Cost of Living

Guy Opperman Excerpts

Tuesday 16th May 2023 Commons Chamber

[The Minister for Employment (Guy Opperman)]

As parliamentarians, we must be democrats first and foremost. We must accept the democratic decision of the British people in the EU referendum, and we must accept the decision of the Scottish people in the independence referendum; I wish the Scottish National party accepted that. As the Member of Parliament for Hexham, which goes to Carter Bar and the border, I was proud to campaign from Aberdeen to Annan, from the Borders to Edinburgh, to make the case for the Union. I believe we should continue to do so in this place.

It is unquestionably the case that the Government fully appreciate, and are assessing and assisting with, the pressures that households face across the United Kingdom. It is quite clear that these derive from the challenge of high inflation, the impact of covid and the impact of global issues, most particularly Putin’s invasion of Ukraine. That is why we continue to take extensive action to help households. In 2023-24, we have increased benefit rates and state pensions by 10.1% and we will spend around £276 billion through welfare support in Great Britain. We have never spent more in this country on low-income families, the disabled or pensioners.

In respect of the cost of living, the steps we have taken over the last year show that this is a Government that will always protect the most vulnerable. The total support package we have provided to help with rising bills is worth over £94 billion across 2022-23 and 2023-24—that is more than £3,300 per UK household on average. Included in that are the cost of living payments made to over 8 million low-income households, around 6 million disabled people and over 8 million pensioner households last year. There has been a 170% increase in applications for pension credit.

The Government paid out £37 billion in the summer of 2022 and billions in the autumn of 2022, and the Department for Work and Pensions has made cost of living payments worth £2.2 billion so far this year. This year, more than 8 million households will get additional payments of up to £900. Over 99% of eligible households on a DWP means-tested benefit have now received their first cost of living payment during 2023-24 of £301. Over 6 million people across the UK on eligible disability benefits will receive a further £150 disability cost of living payment this summer to help with additional costs. More than 8 million pensioner households across the UK will receive an additional £300 cost of living payment this winter. We have also provided ongoing support with the cost of living through the energy price guarantee, which continues for the summer.

We believe strongly that work is the best way out of poverty, and we have the opportunity through our jobcentres up and down the country to assist people and provide support for them. Whether that is youth hubs for young people, the 50Plus offer, the in-work progression or the massive increase in disability employment, we are progressing and supporting those people who are in work to get better jobs and a better opportunity for the way ahead. That is why we are extending the support our jobcentres offer to low-paid workers so that they can increase their hours and move into better paid, higher-quality jobs.

For those on universal credit, we are increasing the childcare cap to £951 for one child and £1,630 for two or more children. We are paying childcare costs up front when parents move into paid work or increase their hours. We are further supporting working people with the largest ever increase to the national living wage—an increase of 9.7% to £10.42 an hour from this April. That represents an increase of over £1,600 to the annual earnings of a full-time worker.

There has been much criticism of the UK economy, but we have to bear it in mind that the UK has the fourth highest employment rate in the G7—higher than the US, France and Italy. Our unemployment rate remains low at 3.9%. We have more people in payroll employment than before the pandemic, at 30 million. A substantial package of labour market interventions, part of which I have outlined, was announced at the spring Budget. That was a huge boost to our efforts. We see youth unemployment—

[Alan Brown]

On that point, will the Minister give way?

[Guy Opperman]

As the hon. Gentleman’s colleague said, probably not.

Our record on youth employment is the second best in the G7, our economic inactivity is back at 2018 levels and the number of vacancies has dropped for 10 quarters in a row. We heard much from the SNP during the debate, but there was no talk whatsoever about luxury camper vans worth £100,000, missing auditors or ferries to the Western Isles that do not exist. Presumably those ferries have both the auditors and the camper vans on them. There was no talk of the comment from the Children and Young People’s Commissioner for Scotland that the SNP Government had failed their people; no talk of the 16 years of failure on police, education and health; and no talk of their total abandonment of the oil and gas sector.

We are discussing the cost of living, but the SNP would rather import oil and gas from overseas than support more than 100,000 jobs in the north-east of Scotland and support the businesses that we have there. The truth is that it is in partnership with the Greens, who are closely related to Extinction Rebellion and have stated explicitly that they are anti-economic growth. Why would we import oil and gas when we can address the cost of living with something that is home-grown and supports more than 100,000 in the north-east of Scotland? That is what this Government are doing and what my hon. Friend the Member for Moray (Douglas Ross) is doing, and we should support him wholeheartedly.

We have just passed the 400th anniversary of the publication of Shakespeare’s “Macbeth”—a tale, interestingly, of a husband and wife in Scotland whose misdemeanours finally catch up with them. I am absolutely sure that that has no relevance whatsoever to the present day. I am absolutely sure that the discussion of independence is always

“Tomorrow, and tomorrow, and tomorrow”.

I am absolutely sure that no one in the Chamber today is

“full of sound and fury,

Signifying nothing.”

However, I am absolutely certain that this Government are assisting on an ongoing basis, and I strongly commend the Prime Minister’s amendment to the House.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

Oral Answers to Questions

Guy Opperman Excerpts

Tuesday 11th October 2022 Commons Chamber

[Kwasi Kwarteng]

As far as I am concerned—I speak to investors regularly about this—the OBR is an institution that commands wide respect, not only in the UK but across the world. Its independence, to me, is absolutely sacrosanct.

[Guy Opperman (Hexham) (Con)]

The energy price guarantee is an outstanding part of the growth plan. It is key, but far too few businesses and households know about it. May I urge the Chancellor to have a nationwide mail-out campaign, coupled with the Government taking the lead on the reduction of energy in all public buildings, as Germany and other countries are doing? That would have the twin benefits of saving consumers money and reducing taxpayer subsidies.

[Kwasi Kwarteng]

My hon. Friend makes an excellent suggestion. Obviously I am very careful not to make unfunded spending commitments on the Floor of the House, but his suggestion is very well made and we should look into it.

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (Second sitting)

Guy Opperman Excerpts

Committee stage
Tuesday 15th June 2021 Public Bill Committees

[The Chair]

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

[Peter Grant]

[Guy Opperman]

[The Chair]

[Matt Rodda]

[Guy Opperman]

[Matt Rodda]

[Guy Opperman]

[Matt Rodda]

Compensation (London Capital & Finance plc and Fraud Compensation Fund) Bill (Second sitting)

Guy Opperman Excerpts

Tuesday 15th June 2021 Public Bill Committees

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I gather that we have a possible vote in the House, so I will attempt my entire response in 10 minutes. Before I do so, it is right that, on behalf of the entire Committee, I thank you for chairing the Committee, Ms Ghani. As the former ports and shipping Minister, and in a month when we celebrate the first female Royal Navy captain, some might argue that you are a well-qualified captain to keep what is—let us be honest—a motley crew in order. If you run for Speaker, Ms Ghani, I will definitely be supporting you.

