Financial Services Bill

Chris Bryant Excerpts

Monday 6th February 2012 Commons Chamber

[Mr Osborne]

As my hon. Friend is aware—

[Chris Bryant (Rhondda) (Lab)]

That’s why she asked.

[Mr Osborne]

Well, the report names Tony Blair, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) and the shadow Chancellor. One of the interesting things is that the shadow Chancellor was, of course, instrumental, as I understand it, in creating the tripartite committee. We will hear in his response a detailed defence of the decisions he took.

Tax Avoidance (Public Servants)

Chris Bryant Excerpts

Thursday 2nd February 2012 Commons Chamber

[Danny Alexander]

There are strict guidelines from the Treasury that have been in place for some time, which are set out in the document “Managing Public Money”, the most recent edition of which was published in October 2007. I quoted the relevant section in my answer to the original question from the right hon. Member for Newcastle upon Tyne East (Mr Brown). The important thing is that Departments, and indeed accounting officers, understand that it is their responsibility to ensure that the rules for managing public money are followed in every case, and I regard it as my responsibility as Chief Secretary to ensure that they are.

[Chris Bryant (Rhondda) (Lab)]

Clearly two Ministers were involved in the decision—the Minister for Universities and Science and the Chief Secretary—but so far the Chief Secretary has used practically every Murdoch excuse in the book: “I didn’t know the detail,” “Nobody showed me exactly what was going on,” and all the rest of it. Will he publish the precise documents that he and the Minister for Universities and Science signed off, so that the public can make a decision about whose responsibility it is?

[Danny Alexander]

The hon. Gentleman might not have caught up with this, but a great deal of information has already been released on this issue under the Freedom of Information Act, which is precisely how it has come to my attention and that of others. As I said, my role in such matters is to sign off the salary arrangements and ensure that they are appropriate, given the level of salary in place. As I said at Treasury questions a few days back, in the 83 cases in which I have been involved where a previous post holder has been in place, I have reduced the salary substantially in 45 cases and frozen it in a further 23.

Oral Answers to Questions

Chris Bryant Excerpts

Tuesday 24th January 2012 Commons Chamber

[Mr Hoban]

My hon. Friend makes an important point. It is vital that banks and other participants in the financial services sector play their full role in supporting growth across the economy and meeting the aspirations of families across the country. It is vital when banks are faced with difficult decisions about how to use their capital that they should focus their efforts on securing lending and boosting economic growth.

[Chris Bryant (Rhondda) (Lab)]

The thing that my constituents who work for Peacocks do not understand is why there seems to be plenty of money in the banks, including RBS, to pay exorbitant bonuses to senior executives, when there is not enough money to keep the company afloat. What will the Government do to try to ensure that those jobs, in a company that is still making money, are protected?

[Mr Hoban]

I do not want to comment on particular decisions. I am well aware of the concerns that people in the hon. Gentleman’s constituency have about the prospect of Peacocks closing. It is vital that banks are in a position to lend to viable businesses. That is why we entered into Project Merlin, which has led to an increase in bank lending compared with last year. That is the right thing to do, and I would encourage the management of Peacocks to engage with the banks and other investors to get the right outcome for them and for their business.

Eurozone Crisis

Chris Bryant Excerpts

Thursday 3rd November 2011 Commons Chamber

[Chris Bryant (Rhondda) (Lab)]

The Minister said something very interesting earlier. He used a phrase that I do not think I have heard a Minister of either side ever use before, which was the remorseless drive towards fiscal union—and, as I understood it, in an approving sense. The danger of that, of course, is that we will end up supporting for the first time a two-speed—a two-tier—Europe, with us very definitely at the second speed and in the second tier. Is that really what he wants?

[Mr Hoban]

We have always accepted that the remorseless logic of monetary union is closer fiscal integration. I believe that this crisis demonstrates that monetary union needs to be underpinned by closer fiscal integration. That is not a new expression on my part; I said nothing novel; the Government have taken this view for some time. We need to ensure that the institutional arrangements are in place to support that. What I think hon. Members on all sides of the House want is a stable eurozone because it will contribute towards economic recovery in the UK.

