and to use the machinery of government unfairly to support one side or the other.
I draw the Committee’s attention to the report that the Public Administration Committee produced just before the general election, “Lessons for Civil Service impartiality from the Scottish independence referendum”. The report shows that the Scottish Executive abused their position by sending out a rather political White Paper, some parts of which read more like an SNP manifesto than an objective Government document—that is always the danger with Government publications—but at least they did not send it out in the purdah period, at the most sensitive moment.
Not only that, but the advice of the permanent secretary at the Treasury, Sir Nicholas Macpherson, on currency unions was published in a completely unprecedented move on the basis that he had to “reassure the markets”. That was his excuse, and I am afraid that we regarded it as only an excuse. Are we to say that Ministers will agree to civil servants publishing their advice during the purdah period? Perhaps they might even be instructed to publish their advice during that period.
Alex Salmond
The hon. Gentleman makes the point that what Governments do outwith the purdah period is quite different from what they can do within that period. Is he aware that there was referendum unit in the Treasury, which during the 28-day purdah period was briefing in favour of the no campaign in the referendum? Can that possibly be right? Should not that sort of practice be stopped before an upcoming European campaign?
Mr Jenkin
There is a serious question about whether civil servants should be closely involved in referendum campaigns over a period much longer than 28 days. There is a serious problem for the civil service if it allows such things to happen. That is why one of the main recommendations of our report is the addition of a paragraph to the civil service code to the effect that what applies to civil servants in general elections should apply to them equally in referendums. That would prevent civil servants who are put in difficult positions, and perhaps asked to do things that they know are not in the spirit of the code, from acting in such a way.
The underpinning of the principle of civil service impartiality during a referendum now rests on section 125 of the Political Parties, Elections and Referendums Act 2000. If we do not press the amendment, we consent to the removal of that protection from the Bill. My right hon. Friend the Minister cannot ask us to do that. It is an issue of principle, and he is asking us to accede to completely the wrong principle. As I have said, I believe that he has been given very wrong advice. Far be it from me to speculate about how many Eurosceptics there are among the permanent secretary community, who might want a bit of extra freedom about what they get Ministers to do during a referendum campaign.
I am deeply disappointed that the Labour party has abandoned all its principles, but we know that it is split on the matter. On Second Reading, it was in favour of scrapping purdah. At Prime Minister’s questions, it was against scrapping purdah. Last night, Labour Members were going to vote for amendment 11, but today they are no longer going to do so. I think that they are in a bit of a muddle, and I suspect that quite a few pro-EU Labour Members would like to help to rig the referendum in favour of the yes campaign. [Interruption.] I see I have provoked the hon. Member for Rhondda (Chris Bryant). In the interests of brevity, I shall not invite him to intervene.
Unless we insist that the provisions for purdah remain in the Bill, we are acquiescing in the dilution of an important principle.
Mr Geoffrey Cox (Torridge and West Devon) (Con)
My hon. Friend has insisted, and I understand this, that any safeguards relating to a purdah period should be in the Bill and should be made clear by statute. As I understand it, the Government’s undertaking, by means of the Minister’s letter, is to table amendments on Report, which would go into the final Act of Parliament and have legal force. It is not a matter of relying on the assurances of civil servants; it is a matter of law. If that is correct, it may go some way to alleviating the concerns of Government Members.
Mr Jenkin
I am grateful to my hon. Friend for drawing the Committee’s attention to that point. We should all be grateful for the fact that the Government have listened, but they are still requesting that we withdraw the amendment. To do so would be to concede the principle that purdah might not exist in statutory form. The Labour party’s amendment on purdah would not actually create purdah; it would require the Government to produce a list of things. What we want in the Bill is purdah. If the Government are not prepared to accept that principle now, on the Floor of the House, I fear that we will have to force the amendment to a vote, because it is a matter of principle.
John McDonnell (Hayes and Harlington) (Lab)
He is not in his usual place, but may I commend the hon. Member for Stone (Sir William Cash), whose health is fragile today but who has still turned up to fulfil his parliamentary duties? I apologise for the fact that I had to leave the debate for 20 minutes to chair a meeting.
I want to speak about amendments 46 and 47, but before I do so, I will say a few words about purdah. I remember the original legislation going through the House. It came about as a result of concerns expressed about what had happened prior to other elections and referendums. At the time, I thought that a number of lessons had been learned about the need to ensure that purdah existed, so that confidence could be expressed in the outcome of a referendum. For the life of me, I cannot understand why the Government are varying the procedure this time. They have not advanced any consistent argument in which I can have any confidence. When we are dealing with such a controversial matter, why stir up such controversy over such a relatively minor point? I do not understand the Government’s motives.
I am minded to support amendment 11. Although the Government have assured us that we will return to the matter on Report, I would like some certainty at this stage, which we might vary on Report. I am quite attracted to the idea of a fairness commission, as proposed in new clause 4. I was a bit anxious when I learned who might be a member of such a commission, but I agree that there needs to be a mechanism for dealing with any unfairness.
I will be brief, because we are running out of time. I have tabled two amendments concerning the Transatlantic Trade and Investment Partnership. Several hon. Members have campaigned doggedly for openness and transparency regarding the negotiations on that proposed partnership between the EU and the US. I accept that it would be out of order for me to go into any detail about that, but the principle is this. For two days in the Chamber, we have debated sovereignty and democratic rights in relation to Scotland and the EU. TTIP may result in Parliament handing over sovereignty and democratic decision making not only to the EU but to transnational corporations and an investor dispute panel of corporate lawyers, meeting in secret. Their decisions could affect regulations governing health and safety, food safety, labour rights and even our recent attempts to achieve some sort of regulation of our finance sector, but we have not had any debate that resulted in a democratic decision of the House. We have had Adjournment debate after Adjournment debate, but there has been no report from Government on the progress of the negotiations. Why? Because the negotiations are held in secret. There was a debate in the European Parliament only last week. When a report was eventually produced, 200 amendments were tabled, and the EU Commission has backed off and delayed the matter.
Mr Grieve
I appreciate my hon. Friend’s point. Governments, like the world, move in mysterious ways. If I may gently coax the Government back to the path of righteousness, as I think we are probably succeeding in doing, I, for one, will be broadly content.
On hearing assurances from my right hon. Friend the Minister that the Government will reconsider this and return on Report with a proper amendment, I will be quite prepared to continue to give them my confidence in this matter. However, if the Government were to be using this as a device to come back whenever Report takes place and try to wriggle out of this obligation again, I would regard that as a rather infamous thing to do, and I am afraid I would not be in a position to support them at all on this matter.
Mr Grieve
My hon. Friend makes a very important point. Certainly, I would be much happier to see the return of section 125 and the introduction of some one-off qualifications for the purpose of this particular referendum. That would be the ideal, because it would preserve the principle of section 125. That would be better than coming back with a set of regulations. I have read the letter. It has a whole series of assurances, but that is not a proper way in which referendums should be conducted. The problem historically—not necessarily in this country—is that referendums have been systematically abused, with many assurances being given. That why this House should, on this matter, fix the Government with a clear responsibility to come up with a legal framework. I see my right hon. Friend the Minister nodding.
Mr Lidington
My hon. Friend is obviously free to take legal opinion of his own, but if he looks again at the wording of section 125 and applies it to the conduct of EU business, he will find that there would be very serious problems in carrying out day-to-day business in the national interest at EU level if the section is left untouched.
We believe that applying the section would be inappropriate because the referendum is taking place as the result of a clear manifesto commitment to negotiate the terms of the UK’s relationship with the European Union and to put them to people in a referendum. Section 125 could make it impossible to explain to the public what the outcome of the renegotiation was and what the Government’s view of that result was.
The Government must be able, and legitimately should be able, to offer their views, including up to the day of the referendum. However, as I have said, the Government are not a campaign: it is not the Government’s job to supplant the role of the lead campaign organisations during the referendum campaign, and it is certainly not our intention to act in that way. We recognise and understand the strength of feeling that exists on this issue, and I am grateful for the constructive and courteous tone in which the debate has been conducted both this afternoon and in private conversations outside the Chamber.
Mr Jenkin
I rise briefly in connection with some amendments standing in my name, such as amendments 32, 29, 22, 30 and 26, relating to provisions in the Bill that struck me as very strange to begin with. They seemed to envisage that royal charter bodies and certain types of charity should become permitted participants as campaigners in referendums and permitted donors to referendum campaigns. The matter of charities and the function of the Charity Commission is the responsibility of the Public Administration and Constitutional Affairs Committee, and it is something we have taken a great deal of care and interest over. I have made inquiries of the Charity Commission, and I am extremely grateful that it has furnished me with a comprehensive note explaining that this is a slightly bizarre tidying-up exercise. It brings the provisions in this Bill into line with what was agreed in the Lobbying Bill which is now an Act from the last Parliament. The Charity Commission is very clear that the Political Parties, Elections and Referendums Act 2000 does not give the charities it covers a general power to campaign or make donations to campaigns.
I will be grateful if the Minister replying to this debate makes it clear that there is no suggestion that charities are being empowered to be donors or participants under this Bill. They are of course governed by charity law and the regulations set down by the Charity Commission. Those are still enforced. This Bill does not alter charity law. When we were conducting the north-east says no campaign, some charities—I shall not embarrass them now by naming them—did allow their logos to be used on the yes campaign website. We quickly made our concern about that clear to the Charity Commission, and they were quickly instructed to take down their logos as this was a misuse of charitable funds and of their logos.
Charities are not intended to be involved in political campaigning. Of course, many of them are involved in campaigns that have political implications—for example, anti-slavery and child trafficking campaigns are legitimate campaigns—but they are not allowed to get involved in party political campaigns. Charities can be punished for making donations to political parties, and it is important for them to understand that this also applies to donations and participation relating to referendums, as set out in the Political Parties, Elections and Referendums Act 2000. That is all that these provisions are intended to do. I therefore do not intend to press my amendments to a vote.
It strikes me that any intervention by a charity would pale into insignificance when compared with the imbalance that is being locked into the Bill. My hon. Friend the Member for Gainsborough (Sir Edward Leigh), when speaking to amendment 53, drew our attention to the fact that political parties would be allowed to participate pro rata according to the vote they received in the general election. Incidentally, the European Union was not a major issue at the general election. It was an issue, but not the major one, and the election result hardly constitutes a mandate for spending on this scale.
If the Government were released from purdah, or if we could not contain what the European institutions were able to do during the referendum, the issue of charities would be very small beer. It is important, none the less, for the charities to realise that they must not get themselves into difficulties by misinterpreting the provisions of the Bill. I would be grateful if the Parliamentary Secretary, Cabinet Office, my hon. Friend the Member for Weston-super-Mare (John Penrose), would reiterate that that is the case.
Mr Jenkin
I should correct the right hon. Gentleman. The correct title of the group to which he referred, to which I and others such as Mr Speaker and one of the Deputy Speakers, the hon. Member for Epping Forest (Mrs Laing), belonged, was called the White Guard.
I want to pick up the right hon. Gentleman’s point about the letter. It says that the Government wish to use civil servants to explain the position arising from the renegotiation during the purdah period. If the referendum is not going to be about the Government’s deal with the EU, what is it going to be about? The letter says that the Government want to use the government machinery for precisely the purpose that they should not be allowed to use it for.
Alex Salmond
That is an excellent point. I bow to the hon. Gentleman’s memory as to the White Guard as opposed to the White Rose group. I am delighted to receive the information that Mr Speaker was a member. I cannot believe that he was unsuccessful in an election anywhere, but I am delighted to have that information. No doubt I shall use it at some point in the future.
I am afraid that I have just got the letter through Twitter and have not had a chance to examine it fully. The hon. Gentleman makes a serious point that goes to the heart of the profound issues that he and others have raised.
Sir William Cash
I do beg my hon. Friend’s pardon. He was a Whip a short time ago, but he has now been promoted, on which I congratulate him. I hope he will pass back the message that we really must have a substantive response to this question.
Furthermore, the amendment will extend the minimum referendum period to 16 weeks, thus providing for a minimum 10-week post-appointment period. I am glad to say that the Electoral Commission supports my amendment; indeed, it supports the majority of my amendments. It says that extending the period to 16 weeks
“would go some way to giving designated lead campaign groups the time needed to get their messages to voters, including to plan and effectively use free mailing and TV broadcasts.”
As a matter of fairness—that hallowed expression—I cannot think of anything more important.
Mr Jenkin
I commend my hon. Friend’s amendment, to which I have added my name, but does that not presuppose that the Government will conclude the negotiations and report them to the House well before the 16-week period kicks in, and that it is not legitimate for them then to use the Government’s machinery to explain the deal that they have reached through the purdah period and the 16-week period up to polling day? Does that not suggest that the Government will try to pull a fast one? Would it not be better if they made it clear now that they are going to conclude the deal long before the referendum is called so that there can be a proper and dispassionate debate about it?
Sir William Cash
I very much agree with my hon. Friend and I will go further and say that in the period between now and Report there will be substantial issues of this kind that we will need to dig into. There are references to counsel’s opinion on the purdah period and views that have been expressed by the Electoral Commission. We had a Bill before us without our having any idea of the outcome of the negotiations. This is not a satisfactory way to proceed.
