Oral Answers to Questions

Edward Miliband Excerpts

Wednesday 12th January 2011 Commons Chamber

[The Prime Minister]

I pay tribute to my hon. Friend and what he does to help drive the regeneration agenda in Gloucester. There are real opportunities now that the regional development agencies, which were unloved in so many parts of the country, are going and we are having stronger local enterprise partnerships. There is much more room for good local development, including in Gloucester.

[Edward Miliband (Doncaster North) (Lab)]

I join the Prime Minister in paying tribute to Corporal Steven Dunn from 216 Parachute Signal Squadron, Warrant Officer Class 2 Charles Wood from 23 Pioneer Regiment Royal Logistic Corps and Private Joseva Vatubua from the Argyll and Sutherland Highlanders, 5th Battalion The Royal Regiment of Scotland. We pay tribute to them for their heroism, commitment and dedication, and our hearts go out to their families and friends. I also join the Prime Minister in sending condolences to the Australian people for the floods that are affecting them.

In opposition, the Prime Minister said:

“Where the taxpayer owns a large stake in a bank we are saying that no employee should be paid a bonus of over £2,000”.

Can the Prime Minister update us on the progress in implementing that promise?

[The Prime Minister]

What I would say is this—[Interruption.] It was the last Government who bailed out the banks and asked for nothing in return. That is what happened. The reason we have difficulties with Royal Bank of Scotland this year is the completely inadequate contract that was negotiated by the Government whom the right hon. Gentleman supported. What we all want to see is the banks paying more in tax, and we will see that; we want to see the banks doing more lending, and we will see that; and we want to see bonuses cut, and we will see that. Perhaps he would now make a constructive suggestion.

[Edward Miliband]

The country is getting fed up with the Prime Minister’s pathetic excuses on the banks. He made a clear promise: no bank bonus over £2,000; it is still on the Conservative website. It is a promise broken.

The Prime Minister cannot answer the question on bankers’ bonuses: let us try him on the bankers’ tax. Can he explain to the British people why he thinks it is fair and reasonable, at a time when he is raising taxes on everyone else, to be cutting taxes this year on the banks?

[The Prime Minister]

We are not, is the simple answer. I know that the shadow Chancellor cannot really do the numbers, so there is no point Wallace asking Gromit about that one. Let me give the right hon. Gentleman the figures. Last year, the banks paid £18 billion in tax; this year, they are going to be paying £20 billion in tax. Their taxes are going up.

[Edward Miliband]

The Prime Minister just needs to look at page 91 of the Office for Budget Responsibility book, published in November, to see that Labour’s payroll tax on the banks raised £3.5 billion in addition to the corporation tax that they pay. His banking levy is raising just £1.2 billion. In anyone’s language, that is a tax cut for the banks. Why does the Prime Minister not just admit it?

[The Prime Minister]

I have given the right hon. Gentleman the numbers showing that the taxes are going up from £18 billion to £20 billion—now let me explain the numbers in terms of his bank bonus tax and our bank levy. Obviously he cannot get the numbers from the man sitting next to him, so let me give him the numbers. The bank bonus tax raised a net £2.3 billion, and the author of that tax, the former Chancellor, the right hon. Member for Edinburgh South West (Mr Darling), who is sitting on the Back Benches, says that you cannot go on introducing this tax year after year, and very sensible that is too. The bank levy will raise £2.5 billion each year once it is fully up and running—[Interruption.] Yes, £2.5 billion; even the shadow Chancellor can tell the right hon. Gentleman that £2.5 billion is more than £2.3 billion. And with the magic of addition and a bank levy every year, which we supported and he opposed—they said “Don’t do it”, remember that?—we will raise £9 billion compared with his £2.3 billion. Even the shadow Chancellor can work out that 9 is bigger than 2.3.

[Edward Miliband]

That is as close as we get to an admission from the Prime Minister that he is cutting taxes on the banks this year. The OBR is very clear that Labour’s bank bonus tax raised £3.5 billion; he will be raising £1.2 billion from the bankers’ levy.

The Prime Minister cannot answer on bonuses and he cannot answer on taxes: now let us talk about transparency. On this, I think he should listen to the Business Secretary. We know that the Business Secretary is not a man to mess with; he told his surgery before Christmas that he had a nuclear weapon in his pocket and he was not afraid to use it, so we should listen to him. He said:

“If you keep people in the dark, you grow poisonous fungus.”

On this occasion, he was not talking about the Chancellor of the Exchequer—he was talking about the bankers. Why does the Prime Minister not listen to his Business Secretary and implement our proposal for the disclosure of all bonuses over £1 million? It is on the statute book and ready to go—why does he not just get on with it?

[The Prime Minister]

That was such a long question that I think it is the right hon. Gentleman who should be thinking about the television career, and he should get his brother to run the Labour party—that is probably a better way round. [Interruption.] Look, we want greater transparency, but let me put this to him: he had 13 years to put these rules in place—why did he never get round to it?

[Edward Miliband]

We know that the Prime Minister has no answer when he starts asking me the questions. Why does he not answer the question on transparency? Let me tell the Prime Minister, he is now in the absurd position of being more of a defender of the banks than even the banks themselves. Stephen Hester, the chief executive of the Royal Bank of Scotland, went to the Treasury Select Committee before Christmas and said,

“If the Walker Report”

—a report that the Labour Government commissioned, which made the recommendation—

“were to be implemented for the whole industry, I’m not arguing against it. I have no great problem with the issue of transparency and would have no difficulty.”

The Prime Minister has had eight months to hold the banks to account—[Interruption.] He has had eight months to hold them to account. When is he going to start?

[The Prime Minister]

I will take a lecture from a lot of people on how to regulate banks, but I will not take one from the Opposition, who let them get away with absolute murder. Who set up the bank regulation that completely failed? Who bailed out the banks and got nothing in return? Who agreed a Royal Bank of Scotland contract with nothing in it about bonuses for this year? By the way, the right hon. Gentleman was at the Treasury all the way through that. He was there when the previous Government knighted Fred Goodwin. [Hon. Members: “Ah!”] Yes—wait for it—they knighted him for services to banking and sent him away with a £70 million pay-off. That is why no one will ever trust Labour on banking or on the economy again.

[Edward Miliband]

What was the right hon. Gentleman saying when all that was going on? He was saying, “Deregulate the banks more.” He even put the Vulcan in charge of his policy on the banks—planet Redwood and planet Cameron. That is the truth; there we have it. Life in 2011 on planet Cameron: one rule for the banks, another for everybody else. Is it any wonder, as we now know, what his Ministers say in private? In the privacy of his surgery, his Health Minister said:

“I don’t want you to trust David Cameron…he has values that I don’t share.”

The Health Minister knows that the Prime Minister is out of touch, the House knows that he is out of touch and now, because of his failure on the banks, the whole country knows that he is out of touch.

[The Prime Minister]

I think the right hon. Gentleman knows that this just is not working. We have ended up with a shadow Chancellor who cannot count, and a Labour leader who does not count. When the right hon. Gentleman was in the Treasury, what did he do when the Government set up the regulatory system that failed? He did nothing. What did he do when they paid out £11 billion in bonuses to bankers? He did nothing. What did he do when they said that they had abolished boom and bust? He did nothing. He was the nothing man at the Treasury and he is the nothing man now that he is trying to run the Labour party.