Eurozone Crisis

Chris Bryant Excerpts

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

My hon. Friend and I have discussed this matter before, and we disagree. What the Foreign Secretary said at the time—I remember because I was his speechwriter—[Interruption.] And there were some very good speeches at the time.

[Chris Bryant (Rhondda) (Lab)]

Didn’t he write any of his own speeches?

[Mr Osborne]

They were all written by him.

The Foreign Secretary described the euro as a

“burning building with no exits”.

That was his point. As I said, the break-up of the euro, disorderly or otherwise, this autumn or in the foreseeable future, would cause enormous instability to the entire global economy and do enormous damage to the British economy.

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[Mr Peter Bone (Wellingborough) (Con)]

The Chancellor is absolutely right to say that a disorderly break-up of the euro would be a disaster, but given that the euro is going to break up, should we not take the advice of the hon. Member for Rhondda (Chris Bryant) and organise an orderly break up of the euro?

[Chris Bryant]

That was not my advice.

[Mr Osborne]

I do not think that the orderly break-up of the euro, even if it were desirable, which I am not saying it would be, could be done in a way that would not lead to a pretty disorderly impact on financial markets and the British economy.

[Chris Bryant]

The hon. Member for Wellingborough (Mr Bone) is a very naughty boy and I shall see him afterwards.

Basically, Greece lied about its finances and Italy is probably still lying about its finances. It would have helped enormously had there been independent proper auditing of those countries’ finances. Many people opposed that when it was proposed, but surely we should be advocating it now. The danger for the Government is that it might apply to all 27 countries, not just the 17 eurozone members.

[Mr Osborne]

Indeed. The statement talked about independent auditing of finance and independent growth figures on which to base fiscal projections, which is precisely what we have introduced in this country through the creation of the Office for Budget Responsibility. That will ensure that we do not get political pressure to alter the growth forecast of the type that the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), detailed in his recent autobiography.

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[Mr Osborne]

I will have to thumb through the index of Peter Oborne’s book, “Guilty Men”, to see whether there is a reference to the hon. Gentleman. I will concede that there are a few references to some of my colleagues in that book, but I have a good alibi, which is that I was writing speeches for the Foreign Secretary at the time, making it clear what some of the problems were with the euro, and some of those problems have come to pass.

[Chris Bryant]

Who wrote the speeches?

[Mr Osborne]

As the Foreign Secretary used to say at the time, he wrote his own speeches, and I write my speeches today—and those who have written my speeches before me have got themselves into the House of Commons, which is a good thing.

The serious point that I would make to the hon. Member for Huddersfield (Mr Sheerman) is this. I completely reject his idea that Britain has been marginalised. We have actually insisted that such matters be discussed at the European Council and ECOFIN. A key component of today’s agreement is the banking package, which is the area where there is most detail. There was a 10-hour negotiation to achieve the banking package last Saturday which Britain was right at the heart of, so we are at the centre of things. I suspect that the hon. Gentleman agrees with me that his party’s Front-Bench policy to marginalise us from the IMF would also see us leaving that key negotiating table.

The Economy

Chris Bryant Excerpts

Wednesday 22nd June 2011 Commons Chamber

[Mr Osborne]

We are engaged in those negotiations, which the Chief Secretary and the Minister for the Cabinet Office are leading for our side. I have asked a very simple question: does the Labour party back public sector pension reform as set out by John Hutton? [Interruption.] That says it all.

[Chris Bryant (Rhondda) (Lab)]

Will the Chancellor give way?

[Mr Osborne]

Will he answer my question? No? I am not taking an intervention. [Interruption.] The question we have here was put by John Hutton himself—

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[Alison McGovern (Wirral South) (Lab)]

rose—

[Chris Bryant]

rose—

[Mr Osborne]

Let me conclude—

--- Later in debate ---

[Mr Osborne]

Let me conclude—

[Chris Bryant]

Come on!