As one who spent 25 years in very senior practice as a constitutional and administrative lawyer dealing with matters such as the dispute between Canada and Quebec, I can only say that counsel’s opinion is not the basis on which to make political decisions. We as lawyers may be very good at coming up with legal answers, but when I get my hands on that counsel’s opinion, as eventually we did on the Iraq opinion, there will be quite a lot of question marks. As my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) said in an earlier intervention, the Government can take their counsel’s opinion; we will take ours.
That is the position on that important amendment. The Electoral Commission supports the principle behind it. Will the Minister be good enough to give us a substantive reply and support amendment 9? I might not hold my breath about that.
The other amendment in my name, amendment 10—again, I am grateful for the support of hon. Members who have signed it—would ensure that no funds or support provided directly or indirectly by European Union bodies have a bearing on the outcome of the referendum. Is there any conceivable basis on which the Committee of the whole House would think a proper and fair referendum could be conducted if the entire resources of the European Commission and the European Union can be deployed in order to support a yes vote in the United Kingdom? By the way, there is no chance whatever that those bodies will not use all that money. They may have problems with Greece and they do not want a Grexit, but that pales into insignificance.
This is a very important proposal. The Electoral Commission takes the view that it already has controls on direct and indirect sources of campaign funding. Before I come to that, I refer to the situation as it applied in Ireland. I have spoken, debated and been at mass meetings when campaigners have been good enough to invite me in the run-up to referendums in France, Ireland, Denmark—all over Europe. There one sees the power of the state, pouring money down the throats of voters, and the machinery that underpins the yes campaign. I have come across some figures suggesting that in the second Irish referendum the amount of money deployed by the yes campaign after the machinery was geared up was around 15 times the amount available to the no campaign. That shows the scale of the problem.
Sir William Cash
The hon. Gentleman is seeking to draw me down that path, but I have been in this place for 31 years and will not buy that one. I am very glad that we got the vote we did last September, but that does not prevent me from being critical of the manner in which the procedures were followed.
I want to say something else. We have mentioned Mr Barroso. Here we are in the Westminster Parliament, described as the mother of Parliaments, and yesterday the celebrations for the Magna Carta were seen all over the world. The fact is that the traditions of those two things are illuminated around the world. We have fought in two world wars, against unprovoked aggression, and through our Parliament—through Churchill in this Parliament—we managed to save not just the United Kingdom, but Europe. They managed to drop a bomb on this place on my first birthday. Indeed, on the day I was born Hitler invaded Holland and France and Churchill became Prime Minister, but that is another story. The fact is that we have played a massive part in relation to democracy. What really worries me is that allowing the European Union to use its financial resources to manipulate the system is very dangerous.
According to the Electoral Commission, a central principle of its regulatory regime is to ensure—this is important—
“that foreign sources of funding do not have an undue influence on our democratic process.”
As hon. Members know, I have an eagle eye for the danger points. The Electoral Commission states that the 2000 Act, which sets out that regulatory regime,
“already provides that referendum campaigners are only able to accept donations over £500 from certain ‘permissible’ sources. In general, the permissibility rules provide that funding can only be accepted by referendum campaigners from certain UK-based sources. There are also rules and offences related to using permissible donors as agents to circumvent the rules.”
The Electoral Commission therefore put in place its regulatory arrangements. What it goes on to say is extremely important, and I still believe that my amendment would achieve this, because it uses the words “directly” and “indirectly” when talking about moneys, resources or support from any source within the European Union. The Electoral Commission states:
“It is important that the legislation is clear about those organisations that can and cannot participate in the referendum. The Commission’s view—
wait for it—
is that the European Commission does not fall within the list of bodies that can register as a campaigner or donate to other referendum campaigners. This amendment is therefore unnecessary.”
However, the analysis that I have provided shows the reach of the tentacles of the European Union, driven by Mr Barroso and his successors—Mr Juncker and all the others. We must never forget that Mr Barroso has said that the European Parliament, and only the European Parliament, is the Parliament for the European Union. He and his successors do not believe in this Parliament. There is a lot of talk now about national Parliaments, but his comments are on the record.
The Electoral Commission’s view is that the European Commission does not fall within the list of bodies that can register as campaigners. We should look into that carefully, because if the Electoral Commission were wrong, the European Commission might manage to worm its way in, on the scale that it has at its disposal, and subsidise the yes vote. I understand that that happened in Ireland, not to mention other countries throughout the European Union.
The Prime Minister has said that we can find an answer to the problems inherent in the purdah question. The Government acknowledge that there are problems with section 125 of the 2000 Act, but they say that they will get around them. That would include dealing with the civil service, but we must remember that the civil service includes permanent representatives. Members who are new to the House may not know about COREPER, the Committee of Permanent Representatives, which is the most powerful body in the European Union bar none, because it stitches up deals between all the member states. As Chairman of the European Scrutiny Committee, I took evidence from our chief representative on that body. I emphasise to the Committee that the evaporation of section 125, combined with the monetary intrusion of the European Union, represents a monumental challenge to our democratic system.
Mr Jenkin
My hon. Friend is explaining coherently how even though the European Commission does not consider itself to be a permitted participant or a permitted donor in a UK referendum campaign, its ability to fund bodies that will be participants or campaigners is unlimited. What about the Brussels-backed CBI, which has already received funds from the European Union, presumably to promote the EU? What is to prevent the CBI from receiving further funds? What restrictions will the Bill place on the CBI’s ability to receive such funds if it wants to donate to other campaigns?
Sir William Cash
This is vital territory. In a nutshell, we will have to get it right. Opening the floodgates on that money would be devastating, especially if it were to be employed alongside the lifting of the restrictions in section 125, which would bring the whole panoply of the civil service into play. That would be a nightmare scenario, but it is a genuine possibility. I am not convinced that the European Union is not a foreign source, although I will look into that. We passed an Act of Parliament, the European Communities Act 1972, under which we absorbed into our legislation all the treaties and all the functions of the bodies in the European Union. Because they became part of our constitutional settlement—for the time being, I trust—I believe that it would be an uncertain, if not a dangerous, assumption to make that the European Union and the European Commission would not be construed as being based in the United Kingdom as well as in all the other EU countries, in other words, as not being a foreign source. This matter will have to be looked at very carefully. I shall consult and confer with my colleagues as to what we do about these amendments.
John Penrose
We have already discussed that, and I understand that promises were made from the Dispatch Box earlier this afternoon by my colleague the Minister for Europe. Further proposals will be brought back to the House in due course, and I hope that the right hon. Gentleman and other colleagues will be pleased by what is brought back at that point.
Clause 3 therefore introduces schedules 1 and 2, which make further provision, and it modifies PPERA in relation to the campaigning and financial controls that will apply for the referendum. It also introduces schedule 3, which makes further provision, and it modifies PPERA in relation to the framework for administering the referendum.
Rather than spending a great deal of time on the detail of those schedules, I will move on to the Government amendments and then try to respond to the other amendments in the group, particularly those tabled by colleagues on the Government side of the Committee. The Government have tabled two amendments, which I will briefly explain. Amendment 14 will increase the spending limits for permitted participants at the EU referendum. The limits will apply instead of those provided for by PPERA. The increase takes account of inflation since PPERA was passed in 2000 but goes no further. The changes will apply to the spending limits for all those campaigners who are eligible to become permitted participants on both sides of the debate, including the designated lead organisations and political parties. It should be fair for both sides.
Amendment 15 gives effect to a recommendation of the Electoral Commission. It provides that where campaigners register as permitted participants but do not incur regulated spending, the responsible person must submit to the Electoral Commission a declaration that no regulated expenses were incurred. It will apply only for the purposes of this referendum. It is a technical amendment. Under the current provisions, there is no provision for a nil return. Although that can perhaps be seen as a logical approach in the event of a campaigner not spending, it creates a challenge for the Electoral Commission in undertaking its statutory duties. When a registered campaigner does not submit a spending return after the poll, it is not always clear whether that is an act of non-compliance, or because they have not incurred regulated spending. The amendment will make the situation clearer. Every registered permitted participant will be required to submit a return or declaration of some sort. Failing to do so without reasonable excuse will be a criminal offence. That should help to ensure that the Electoral Commission can focus its attention on clear cases of non-compliance. Given that it applies only to people or organisations that have already registered as campaigning groups, it ensures that transparency will be paramount.
Let me move on to some of the other amendments in the group. I will begin with amendment 9, tabled by my hon. Friend the Member for Stone, which a number of colleagues have addressed. The amendment seeks to extend the referendum period from the currently envisaged 10 weeks to up to 16 weeks. Having listened to my hon. Friend’s speech, I think that he is particularly concerned because at the start of any campaign the Electoral Commission needs to go through a process of designating the lead campaigning groups, and in the past there have been great concerns. In fact, the designation process has occasionally lasted for five or six weeks. If that six-week period begins at the start of 10 weeks of referendum campaigning, we will effectively end up with lead campaigning organisations being designated as such, and getting the public funds to which they are entitled, with a period of only four weeks to go before polling day. My hon. Friend rightly pointed out that that might put a crimp in the way in which the campaign was run, for both sides, which would not leave enough time to air important issues or make preparations. His proposed solution is to extend the period from 10 weeks to 16 weeks. I suggest a slightly more flexible alternative, which I hope will achieve the same outcome.
The Bill states that Parliament must agree to an affirmative statutory instrument to fix the date of the referendum in law. As my hon. Friend knows, an affirmative SI takes about six weeks to go through Parliament. Therefore, after the announcement of the election date, the House will consider the SI for a period of about six weeks before it approves the date of the referendum, and only then can the 10-week period start. Clearly, that will not help unless the designation of lead campaigning organisations can be done in parallel.
As my right hon. Friend the Member for Wokingham and others have mentioned, stirrings of campaigns are already under way. Campaigns are already gearing up, and the organisations involved are already co-operating and co-ordinating with each other, although we are at an early stage. I encourage those on both sides of the debate to engage at an early stage with the Electoral Commission, because both sides will, in all probability, start campaigning unofficially long before the eventual official start of the referendum campaign. Because they will be able to start engaging with the Electoral Commission at an early stage, not only will we be able to begin designation six weeks before the beginning of the 10-week period, but we stand a decent chance—with the Electoral Commission’s blessing, of course—of getting through the designation process rather faster than we otherwise could.
Mr Jenkin
To assist the Committee, and indeed the whole House, in the scrutiny of the Bill, will my hon. Friend undertake to produce a d-minus chronology of events that details all the steps between the Government’s decision to proceed with the referendum and the referendum itself? Presumably, that chronology could include the latest possible date for the conclusion of negotiations. We are concerned because some of the Government’s statements suggest that negotiations will conclude after the Government have triggered the referendum process.
John Penrose
I will happily produce a d-minus election schedule. What I will not be able to do, because it has less to do with the Bill, is to say when negotiations might be complete. However, we will be able to work back and produce a schedule that indicates how the process could and should look.
Women and the Cost of Living
Bernard Jenkin Excerpts(12 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Gloria De Piero
That provides extraordinary evidence of why freezing energy bills is so important.
Netmums found that one in five mums are regularly missing meals so that their kids can eat. One mum said:
“If it’s a choice between me or the kids eating, I will feed them. I have lost so much weight my clothes don’t fit but I can’t afford to buy any more.”
This is Tory Britain.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The hon. Lady is making a powerful speech, and we should all be concerned about the issues she raises, but will she reflect on the fact that it was the last Labour Government who piled the green levies on our energy bills, which are now hitting women harder than men?
Trident Alternatives Review
Bernard Jenkin Excerpts(12 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Danny Alexander
I agree with many of the things President Obama has said, including in his recent Berlin speech. I would point the hon. Lady, however, to the Government’s own threat assessment in the strategic security and defence review, which says that state-on-state nuclear attacks are a tier 2 threat. I will come to the threat analysis in a moment.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
This is the nub of matter. That is just one threat assessment, but no serious conflict with which this country has been involved over decades—extending even to the second world war—has been expected. Wars are unexpected, so why does the right hon. Gentleman rest any assurance on a single threat assessment? How does he know that that threat assessment will not have to be changed in a few days’ time, let alone in 10 or 20 years?
Danny Alexander
I will address that point as I move through my speech, although I am glad to have taken my hon. Friend’s intervention. All I would say is that the degree of readiness of our conventional weapons and forces is scaled to the threats of the time, and my precise proposal is that we could adopt a similar approach here.
John Woodcock
Absolutely. On the Liberal Democrats’ official figures, the savings will not even start to accrue until 2025, but by that time work would have to be well under way in Barrow shipyard and the supply chain to make the costly preparations for the Astute successor submarines. The Liberal Democrats need to come clean about the extra cost, because it makes a mockery of what the right hon. Gentleman rightly said are incredibly modest savings over a 30, 40 or 50-year period.
It should be remembered that the capacity to build nuclear submarines is one of the very few sovereign protected capabilities deemed so important and sensitive that the overwhelming majority of construction must be carried out on British soil. The submarine supply chain—centred in Barrow, but stretching from Aberdeen to Plymouth—is so advanced and finely tuned that any period in which it is left idle risks destroying it entirely. That is the lesson of the mass redundancies in my constituency in the 1990s. It is a great shame that some of those who now have the privilege of governing do not seem to have learnt a thing.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
On a point of order, Mr Speaker. I am distressed to raise this point, but for some reason the Chief Secretary seems to have adopted a posture of preserved deterrence—that is, he is not here. He left the Chamber shortly after the Opposition spokesman sat down, in a three-hour debate of such importance. I am afraid that I regard that as rather a discourtesy to the House. Did the Chief Secretary give a reason when he left the Chamber and, if not, should he not have done so as a courtesy to the House?