Let me discuss what clause 2 does and does not do. It creates a power to make a loan to the board of the Pension Protection Fund, following the decision of 6 November 2020 in the case of the PPF v. Dalriada. It achieves that by inserting a new section into the Pensions Act 2004 to provide the Secretary of State with a power to loan money to the board of the PPF.

I think it is fair to point out to the Committee that the clause deals with matters that are predominantly––almost entirely––to do with 2010 to 2014. Many would wish to make this a case about pension freedoms, when in fact pension freedoms post-dated these matters. It is clearly a serious and important matter, and, following a court decision, the Government have accepted the entirety of that decision.

The practical reality is that the Fraud Compensation Fund has assets of £26.2 million, and the potential liability arising from the court judgment is £350 million. I accept that points have been made in respect of how the loan is to be repaid in the longer term and I will address that, but I shall now turn briefly to the amendments.

Amendment 3 seeks an impact assessment. With great respect to the Members who tabled that request, it is utterly unnecessary. It is, in fact, precluded by the decision of the House on section 22 of the Small Business, Enterprise and Employment Act 2015, of which I am sure Members are acutely aware. It states that impact assessments are not required in respect of levies or other such charges in these particular circumstances.

Secondly, the clause is implementing a court judgment.

[Peter Grant]

Will the Minister clarify his last comment? Did he say that impact assessments are not required or that they are not permitted? Surely, if they are not required, we can still ask for one if we think it would be useful.

[Guy Opperman]

That is a very fair question that I shall attempt to answer while I am on my feet, but I believe that it is not required. Section 22 of the 2015 Act excludes impact from the definition of regulatory provision, so I believe that it is an exclusion rather than a requirement. If I am wrong in any way, I shall write to the hon. Gentleman and correct myself. I may be corrected while I am on my feet, although in the brave new world of covid, that is quite difficult, as I am sure that he understands.

Clearly, if we were to do an impact assessment at this time, it would fundamentally delay the implementation of payment to members, and the blunt truth is that the PPF will run out of money by October if we do not progress this legislation. The levy increase will be consulted on post the passing of this Bill. It will need consultation, regulations and debate in the usual way.

Amendment 5 would also delay the progress of this matter. The Government will respond to the Work and Pensions Committee, to which I gave detailed evidence, before the end of the summer term. The full response of the Government in respect of all matters relating to such scams will be made before the end of term. We are already progressing Project Bloom and there is the work of the Money and Pensions Service that was introduced by my hon. Friend the Economic Secretary to the Treasury in the previous Act that we worked on. We have produced section 125 of the Pension Schemes Act 2021, which Her Majesty signed on the dotted line in early February, and the consequential transfer regulations that we have consulted on over the past month to ensure that pension scams are prevented on an ongoing basis.

I have been asked to address other matters. It is clear that Ministers are engaging with various organisations, including Google and Facebook. The two of us have made our views very clear to those organisations about how they should regulate themselves. I agree that Pension Wise should be used more but, with great respect, I disagree with the Chair of the Select Committee’s proposal for the many good reasons that I outlined in the debates on Report and Third Reading of the 2021 Act. Clearly the work that we are doing jointly with the Treasury and other organisations, including the FCA, on stronger nudges towards using Pension Wise and other things will make a massive difference.

On amendment 6, there is already an annual report. In true Chamberlain style, I have it here in my hand: the annual report of the Pension Protection Fund, which is published every July. I know, Ms Ghani, that you will have read the most recent version, and will be looking forward with bated breath to the July 2021 report, which will specifically address the issues whose importance today’s witness made very clear.

In those circumstances, I invite hon. Members not to press their amendments.

[The Chair]

Let us try to ensure that we get through this portion of business before the Division. The Opposition spokesperson may of course respond, but let us keep it brief.

[Matt Rodda]

I am grateful to the Minister for his response. I feel that he is being somewhat generous in his description of the Government’s assessment of this problem and the level of response. I urge him to redouble his efforts and to focus on some of these points in further detail.

I think that the hon. Member for Glenrothes is right to draw attention to the subtle legal difference on the issue of the impact assessment. Surely, given the scale of what is going on, it would be wise to carry out an impact assessment. I appreciate the pressure of time, but perhaps with the considerable resources of DWP, which has the largest staff quota of any Department and a very able group of civil servants, it would be possible to carry out an impact assessment on a rapid turnaround, given the scale of what we are talking about and, indeed, the problems of the sector as a whole.

On the ongoing consultation and the possibility of reviews in this area, will the Minister agree to meet me and the not-for-profit providers to explore the particular issues affecting them?

[Guy Opperman]

I will, of course, agree to meet them. I already meet NEST and the People’s Pension regularly, and they have made a very good pitch for a reduced levy. It is already a reduced levy, as I am sure the hon. Gentleman is aware, and there is already a 0.75% cap, but of course I am looking forward to meeting them as part of the ongoing consultation.[Official Report, Vol. 697. 17 June 2021, c. 3MC.]

[Matt Rodda]

I am very grateful to the Minister and put on the record my thanks to him for offering that meeting. I look forward to seeing him and discussing the matter.

On amendment 5, the Minister mentioned the regulations in the Pension Schemes Act 2021, but will he write to me to discuss some of the ways in which the specific parts of the regulations relate to this issue? He has been reported in the media as suggesting that it might be wise to consider pension scams in the online harms Bill. Perhaps he will comment on that now or write to me separately, because we would like to work constructively with the Government on this matter. I appreciate that online harms are a huge and wide-ranging issue, and I have a constituency interest in violent crime in respect of a tragic incident in Reading.

[Guy Opperman]

I would be happy to write to the hon. Gentleman. He can read in detail what I said in The Times on both occasions, and that is pretty much all I can say on that matter.

[Matt Rodda]

I thank the Minister for his candour and for offering me a cutting from The Times, which is a fine newspaper.

Finally, on the PPF annual report, the issue is that while these documents are very worthy, and we should all read them, there is a delay. I urge the Minister to consider the need to reassure organisations in the sector, pension savers and pensioners themselves in the near term, rather than our having to wait well into 2022 before the 2021 annual report is available.

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Bill to be reported, without amendment.

Financial Guidance and Claims Bill [Lords]

Guy Opperman Excerpts

3rd reading: House of Commons & Report: 3rd sitting: House of Commons
Tuesday 24th April 2018 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I can now inform the House that I have completed certification of the Bill, as required by the Standing Order. Clauses 29 and 31 of, and schedule 4 to, the Bill, as amended, relate exclusively to England and Wales and are within legislative competence. Copies of the final certificate will be made available in the Vote Office and on the parliamentary website.