[Mr Osborne]

I think that the hon. Lady is the Parliamentary Private Secretary to the former Prime Minister, and given that he will never be here to speak for himself, she must speak for him.

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[Mr Osborne]

Let me conclude now.

The scales have fallen from the eyes of Labour MPs. They realise that they have a shadow Chancellor who has to spend the next four years defending his record, and they are completely silent as they realise that they are going to be talking about the past, not the future.

[Chris Bryant]

Will the Chancellor give way?

[Mr Osborne]

I am not giving way. Let me conclude my speech.

That is because the shadow Chancellor is a man—

[Chris Bryant]

Give way!

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Can we be a little calmer? Mr Bryant, I know you are very excited, but I am sure that people will give way.

Eurozone (Contingency Plans)

Chris Bryant Excerpts

Monday 20th June 2011 Commons Chamber

[Mr Hoban]

My hon. Friend will of course recollect that one reason why we made a bilateral loan to Ireland was the particularly close relationship between the UK and Irish economies. That relationship did not exist with Portugal, and it does not exist with Greece, so there is a different approach. It is important to remember that Greece was bailed out by eurozone countries, and that the bail-out of Greece should continue to be done by them.

[Chris Bryant (Rhondda) (Lab)]

Is not the danger of the Government’s deliberate attempts to steer as far away from any involvement whatever that the indirect, knock-on effect for British businesses and banks, and in the end for British taxpayers, will be far more significant than he is letting on? That is why many Opposition Members feel that he is being deeply complacent.

[Mr Hoban]

I do not think anyone is in a position to accuse this Government of being complacent. We are the Government who have taken action to tackle the fiscal deficit that we inherited from the Labour party. That has enabled the spreads between UK gilts and German bunds to narrow, reflecting market confidence in the measures that we are taking to sort out the problems in the British economy. The Labour party is failing to take its responsibilities seriously or to acknowledge the mistakes that it made when it was in government. It also fails to recognise the strength of support for the actions that this Government have taken to resolve the economic crisis in this country. Had we not taken that action, we might well have been in the firing line with Greece.

Finance (No. 3) Bill

Chris Bryant Excerpts

Tuesday 3rd May 2011 Commons Chamber

On the specific nature of some of the certain chargeable equities listed and described in the Bill, we understand that there is clearly a rationale in their design in respect of short and long-term liabilities. However, would the Minister care to explain the difference between his definition of short-term liability and long-term liability and where the line is being drawn?

[Chris Bryant (Rhondda) (Lab)]

I think that my hon. Friend is referring in particular to part 2 of schedule 19, which hangs off the clauses we are debating, and which contains a seven-step guide that actually has an extra step that does not apply in some cases. Is that not the most complicated way ever in legislation of determining a charge? Why does it need to be so complicated?

[Chris Leslie]

The Minister needs to answer that question. Hon. Members might care to turn to page 297 of the Bill. The steps might at first appear quite straightforward, but then we get to this odd provision in paragraph 7, with its proportions X, Y and Z of various different amounts and so on. I understand that that provision is triggered because the Treasury has to recoup retrospectively some of the money taken, since the Chancellor tweaked the levels of tax on 8 February and again in March. It therefore becomes incredibly complex and difficult to hold to account. The design of the bank levy has not been made easy by the Chancellor’s decisions.

[Chris Leslie]

As I said, the reason for the complexity is that all the variables in the design of the bank levy have to be amended because the Treasury wants to squash it around that figure of £2.5 billion or £2.6 billion of revenue. In other words, the whole of the bank levy is being driven by that particular sum, which is a very odd way of designing a tax.

[Chris Bryant]

In fact, there are not just one or even two different rates being introduced—which one might understand, given the difference between long term and short term—but 10, each of which will undoubtedly pay for thousands of accountants, as they crawl over what counts in each category. Surely that is nonsensical and an example of the kind of legislation that banks which might want to stay in this country will abhor.