Angus Robertson (Moray) (SNP)
I am pleased to be able to take part in a debate on the alternatives review, which many people with different views on deterrence theory believe to be fundamentally flawed because it did not consider all the alternatives. That is more relevant to Scotland than it is to many other places because Scotland probably has the highest megatonnage of weapons of mass destruction of any nation in the world.
The Liberal Democrats must be living in a parallel universe if they think that people in Scotland do not think it important to consider all the options, not least because the majority of our public representatives have voted against Trident renewal. In the Scottish Parliament on 14 June 2007, 71 Members of the Scottish Parliament voted against Trident renewal; only 16 voted in favour. In this place, on 14 March 2007, 33 Scottish MPs voted against the Trident renewal proposals, with only 22 voting for them.
This is the view not only of parliamentarians; it is consistently the view of the majority of people in Scotland. In October 2012, a YouGov poll showed that 57% of people in Scotland thought that the Scottish Parliament should have more powers to bring about the removal of Trident from Scotland. In September 2011, an Angus Reid poll for the Sunday Express showed that 57% of people in Scotland did not agree that Trident should be based on the Clyde. In 2010, a YouGov poll showed that 56% of people in Scotland believed that we should not buy a replacement for Trident. It goes on and on.
Mr Jenkin
Let me draw the hon. Gentleman’s attention to the report produced by the Public Administration Committee, which experimented with deliberative polling to find out how to inform national strategy at the heart of government by engaging with the public. What did the poll conducted on our behalf show? The final question asked whether the United Kingdom should order four new submarines or give up nuclear weapons altogether. In Scotland, 49% were in favour and 43% were against.
Angus Robertson
As the hon. Gentleman knows, there are always outliers in polling—[Interruption.] I reflect on the fact that the Scottish National party is the only majority Government in the United Kingdom, receiving more votes than all of the three UK parties combined on the second vote. The hon. Member for Harwich and North Essex (Mr Jenkin) can laugh, but he represents a party that is the worst-performing centre-right party in the industrialised world. That is how badly it performs in Scotland. Even when his friend Lord Ashcroft polled in Scotland, he found that in principle 48% of Scottish respondents oppose the UK having nuclear weapons.
The Liberal Democrat review would have been worthy, as the former Defence Secretary the right hon. Member for Coventry North East (Mr Ainsworth) suggested, if it had taken evidence and spoken with other people—people outside the Ministry of Defence, people outside government. The Lib Dem spokesman could have met the Scottish Trades Union Congress and spoken to its general secretary, Grahame Smith, who said that renewing Trident “will cost Scotland jobs”. We might not all agree with those views, but they are views of important people, and if we are going to have a review that looks into alternatives, surely the relevant people should be spoken to.
Did the right hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander) meet the Scottish Trades Union Congress? No, he did not. Did he meet Unison, whose Scottish general secretary condemned the Government’s decision to replace Britain’s Trident nuclear fleet?
Sir Gerald Howarth (Aldershot) (Con)
I pay tribute to my hon. Friend the Member for North Devon (Sir Nick Harvey), who was a very good and collegiate colleague in the Ministry of Defence. I am sorry that he was not able fully to carry out this work, because had he done so, I suspect the result would have been a lot better than this inadequate document that has been presented to the country today. It has taken two years to produce what has amounted to a mouse.
It is important that we remember the context. In 2009, the leader of the Liberal Democrat party, who is now the Deputy Prime Minister, said in this House that
“we should admit that we neither need nor can afford to replace Trident.”—[Official Report, 1 July 2009; Vol. 495, c. 297.]
That is where the Liberal Democrat party was a few years ago. It now appears to agree that we should continue with the deterrent, albeit on a part-time basis. However, this is not the end of the story. This is not the party’s defined position. The document does not represent the settled policy of the Liberal Democrats. That is to be settled by their whacky members at their party conference later this year. Therefore, whatever is said from the Dispatch Box, or by Liberal Democrat Members, is not the final word on this matter of huge importance. One thing that can be said of the document is that at least it has sparked this important debate, which has produced some extremely impressive speeches that I hope will gain wider currency across the country.
I wish to make three points. First, the deterrent has deterred. It has worked. We therefore do not need to invite people to make an act of faith.
Mr Jenkin
I listened carefully to the honest and courageous speech by the hon. Member for Brighton, Pavilion (Caroline Lucas), in which she said that the more countries that have nuclear weapons, the more likely it is that they will be used. Does my hon. Friend agree that the only time nuclear weapons have been used was when only one country had them, and that as more countries have acquired them the likelihood of their being used has decreased? No nuclear weapon has been used since more than two countries have had nuclear weapons. Does that not tell us something?
Sir Gerald Howarth
It does, but, if I may, I will come on to my hon. Friend’s point in a moment.
My second point is that, yes, the deterrent has worked and it worked during the cold war. The argument is that the cold war has ended and so we no longer need the deterrent. However, as my right hon. Friend the Member for North Somerset (Dr Fox) said, we cannot predict what threats we might face in the next 30 or 40 years. While there appears today to be no immediate nuclear threat to our country, we know that other countries either have, or intend to acquire, a nuclear capability, and that there are approximately 17,000 nuclear weapons in existence.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I will confine my remarks to just a few points. I congratulate the hon. Member for Bridgend (Mrs Moon) on bringing out the NATO side of the debate. Our continuous-at-sea deterrence is an important contribution to NATO. It is a pay-back to the United States for being the ultimate guarantor of European security. We should not imagine for a minute that if we started downgrading our deterrent, the United States would remain as interested as it is now in maintaining security in Europe, with all the benefit for this country.
This debate has demolished the credibility of the document. The idea that it came as a surprise that submarine-launched cruise missiles with new nuclear tips were going to be fantastically expensive represents a scale of political dishonesty that stretches the imagination even for Liberal Democrats. I cannot imagine how anybody has ever taken the document seriously.
The debate has essentially been about continuous-at-sea deterrence or not. The document damns the idea of a part-time deterrent. Paragraph 33 states that a non-continuous posture depends upon political confidence that
“a potential aggressor would not launch a no-notice pre-emptive attack”—
there is no guarantee of that;
“with sufficient warning, the UK could re-constitute back-to-back patrolling”—
there is no guarantee of that;
“such back-to-back patrols could then be sustained long enough to cover any emergent crisis”—
and there is no guarantee of that if we have only three or two boats.
The point that I wish to make briefly is what defence policy is really about. It is not about predicting the future and working out what we might use. It is not about pretending that we can assess threats and that then settles what we need for the future. The whole point about defence planning and defence policy is that it is about preparing for what we do not expect, making contingencies for what we cannot foresee. That is what the whole document fails to do. The idea that we now live in a different world from the one we lived in during the cold war, and therefore that the global environment has given us permission to downgrade our nuclear capability, is clearly nonsense.
There is another misunderstanding. This is not a weapons system that we have not used, do not use and are unlikely to use. The importance of our continuous-at-sea deterrent is that we use it every day. It shapes the global environment in which we live. Why is state-on-state warfare a second-tier threat rather than a primary threat? Why has state-on-state warfare between the major powers become unthinkable since the end of the first half of the 20th century? It is because those major powers have nuclear weapons. Were we to start destabilising the credibility of our continuous-at-sea deterrence, we would be destabilising the very global environment that the Liberal Democrats believe gives them permission to go part-time on our deterrent. My hon. Friend the Member for Aldershot (Sir Gerald Howarth) put it well. The part-time deterrent is no deterrent. We might as well pack it in unless we are going to stick with continuous at-sea deterrent.
Financial Transaction Tax and Economic and Monetary Union
Bernard Jenkin Excerpts(12 years, 9 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Greg Clark
That goes to the heart of our concern, because under the mechanism set out, we would be under such an obligation, which we consider to be a breach of the protections we enjoy, in particular not to have to incur costs when the benefits do not flow to a non-participating member state. That is precisely one of our objections.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
Does the proposal not expose the beguiling attraction of allowing enhanced co-operation as a gesture of good will to our European partners, when in fact it is a trap enabling them to exercise powers through qualified majority voting, without our participation, which then creates obligations in relation to our own financial transactions, even though they might be taking place outside the EU? My right hon. Friend expresses support for co-operation between free, sovereign states in their tax affairs, but that is not what we are talking about here, because enhanced co-operation is likely to result in obligations that are enforceable in European Community law, even though we have not had a chance to vote on them.
Greg Clark
My hon. Friend makes a powerful point. That is precisely why we are challenging the legitimacy of the proposal. The enhanced co-operation procedure is available to member states provided it is legal and compliant with the treaty, and our view is that it is certainly not. In particular, the extra-territorial effects—exactly what my hon. Friend is concerned about—are contrary to article 327 of the treaty on the functioning of the European Union, as it fails to respect the competences, rights and obligations of the non-participating member states. Furthermore, the decision to proceed with the FTT has extra-territorial effects for which there is simply no justification in customary international law. The Select Committee has been prominent in its scrutiny of that, and no doubt its Chair will have something to say about it.
We should consider the economic effects of the tax as well as the legal issues. What we are discussing is obviously very important to the economy of the United Kingdom, where 2 million people are employed in financial and related professional services. That sector has created a trade surplus for the country at a time when I think all nations should be trying to increase their trade, and its activities are highly integrated with those in other EU countries. Our best estimate is that 30% of over-the-counter derivatives trading in London involves a counterparty in a proposed FTT zone country; similarly, about 30% of investors in UK gilts are located overseas, which means that the FTT is even likely to affect UK Government funding costs.
However, it is not only the financial sector that would be affected. The European Association of Corporate Treasurers, which represents those who manage companies' finances throughout Europe, has said, very explicitly, that the FTT
“will fall on companies in the real economy, and compound the negative effects of the financial crisis.”
In this country, the CBI agrees.
Greg Clark
The hon. Gentleman makes a powerful point, and I was wrong in seemingly indicating that it was only Government Members who share some of these concerns. He has a long and distinguished record of being not only concerned but an active force in drawing attention and suggesting remedies to some of these matters.
On the proposals before us, one suggestion that has been made is that there should be new mechanisms to increase the level of co-operation between national Parliaments and the European Parliament to contribute to this process—it certainly will not be the end of the matter. It has been stated that how it is done is a matter for the Parliaments to determine themselves. I understand that the Conference of Speakers of EU Parliaments agreed in April to set up such an inter-parliamentary conference to discuss EMU-related issues. The conclusions of that meeting state that the conference
“should consist of representatives from all the National Parliaments of Member countries of the European Union and the European Parliament”.
That reflects one of the recommendations in the Select Committee’s report.
The Government have consistently highlighted the importance of these issues since the December European Council. For example, it was highlighted by the Prime Minster in his Bloomberg speech in January, when he set out his agenda for EU reform. He was clear that the future European Union we need must entail a bigger and more significant role for national Parliaments. He said:
“It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”.
My right hon. Friend the Foreign Secretary has said that
“if the European Parliament were the answer to the question of democratic legitimacy we wouldn’t still be asking it.”
He went on to outline a concrete set of ideas, including the proposal to have an EU “red card” system that would allow national Parliaments, working together, to block legislation that should not be agreed at the European level. Furthermore, we have said that we would support calls by this House to summon a European Commissioner to explain a proposal directly to this Parliament if the Committee demanded it.
Mr Jenkin
I wholeheartedly support the principles set out on the primacy of national Parliaments in the Prime Minister’s Bloomberg speech, but neither of the proposals that the Minister has just mentioned—the red card and the summoning of an EU Commissioner—addresses the primacy issue. The red card just creates another opportunity for our national Parliament to be outvoted by other national Parliaments, and summoning an EU Commissioner has no legislative effect whatsoever. What are the Government going to table in concrete terms that will assert the primacy of national—
Mr Deputy Speaker
Order. Mr Jenkin, I have mentioned that we want short interventions. That was your second intervention and you are hoping to speak as well. If you want Members to get in, we are going to have to use the time well—it is going very quickly.
Chris Leslie
It is a sentence that takes note of something self-evident. Of course there is a challenge—we all know that there is a challenge and that the Minister’s agenda is to try to throw a spanner in the works and do what he can to stop that European variant of the FTT. He should consider what is in the motion; we did not particularly want to remove any of those other aspects of it. Taking note of the challenge was quite a good bit to leave out. Let me restate the case on which we must focus.
Chris Leslie
I want to make some progress, as there is not much time.
For the longer term, we must recalibrate the contribution of financial services to society. Of course, we must nurture a revival and restoration of the City of London’s primacy as the most trusted and professional place for financial transactions, but we cannot ignore the fact that most other jurisdictions are revisiting how banking and finance pays into society and what sort of responsibility we seek.
We have heard already from my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) about the IMF report after the G20 in 2009, which sought to think through new ways for the financial services sector to make a fair and substantial contribution to meeting the costs associated with Government interventions to repair it. In this country the interventions, in one form or another, cost near £1 trillion.
When in government, we started with the bank bonus tax, a payroll tax implemented by my right hon. Friend the Member for Edinburgh South West (Mr Darling), the former Chancellor. We thought that was a good idea then and we still think it is a good idea today. The Government then came along with the bank levy; we think that it is a good idea, but it has been poorly enforced. Ministers promised £2.5 billion in every year, but two years ago it raised just £1.8 billion and last year just £1.6 billion. Ministers keep coming back to the House and saying, “Don’t worry, we’ll deal with this shortfall.” The Minister has said that on numerous occasions, but we will believe it when we see it.