Under Standing Order No. 83M, a consent motion is therefore required for the Bill to proceed. Copies of the motion are now available. Does the Minister intend to move the consent motion?

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

indicated assent.

The House forthwith resolved itself into the Legislative Grand Committee (England and Wales) (Standing Order No. 83M).

[Dame Rosie Winterton in the Chair]

Financial Guidance and Claims Bill [ Lords ] (Third sitting)

Guy Opperman Excerpts

Tuesday 6th February 2018 Public Bill Committees

[John Glen]

Clause 27 deals with the application and enforcement of the interim fee cap before the transfer of claims management regulation to the FCA. It states that the cap will be implemented by the claims management regulation unit and legal services regulators in England and Wales. It also defines the first interim period as the period beginning with the day the cap comes into force, two months after Royal Assent, until the day before regulation transfers to the FCA. It is clear that the clause plays an integral part in establishing the interim fee cap.

Question put and agreed to.

Clause 27 accordingly ordered to stand part of the Bill.

Clause 28 ordered to stand part of the Bill.

Clause 29

Extent

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

I beg to move amendment 7, in clause 29, page 25, line 32, leave out from beginning to “extends” and insert “Part 1, other than the provisions mentioned in subsections (2) to (3B),”

This amendment makes a minor drafting change, restructuring the extent clause, in consequence of the changes to that clause made by Amendment 8 and the amendments relating to Part 2.

[The Chair]

With this it will be convenient to discuss the following:

Government amendments 8 to 16.

Clause stand part.

Clause 30 stand part.

[Guy Opperman]

It is pleasure to serve under your chairmanship once again, Mr Rosindell. Amendments 7 to 16 are consequential to main amendments that the Committee has already made. Clause 30 allows the provisions of the Bill to be enacted at the appropriate times, some in relation to part 1 and some to part 2.

--- Later in debate ---

[Gareth Thomas]

I am extremely grateful to you, Mr Rosindell, because you made your intervention just as I was drawing my remarks to an end. Given your great act of charity, I have made the three points I wanted to make, and I now look to the Minister to address my concerns.

[Guy Opperman]

That was undoubtedly the most ingenious way of creating a submission. I have to confess that, when I looked at the commencement order that I have to speak to, I did not expect to have to answer three specific points, but I hope I can give the hon. Gentleman a detailed answer. I assure him that if I fail in that task, I will give him a definitive answer next Monday, when we will meet to discuss these matters.

Let me take the hon. Gentleman’s points in reverse order. BrightHouse will be covered by the levy for the single financial guidance body. I believe that I will be able to give him more detail when I see him in 10 days’ time.

The hon. Gentleman will know that I founded and built up a credit union. I think I am the only MP to have been mad enough to do so—the grey hair I am rapidly acquiring is due to that mad endeavour, of which I am extremely proud. I am no longer specifically involved in it, but both I and my hon. Friend the Member for Salisbury are passionately committed to credit unions. We will review the nature of credit unions and how they are provided for statutorily under the Credit Unions Act 1979. I am happy to discuss that with the hon. Gentleman separately.

Let me make three points on access to data. First, the Money Advice Service already performs that service by creating a data bank and an information process by which it can judge the way ahead. Secondly, clause 18 specifically addresses requirements for the disclosure and interaction of data between the various bodies to ensure that the point the hon. Gentleman raised is addressed. Thirdly, with regard to the Bill as a whole, FCA work is also going on to obtain a quarterly dataset. Both the FCA and the Money Advice Service are doing that. I will happily reply in more detail to the three points that he rightly, and very ingeniously, put to me.

[Gareth Thomas]

I am grateful to the Minister for his generous response. Perhaps he would be willing to look kindly on a letter setting out some of the concerns about the dataset that is currently provided. I gently suggest that Ministers might engage with UK Finance to encourage the release of further data to help make that a more useful exercise.

[Guy Opperman]

I would be delighted to receive such a letter. I commend the Government amendments to the Committee.

Amendment 7 agreed to.

Amendments made: 8, in clause 29, page 25, line 37, at end insert—

“(3A) In section (Occupational pension schemes: requirements to recommend guidance etc)—

(a) subsections (1) to (5) extend to England and Wales and Scotland;

(b) subsections (6) to (9) extend to Northern Ireland.

(3B) Paragraph 25 of Schedule 3 extends to England and Wales and Scotland.”

New subsection (3A) updates the extent clause so that the amendments to the Pensions Schemes Act 1993 in NC2 extend only to England and Wales and Scotland and the amendments to the Pension Schemes (Northern Ireland) Act 1993 extend only to Northern Ireland. New subsection (3B) contains text previously in subsection (6) in consequence of restructuring this clause.

Amendment 9, in clause 29, page 25, line 38, leave out subsections (4) and (5) and insert—

“(4) Part 2, other than the provisions mentioned in subsections (5) and (5A), extends to England and Wales and Scotland.

(5) The following provisions extend to England and Wales—

(a) section24(12) and Schedule4;

(b) section27;

(c) section (PPI claims: interim restriction on charges imposed by legal practitioners after transfer of regulation to FCA).

(5A) Section (Cold calling about claims management services) extends to England and Wales, Scotland and Northern Ireland.”

This amends the extent clause, so that the new clause inserted by NC3 extends to England and Wales only, and the new clause inserted by NC6 extends to England and Wales, Scotland and Northern Ireland.

Amendment 10, in clause 29, page 25, line 42, leave out subsection (6) and insert—

“( ) This Part extends to England and Wales, Scotland and Northern Ireland.” —(Guy Opperman.)

This amendment contains a minor drafting change consequential upon the restructuring of the extent clause.

Clause 29, as amended, ordered to stand part of the Bill.

Clause 30

Commencement

Amendments made: 11, in clause 30, page 26, line 13, at end insert—

“(1A) Subsections (6) to (9) of section (Occupational pension schemes: requirements to recommend guidance etc) come into force on a day appointed by order made by the Department for Communities in Northern Ireland.

(1B) An order under subsection (1A) may make—

(a) transitional, transitory and saving provision in connection with the coming into force of any provision in section (Occupational pension schemes: requirements to recommend guidance etc)(6) to (9);

(b) incidental and supplementary provision, and

(c) different provision for different purposes,

and the power to make such an order is exercisable by statutory rule for the purposes of the Statutory Rules (Northern Ireland) Order 1979 (S.I. 1979/1573 (N.I. 12)).”

This amendment gives the power to bring into force the provisions amending the Pension Schemes (Northern Ireland) Act 1993 in the new clause inserted by NC2 to the Department for Communities in Northern Ireland.

Amendment 12, in clause 30, page 26, line 14, leave out “28” and insert “(PPI claims: interim restriction on charges imposed by legal practitioners after transfer of regulation to FCA)”

This amends the commencement clause, so that the new clause inserted by NC3 comes into force 2 months after Royal Assent.