[Chris Leslie]

Far be it from me to defend the poor banks in their compliance with the provisions, but obviously the more the compliance costs go up, the higher the likelihood that customers will end up footing the bill of taking on accountants to address the complexity of what should be a simple banking levy. Whether there are two rates or 10, however, all the rates in the bank levy are far too generous and far too low.

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[Chris Leslie]

I do not know whether we have to hope that the Liberal Democrats will take strong action before that moment comes—I do not know whether that is an oxymoron—but the Government have dangled the prospect of a tax cut for only the very richest people. It is interesting that they are designing the Bill’s provisions to allow the potential avoidance of the 50p rate following what I considered to be a fairly positive change at European level to defer bonuses in an attempt to discourage short-term high-risk activities.

[Chris Bryant]

I understand my hon. Friend’s point and I disagree with what the Government are doing, but I suspect that he is wrong. I suspect that the Government will not obtain the tax take that they will need over the next few years. Because of the way in which they are managing the economy—because of the profound risks that they are taking with the economy—there is no chance that they will introduce tax cuts of any kind before the next general election unless they also engage in another massive round of cuts in public services.

[Chris Leslie]

However, the alacrity and, almost, relish with which the Government have introduced some of their spending cuts make me wonder whether their rewards for the bankers constitute a payback for the cover to get stuck into public investment in the way that they always wanted to do, and for which purpose many of them came into politics.

The bank levy is a weak response to the debts that banks owe the taxpayer. The Government say that they want a big society, but they are happy to see public investment shrink and rewards for banks grow, built on the backs of taxpayers. It is a big society if you are a banker, but a very small society if you are not. Our amendment would at least make the Government pause and reflect on their increasingly untenable position—we hear that they are good at pausing and reflecting—and I urge Members to support it.

[Mr Redwood]

I listened carefully to the shadow Minister’s speech, and it is quite true that the public mood is one of wishing to see both a just return on its forced investment in the banking industry and the banking sector—particularly the state-owned and subsidised banking sector—making its contribution to the recovery, in view of what happened in 2008 and 2009.

I remember in 2007 and 2008 being in dispute with the then Government, because I felt they were setting up a banking crisis that we could have avoided, but unfortunately my voice was not listened to; they did not take action on interest rates and money market conditions to prevent the crisis. When it started, I think I was the only MP who said, “Do not give all this money to the banks.” I felt it was wrong to buy shares in the banks and to support the bondholders. I thought we had a duty to the depositors and individuals who were tied up with the banks, but not to those who had financed and run the banks in those conditions. Unfortunately, the decision was made to embark on a massive subsidisation and share-buying programme, which the previous Government did. So we are where we are, and I think that we all agree that what we wish to do now is get the maximum value we can out of the banks that are subsidised or in state ownership, because that would make the public feel better about it. Surely, now is the time when those state-owned and state-subsidised banks should make their fuller contribution to the recovery, after their role in the recent crash.

[Chris Bryant]

I apologise in advance to the right hon. Gentleman if what I am about to say is an inaccurate representation of what he said in the past, but my memory is that he produced a report in which he argued there should be much less regulation of the financial services industry—in fact almost none—[Interruption.] He is shaking his head. I am sure he will be able to enlighten us by correcting me.

[Mr Redwood]

How many times will I have to deal with this idiotic canard that Labour dreamt up? The report was very clear: it said the then Government were not regulating cash and capital strongly enough, and it was a cash and capital problem that the banks had that led to the crisis. If the then Government had taken our advice, the banks would have been made to have more cash and capital at a much earlier stage of the cycle, so we would not have gone into the period of banking weakness during the credit crunch.