A bank levy and a bank bonus tax can only be part of the bigger picture. We must recognise that there is an ongoing systemic risk from financial services innovation and trading beyond the mainstream banks.
Economic Growth
Bernard Jenkin Excerpts(12 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The right hon. Gentleman has seen the Prime Minister’s draft Bill. If it became an Act of Parliament requiring a future Government to move an order to set a date for a referendum before 2017, would he do so?
Ed Balls
I have just explained that we do not support the idea of legislating now for a referendum four years ahead, for precisely the reasons that the Engineering Employers Federation, London First and Lord Heseltine have set out and I have set out in our amendment, as have my colleagues. I think that it would destabilise investment and jobs.
Mr Osborne
As our Scotland analysis papers show, Scotland would have to apply to join the European Union as it became a new state. I am glad the Scottish National party is taking part in this debate on economic policy. Perhaps we will get a clearer view from SNP Members, after the shambles of the past three weeks, of what their policy is on the currency that Scotland would use, should Scotland vote to leave the Union. We have not had a clear answer. Some members of the SNP have said that Scotland should have its own currency, others have said that Scotland should join the euro, and still others have said that they would negotiate a monetary union with all of us in order to keep the pound. There is complete confusion in the SNP ranks and until they have a clear answer to that, they will not be listened to on much else.
Mr Jenkin
Does my right hon. Friend agree that the Government are committed to what one might call a policy of negotiate and decide, although that has a familiar ring to it? Would it not help the clarity of this debate if the Government set out exactly what they intend to negotiate on? That has not been clear from anything they have so far said.
Mr Osborne
As my hon. Friend knows, and he takes a close interest in these matters, this is the beginning of a process of setting out what we want to achieve in a renegotiation, and in a conversation about that. Of course, we will then seek to achieve that renegotiation, achieve that new settlement—I am confident that after the election the Prime Minister and a Conservative Government will be able to achieve that—and put it to the British people in a referendum.
Richard Ottaway (Croydon South) (Con)
As a secondary modern schoolboy, I am always pleased to follow the right hon. Member for Coatbridge, Chryston and Bellshill (Mr Clarke).
In the regrettable absence of a debate on foreign affairs, I will use today’s theme to focus on the EU’s rule in economic growth. The British economy is not an isolated beast. It is part of a global economy and, in particular, a European economy focused on the EU. That European economy needs reform, but we need to be part of it.
Global economic success is to be found in single markets around the world. We should look at the economic growth in Brazil, Russia, India, China and the USA. What do those countries have in common? They are all single markets. The EU single market, an invention of Margaret Thatcher, which stretches from Athens to Oslo, is the largest single market in the world. We in the UK are 60 million in a world of more than 7 billion—less than 1%. Do we want to face the global markets alone or as a member of a trading bloc that represents 500 million people?
What is the alternative? Perhaps we could be outside the EU, negotiating our own terms of trade. Perhaps we could be an independent sovereign state, calling the shots on our own terms like Norway and Switzerland. Those propositions may sound attractive, but I disagree with the Secretary of State for Education, who says that life outside the EU would be “perfectly tolerable”. Norway and Switzerland do not call the shots. They pay billions every year for access to the single market and Switzerland has been forced into renegotiation.
We would have to renegotiate our own free trade agreements. The holy grail of trade agreements is an EU-US deal. We would look pretty dumb if we were leaving the EU just as it was signing up to such a trade agreement. Imagine the impact on our car industry, which exports five out of every six cars made in the UK, if it had to pay the EU import tariff on cars of 9.6%. Where would a foreign car manufacturer invest, faced with that situation?
Mr Jenkin
The United Kingdom has a trade deficit with the other 26 EU member states of £70 billion. I cannot imagine that the EU would want to cut itself off from the British market by getting into a trade war with the United Kingdom. May I also point out that we export more to the rest of the world than to the EU? The EU is declining in relative terms, whereas markets in the rest of the world are expanding. Surely we are a global trading nation, not just a regional trading nation, and that does not require us to be a member of the single market.
Richard Ottaway
We can all trade statistics on who trades what with whom, but about 50% of our exports are to the European Union. We export four times as much to the EU as to the United States.
Richard Ottaway
I will not give way.
We sell more to Sweden, which has a population of 9 million, than to India, which has a population of 1.1 billion. That is the truth of the matter.
Richard Ottaway
I am not giving way.
The EU is not going to let us set up an offshore free trade island like Hong Kong, undercutting its industries. We will have to pay for access to the single market. The EU will dictate the terms of trade, and we will still be under the thumb of Brussels. I say to my hon. Friend that that is not gaining sovereignty, it is losing it. The plan to impose an EU-wide financial transaction tax is just a warning shot. As a member of the EU, we can go to the European Court of Justice and challenge it. Outside the EU, it would simply be imposed and we would just pay the tax.
I say to the Economic Secretary that his policy on the eurozone is spot-on. Supporting policies that will stabilise the single currency area and encouraging growth through integration is exactly the right approach. At the same time, we expect the Treasury to keep a watchful eye on the national interest in the single market. A good example of that is the agreement on the single supervisory mechanism in the banking union, which shows the clout that we still carry in the EU and how we protect our position inside the single market but outside the eurozone. He should continue with that approach. That example also illustrates how far we have come in building alliances inside the European Union since the veto in December 2011. Inside, we simply have more strength.
No one denies that the EU needs reform, and I am no great Europhile on this. [Interruption.] May I say to my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) that that sort of contemptuous laugh does no good to the debate whatever? No one denies that the EU needs reform. Primarily, it has to choose between being a social market economy and being something tougher. In his Bloomberg speech, the Prime Minister set out a course of action that recognises British Euroscepticism but keeps us at the table, using our influence. Within the EU, the UK will continue to thrive as a major player on the world stage and our economy will be stronger, but outside, I believe that the future will be bleak.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
When I received, somewhat to my surprise, a telephone call from my hon. Friend the Member for Basildon and Billericay (Mr Baron), inviting me to add my name to an amendment that regretted the absence of an item in the Queen’s Speech, I confess I was somewhat astonished. I think it a mark of the enormous shift in opinion that is taking place on what has for decades been a matter of fundamental consensus in British politics that we find ourselves straining the conventions and normal behaviour, and even the Standing Orders of the House, to accommodate this debate. I say to my hon. Friend the Member for Croydon South (Richard Ottaway) that I utterly respect the sincerity of his views, and I was expressing no more than frustration that he would not allow me a spare minute of his time to explain the statistics on which I think this fundamental debate should be based.
I agree with the terms of the amendment and will support it, although I might not have tabled it myself. I doubt that some of the noise and discord around this issue has impressed those who failed to support us in the elections two weeks ago, reflecting a certain and widespread despair about the ability of all three main parties to keep their promises on referendums, which has become an emblem of the distrust in which so many of our voters hold the British political establishment.
Mrs Anne Main (St Albans) (Con)
Many members of the British public, whether they hold the views of my hon. Friend the Member for Croydon South (Richard Ottaway) or those of my hon. Friend the Member for Harwich and North Essex (Mr Jenkin) and indeed myself, would like to have the discussion. We went into a referendum on the alternative vote with a discussion led by the Prime Minister, who was not in favour of it, and other Members held honourable positions on the issue. This is about giving the discussion to the British public, however they would like to view it.
Mr Jenkin
I am grateful to my hon. Friend for that intervention. I will not debate at length the quality or timing of an EU referendum, although I think that those who voted for UKIP and are likely to do so in next year’s European elections will not be impressed unless we make every effort to hold a referendum as soon as possible, rather than when it suits the three main political parties for whatever reasons we have to continue putting it off.
I wanted to say to my hon. Friend the Member for Croydon South that I have the figures from the House of Commons Library, and our total earnings from abroad constitute 44% of our GDP. We are a global trading nation and trade a higher proportion of our GDP than any other major European state. Trade with the EU comprises 19% of GDP, and 25% with the rest of the world. The rest of the world is the growing proportion; the EU is the declining proportion. Manufacturing is the only part that would be excluded, by virtue of the tariffs that were mentioned earlier by my hon. Friend, and manufacturing exports to the EU comprise 10% of GDP, and 10% to the rest of the world—a substantial and important part of our economic activity.
The point is that there is no evidence that we would not continue to trade that proportion of our manufactures with the European Union—incidentally, the figures are inflated by what we know as the Rotterdam-Antwerp effect because a lot of what we export to the EU is instantly exported to the rest of the world. We are regulating our entire economy and burdening our taxpayers with the costs of the contribution—rising to £19 billion gross—with our membership of the European Union. One hundred per cent. of our economic activity is burdened with those regulatory costs for the sake of less than 10% of our overall GDP.
Sir Bob Russell
May I ask my neighbour and parliamentary colleague whether anything he has just said could not have been said by a member of UKIP?
Mr Jenkin
I totally agree. The irony of this debate is that a lot of people in UKIP are saying things that are similar to what is felt by a lot of people who would like to vote Conservative at the next election. There is a majority in this country, and I think the Prime Minister was right to say that he wants a different relationship—a new relationship with our European partners.
This entire debate is conducted on the premise that membership of the single market is indispensable to our national interest, is it not? Those who say we must remain in the EU come what may believe that the single market is indispensable to our national interest, but here are the facts. I have already mentioned how little of our GDP that we export in goods would be subject to tariffs were we not to have a free trade arrangement with the EU—probably around 8.7% of GDP. The idea that 3 million jobs are dependent on exports to the EU and that we would lose them if we left is a myth. There is no substantial evidence that we would lose any jobs. On the contrary, if we had a freer and less regulated economy, we would probably create more jobs by trading more easily with the rest of the world.
The EU is in long-term structural decline and our non-EU markets are expanding. The UK enjoys a trading surplus with the rest of the world—with which we trade much more effectively—and we have a £70 billion trade deficit with the EU. The rest of the EU would therefore not want a trade war with the UK; it would not be in its interest. The idea that Ireland, or even Germany, would enter a trade war with the UK is absolutely ridiculous.
By the Commission’s own admission, EU red tape costs 4% of the EU’s GDP. The single market does not reduce the costs of doing business in the EU; it is a regulatory burden on trading in the EU.
Debbie Abrahams (Oldham East and Saddleworth) (Lab)
Will the hon. Gentleman give way?
Mr Jenkin
I am not going to give way.
The EU internal market has become an end in itself—it is a means of promoting political integration. We must accept that, in the minds of our European partners, the single market is indivisible from the treaties. Even if the UK were to leave the EU altogether and apply for article 50, the EU would be legally required to negotiate free and fair trade with non-EU countries, so we would continue to have access to EU markets. That different perspective, which voters and large parts of business are beginning to appreciate, is shifting the burden of the debate.
Are we doing the right thing in creating such long uncertainty by putting off a referendum until 2017? Should we not have the referendum much sooner to bring the debate to a head? Are we too scared of our own voters to face the truth?
Mr William Cash (Stone) (Con)
Basically, I regard the whole question of having a referendum as fundamental. I led the Maastricht referendum campaign, and the question now is about the same fundamental questions we were addressing then. This is the problem: nothing has changed, but much has got worse. The real problem is one of urgency. This is not just about an abstract theory of sovereignty; it is about the economy, who governs Britain and whether we can achieve economic growth, which is what the debate is actually about. We cannot achieve economic growth in the circumstances I shall now describe. In my judgment, it would be wrong to wait until 2017, given that the situation is so urgent, as hon. Members will hear in a moment. The British Chambers of Commerce, which represents 104,000 businesses and 5 million employees, is concerned about the delay and the uncertainty that goes with it and about over-regulation.
It is generally acknowledged by all parts of the House that our relationship with the EU has to change, but the trouble is with the institutional treaty changes, on which I have had meetings in Brussels. I saw Mr Van Rompuy only 48 hours ago and also Mr Olli Rehn, and the fact is that they are on a railway line, and are continuing along it. They talk about destiny, contracts with other countries—unenforceable as they might be—and more centralisation. The European Scrutiny Committee had an interesting meeting on that.
Mr Jenkin
In his travels around Europe, has my hon. Friend gained the impression that there is any appetite in the Commission or among our European partners for substantial treaty change that would allow the United Kingdom to have a different relationship with the EU while remaining signed up to the existing treaties?
Mr Cash
It is my opinion, based on extensive discussions yesterday and over several months, that there is absolutely no prospect of any changes that would even begin to alter the circumstances we are now in and which are pivoted on the existing treaties.
The problem is one of debt and deficit. We cannot pay for the public services needed in the country, whether health, education or whatever. I hear the point from Opposition Members and I agree with some of their arguments—it is not right that people should be deprived of services—and I do not believe that the entire answer depends on cuts. It depends on the subject of this debate, which is economic growth. We can grow with the rest of the world. We are running a trade surplus of about £13 billion with the rest of the world, other than the EU, with enormous potential in south-east Asia, India and Africa, which is where the emerging markets are. This is where we have to concentrate our efforts.