Amendment 13, in clause 30, page 26, line 21, at end insert “except section (Occupational pension schemes: requirements to recommend guidance etc) (6) to (9)”

This amendment is consequential on amendment 11.

Amendment 14, in clause 30, page 26, line 29, at end insert “, and

(ii) section (Cold calling about claims management services)”

This amends the commencement clause to provide for NC6 about cold calling in relation to claims management services to be brought into force on a day appointed in regulations made by the Secretary of State.

Amendment 15, in clause 30, page 26, line 31, at end insert “, other than section (Cold calling about claims management services)”

This amendment is consequential on amendment 14.

Amendment 16, in clause 30, page 26, line 31, at end insert—

“( ) The Treasury must obtain the consent of the Lord Chancellor before making regulations under subsection (3) or (5) in relation to section (Legal services regulators’ rules: charges for claims management services).”—(Guy Opperman.)

This amendment requires the Treasury to obtain the consent of the Lord Chancellor before making regulations for the commencement of the new clause inserted by amendment NC4.

Clause 30, as amended, ordered to stand part of the Bill.

--- Later in debate ---

Short Title

[Guy Opperman]

I beg to move amendment 17, in clause 31, page 26, line 34, leave out subsection (2).

This amendment removes the privilege amendment inserted by the Lords.

[The Chair]

With this it will be convenient to discuss clause stand part.

[Guy Opperman]

The amendment is a minor change that removes the privilege amendment inserted in the House of Lords. Privilege amendments are inserted to acknowledge that it is the privilege of the House of Commons to control charges on the people or on public funds. Its removal is a formality.

Amendment 17 agreed to.

Clause 31, as amended, ordered to stand part of the Bill.

New Clause 1

Personal pension schemes: requirements to recommend guidance etc

“(1) Section 137FB of the Financial Services and Markets Act 2000 (FCA general rules: disclosure of information about the availability of pensions guidance) is amended as follows.

(2) After subsection (1), insert—

“(1A) The FCA must also make general rules requiring the trustees or managers of a relevant pension scheme to take the steps mentioned in subsections (1B) and (1C) in relation to an application from a member or survivor—

(a) to transfer any rights accrued under the scheme, or

(b) to start receiving benefits provided by the scheme.

(1B) As part of the application process, the trustees or managers must ask the member or survivor whether they have received appropriate pensions guidance or appropriate independent financial advice.

(1C) In a case where the member or survivor indicates that they have not received appropriate pensions guidance or appropriate independent financial advice, the trustees or managers must also—

(a) recommend that the member or survivor seeks such guidance or advice, and

(b) ask the member or survivor whether—

(i) they wish to wait until they have received such guidance or advice before deciding whether to proceed with the application, or

(ii) they wish to proceed with the application without having received it.

(1D) The rules may—

(a) specify what constitutes appropriate pensions guidance and appropriate independent financial advice;

(b) make further provision about how the trustees or managers must comply with the duties in subsections (1B) and (1C) (such as provision about methods of communication and time limits);

(c) specify what the duties of the trustees or managers are in the situation where a member or survivor does not respond to a question mentioned in subsection (1B) or (1C)(b);

(d) provide for exceptions to the duties in subsections (1B) and (1C) in specified cases.”

(3) In subsection (2), for “this section” substitute “subsection (1)”.

(4) After subsection (2) insert—

“(2A) Before the FCA publishes a draft of any rules to be made by virtue of subsection (1A), it must consult—

(a) the Secretary of State, and

(b) the single financial guidance body.”

(5) In subsection (3), for “the rules” substitute “rules to be made by virtue of subsection (1)”.

(6) After subsection (3) insert—

“(3A) In determining what provision to include in rules to be made by virtue of subsection (1A), the FCA must have regard to any regulations that are for the time being in force under section 113B of the Pension Schemes Act 1993 (occupational pension schemes: requirements to recommend guidance etc).”

(7) In subsection (4), for the definition of “pensions guidance” substitute—

““pensions guidance” means information or guidance provided by any person in pursuance of the requirements mentioned in section5 of the Financial Guidance and Claims Act 2018 (information etc about flexible benefits under pension schemes);”.” —(Guy Opperman.)

This new clause requires the FCA to make rules requiring trustees or managers of personal and stakeholder pension schemes to check whether members have either received guidance or advice or have opted out of receiving it before accessing or transferring their pension assets. It also makes consequential amendments to FSMA 2000. It would be inserted after clause 18.

Brought up, read the First and Second time, and added to the Bill.

New Clause 2

Occupational pension schemes: requirements to recommend guidance etc

“(1) The Pension Schemes Act 1993 is amended as set out in subsections (2) to (5).

(2) After section 113A insert—

“113B Occupational pension schemes: requirements to recommend guidance etc

(1) The Secretary of State must make regulations requiring the trustees or managers of an occupational pension scheme to take the steps mentioned in subsections (2) and (3) in relation to an application from a relevant beneficiary—

(a) to transfer any rights accrued under the scheme, or

(b) to start receiving benefits provided by the scheme.

(2) As part of the application process, the trustees or managers must ask the beneficiary whether they have received appropriate pensions guidance or appropriate independent financial advice.

(3) In a case where the beneficiary indicates that they have not received appropriate pensions guidance or appropriate independent financial advice, the trustees or managers must also—

(a) recommend that the beneficiary seeks such guidance or advice, and

(b) ask the beneficiary whether—

(i) they wish to wait until they have received such guidance or advice before deciding whether to proceed with the application, or

(ii) they wish to proceed with the application without having received it.

(4) The regulations may—

(a) specify what constitutes appropriate pensions guidance and appropriate independent financial advice;

(b) make further provision about how the trustees or managers must comply with the duties in subsections (2) and (3) (such as provision about methods of communication and time limits);

(c) specify what the duties of the trustees or managers are in the situation where a beneficiary does not respond to a question mentioned in subsection (2) or (3)(b);

(d) provide for exceptions to the duties in subsections (2) and (3) in specified cases;

(e) provide for the Secretary of State or another prescribed person to issue guidance for the purposes of this section, to which trustees or managers must have regard in complying with their duties under the regulations.

(5) In determining what provision to include in the regulations, the Secretary of State must have regard to any rules that are for the time being in force under section 137FB(1A) of the Financial Services and Markets Act 2000.

(6) In this section—

“relevant beneficiary”, in relation to a pension scheme, means—

(a) a member of the scheme, or

(b) another person of a prescribed description,

who has a right or entitlement to flexible benefits under the scheme;

“flexible benefits” has the meaning given by section 74 of the Pension Schemes Act 2015;

“pensions guidance” means information or guidance provided by any person in pursuance of the requirements mentioned in section5 of the Financial Guidance and Claims Act 2018 (information etc about flexible benefits under pension schemes).”