We also said that the mortgage regulation introduced by the then Labour Government was not fit for purpose, was useless and might as well be scrapped. Our case was proved extremely well, because it was the mortgage banks that crashed—the very banks that were the object of the extra regulation. The extra regulation was clearly regulating the wrong things. We were not against regulation: we said mortgage banks and other banks should be regulated, but it was vital to understand what the problem was. It was very clear in ’06 and ’07 that the problem was an excess of lending of poor quality. It was also very clear that the answer was more cash and capital, and that was what we recommended. It is a great pity that the then Government did not follow our advice.

Amendment of the Law

Chris Bryant Excerpts

Monday 28th March 2011 Commons Chamber

[Mr Pickles]

I suspect that when the hon. Gentleman was putting that question together in front of his shaving mirror, it seemed more of a tummy tickler than it actually was.

[Chris Bryant (Rhondda) (Lab)]

One of the big issues in many former mining constituencies is that a large proportion of people live in their own homes, but there is no work in the area any more. People do not want to make the decision to move to a place where there is work, but where they cannot afford the price of homes. How does the Secretary of State propose to get round that vicious circle, in which many people in my constituency and in the constituencies of many Opposition Members are stuck?

[Mr Pickles]

The hon. Gentleman will know that we have just put £30 million into the former coal homes area.

[Chris Bryant]

The former coal homes?

[Mr Pickles]

Into the former colliery areas. That £30 million is more than the hon. Gentleman’s party had put in. We will certainly do our best to ensure that there is sustainable development in that area.

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[Mr Pickles]

The local plan will have to reflect the presumption as well. It will be reflected in the national planning framework, which in turn will be reflected in the local plan. If a plan is ambiguous or out of date, that presumption will take effect, but there might be an existing plan that conforms to the presumption in favour of sustainable development. Members will now understand why planning is such fun.

Our planning reforms, like the new roles for local councils and entrepreneurs, are there to drive growth, just like the council tax freeze for hard-working families. They show that localism and economic growth go hand in hand. Those who think that the key to getting Britain growing again is for Whitehall to seize control should learn the lesson of history, which is that it repeats itself because no one was listening the first time round.

Let us compare two years, 1924 and 2009. There are many parallels. In 1924, Lenin is dead and Stalin is planning to take absolute power; John Logie Baird is demonstrating a prototype of his latest invention, the televisor; in New York, theatre audiences are getting their first sight of a dance called the Charlton—[Hon. Members: “Charleston!”] Charleston. I do beg your pardon. Also, house building in the UK reaches an all-time low.

[Chris Bryant]

Will the Secretary of State give way?

[Mr Pickles]

No.

In 2009, pleasingly, Lenin is still dead and the Soviet Union is no more; multi-channel TV is available in most homes; and “Strictly Come Dancing” becomes almost compulsory viewing. What is Labour’s contribution to this wave of nostalgia for the roaring twenties? A dance revival such as bringing back the Black Bottom? Introducing a flapper to speak from the Dispatch Box? No, a record fall in the number of new builds. The Labour party rails against the system and the machine, ups its target and achieves absolutely nothing. That is what central control brought us—growth constraint, innovations stifled and an economy needlessly held back. This is a positive Budget, a Budget for stability, balanced growth and above all fairness, and I commend it to the House.

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[Caroline Flint]

We were part of a global crisis that affected countries around Europe and the world, but it is interesting that before the international crisis hit, we had the second lowest debt of any G7 country. We had brought overall public sector net borrowing down, and the now Prime Minister and Chancellor committed themselves to Labour’s spending plans. In 13 years, we created 1.1 million enterprises, and in the past two years, which included our last year in government, the World Bank ranked the UK fourth in the world and first among European countries for the ease of doing business.

[Chris Bryant]

I am particularly glad that my right hon. Friend has reminded that lot over there on the Tory Benches that they fully supported Labour’s spending plans up until the end of 2008 and promised to spend the additional benefits of growth on the economy, which they never seem to remember. That lot on the Liberal Democrat Benches, when they were sitting over here on the Opposition Benches, urged even greater levels of spending, so we are not going to take any hypocrisy from them.