On our trade relations with the other 26 member states, I ask hon. Members to take account of the following very alarming figures. Two weeks ago, during a debate on the Maastricht treaty and the convergence criteria, I gave what was then the latest figure, which was that we were running a trade deficit with the other 26 of £47 billion. Now, some might think a deficit of that scale is an awfully big loss, but the following Monday the new figure came out. In one year, the deficit had risen from £47 billion to £70 billion. Furthermore, the German surplus, which was running at £30 billion, rose to £70 billion between 2011 and 2012. It is essential that we take note and hold this referendum—and hold it urgently—because we have to deal with fundamental changes in the relationship that will enable us to disentangle ourselves from the spider’s web that we have got caught up in and which we have not asked the British people about since 1975. It is a vital question of national interest, and I beg hon. Members to listen.
Mr Jenkin
Is not the corollary of what my hon. Friend is saying that if we follow the programme of the Labour party and continue to pursue a policy of closer integration and more burdens on our economy, it will mean more cuts, more borrowing, slower growth and more unemployment than if we sort out this relationship?
Danny Alexander
I was not aware of that fact, but the House will remember what happened in 2009 and who was responsible.
The single market helps the UK to attract inward investment. As part of the largest single market in the world—it has 500 million people and is worth £11 trillion —the UK hosts more headquarters of non-EU businesses than France, Germany and the Netherlands combined. UK consumers benefit from EU regulatory standards, and the collective voice of EU member states helps to advance UK interests and influence throughout the world, as the US President said only this week.
Mr Jenkin
What evidence is there that the United Kingdom would be unable to negotiate a free trade agreement of its own with the United States if we were not part of the European Union and that we would not be able to negotiate a free trade agreement with the European Union if we were outside it? The treaties say that the EU would have to do that.
Danny Alexander
I respect the sincerity of my hon. Friend’s position. He has expressed those views for very many years and has done so coherently. As a politician, I believe, however, in breaking down barriers between peoples, not erecting new barriers, and I was making this point at the Scottish Affairs Committee today on the subject of Scottish independence. So of course it would be possible to strike these agreements, but the net effect on the UK economy of such an approach would be much less advantageous than being part of the largest single market in the world. The collective voice of the EU helps to advance UK interests.
Banking Union and Economic and Monetary Union
Bernard Jenkin Excerpts(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Greg Clark
My hon. Friend is entirely right. I do not think that we should be shy about insisting on protecting something that is very important to us. The single market in financial services is essential, and the current proposals would compromise it.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
I, too, welcome my right hon. Friend’s approach, but may I caution him about the double-edged invocation of the single market? We are threatened not just by the voting rights in the European Banking Authority, but by those in the Council of Ministers. It is equally possible that the member states of the eurozone that are in the banking union will caucus in the Council and use a single-market measure to create a single market in banking services to reflect the policy already adopted by the banking union. How are we to be protected from that?
Greg Clark
My hon. Friend is right to be alert to those dangers and risks. One of the clear principles on which we have insisted throughout all our negotiations on all the different dossiers is that we will accept nothing that would compromise our ability to participate in the single market.
Let me say a bit more about our stance on the EBA. What is currently proposed would not just require but enable members of the eurozone to caucus and adopt positions, which poses the clear risk that the ECB could dominate EBA decision-making. Given that 17 of the 27 EBA members are in the eurozone, that would constitute a blocking minority on all issues decided by qualified majority voting, and indeed a qualified majority under the new Lisbon rules.
Moreover, such action by the Commission would create an asymmetry of treatment between supervisory bodies. The proposal reflects the legal position that, as an EU institution, the ECB cannot be legally bound by EBA decisions on binding mediation, whereas the Bank of England could be. We have argued since the start of the negotiations that it would be inequitable and unacceptable if the Bank of England could be directed in that way but the ECB could not. We are pleased that our concerns are finally being acknowledged, but the asymmetry must be resolved if there is to be any final agreement.
As is required by both the motion and the amendment tabled by the Chairman of the European Scrutiny Committee, my hon. Friend the Member for Stone (Mr Cash), we will certainly use what the amendment describes as our
“best endeavours to ensure that the proposed changes…in the European Banking Authority are not adopted”.
In fact, that is an uncharacteristically mild form of words from my hon. Friend. We will insist that those changes are not adopted, and we will require full protection for the position of the United Kingdom and the other non-eurozone members in the EBA.
Greg Clark
I am grateful to my hon. Friend for that. I am not as familiar as he is with what went on in the previous exchange of correspondence, but I can say that it is essential that the arrangements need to be legal. There is no point marching up a hill of banking union if the whole thing falls apart—I mix my metaphors, but he understands what I mean. There are also other matters on which we will need to be satisfied before any of the proposed measures can be adopted.
Mr Jenkin
My right hon. Friend made an important point when he said that the British Government would reserve their position on the legality of this new instrument and how it might be used. Will he just expand on that? Would it not be sensible for UKRep to write a letter similar to the one written in the case of the fiscal union treaty, at the very least, in order to make that clear?
Greg Clark
I do not think that there is any difference between us on this. It is essential that this arrangement is legally sound. At the moment, the negotiations are continuing and the shape of the regulation is evolving, but the sensible commitment I have given is to make sure not to proceed unless we are satisfied that it is legally robust.
Let me talk about some of the other measures we need to bear in mind. We must make it absolutely clear that both now and in the future there should be no requirement, for example, for clearing houses that handle significant amounts of euro-denominated business to be located geographically in the eurozone, as proposed by the ECB—a proposal against which we have launched legal proceedings. That blatantly undermines the single market and the United Kingdom’s financial services industry. It is a poor indication of the ECB’s attitude if it intends to proceed in such a way. We need to be clear, too, that London is home to more clearing houses than any other EU capital and such proposals are unacceptable.
As the House will see, there is some way to go before the banking union proposals are acceptable to the Government. They will not be agreed by the United Kingdom unless and until we are satisfied that the UK’s position in the single market has been secured.
Let me turn briefly to the document known as the four presidents’ report, which was published on 12 October. It is an interim report that gives a general overview of the measures that the euro area member states might want to consider taking to improve the functioning of the euro. At this stage, there is little detail in the report apart from in the area of banking union and a great deal more discussion will be needed before there is agreement even on which issues should be explored further. The House will have a particular interest, however, in the discussion about democratic legitimacy and accountability.
I emphasise again that although the UK will not be part of the arrangements, it seems to me to be important that when significant decisions are being taken at the eurozone level about national matters, national Parliaments should be able to scrutinise those decisions, just as the Bank of England, the UK regulatory authorities and not least Ministers are accountable to this House and the House of Lords.
Chris Leslie
It is right for the hon. Gentleman to voice that anxiety. I do not want us to be on the margins, unable to promote the best interests for our nation and our economy. Given that our financial services sector represents approximately 40% of the total of the European Union’s financial services sector, that is absolutely at the core of our vital national interests. It is therefore imperative for us to remain an active driving force in the EU single market in financial services.
Mr Jenkin
It seems to me that the hon. Gentleman is trying to have his cake and eat it. Either he is going to be in the room—in the banking union—or not. If he is not going to be in the banking union, the question that he is failing to grapple with is this: what safeguards and protections do we need given that we will not be in the room because we will not be in the banking union? Perhaps he could provide an answer to that question instead of just waffle.
Chris Leslie
The hon. Gentleman is too kind, as uncharacteristic of him as that may be.
I am afraid that this is a tall order for the Government to negotiate. It is a conundrum. I do not in any way shrink from the mountain that needs to be climbed in squaring this circle, if I may mix my metaphors in that way. I am just concerned that the Government’s approach—perhaps an echo of their approach to the EU budget—is not ambitious enough. I urge hon. Members to talk to institutions across the City of London and to financial services practitioners across the country. They are very worried about their position if they are not able to be part of a single market. They know very well that there are forums in which the rules will be made and shaped, and yet of course they want to reserve our rights from a UK position. Somehow, we have to try to forge a negotiating strategy that manages to do better.
Mr William Cash (Stone) (Con)
I beg to move amendment (a), in line 10, leave out from ‘and’ to end and add
‘whilst welcoming the Government’s desire to seek safeguards for the UK, calls on the Government in respect of Regulation (EC) No. 1093/2010 to use its best endeavours to ensure that the proposed changes in the voting rights in the European Banking Authority are not adopted, to use its veto in respect of European Union Document No. 13683/12 so as to ensure that the powers of the Governing Council of the European Central Bank are not unlawfully delegated to the Single Supervisory Mechanism without an amendment of the treaties and/or to refer that matter to the European Court of Justice for adjudication of that proposal.’.
I am deeply troubled by the wording of the motion. In my judgment, it simply does not make sense to state that the House should welcome
“the Government’s decision to remain outside the new supervisory arrangements while protecting the single market in financial services.”
We acquiesced in to the Lisbon treaty, the Labour party agreed to the transfer of jurisdiction over the City of London to the EU, which was wrong—the Single European Act was never remotely intended to produce such a result—and, furthermore, views I have received from the City clearly demonstrate that it does not believe that the proposals in the motion will protect the UK or a single market in financial services.
There is another massive issue about the rule of law in Europe. The Foreign Secretary, in his speech to the Körber Foundation conference in Berlin a fortnight ago, said that what bound us together in the EU and the reason for the Government wanting to remain part of it was that it
“has helped to spread and entrench democracy and the rule of law across Europe.”
The tragic reality is that the EU does not subscribe to the rule of law. On 17 December 2010, Madame Lagarde said about the first bail-out fund, the European financial stability mechanism:
“We violated all the rules because we wanted to close ranks and really rescue the euro zone.”
Germany and France themselves broke the stability and growth pact. Furthermore, both the Government and the Attorney-General are clearly of the view that the agreement on the fiscal compact was unlawful, but in reality nothing has been done—hence my call for the legal reserve on this matter, although the legal reserve issued before has never been implemented.
The Government know that the proposals referred to in the second part of my amendment are unlawful. The Council of Ministers’ own legal adviser, in a lengthy opinion which I have seen and which the Government cannot dispute, states that there will have to be an amendment to the treaties if the powers of the governing council of the ECB are to be delegated to the single supervisory mechanism.
The legal opinion says on the proposal amending the EBA regulation, in effect, that in terms of the EBA’s dispute resolution powers there is no justification for treating the ECB differently from banking authorities in non-eurozone member states by exempting it from those powers. To do so would be a clear breach of the principle in law of non-discrimination.
As to the proposal giving the ECB prudential oversight of credit institutions in the eurozone, the legal opinion states that in establishing the single supervisory mechanism the council must respect the legal framework for decision making within the ECB set by primary law—that is, the treaties. This framework does not allow the ECB’s governing council to delegate decision-making functions on banking supervision to a subsidiary body such as the SSM. There is nothing in the legal base for the SSM proposal, in article 127(6) of the treaty on the functioning of the European Union, which would permit secondary law—that is, this draft regulation—amending the rules laid down in primary law. There is no question about it and the Government know that.
Non-eurozone member states are not entitled to participate in the ECB’s decision making, so they can have no formal decision-making role in the SSM as conceived. Furthermore, the law on banking supervision in the EU will be made up of directives to a significant extent. This is a requirement of the treaties. That means that the ECB cannot propose one-size-fits-all legislation on banking union. Rather, it can propose legislation which allows for differences in national transposition.
We simply cannot countenance a situation in which there is a wilful breach of the rule of law and where the dysfunctional European Union vaunts the rule of law, yet deliberately breaks its own rules. This is precisely what led to the kind of constitutional crisis that we have seen in our own history when Governments from the Stuarts onwards claimed a divine right to rule but then broke the common law. This is the primrose path to constitutional disaster not only for the United Kingdom, but for Europe as a whole. I hope the House will understand my concern, as I suggested back in the 1990s that this would happen.
I hear what the Minister says but I cannot understand why and how, given comments that I have received from the City of which I am sure he is aware. Those in the City make it clear that the single market would be put at risk by an imperfect single market in financial services in which rules differed by level of membership of the EU. Furthermore, they say:
“It is essential that voting arrangements within the European Banking Authority are clarified so as to avoid members of the Banking Union voting together en bloc and imposing financial regulation on non-Eurozone members through qualified majority.”
For “clarified”—
Mr Jenkin
Does my hon. Friend agree that for us to invoke the single market is doubled-edged, because in the end it will be the Commission that invokes the single market as a pretext for levelling the playing field which has been unlevelled by measures taken by the banking union? We will therefore finish up with measures that we do not want being imposed on us by qualified majority voting.
Mr Cash
That is precisely right. It was never intended when we voted—and I voted at the time, with a reservation about the sovereignty of the United Kingdom Parliament, which I was not allowed to debate—that we would be in this very position. That was in 1986 when I voted for the measure, but it was with that reservation.
To complete my point, where the comments from the City say “clarified”, I would say changed. We must change the rules, not merely clarify them, but we cannot do so because of QMV. That is the problem and it comes from the Single European Act.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
In some respects, this is a modest debate compared with last week’s, although it is worth reflecting that employment in the City, as reported by City AM, has collapsed by more than 100,000 since the peak of 2007. Some of that was self-inflicted, but much of it was inflicted by increased regulation. The Centre for Economic and Business Research reports that employment in the City is set to fall much lower. Most of the jobs are highly paid, high-taxpaying jobs, on which the economy in general and the economy of London and the south-east in particular depend very deeply.
I commend the sincerity of my right hon. Friend the Minister’s approach. He is in a difficult position. The difficulties he is confronting are a microcosm of the conundrum of the UK’s place in the EU. We are not in the room, so we cannot function as a positively engaged member of the EU on our current terms of membership, but we are also not negotiating the alternative terms of membership that would protect us from the effects of the treaties we have already signed.
