Oral Answers to Questions

Edward Miliband Excerpts

Wednesday 19th June 2013 Commons Chamber

[Edward Miliband (Doncaster North) (Lab)]

Following the Parliamentary Commission on Banking, can the Prime Minister confirm that he supports its important recommendations on bonuses and criminal penalties, and that he will use the banking Bill to implement them?

[The Prime Minister]

Yes, I do support both those measures. Obviously we need to take time to read this excellent report, and I commend my hon. Friend the Member for Chichester (Mr Tyrie) for the excellent job that he has done. Penalising, including with criminal penalties against bankers who behave irresponsibly—I say yes. Also, making sure that for banks in receipt of taxpayers’ money we can claw back and have a ban on bonuses—I say yes too.

[Edward Miliband]

On the specific issue of criminal penalties, I am glad that the Prime Minister supports the proposal, but will he confirm for the House on this important issue that the Government will put down the appropriate amendments to the banking Bill, which is currently going through Parliament, to make sure that this gets on the statute book as soon as possible?

[The Prime Minister]

We will be using that Bill to take these important steps. The key thing is that we have the opportunity, first, because we said there should be a parliamentary inquiry that could be done rapidly, rather than a public inquiry, which the right hon. Gentleman supported. If we had done that, we would just about be getting going with the inquiry. Instead, we have a good inquiry and good results, and we can have strong legislation too.

[Edward Miliband]

Just to be clear about this, if the Government do not put down the amendments on criminal penalties in the banking Bill, we will and we will make sure they happen.

The Prime Minister praises the Parliamentary Commission on Banking, but let us turn to one of its recommendations from last year’s report. It said that the Government should legislate for a general power to break up the banks, breaking up high-risk casino banking from high street banks. We think it is right, the commission thinks it is right, but the Government are so far refusing to implement—[Interruption.] The part-time Chancellor is trying to give some advice to the Prime Minister. We think it is right and the commission thinks it is right, but the Government have so far refused to implement that recommendation. Why are the Government not doing it?

[The Prime Minister]

Let me say first that I would rather listen to my Chancellor than listen to the right hon. Gentleman’s neighbour the shadow Chancellor. We remember his advice. Mortgages of 125% from Northern Rock: that is fine. A knighthood for Fred Goodwin: that is fine. The biggest banking bust in British history: that is fine. The shadow Chancellor was the City Minister when all that went on, and it is this Government who are clearing up the mess. As I have said, we would not have these results without the excellent inquiry that was commissioned by this Government, and we would not be able to legislate if we did not have the excellent banking Bill provided by this Government.

As for the right hon. Gentleman’s question, we are putting a ring fence around retail banks, something which, in 13 years of a Labour Government, the right hon. Gentleman and the shadow Chancellor never got round to doing, although they were both in the Treasury.

[Edward Miliband]

We are really not going to take lectures from the guy who was the adviser on Black Wednesday in 1992.

The Prime Minister had no answer to the question about retail and investment banking. Perhaps he can do better on the issue of bonuses and the banks. Last week’s figures from the Office for National Statistics showed that in April bonuses in business and financial services were 64% higher than they were a year ago. Why does the Prime Minister think that is?

[The Prime Minister]

Bank bonuses are about a fifth of what they were when the right hon. Gentleman was in the Treasury. They have been going down, not up.

If the right hon. Gentleman wants to discuss the issue of banking, perhaps he will reflect on the fact that the Labour Government’s other City Minister, Lord Myners, had this to say today: “The Government of which I was a member certainly has to take some culpability for the fact that the regulatory oversight of the banks was not as effective as it should be.” He went on: “To do otherwise would be to pull the wool over the eyes of the electorate.” Perhaps the next time the right hon. Gentleman stands at the Dispatch Box, he will apologise for the mess that Labour made.

[Edward Miliband]

The Prime Minister is asking questions, Mr. Speaker. He is preparing for opposition.

Let us talk about what people were saying in 2008. We all remember the speeches, do we not, Mr. Speaker? Let me quote from “David Cameron: A Conservative Economic Strategy”. In March 2008, the Prime Minister said:

“As a free-marketeer by conviction, it will not surprise you to hear me say that a significant part of”

the problems of the last decade

“has been…too much regulation”.

There we have it: the Prime Minister wanted less regulation of the City.

Let us return to the question about bonuses. The fact is that bonuses in the City were up by 64% in April—and why? Because the Prime Minister has cut the top rate of income tax from 50p to 45p. People took their bonuses in April, and were given a massive tax cut as a result. Will the Prime Minister confirm that 64% figure, and the fact that people are being given a massive tax cut as a result of his decision?

[The Prime Minister]

First, let me give the right hon. Gentleman the figures. In 2012-13, City bonuses will be 85% lower than they were in 2007 and 2008, when those two were advising, or working in, the last Government, and had responsibility for regulating the City. It does not matter what the right hon. Gentleman says; he cannot get over the fact that they presided over boom and bust, the collapse of the banks and the failure to regulate. We remember what they said in 2008: they said “No more boom and bust” . They referred to

“ a… golden age for the City”.

That is what they said. They cannot hide their dreadful record, and they ought to start with an apology.

[Edward Miliband]

The whole House will have noted that the Prime Minister cannot deny the figures that I read out to him. He does not even know the facts. Bonuses are up so that people can take advantage of his massive cuts. Here is the truth. For all his tough talk, the reality is that the Prime Minister is dragging his feet on banking reform. Business lending is still falling, bonuses are rising, and while ordinary families are suffering, he is giving a massive tax cut to the bankers.

[The Prime Minister]

Just another display of extraordinary weakness! Labour had 13 years to sort out this problem and did absolutely nothing. It is this Government who have introduced the banking Bill, this Government who have introduced the ring fence, this Government who have put the Bank of England in charge of regulating credit in our economy. Instead, what we ought to be getting from the right hon. Gentleman is an apology and a thank you to us for clearing up the mess they left.