In addition, will my right hon. Friend remind that lot over there of one further piece of history? In 1924, George Lansbury—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. You have to be much shorter, Mr Bryant.

Amendment of the Law

Chris Bryant Excerpts

Wednesday 23rd March 2011 Commons Chamber

[Chris Bryant (Rhondda) (Lab)]

The Conservatives spend all their time suggesting that this is just a national problem. The hon. Gentleman cited the possibility of our debt being 71% of GDP, but in Germany the figure is 79%, in France it is 75%, in Italy it is 116% and in Japan it is 194%. These problems came to every country in the world, and my right hon. Friend the Member for Kirkcaldy and Cowdenbeath (Mr Brown) was not responsible for all of them.

[Joseph Johnson]

Markets can turn on a dime if they detect backsliding. Recovering lost confidence would require much bigger cuts to public spending than the credible ones that the Government have outlined. Evidence for that is in abundant supply in countries on the periphery of the eurozone. Despite the agreement on the post-2013 European stability mechanism, concerns about the underlying solvency of the most vulnerable countries—Portugal, Ireland and Greece—are growing.

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[Joseph Johnson]

Absolutely—their way of looking at our borrowing requirements is completely irresponsible. To think that we should pay more than £120 million a day in interest, which we are currently paying, is utterly absurd.

[Chris Bryant]

Incidentally, it is interesting to hear the hon. Member for North East Somerset (Jacob Rees-Mogg) condemn cavaliers. I thought he was one in the 17th century.

Many countries whose debt is a higher share of gross domestic product than the UK’s are not cutting anywhere near as fast as we are. Of all 29 major industrialised countries, only one is cutting faster than us: Greece.

[Joseph Johnson]

The hon. Gentleman may be a great economic expert, but he might find that the world’s foremost economists and international financial organisations, from the International Monetary Fund to the OECD—the entire gamut of respected economic thought—see this fiscal consolidation as necessary. There is no backsliding, which I applaud.

Before those interventions, I was saying that Portugal is moving ever closer to becoming the third eurozone periphery country to need a bail-out. Borrowing costs are again rising to a new euro-era high in Ireland, which desperately needs eurozone members at tomorrow’s summit to reach a political compromise on revised lending terms.

By contrast, Britain is a different story, thanks to the credible policies in the emergency Budget last June and the policies announced in October’s spending review. There is no sign whatever of any funding problems in the gilts market—quite the opposite—and we must prize that achievement. We have saved our triple A credit rating, which was under threat of downgrade in the last months of the previous Government, and kept our borrowing costs close to historic lows.

The coalition Government have earned the respect of the international capital markets and have their confidence, because the combination of a tight fiscal and a loose monetary policy remains the best chance of avoiding a sovereign debt crisis while ensuring acceptable increases in GDP. Britain simply could not for long run a budget deficit of 11% of GDP—the second highest in the OECD—without taking the unacceptable risk of losing the confidence of the bond markets. Almost a year on, the wisdom of taking decisive action to reduce the risk of sovereign debt crisis is obvious to all except perhaps Labour Members. Even Gavyn Davies, the Labour-supporting economist, conceded in yesterday’s Financial Times that getting the deficit down was a “defensible decision”.

A debt crisis would have been disastrous for growth and unemployment, as many European nations are now discovering. Furthermore, unlike those countries, Britain can, and is, using monetary and exchange rate policy to offset the fiscal tightening, as my right hon. Friend the Member for Wokingham said. I hope that that will keep the economy recovering.

As I have said, all manner of international bodies, from the IMF to the OECD, are unanimous in urging the Chancellor to stay the fiscal course that he has so consistently outlined for this country. Yes, real GDP growth may have dipped temporarily as consumers’ expenditure has been weakened, and today’s growth forecasts for 2011 from the Office for Budget Responsibility may be a little lower than we would have liked. However—