It needs to be pointed out that banking union simply was not envisaged in the Lisbon treaty. We now find ourselves confronted with a new institution and a reform that simply was not regarded as necessary when the Lisbon treaty and its predecessors were signed. The treaty is not fit for purpose for a banking union.
The problem is that no arrangements that nibble at those problems will protect the UK’s interests—a wholesale change in our relationship is the only way to protect them. Sadly, the motion represents the Government yet again passing up a substantial opportunity to start laying the foundations of a different relationship and to start leveraging the renegotiation of our terms of membership. That is a matter of great significance.
Andrea Leadsom
I am grateful to my hon. Friend, but I have to challenge him, because I think that the Government are absolutely committed to renegotiating. Why does he think that they are not?
Mr Jenkin
Unfortunately, our party’s leadership does not intend to start substantive renegotiation of our relationship until after 2015, long after this particular opportunity will have passed us by. If we attempt to remediate this measure and its effects on our interests, we will not succeed. This is happening in case after case—the fiscal union treaty is another example.
Mrs Anne Main (St Albans) (Con)
Does my hon. Friend agree that we should use every opportunity and not waste any of them? We have an opportunity to make a difference. If we just keep noting everything and do not use our opportunity, that will be another chance gone and the electorate will not forgive us for it.
Mr Jenkin
I am afraid that my hon. Friend is right that failure to get the maximum leverage out of these opportunities means that they will be forgone for ever. We may well get to 2015 and find that all the major decisions to federate the eurozone will have already been taken and our opportunities to then renegotiate will look slim and incredible.
I will close by picking up on the contribution of my hon. Friend the Member for Stone (Mr Cash), who is the Chairman of the European Scrutiny Committee and whose comments add a Götterdämmerung-like quality to this debate. Hitherto, the architects of European integration have, like the gods in “The Ring”, attempted to construct their Valhalla on the basis of principles and the rule of law, yet they are now compromising those very principles, on which the legitimacy of this structure depends, and, in doing so, sowing the seeds of their own destruction.
If this was being done properly—I invite the House to reflect on this—it would be a treaty change and there would be an intergovernmental conference. There would be a huge amount of debate about what other changes needed to flow from an intergovernmental conference and we would end up with a whole Act of Parliament, which would have to pass through both Houses of Parliament in this great building. The issue, however, is being debated in a mere 90 minutes on a quiet Tuesday afternoon before the Minister is sent—haplessly, perhaps —to the Council of Ministers to either agree or disagree with these momentous changes.
Major changes are being made in a more casual manner as the European Union becomes more desperate to shore up its previous mistakes. “Macbeth” comes to mind: the worse a situation gets, the more rash and irrational the actors become in defence of the indefensible. I hope that right hon. and hon. Friends will remember this debate, because the move from legality to illegality is a very big step, yet that is what we are witnessing as the Government approach this particular decision. I hope yet that they will see sense and veto the proposal.
Multiannual Financial Framework
Bernard Jenkin Excerpts(13 years, 4 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The speech by the hon. Member for Preston (Mark Hendrick) sounded more like a speech in favour of an increase in the European budget, albeit disguised as a speech in favour of a cut, because that happens to be what he is being asked to vote for today.
I note that passions are high in this debate, not least among my hon. Friend the Member for Banbury (Sir Tony Baldry) and the hon. Member for Ilford South (Mike Gapes). Let me assure them both—because I think they come from the same European stable—that the last thing those of us who support the amendment want to do is wreck Europe or to wreck our relationship with our European partners.
But something very big is happening in British politics—much bigger than this debate. We are debating the European multiannual financial framework, but there is something rather familiar about the positions being adopted by those on the two Front Benches. One could almost imagine that, if they were to change places, each would be making the other’s speech. Indeed, in the last Parliament, one felt that that was exactly what was happening. There is something deeply disconnected about the debates that we have been having in the House about our future relationship with the European Union, and about the aspirations of the British people and what they want that relationship to be.
I would caution my right hon. and hon. Friends against taunting Labour Members over their volte face on this issue. I have no doubt that they have made a volte face on the question of European spending, but for us to accuse them of doing so will cut absolutely no ice with the voters. I would note, however, that the Labour party’s volte face represents a big shift in the politics of this country and in the politics of our relationship with the European Union. Labour is an opposition party that is hungry for power. Even Labour Members can now sense the tide of opinion that is flowing against the European Union among our voters. They are picking up the vibrations from their constituents and from the voters they need in order to get elected, and they have discovered a new principle in order to reflect that: they now want to cut the European budget.
Mr MacShane
I am deeply grateful to the hon. Gentleman. Whether this is a volte face or a volte farce I am not quite sure, but he is quite right to say that the tide is flowing; it is flowing to Labour and away from the Conservatives.
Mr Jenkin
I believe that the Labour party is picking up the anger of the British people about the idea of spending more money on European policies when we are having to cut back on policies of our own.
There is something rather chilling about the exchanges between those on the Front Benches, which tacitly suggest that a veto is a defeat and that it could lead to a worse budgetary outcome for the United Kingdom than could a negotiated settlement. That seemed to be the burden of the argument put by the hon. Member for Nottingham East (Chris Leslie). I should just like to point out to him what that says about the relationship that we now have with the European institutions. Those institutions are so overpowering and so powerful that even the veto of the Prime Minister of the United Kingdom cannot stop the European train on its way to its destination. The British people feel that something has gone wrong with that relationship. This was not the basis on which we were sold membership of the institution, and it was not the basis on which all the assurances were given by successive Governments that each treaty represented no substantial change and was just a “tidying-up exercise”.
Jacob Rees-Mogg
My hon. Friend is absolutely right to say that the veto does not really work. Ought we not therefore to be looking to amend the European Communities Act 1972, while recognising that this motion is dealing with the system as it is?
Mr Jenkin
I would just point out that we should not try to make ourselves too important in this debate. This is a take-note motion. I have spoken in many debates on such motions. The amendment expresses an opinion on whether the Prime Minister should adopt this little bit of body language or that little bit of body language. It will not make a blind bit of difference to what he does when he goes to the Council of Ministers. The amendment is simply a cry of despair from the British people who want their elected representatives to say something to the Front Benchers of both parties, who have betrayed the British people on the question of our relationship with our European partners throughout the 20 years I have been in Parliament.
The problem in this country is that the governing class is now so out of line with our people’s aspirations for the relationship with our European partners that they are putting the United Kingdom in the worst of all possible worlds. It cannot deliver the engagement of the British state with our European partners on the terms set down in the treaties, and it is not trying to deliver the different terms of agreement with our European partners that the British people would prefer, that our country needs, and that are in the national interest. So wide is this gulf that even the Labour party is picking up the vibrations and is beginning to respond.
Mike Gapes
Does the hon. Gentleman accept that if he got his wish and the UK left the European Union, as did Norway, in order to get access to the single market and to sign up to the acquis, we would pay billions into the EU yet not have any say at all?
Mr Jenkin
I do not want to leave the European Union; I want us to engage in a renegotiation of our terms of membership. Now is perhaps not the occasion for such a debate, but it is quite clear that the European Union is becoming a very different kind of European Union—even from the European Union agreed in the Lisbon treaty, let alone from the Common Market, which the British people voted to join all those years ago. It seems to me that if the EU is changing fundamentally and we do not want to be part of a political union, an economic union or part of a currency union or a banking union, we are going to have to change the arrangements by which the EU can legislate to make the laws in our own land.
That seems to me to be absolutely plain and axiomatic, absolutely simple, yet what we have at the moment is a coalition that is paralysed by that coalition—paralysed by an institutionalised disagreement by the two parties in coalition. The renegotiation opportunities at the moment are passing us by. The British people are aware of that paralysis and I do not think that they will put up with it. We are going to finish up having more debates like this, more crises, more difficulties, more dysfunctionality in how Ministers are forced to conduct themselves in the Councils of Europe—and that will put this country in the worst of all possible worlds. To that extent, I agree with the hon. Member for Ilford South.
What this country needs to do is rapidly reassess what relationship we want with the European Union so that our resources can no longer be appropriated in a manner over which even this House, which founded its powers on the control of supply, has no control. As for “own resources”, it is about the European Union having the right to sequester taxation, money and supply from our country, without the consent of this House. I do not think that is what the British people want; it is certainly not good value for money, and they can see that. This relationship is in crisis. The message that a vote for this amendment tonight will convey to the Government is that they are not addressing this crisis with sufficient urgency.
Mr Denis MacShane (Rotherham) (Lab)
To every thing there is a season, and a time to every purpose under the heaven. Without indulging in some of stronger language and rhetoric of different colleagues, I say that this may be an important parliamentary moment, because the British people decided in May 2010 not to give any of us a majority. I think they wanted a different kind of Parliament to emerge, one that was a bit freer, a bit more liberal and a bit less whipped; I am a party animal myself and the Whips are necessary, but perhaps tonight some signal can be sent that we are listening.
There are technical points that can and cannot be made. I would dearly love to see, in South Yorkshire or perhaps in Northern Ireland, every public servant’s salary reduced to €100,000—about £80,000. If that salary level was applied, there would be a revolt in Whitehall, and among Cabinet Ministers and senior Ministers of State, if not perhaps among junior Ministers of State.
We have heard the language of “betrayal” used, and I think that is silly, because the country is going through a serious discussion about what its future relationship with Europe will be. The people have never elected Mr Nigel Farage or the UK Independence party to a seat in this House, although they have elected him to the European Parliament. However, his spirit has been present in much of tonight’s debate.
We are facing a fundamental divide, as there are two approaches to European politics. We heard one earlier today, when the ten-minute rule Bill was introduced. It was supported by a large number of Conservative Members and it called for the end to the free movement of people in Europe. It was a well-argued case, but of course it utterly destroys the purpose of the European Union if we are to have passport checks at every border and not allow people to live where they wish.
We are now finding that there is a big debate about the money we spend. I take all the points that have been made about cuts, but we could have the same argument about the Department for International Development’s spending, and I might argue about whether the £13 billion we spent in Afghanistan is money wisely spent. Underneath it all is this dichotomy over Europe. There is a debate about being in or out—an honest debate that we are beginning to have—and another debate among those of us who believe we should stay in the European Union about what kind of European Union there should be.
The voting of money is, of course, what determines what kind of policy we have. This budget is the wrong budget, drawn up by conservatives and cautious, complacent centre-right bureaucrats and politicians. It is inappropriate and it keeps the European budget in the same old tramlines of protectionist common agricultural spending and ineffective regional spending.
Mr MacShane
I will not give way. I am very happy with the Speaker’s reduction of the time limit.
Last week, Labour MEPs voted against that budget and for a different priority that would focus on growth, on jobs and on what is needed. That is what I believe should be done, which is why I am happy to vote for the amendment tonight. I am not sure what will happen thereafter. This country will have to face a big question. Tonight it is right that Parliament asserts its authority. That does not mean the end of the debate; it is just the beginning of the debate about whether we stay in the European Union or not.
Small Charitable Donations Bill
Bernard Jenkin Excerpts(13 years, 6 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Miss Smith
I shall be happy to look into the matter, within my powers, and come back to him. However, it might well be a question for the Charity Commission, in which case the hon. Gentleman will know where to direct his inquiries. If there is information I can give him, though, I shall be happy to get back to him.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
To assist the Minister and the House, may I inform Members that the Public Administration Committee is conducting an inquiry into the post-legislative review of the Charities Act 2011 and that the role and charitable status of religious organisations are subjects we are concerned about? I invite the hon. Member for Coventry South (Mr Cunningham) to engage with the Committee on this subject. We are happy to discuss it with him.
Miss Smith
I thank my hon. Friend for that contribution, which I hope has given the House enough to go on on this subject.
The purpose of the scheme—
Miss Smith
It is indeed about getting it right for those groups that we all care about. I can reassure the hon. Lady that I have already made changes to the Bill on a number of points, in comparison with what was originally outlined. If I can make a little progress, I will come on to explain them. I further reassure her that the whole point of having a public scrutiny stage for the Bill is exactly to hear those points. I have made it my priority to work with those representative bodies and, indeed, to work directly with charities as much as possible, reassuring them about the benefits of the scheme and explaining why I designed it carefully in order to protect its aims.
Mr Jenkin
I welcome the Bill, as does the charitable sector generally. So many people making small donations have thought about the need for this reform, and it is such an obvious reform to make—although, of course, the implementation is much more complex than the concept. Would it be sensible for the Government to agree now that whatever scheme is implemented in the Bill will be subject to review after two or three years, so that there is a mechanism allowing it to be swiftly amended by secondary legislation within a limited period? That will enable lessons to be learned, and perhaps it will be possible to extend the scheme to a broader range of charities so that more of them can benefit from it in the future.
Miss Smith
My hon. Friend has made a good point. I know that he has spoken to charitable groups in his constituency and others and has benefited from his experience on the Public Administration Committee. He will be aware that the impact assessment contains a commitment to keep the scheme under review. I am sure he will agree that the purpose of the scheme is to engage the charitable sector, and that it is certainly not intended to “turn off” charities that we want to support by means of the mechanism that it provides. I hope I can reassure him that we want to encourage smaller charities not to give up on gift aid, and to embrace a new scheme which we hope will be helpful.