(3) In section 115 (powers as respects failure to comply with information requirements), in subsection (1), after “113” insert “, 113B”.

(4) In section 182(5) (power of Treasury to direct that regulation-making powers are exercisable only in conjunction with them), after “except” insert “regulations under section 113B or”.

(5) In section 185(2) (consultations about other regulations: exceptions), after paragraph (c) insert—

“(ca) regulations under section 113B; or”.

(6) The Pension Schemes (Northern Ireland) Act 1993 is amended as set out in subsections (7) to (9).

(7) After section 109A insert—

“109B Occupational pension schemes: requirements to recommend guidance etc

(1) The Department must make regulations requiring the trustees or managers of an occupational pension scheme to take the steps mentioned in subsections (2) and (3) in relation to an application from a relevant beneficiary—

(a) to transfer any rights accrued under the scheme, or

(b) to start receiving benefits provided by the scheme.

(2) As part of the application process, the trustees or managers must ask the beneficiary whether they have received appropriate pensions guidance or appropriate independent financial advice.

(3) In a case where the beneficiary indicates that they have not received appropriate pensions guidance or appropriate independent financial advice, the trustees or managers must also—

(a) recommend that the beneficiary seeks such guidance or advice, and

(b) ask the beneficiary whether—

(i) they wish to wait until they have received such guidance or advice before deciding whether to proceed with the application, or

(ii) they wish to proceed with the application without having received it.

(4) The regulations may—

(a) specify what constitutes appropriate pensions guidance and appropriate independent financial advice;

(b) make further provision about how the trustees or managers must comply with the duties in subsections (2) and (3) (such as provision about methods of communication and time limits);

(c) specify what the duties of the trustees or managers are in the situation where a beneficiary does not respond to a question mentioned in subsection (2) or (3)(b);

(d) provide for exceptions to the duties in subsections (2) and (3) in specified cases;

(e) provide for the Department or another prescribed person to issue guidance for the purposes of this section, to which trustees or managers must have regard in complying with their duties under the regulations.

(5) In determining what provision to include in the regulations, the Department must have regard to any rules that are for the time being in force under section 137FB(1A) of the Financial Services and Markets Act 2000.

(6) In this section—

“relevant beneficiary”, in relation to a pension scheme, means—

(a) a member of the scheme, or

(b) another person of a prescribed description,

who has a right or entitlement to flexible benefits under the scheme;

“flexible benefits” has the meaning given by section 74 of the Pension Schemes Act 2015;

“pensions guidance” means information or guidance provided by any person in pursuance of the requirements mentioned in section5 of the Financial Guidance and Claims Act 2018 (information etc about flexible benefits under pension schemes).”

(8) In section 111 (powers as respects failure to comply with information requirements), in subsection (1), after “109” insert “or 109B”.

(9) In section 177(6) (power of Department of Finance to direct that regulation-making powers are exercisable only in conjunction with them), after “except” insert “regulations under section 109B or”.” —(Guy Opperman.)

This new clause makes equivalent provision to that in NC1 for occupational pension schemes and requires the Secretary of State and the Department for Communities to make regulations corresponding to the FCA rules mentioned in NC1. It also makes consequential amendments to the Pension Schemes Act 1993 and the Pension Schemes (Northern Ireland) Act 1993.

Brought up, read the First and Second time, and added to the Bill.

New Clause 3

PPI claims: interim restriction on charges imposed by legal practitioners after transfer of regulation to FCA

“(1) A legal practitioner—

(a) must not charge a claimant, for a service which is a relevant claims management activity provided in connection with the claimant’s PPI claim, an amount which exceeds the fee cap for the claim, and

(b) must not enter into an agreement that provides for the payment by a claimant, for a service which is a relevant claims management activity provided in connection with the claimant’s PPI claim, of charges which would breach, or are capable of breaching, the prohibition in paragraph (a).

(2) Subsections (2) to (5) and (7) of section 27 apply for the purposes of the prohibitions in subsection (1) as they apply for the purposes of the prohibitions in section 27(1) but as if—

(a) references in those subsections to “regulated claims management services” were references to “relevant claims management activity” and references to “regulated persons” were references to “legal practitioners”, and

(b) the first entry in columns 1 and 2 of the table in subsection (5) were omitted.

(3) Subsection (1) applies as follows—

(a) the prohibition in subsection (1)(a) applies only to charges imposed by a legal practitioner under an agreement entered into during the period—

(i) beginning with the first day of the second interim period (within the meaning given by section28(6)), and

(ii) ending with the end date for that practitioner, and

(b) the prohibition in subsection (1)(b) applies only to agreements entered into by a legal practitioner during that period.

(4) For the purposes of subsection (3), the end date is—

(a) for a legal practitioner for whom the relevant regulator is the Law Society of England and Wales, the day before the coming into force of the first rule made by the Law Society of England and Wales under section (Legal services regulators’ rules: charges for claims management services) that applies to, or to any description of, PPI claims, and

(b) for any other legal practitioner, 29 April 2020.

(5) In this section “relevant claims management activity”—

(a) does not include any reserved legal activities of the kind mentioned in section 12(1)(a) or (b) of the Legal Services Act 2007 (exercise of a right of audience or the conduct of litigation), but

(b) otherwise, means activity of a kind specified in an order under section 22(1B) of the Financial Services and Markets Act 2000 (regulated activities: claims management services), disregarding any exemption in that order for activities carried on by, through, or at the direction of, a legal practitioner.” —(Guy Opperman.)

This new clause requires the Law Society of England and Wales, the Bar Council and the Chartered Institute of Legal Executives, after the transfer of regulation from the Claims Management Regulator to the FCA, to enforce a fee cap in respect of charges by lawyers for certain claims management services provided in connection with a PPI claim until, in the case of the Law Society, the Society has made its own rules about charges for PPI claims, and in any other case, 29 April 2020.

Brought up, read the First and Second time, and added to the Bill.

New Clause 4

Legal services regulators’ rules: charges for claims management services

“(1) The Law Society of England and Wales, the General Council of the Bar and the Chartered Institute of Legal Executives may make rules prohibiting regulated persons from—

(a) entering into a specified relevant claims management agreement that provides for the payment by a person of specified charges, and

(b) imposing specified charges on a person in connection with the provision of a service which is, or which is provided in connection with, a specified relevant claims management activity.

(2) The Law Society of England and Wales must exercise that power to make rules in relation to all relevant claims management agreements, and all relevant claims management activities, which concern claims in relation to financial products or services.

(3) The Law Society of Scotland may make rules prohibiting regulated persons from—

(a) entering into a relevant claims management agreement concerning a claim in relation to a financial product or service that provides for the payment by a person of specified charges, and

(b) imposing specified charges on a person in connection with the provision of a service which is, or which is provided in connection with, a relevant claims management activity concerning a claim in relation to a financial product or service.