As I was about to say to the hon. Member for Clwyd South (Susan Elan Jones), many improvements to the Bill have been suggested, and I have listened to those suggestions during our consultation on the scheme. We originally proposed a one-for-one match in relation to the amount of donations on which a claim could be made under the scheme, and on which a claim could be made under gift aid, in the same tax year. Every £1 claimed on small donations would need to be matched with £1 claimed under gift aid. However, the sector feared that that would constitute too high a barrier for many organisations, especially small charities.
Having listened carefully to what charities thought, I accepted that our proposed arrangement would limit the amount of small donations payments that could be claimed for some of those charities. We have therefore reduced the level of matching from 100% to 50%, so that charities and CASCs will be able to make a claim for £2 on small donations for every £1 donated under gift aid. I think that that is a good compromise between helping charities to claim as high a level of small donations payments as possible, and ensuring that the payments go only to legitimate charities. Given that such a matching procedure will significantly reduce the attractiveness of the scheme to fraudsters, I hope that the sector will support it.
Let me now explain how we intend to ensure fairness of access to the scheme for charities that are doing similar work in a given locality. The scheme allows all charities that meet the entry requirements to claim a payment on up to £5,000 of small donations per charity. For many charities, that will suffice. Small local charities that are independent charities in their own right need consider the rules no further. I hope I can reassure Members that small charities will welcome the scheme, and, in terms of what they receive of the proportion that they seek, will obtain the most benefit from it. However, the scheme also allows some charities to claim more on small donations than the main limit of £5,000 if they carry out charitable activities in what we have called a “community building”, and meet certain conditions.
When we were developing the detail of this part of the scheme, it became clear that unless special rules were introduced, some charities would be able to claim hundreds or even thousands of times less under the scheme than their counterparts doing very similar work, simply because of the way in which they were historically set up. For example, Church of England parish churches are generally set up as separate charities, but in the Roman Catholic Church there is usually one charity at the diocese level with a couple of hundred parish churches below it. Without special provision, the Catholic Church, and certain other secular and faith charities with similar set-ups, would qualify for a small fraction of what their counterparts could claim under the scheme, unless they were to fragment and set up many more charities locally. I do not think forcing charities to set up more charities just for the sake of this scheme is sensible, nor would placing them at a very significant financial disadvantage simply because of the way they have historically been structured. So I have introduced the community building rule to ensure that charities carrying out similar activities in local communities—either through independent charities under an umbrella organisation or as local groups of a larger charity—get allowances under the scheme that are not hundreds or thousands of times different. Finding a solution to that issue was a priority.
Miss Smith
As I have said, there will, of course, be an opportunity to review the Bill in the light of how it operates. The answer to this question is all to do with realism: the Bill’s provisions are, in effect, a form of public spending—I shall explain later how they differ from tax relief—and so a limit has to be included in the design, because such funds are not endless.
The sector has raised concerns about the perceived complexity of the community building rule. It is true that in order to obtain a simple result—that charities doing the same things should get an entitlement that is similar—we are going to need to put in place some fairly detailed rules. I hope Members agree that that is preferable to disadvantaging some charities just because of the way they are set up. However, as I have said, it is only those charities, or groups of connected charities, wishing to apply for top-up payments on more than £5,000 in donations who need to consider the community building rule. Most small charities collect less than £5,000 in small donations, so the rules will be irrelevant to them. Her Majesty’s Revenue and Customs will issue clear guidance, developed through working with the sector, to show exactly how these rules will work in real-life situations. I am confident that that can be made to work.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)
I am pleased to have the opportunity to speak on an issue that is particularly important for charities and CASCs. I am sure that Ministers well recall the Finance Bill Committee debates, where we heard about the good work being done by charities, local organisations and CASCs across the UK. I have no doubt that the success of the Olympics and Paralympics is leading to more and more people, particularly the young, seeking to be involved at that local level. That will, of course, be welcomed by the clubs and organisations, but it also places additional pressures on them to recruit, to retain volunteers and to expand on their activities, rather than just sustaining what they are doing. I am sure that we will hear a lot about the good work being done in each constituency.
We also know that many charities are feeling the impact of the recession. A number of individuals have told me that they are no longer able to keep up their monthly gift aid donations as they feel the squeeze on their household budgets. Many have reluctantly had to take the decision to cancel their donations or to lower the amount that they give to charity, and a large number of them have told me that they have felt particularly bad about that when they have received a phone call, an e-mail or other correspondence from a charity asking them to reconsider.
I have also heard that small local charities are finding that while donations are less than they would have received in the past, the calls on their services are increasing during these tough economic times. Only last week, I heard from people in my local area about churches being approached to help people who are struggling financially, and that has not happened for many years. So every additional penny and pound that can be added to the funds that charities have raised for themselves will, of course, be very welcome and will be put to very good use.
I recognise that the Bill’s intention is to provide more help to those organisations, which is why the Opposition support the Bill in principle. However, it is our responsibility to examine it closely, and to assess whether it delivers what it promises and where it may need to be improved. That will be the focus of my remarks. I hope that the Minister will accept that this is being done in a constructive way ahead of the Committee stage.
As the Minister said, the Bill introduces the gift aid small donations scheme, which was announced in the 2011 Budget; the Chancellor proposed a new scheme enabling gift aid to be claimed on small donations, up to a total of £5,000 per charity, without the need for donors to fill in a gift aid declaration. That would mean that each charity could claim up to £1,250 per year. As she said, the scheme is similar to gift aid, in that the amount the charity gets is linked to the income tax rate of the donor; it is a gift aid-style top-up payment. As we have heard, the scheme’s purpose is to enable charities and CASCs to claim a gift aid-style payment on small cash donations of up to £20, where it is often difficult, if not impossible, to obtain the gift aid declaration.
When the Chancellor announced the scheme, he said that it would deliver
“gift aid on the contents of the collecting tin and the street bucket”.
He also promised that the reforms would be bureaucracy-lite, as he described it,
“without the need for donors to fill in any forms at all.”—[Official Report, 23 March 2011; Vol. 525, c. 962.]
More recently, a Treasury spokesperson confirmed that the scheme is
“intended to reduce the administrative burden and boost the income of small groups that rely on”
those very important
“bucket donations.”
As the Minister has said, and other Members have commented, the Bill’s intentions have generally been welcomed. Concerns have been expressed, however, by organisations such as the National Council for Voluntary Organisations, the Charity Finance Group and the Charities Aid Foundation, who described the legislation as highly complex and not accessible enough for smaller charities. They have raised concerns that there is a danger that it will simply act as a reward scheme for the established organisations that are already good at, and involved in, claiming gift aid. They also suggest that some of the provisions proposed in the Bill could significantly disadvantage certain types of charities, which has prompted some concerns about the equality dimensions of the scheme.
Those organisations are asking the Government to simplify the scheme, to make it more accessible to smaller organisations and to make it fairer, allowing equal access for similar charities. We have already heard the comments and concerns from Caron Bradshaw, the chief executive of the Charity Finance Group, and Sir Stuart Etherington, the chief executive of the NCVO. I say gently to the Minister that the Opposition’s approach is not about a battle of quotes. I am sure that she agrees that people such as Caron Bradshaw and Stuart Etherington reflect the sincerely held views of the charities and organisations and their concerns about the Bill. We should listen to those voices. The Minister has the opportunity to lay out how she will take account of some of those concerns as the Bill makes progress. To be fair, she has gone some way towards doing that, but we still need to hear more from her about a number of matters.
Mr Jenkin
As I said, the Public Administration Committee is very interested in this issue and my hon. Friend the Economic Secretary was very receptive to the idea of revising the scheme after a period of operation to accommodate those concerns. Does the hon. Lady agree, therefore, that it would be sensible to include a clause that allows the scheme to be amended by secondary legislation without having to come back to the House to get another Act of Parliament? That clause is not in the Bill at the moment, but would she support its inclusion?
Cathy Jamieson
The hon. Gentleman makes an interesting point and that is precisely the kind of thing that the Bill Committee will want to consider very closely. Anything that makes reviewing and improving the Bill once it has been enacted better is worth considering and, potentially, supporting. I also hope that we will see where we can improve the primary legislation to make it less likely that we will need to revisit or revise it quickly. I hear what he says and I am sure that we will have further such discussions in Committee.
Let me return to some of the issues raised by the charities and the voluntary sector. The Bill proposes that an eligible charity must have been registered with HMRC for a minimum of three years, have made a gift aid claim in three of the past seven years and not had a penalty imposed as a result of a gift aid claim. One obvious concern raised by many small charities who rely on small cash donations is that they will not necessarily have a three-year history of claiming gift aid. They feel that that has the potential to disadvantage them from the start. I shall say something else about that shortly.
Another area of concern is the matching provision outlined in clause 1, and the Minister has given us some information about her thinking and why she decided to set the ratio at 2:1 rather than at the point she originally intended. In order for a charity to take full advantage of the scheme, claiming the maximum £1,250 on £5,000 of small donations, it will need to have claimed at least £625 in gift aid in the same year. Charities say that that raises a number of potential problems. As we have heard, many small charities may not be registered with HMRC, and unless they register they will not be eligible to join the scheme. There is a worry that the three-year period may not give people an incentive to do so. Many may simply decide that the scheme is too complex, particularly some of the small charities that do not have the resources or an extensive staff network; they may just rule themselves out.
Additionally, many small charities only receive cash donations, so they often do not raise enough to claim the maximum £625 in gift aid in a year that they would need to benefit from the scheme. Ministers may want to give charities some reassurance about that, because charities that claim less under gift aid are at a direct disadvantage as a result of the matching provision, compared with those that are better able to use the scheme. That could further reduce access to the very small charities that the Minister said she would like to see benefit.
The NCVO recommends that the matching 2:1 principle is dropped, and would welcome steps to open up the scheme—for example, so that start-up charities and those currently not registered for gift aid had the opportunity to register and get into the system sooner. I heard what the Minister said about anti-avoidance measures and potential fraud, but we want to ensure that we do everything possible to allow smaller charities that try to respond to local issues, or are set up to respond—not quite on an emergency basis—to a particular issue, to get as much benefit as possible.
On the connected principle, charities have identified additional areas of concern in clauses 4 to 9, which cover the rules intended to stop charities and community groups fragmenting in order to be eligible for greater amounts under the scheme. Clause 5 defines the meaning of “connected” using section 993 of the Income Tax Act 2007, where a person who has control is “a trustee”, or a person who
“has power to appoint or remove a trustee…or…has any power of approval or direction in relation to the carrying out by the trustees of any of their functions.”
However, charities are not connected
“unless the purposes and activities of the charities are the same or substantially similar.”
Once again, charities and the organisations that represent them have pointed out that in reality many trustees will serve on more than one trustee board, which is particularly likely at local level. The concern is that there could be an impact on the charity’s eligibility to join the scheme if a trustee sits on the boards of two organisations that are considered similar. Charities suggest that that could easily occur, because if an individual has expertise or an interest in a particular area of service provision, they might sit on the boards of two comparable organisations. It is important that the rule is not seen as a barrier to attracting people or appointing high quality trustees with experience and expertise. I hope the Minister will look at the issue and offer some reassurance and, if necessary, some changes so that we get the maximum benefit from the Bill.
It is highly unlikely that an organisation would be incentivised to fragment to increase its accessibility to the scheme, which has been given as the main reason behind the provision. The majority of charities simply want to get on with doing the job—I see the Minister nodding. Of course they want to maximise their resources and the last thing on their minds is setting up different structures to fragment to obtain some other advantage—as it has been described. Will the Minister consider providing further clarification so that charities with similar purposes will not be disadvantaged simply because they have a common trustee?
Professional Standards in the Banking Industry
Bernard Jenkin Excerpts(13 years, 8 months ago)
Commons ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Ed Balls
I understand the points made by Members on both sides of the House.
Before I summarise, let me say to the Attorney-General that I have tried to listen very carefully to his contributions. There have been many of them, all have been helpful and constructive and they have helped us to understand the challenges that we face rather better than we had done on the basis of the Chancellor’s contributions in recent days.
Let me say also that, if at any point I misrepresent the right hon. and learned Gentleman, I will always in an honourable way correct the record in this House—not, as we now know, a standard of behaviour that we can expect from the Chancellor in this House.
To summarise, the argument goes as follows. Point one is that the Attorney-General does not believe that it is possible to have a proper, thorough investigation into all the details of the LIBOR market by the end of the year. I understand that; I hear his argument. Our argument is that a judge-led inquiry gives us a better chance of having an investigation into something legally sensitive than a parliamentary inquiry. If one is true and two is true, that means that the Government’s proposal for a parliamentary inquiry by the end of this year is defunct—dead, torpedoed, gone.
That is why, rather than intervening again, the Attorney-General should speak to the Chancellor, call the Prime Minister—wherever he is—and say that they should withdraw these motions, get to the drawing board and come back with a plan that is baked rather than half baked. [Hon. Members: “Plan B!”] Plan B.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
A few moments ago, the right hon. Gentleman said that even if the House votes for establishing a Joint Committee, Her Majesty’s official Opposition will continue to press for a judicial inquiry. Will he clarify that? Does that mean that he will be discouraging Members from the Labour party, be they in either House, from co-operating with and taking part in a Joint Committee? Is he going to wreck it?
Ed Balls
I was going to come to the votes at this point. I have said that we will vote for our motion. I have said that if that fails, we will continue to press for a full public inquiry because we think that that is the only way to do this properly. The Attorney-General probably agrees with us on that matter now.