(4) Rules under this section may make provision securing that for the purposes of the prohibition referred to in subsection (1)(a) or (3)(a) charges payable under a relevant claims management agreement are to be treated as including charges payable under an agreement treated by the rules as being connected with the relevant claims management agreement.

(5) In this section ‘regulated persons’ means—

(a) in relation to the Law Society of England and Wales—

(i) persons who, or licensable bodies which, are authorised by the Law Society to carry on a reserved legal activity,

(ii) European lawyers registered with the Law Society under the European Communities (Lawyer’s Practice) Regulations 2000 (S.I. 2000/1119), and

(iii) foreign lawyers registered with the Law Society under section 89 of the Courts and Legal Services Act 1990;

(b) in relation to the Law Society of Scotland, Scottish legal practitioners;

(c) in relation to the General Council of the Bar—

(i) persons who, or licensable bodies which, are authorised by the General Council to carry on a reserved legal activity, and

(ii) European lawyers registered with the General Council under the European Communities (Lawyer’s Practice) Regulations 2000;

(d) in relation to the Chartered Institute of Legal Executives, persons authorised by the Institute to carry on a reserved legal activity.

(6) The rules must be made with a view to securing an appropriate degree of protection against excessive charges for the provision of a service which is, or which is provided in connection with, a relevant claims management activity.

(7) The rules may specify charges by reference to charges of a specified class or description, or by reference to charges which exceed, or are capable of exceeding, a specified amount.

(8) The rules may not specify—

(a) charges for a reserved legal activity within the meaning of the Legal Services Act 2007 (see section 12 of that Act);

(b) charges imposed in respect of—

(i) the exercise of a right of audience by a Scottish legal practitioner;

(ii) the conduct of litigation by a Scottish legal practitioner.

(9) In subsection (8)(b)—

‘conduct of litigation’ means—

(a) the bringing of proceedings before any court in Scotland;

(b) the commencement, prosecution and defence of such proceedings;

(c) the performance of any ancillary functions in relation to such proceedings;

‘right of audience’ means the right to appear before and address a court in Scotland, including the right to call and examine witnesses.

(10) In relation to an agreement entered into, or charge imposed, in contravention of the rules, the rules may (amongst other things)—

(a) provide for the agreement, or obligation to pay the charge, to be unenforceable or unenforceable to a specified extent;

(b) provide for the recovery of amounts paid under the agreement or obligation;

(c) provide for the payment of compensation for any losses incurred as a result of paying amounts under the agreement or obligation.

(11) For the purposes of this section—

‘relevant claims management activity’ means activity of a kind specified in an order under section 22(1B) of the Financial Services and Markets Act 2000 (regulated activities: claims management services), disregarding any exemption in that order for activities carried on by, through, or at the direction of, a legal practitioner;

‘relevant claims management agreement’ means an agreement, the entering into or performance of which by either party is a relevant claims management activity;

‘Scottish legal practitioner’ means—

(a) a person qualified to practise as a solicitor in accordance with section 4 of the Solicitors (Scotland) Act 1980;

(b) European lawyers registered with the Law Society of Scotland under the European Communities (Lawyer’s Practice) (Scotland) Regulations 2000 (S.S.I. 2000/121);

(c) foreign lawyers registered with the Law Society of Scotland under section 60A of the Solicitors (Scotland) Act 1980;

(d) an incorporated practice within the meaning given by section 34(1A)(c) of the Solicitors (Scotland) Act 1980;

(e) a licensed legal services provider within the meaning of Part 2 of the Legal Services (Scotland) Act 2010 (see section 47 of that Act) that provides, or offers to provide, legal services under a licence issued by the Law Society of Scotland;

‘specified’ means specified in the rules, but ‘specified amount’ means an amount specified in or determined in accordance with the rules.

(12) This section does not limit any power of the Law Society of England and Wales, the Law Society of Scotland, the General Council of the Bar or the Chartered Institute of Legal Executives existing apart from this section to make rules.”—(John Glen.)

This new clause makes provision about rules prohibiting charges for claims management services which may be made by the Law Society of England and Wales, the General Council of the Bar, the Chartered Institute of Legal Executives and (where the claim concerns financial products or services) the Law Society of Scotland, and imposes a duty on the Law Society of England and Wales to make such rules in relation to claims concerning financial products or services.

Brought up, and read the First time.

[John Glen]

I beg to move, That the clause be read a Second time.

--- Later in debate ---

[Guy Opperman]

It is a delight to respond to a very important and legitimate point. I should make a number of declarations at the outset: I know LawWorks very well, I set up a free representation unit and a pro bono unit, and two Labour Peers have given me awards for my pro bono works in the past. Lord Goldsmith and Baroness Scotland were both most ill advised in giving me the pro bono lawyer of the year and then a pro bono hero award for exactly this sort of work, although not in respect of debt advice. I have great sympathy with the hon. Lady’s point. I will address it briefly now but am happy to discuss it in more detail.

There are a number of easy arguments to make. Most importantly, this is a matter that the single financial guidance body can already address. Clause 3(5), (9) and (10) give capacity for the single financial guidance body to review the provision of those types of arrangements, and to make recommendations once it has come to a conclusion on whether it is an appropriate way forward.

I accept and acknowledge that the FCA transfer has created some anomalies, but there is a reason why. The hon. Lady will fully understand that the Government are keen to ensure that consumers in problem debt have access to high-quality, regulated debt advice. The new body will, to a great degree, go a long way to ensure that that specific goal is met, but there are a couple of extra points I will make.

First, it is important to note that, during the transfer of debt advice regulation to the FCA, the not-for-profit debt advice providers widely supported the FCA regulation of their activity because they felt it was important to ensure that all debt advice was of a high quality. Secondly, with great respect to LawWorks and the point made, I do not believe the assertion made is appropriate. Of course, individual organisations can apply to be regulated if they so choose, or to get a group regulation under FCA rules, but I think it appropriate that we consider it in more detail and invite the SFGB to go away and decide whether it is something it would recommend as part of the statutory remit we have set up under clause 3. In those circumstances, I invite the hon. Lady not to pursue her new clause.

[Yvonne Fovargue]

I thank the Minister for his reply and I am pleased that he has taken on board the principle. Certainly we do not want to deregulate the Debt Advice Network. I am in favour of it being a regulated body so that we can have high-quality advice. I beg to ask leave to withdraw the motion.

Clause, by leave, withdrawn.

[Guy Opperman]

Am I correct that we have now finished all particular clauses that need to be decided thus far?

[The Chair]

It would appear so.

Question proposed, That the Chair do report the Bill, as amended, to the House.

[Guy Opperman]

Although the Committee has finished earlier than programmed, I think it is fair to say that the Bill has received thorough scrutiny from hon. Members in all particular ways. Some measures have been more scrutinised than others, even though they were not particularly on the amendment paper as appropriate for scrutiny.

I put on the record my thanks to your good self, Mr Rosindell, and also to Mr Stringer for keeping us moderately in order and for running the sessions so smoothly. I also thank Hansard, the Doorkeepers and the Clerks for enabling us to get through the business so efficiently. On behalf of my hon. Friend the Economic Secretary to the Treasury and myself, I thank the multitude of officials who have kept us in order. I also thank the hon. Member for Birmingham, Erdington, for the Opposition, and the hon. Member for Paisley and Renfrewshire South, for the Scottish National party, for the constructive way in which they have engaged with the debate. We believe we are taking forward a Bill that all parties fundamentally support, and doing the right thing. I look forward to continuing any of those further discussions on Report.

[Jack Dromey]

To respond briefly, I echo those thanks to all who have played their part in the passage thus far of the Bill, initially through the other place and then through the House of Commons.

I will make two points. First, as I said on Second Reading, this is a good Bill and a welcome step in the right direction. The establishment of the SFGB is welcome indeed. Crucially, we now need to make it effective at the next stages. In Committee we set out, as we said on Second Reading, to further strengthen the Bill and to inject what I called a “sense of urgency” into certain of the provisions contained in the Bill.

Secondly, I hope the Government will reflect on what has been said in respect of both cold calling and default guidance on Report. In conclusion, it would be churlish not to recognise that this is a welcome step in the right direction. I thank both Ministers concerned for their constructive engagement. Would that that was always possible on all occasions on all issues with those on the Government Front Bench. Having said that, it would be churlish indeed not to reflect that engagement. I hope the Ministers accept on Report the overwhelming logic and power of argument in respect of cold calling and default.

Duties of Customs

Guy Opperman Excerpts

Ways and Means resolution: House of Commons
Monday 20th November 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Answer the question.

[Anneliese Dodds]

I just have, if the hon. Gentleman doesn’t mind. The Government have stated that the motions are about that future relationship, and so we have to take them at their word, even if we might have been mistaken in doing that on other issues.

It has been suggested that, if the Government recover a sense of responsibility and sincerity and genuinely engage us in negotiations, albeit after wrongly ruling out a customs union with the EU, it could involve the adoption of deals similar to CETA or the Turkish deal. Now, CETA does not cover agriculture, so if we get a deal on industrial goods procurement and so forth, we might then need, concomitantly, still to have a deal on the protection of sensitive agricultural products, so we would need to have those powers still there. The Turkish bespoke deal, for its part, still necessitates anti-dumping and countervailing duties on both the Turkish and the EU sides.

To conclude, we have to be clear about what amendments (e) and (f) ask for. They do not, in and of themselves, guarantee that the Government will seek continued customs union membership, because they would apply across the piece of whatever arrangements the Government lead us to.

Draft Horserace Betting Levy Regulations 2017

Guy Opperman Excerpts

Monday 27th March 2017 General Committees

[Sir Edward Garnier]

My right hon. Friend makes the point I was trying to make rather better than I was making it myself; I am grateful to him for having done so.

It is perfectly true that the number of people from the medical services, vets, stewards and other officials now needed to put on a day’s racing is enormous. From the stable yard right the way through to the car park, there are lots and lots of people, all of whom have to be paid, apart from some of the kind volunteers who help out for the love of it. Those are not racecourses that are putting on tens of meetings a year or attracting the greatest of the prize money. Of course, the famous yards that my hon. Friend the Member for Shipley mentioned will no doubt benefit from the regulations, but I hope the money will trickle down and enable racecourses such as Leicester and—is there a racecourse at Hexham?

[Guy Opperman (Hexham) (Con)]

“Is there”? It is the best racecourse in the country!

[Sir Edward Garnier]

Well, there we are. I have achieved publicity for that great racecourse in Northumberland, in addition to the one in Leicestershire.

Even if these regulations lead to an increase in the cash flow coming into the small racecourses by only a small measure, the Government will have achieved a public benefit. I salute the Minister for what she has achieved. I wish this new levy system Godspeed, and I trust that vast sums of bookies’ money will end up in Oadby, the home of Leicester racecourse in my Harborough constituency.

Bankers’ Bonuses and the Banking Industry

Guy Opperman Excerpts

Wednesday 25th February 2015 Commons Chamber

[Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op)]

I beg to move,

That this House believes bonuses should be rewards for exceptional performance and that, following the banking scandals that have emerged in the last few months, this year’s bank bonus round should reflect this principle; further believes that a tax on bank bonuses should be levied in order to fund a guaranteed paid starter job for young people who have been out of work for over a year, and that this tax should cover allowances paid by banks which attempt to get round the EU bonus cap; calls on the Government to reform the rules on bankers’ bonuses by extending clawback of bank bonuses that have already been paid in cases of inappropriate behaviour to at least 10 years and by also extending the deferral period for senior managers to 10 years, in line with the recommendations of the Parliamentary Commission on Banking Standards; and further calls on the Government to implement wider reform of the banking industry to increase competition and boost net lending to small and medium-sized businesses.

As we enter this year’s bank bonus season, I am reminded that seasons used to be for football and fashion, but it now seems that we have a season for bank bonuses as well. I am delighted to have this opportunity to set out everything that a Labour Government would do to reform the banking sector in this country, and to highlight the areas where the current Government have failed to make the necessary reforms.

Earlier this month, in our Opposition day debate on tax avoidance, my hon. Friend the Member for Birmingham, Ladywood (Shabana Mahmood), with whom I have traded places today, explained how the tax system is underpinned by the principles of fairness, trust and transparency. Those principles are equally applicable to the banking sector. Just as a Labour Government will restore those principles to the tax system, ensuring that tax loopholes are closed, tax dodgers are caught, and everyone pays their fair share, so we will restore them to the banking sector. In doing so, we will be acting in the best interests of businesses, consumers, the wider economy and the banks themselves.

[Guy Opperman (Hexham) (Con)]

The hon. Lady’s motion seeks to increase competition in banking. Will she therefore explain why the Labour Opposition voted against the Financial Services Act 2012, which specifically encouraged competition in banking services?

[Cathy Jamieson]

Having sat on the Bill Committee for that piece of legislation, I remember well the considerable discussion that there was. If the hon. Gentleman has read our paper on banking reform, he will know that we support the reference to the Competition and Markets Authority to ensure that we get new challenger banks in the system. That will be an important feature of our reforms in government.

Our programme of reform, as stated in our recent paper on banking, is designed to undo the reputational damage that has been inflicted by the financial crisis and the subsequent scandals. Our approach will help to restore the trust and confidence of savers, businesses and investors, and to ensure that fair dealing, integrity, prudence and probity are once again the pillars on which Britain’s banks are founded. In a global industry, an international reputation for good practice can only be a competitive advantage.