Tonight, the Leader of the Opposition and I will vote against the Government’s proposal for a limited parliamentary inquiry, for the reasons I have set out, as currently proposed. On the basis of the contributions we have now heard from the Government Front Bench, the inquiry is not even remotely up to the task ahead.
In answer to the question, put by the hon. Member for Harwich and North Essex (Mr Jenkin), about what we would do if we lost the second motion, on the basis of the debate so far and the Attorney-General’s comments, I say to all Members of the House, including the Liberal Democrats, that they should think hard, do the right thing, ignore the Whips and vote for the inquiry that will work.
Ed Balls
I am not going to give way because I have answered the hon. Gentleman’s question. [Hon. Members: “No!”] I have.
We want to win this vote for the British people. Set against the depths of malpractice that have now been revealed and the scale of the challenge that we face, our strong belief is that the Government’s decision to reject our call for an independent and judge-led public inquiry is a grave mistake. Only an independent and open public inquiry—not politicians investigating bankers—can rebuild trust. That is our view, and the view of many Opposition Members. The doubters have been persuaded by the Attorney-General. Members on the Government Benches should change their mind—withdraw the motion, do the right thing and let us sort this out once and for all.
Mr Osborne
I will make further progress in my speech and then give way, but I am not giving way at the moment. If we—[Interruption.]
Madam Deputy Speaker (Dawn Primarolo)
I am eternally grateful for the help from the hon. Gentleman in reminding the House of what I have already said to the House, which is that if Members believe that this demonstrates the behaviour of the House at its very best on a serious matter, they are sorely mistaken, regrettably. However, each Member in this House is responsible for their own behaviour, and not me, thank goodness, so perhaps we can continue with the debate.
Mr Bernard Jenkin (Harwich and North Essex) (Con)
The hon. Member for Birmingham, Hall Green (Mr Godsiff) has underlined the importance of having a banking system that commands public confidence. I do not know how serious the LIBOR scandal is in relation to the ability of the banks to support jobs and growth, which we so desperately need at the moment, but it is clearly a mortal blow to the reputation of the City so we need to deal with it effectively and quickly.
I say to Front Benchers on both sides in this debate that this has not been the finest hour of the House of Commons. We have not seen the finest, highest and most principled leadership from Front Benchers of either side. Many among the public will look at the debate and scoff at our self-importance and arrogance. The City itself will be in utter despair that Front Benchers should have chosen to use this opportunity to tear chunks out of each other instead of co-operating to find a solution on which they can agree.
No solution will work unless there is consensus. I say that with a very heavy heart, having great respect for the prodigious abilities of both my right hon. Friend the Chancellor and the shadow Chancellor, as well as for their public service in the House. But I really think that we have to do better. Anybody could have seen over the past few days that the debate would be a complete car crash, and so it has been. We must seek to extract something positive from it at the end of the day.
My hon. Friend the Member for Chichester (Mr Tyrie) raised the tone of the debate in a laudable manner. He referred to the Marconi scandal of 1912; this is its 100th anniversary, and I will say a few words about it soon if I have time. The parallels are chilling.
First, I shall say a brief word about the powers of Select Committees. The shadow Chancellor is completely wrong—we have the powers. There is some doubt about the manner of their exercise and how we might deal with contempt, but there is no doubt that we have the powers. As Chairman of a Select Committee, I have exercised them. People are in fear of them. It does the House no service for the shadow Chancellor to go around saying that we do not have powers. That undermines the authority of the House and it is not in the interests of the House.
Damian Collins
I am closely following my hon. Friend’s argument. Is not the Standards and Privileges Committee currently looking at the sanction for contempt of Parliament?
Mr Jenkin
Actually, it is the Liaison Committee on which I serve as a Select Committee Chairman. I am personally looking into the matter and will report to the Liaison Committee next week; that will be part of our report on the powers and effectiveness of Select Committees, which we hope to produce before the end of this term. It greatly ill serves the House to denigrate the powers of Select Committees.
I am going to support the Government motion. I am not in favour of a judicial inquiry; I think it would be completely dotty to plunge us into such a lengthy procedure. However, I want to sound some warnings about the dangers that might befall a parliamentary Select Committee inquiry as proposed in the Government motion. We must be mindful, not least, that if Ministers or ex-Ministers were to be called to give evidence to try to sort out the absurd row that we have seen this afternoon, the Committee could not possibly function. Indeed, it could not possibly function if Opposition Front Benchers were determined to undermine its authority and operation.
It was highly irresponsible of the shadow Chancellor to fail to answer my question or that of my right hon. Friend the Chancellor about whether the Opposition will go on non-speaks if the motion is carried. I commend the hon. Member for Dundee East (Stewart Hosie), who said that even if the Opposition lose the vote, Scottish National party Members will co-operate with the inquiry. How is the House meant to make a judgment about whether to vote for the motion unless we have a clear view from the shadow Chancellor?
My hon. Friend the Member for Chichester mentioned the Marconi scandal. That occurred when Ministers—Liberal Democrat Ministers, I hasten to add, just for fun—were accused of buying and selling shares for profit—
John Thurso
I want my hon. Friend to tell us all about the Marconi scandal, but we were Liberals then.
Mr Jenkin
I beg my hon. Friend’s pardon. Of course—rebranded to cleanse the history.
Lloyd George’s Government were deeply embroiled in what we would call an insider dealing scandal. A Select Committee was very contentiously set up. It divided on party lines, it divided on whether to call Ministers as witnesses, it divided into party groups during the questioning of witnesses, and it divided along party lines in the writing of the report. In fact, it produced three reports—the official report, the Chairman’s report, and a minority report. Interestingly, the introduction to the 23rd edition of “Erskine May” says:
“Such highly visible failure condemned their successors”—
Select Committees—
“to a very limited role for almost half a century.”
I place great faith in my hon. Friend the Member for Chichester that he will draw stumps on the exercise if there is any danger that the Joint Committee is going to collapse in such a welter of recrimination. First, it could not produce a decent report under such circumstances; and secondly, it would damage this House in a very serious manner.
I do not wish to give succour to Her Majesty’s Official Opposition, but I note that the consequence of the Marconi scandal was the passing of the Tribunals of Inquiry (Evidence) Act 1921 when, following a subsequent scandal that engulfed the Government, it was decided that there had to be an alternative means of conducting a judicial inquiry outside Parliament with a judge, and that is how that format came into being.
The report by the Salmon royal commission on tribunals and inquiries, which was produced in the 1960s and is still the bible of how tribunals and inquiries are conducted, said that it would be “a retrograde step” to resurrect the format of a judicial inquiry within Parliament. Among the drawbacks listed by Lord Salmon were that Committees were composed of Members representing the relative strength of parties in the House, that parliamentary Committees do not hear counsel—something that has been suggested today—that some of, if not all, their members will have no experience of taking evidence or cross-examining witnesses, and that witnesses might not enjoy the same absolute privilege as in a tribunal set up under the Act. Those are the dangers that we have to guard against when we vote for the motion.
As I say, I am going to support the motion, but I add one other caveat. I would be grateful if the Minister will confirm that the Government will not present any objection to providing the resources—the money—that the Joint Committee will need to carry out its functions. We cannot have this new Committee raiding the staff and resources of other Committees. I think that if the inquiry is confined to matters of policy and recommendations for legislation rather than trying to settle the internecine disputes that we have seen on the Floor of the House this afternoon, then it can function with the support of the Opposition, but if the Government want it to happen it must have the necessary resources, which may be substantial. I would also recommend recalling a senior Clerk who has recently retired instead of raiding a Clerk from another Committee, because otherwise all our work will be disrupted.
Mark Reckless (Rochester and Strood) (Con)
In 1993, I joined Warburg’s as UK economist. One of the first things I recall is visiting the chairman of the bank, Sir David Scholey, in his office with my entry cohort. He said to us that what the bank had that mattered most was its reputation, that capital would always flow to good ideas and that if we did not have great amounts of capital, that was not a problem because we had our client relationships. He said that we must always remember to put our clients’ interests first, never our own.
My first boss was George Magnus, the chief economist at Warburg’s, who is still active. I remember him saying to me that we should never talk our book, and that we were there to be objective. He said that we should never be particularly proud if we got something right or concerned if we got something wrong, but that we should be proud of the integrity of our way of thinking. When I was given a bonus, I expressed gratitude. The culture had not yet become that we should look upset in the hope of more next time.
Only when I went to do an MBA at Columbia university in New York did I realise that the fact that I had become a rated analyst was of personal value to me and that I could perhaps have gone to another bank and got more money. When I came back from America, the position here had changed. We had the regulatory system of the FSA, and I was more involved in advising retail banks.
One case that I worked on for a substantial time was that of a retail bank merging with an insurance firm. It was clear to me that to treat customers fairly in merging the compliance function, as I was tasked to do, we had to focus on how that insurer might sell products to the bank’s customers. There was nothing wrong with that per se—that, along with stripping out cost, was the rationale for the merger—but it clearly brought risks, and we needed a function that would stop inappropriate sales to customers for whom they were not correct. Yet the main issues in dealing with the FSA were a turf war between the bank and the insurance regulator and a vast amount of time spent on box-ticking compliance. The question is not just whether the system is over-regulated or under-regulated, it is about the quality of the regulation.
I then became a lawyer—I am both a qualified barrister and a solicitor—when I worked on bank recapitalisations and FSA litigation. I served as a judicial assistant to the vice-president of the Court of Appeal. The motion asks for a judge-led inquiry. I have enormous respect for our senior judiciary, but they have almost entirely been judges and lawyers—they have not worked in financial services industries and are not, as hon. Members are, representative of wider society.
On LIBOR, two separate things happened with Barclays. First, there was market abuse—we will see what happens in respect of other banks. Because the two mid-quartiles of LIBOR were measured, it was thought there could be no gain by giving a low or high response, but there was collusion by so many players that there was market abuse, and the FSA was asleep on the job.
I would encourage hon. Members to think about the second Barclays aspect in terms of the perspective of the time. The British Bankers Association says that LIBOR
“is not necessarily based on actual transactions”.
Banks are asked a question:
“At what rate could you borrow funds, were you to do so by asking for and then accepting inter-bank offers in a reasonable market size”?
We should note that the question refers to “offers” rather than “an offer”, but the BBA goes on to say:
“Therefore, submissions are based upon the lowest perceived rate at which a bank could”
borrow. It also says that “reasonable market size” is not defined and that
“it would have to be constantly monitored and in the current conditions would have to be changed very frequently.”
Whitehall was therefore using Barclays reports for a purpose for which they were not designed. It was looking not at LIBOR, but at one particular bank’s reports, which were quite possibly compiled by a junior person, in an incredibly difficult market position. Therefore, if Barclays reported a higher rate than other banks, it might be that it had different perceptions of “reasonable market size”, or it might not ask the offered rates because the market had frozen. Which banks were asked and how are those considerations to be reported? The banks are not being asked: “What are your bid and offer rates?” They are being asked: “What do you perceive one of your competitors might offer you were you to ask?” In the context of the financial crisis, that is potentially different from the market abuse I have described.
We should also consider the UK in the international context. We have a huge banking industry in this country. If a regulator says that much of it is socially useless, people might reply, “Yes, but the employment and prosperity of many people in the country depend on it.” How do we clear it up so we can offer a market and export our financial services to the world sustainably and in a way that will keep our reputation? Hon. Members can rail and bash the bankers for the bust we are suffering—that is quite fair and proper—but we must accept that the bankers also gave us our boom. Our borrowing and extra spending was based on candyfloss, and on a boom that the bankers created. They are as responsible for what we enjoyed in the boom as they are for the bust.
Mark Reckless
Elements of such regulation have been backed, but we must look at the quality of regulation. We can have a market system in which people are clear what the regulation is, or a system in which the Government run regulation and bail everyone out, making the taxpayer responsible. We were betwixt those two separate models. Some parts of the market but not others were regulated, and people put stress and reliance on LIBOR that it was never designed for, which led to much of the problem.
We cannot take what the regulators say as Gospel. Many say that Barclays accepted that the Bank of England and Paul Tucker had not told it to lower the rate. Barclays was let off tens of millions in fines because the regulators agreed that, but the regulators have a vested interest—people might ask why they were asleep on the job in the earlier phase, and what LIBOR was doing in 2008-09. Hon. Members should consider what reliance Ministers or officials at that time put on LIBOR—we should ask what LIBOR said about Barclays, why the Government were trying to push Barclays into a bail-out it was trying to resist, and why there was such reliance on that rate.
Mr Jenkin
My hon. Friend is making a very interesting speech. Is he saying that because it was widely known that the Government were prepared to rescue the banks, the self-discipline that liability for bankruptcy provides in a banking system was abandoned and the whole market was distorted?
Mark Reckless
For the calculation of LIBOR, I wonder whether it had been abandoned for RBS and Lloyds HBOS—as it became—while Barclays continued operating in a market context. The BBA now says that banks have to quote on the basis of an unsecured, unregulated, non-Government-supported rate, but I do not know whether that was the definition it gave at the time. That would have been a concern.
In conclusion, Members of Parliament, representing their constituents, have the necessary range of experience to have a reckoning, as a society and a nation, with what has happened with our banks, to assess the costs, as well as the benefits that we enjoyed, and to consider how to move on and put the matter behind us. I know, from my experience on the Home Affairs Committee, that we can have a non-partisan Committee that can reach across. We have people with the necessary experience and independence of mind. We can get together a group of people to come up with a report that downplays partisanship, to find out what went wrong and to learn the lessons for the future.