[Cathy Jamieson]

As the hon. Gentleman knows, we did have a global financial crisis. The Labour party has accepted that perhaps the regulation could and should have been tighter; we have said that on numerous occasions. I was not in this place at the time of the financial crisis, but I do not recall many on the Conservative Benches making the case for tougher regulation. Indeed, the opposite is true; they were actually looking for light-touch regulation. I hear what the hon. Gentleman is saying, but perhaps he should look at his own party’s record on this matter as well.

[Guy Opperman]

rose—

[Cathy Jamieson]

I want to make a bit of progress, but I will give way once more to the hon. Gentleman.

[Guy Opperman]

Clearly, regulation is needed, but it is only because we have relaxed some parts of the regulations that we have been able to allow up to 20 new challenger banks to be established since 2010. Does the hon. Lady think that her proposals will encourage or discourage challenger banks? The evidence thus far is that Labour has voted against every single measure that would create greater competition in banking.

[Cathy Jamieson]

I am now becoming a bit confused about what Conservative Members are arguing for here. Do they want more or less regulation? [Interruption.] Did I hear someone say both? The important issue here is to ensure that regulation is fit for purpose, and that we do not simply have more of the same when we talk about new entrants into the banking system.

--- Later in debate ---

[Cathy Jamieson]

No, I want to finish this point.

As I said, it seemed that the scenario proposed was still fairly generous, but it was obviously not generous enough for the Chancellor, who decided to take legal action. The quest ended in failure after he meekly admitted defeat at the hands of the EU’s lawyers, but not before he had wasted thousands of pounds of taxpayers’ money in legal fees. Let us remember that this Chancellor will not devote himself to ensuring that tax avoiders and evaders are brought to book, when the first thing that he does is to challenge something of that sort, but he will devote himself to defending the right of bankers to receive high bonuses, while spending taxpayers’ money as he does so.

The Chancellor has been a diligent defender of bankers on the home front, too. Last year he had to be pressurised by Labour and others into refusing to give taxpayer-owned RBS the shareholder permission it needed to breach the cap and to pay bonuses of 200% of salary, and he still has serious questions to answer on HSBC. Over recent weeks, he has done his best not to answer them and has sent his Treasury Ministers out to do the talking for him. On Monday, he finally put in an appearance, yet he did not have any answers at all, so we need to keep asking the same questions. Did he discuss allegations of tax evasion at HSBC with Lord Green before Lord Green was made a Tory Minister; why has only one person been prosecuted out of 1,100 names; and why has he signed a deal with Switzerland that could prevent HMRC from getting its hands on similar information in future? He has been Chancellor for nearly five years and this is his responsibility. He needs to start taking his responsibilities seriously. If he does not, people are going to draw their own conclusions.

Let me move on to Labour’s reforms. It has been clear since this Government took office that they do not have the stomach for the serious reforms that we need. As our motion explains, a Labour Government will do things very differently. Our starting point, as I outlined, will be trust and fairness. We believe that banks should serve the needs of their customers and the economy, and that bonuses should be a reward for exceptional performance, not a compensation for failure.

[Guy Opperman]

Will the hon. Lady give way?

[Cathy Jamieson]

I will, in the hope that the hon. Gentleman is going to agree with my last point.

[Guy Opperman]

I do agree that there is a need for greater competition. Let me ask the hon. Lady this question again: why did she troop through the Lobby—I presume that she did so with the rest of her colleagues—to vote against the provisions on greater competition in the Financial Services Act 2012?

[Cathy Jamieson]

As I said to the hon. Gentleman earlier, perhaps he would like to take some time to read the report that we produced last week, which shows that we need to make several changes to ensure that there is greater competition. I do not see anything inconsistent in that and I hope that he will choose to read the report.

I want to return to the point that bonuses should be a reward for exceptional performance, not a compensation for failure.

--- Later in debate ---

[Andrea Leadsom]

The hon. Lady will know that the Government have taken steps to bring down significantly the amount we are borrowing each year to get our economy on the road to recovery after the disaster caused by the Labour party.

To return to the point of this debate, the real fact is that the public are absolutely right to be furious about the behaviour and misconduct of banks. It still feels as though there are fresh examples every day of the shameful practices that went on in the bad old days. The public will want to know what this Government have done to sort out the mess left by the previous Government.

I can tell the House that, under this Government, we have the toughest remuneration regime of any major financial centre in the world; we are making banks raise their standards, rebuild their reputation and get back to the job they used to do prudently and respectably for centuries; and we are making sure that we never go back to the bad old days of banking.

[Guy Opperman]

Will the Minister give way?

[Mr Marcus Jones]

Will the Minister give way?

[Andrea Leadsom]

I will give way in a moment, but I want to be very clear at this point. In such debates, there is always a sense that somehow all bankers are terrible people. The truth is that the vast majority of the up to 2 million people employed in financial services do an honest day’s work and always have done. They would not seek to rip anybody off, or distort anything they do. They are honest, decent people. I want to pay tribute to the work of financial services not just in oiling the wheels of our economy, but in contributing so much to our economy as a whole. Notwithstanding the very real misconduct issues, which have disgusted all of us right across the country, it is true that only a small number of people are responsible for such wrongdoing. I will talk about what we have done to put that right after I have given way.

[Guy Opperman]

Will my hon. Friend also make the point that this Government have ensured that LIBOR funds, which were not previously given to good causes, have benefited air ambulances—my hon. Friends and I supported them at No. 11 Downing street last night—and 96 military charities? This Government have brought in a magnificent innovation that supports wonderful charities.

[Andrea Leadsom]

I am very grateful to my hon. Friend for raising that point. The Government are extremely proud that fines for misconduct go to good causes, unlike under the Labour party, when any fines for misconduct were passed straight back into the hands of the people who committed it. The LIBOR fines have gone to military charities and air ambulances, as he pointed out, and the fines for the appalling foreign exchange rigging will support the NHS and GP surgeries in particular.

--- Later in debate ---

[Mr Bain]

The Government whom the previous Labour Government replaced were content to leave a wages structure in place in this country in which security guards earned less than £1 an hour. That inequality had to be tackled, and that gap reduced during the previous Parliament. People will want to hear during this debate about the next Parliament, and about our vision for the future of a high-skill, higher wage, higher investment economy. I believe that the Labour party has the more convincing vision.

[Guy Opperman]

I have here the House of Commons unemployment statistics for February 2015 for Glasgow North East. Surely this Government’s long-term economic plan has done something when the number of total claimants has reduced by 19.6% in the hon. Gentleman’s constituency, youth unemployment for 18 to 24-year-olds has reduced by 27%, and those unemployed for more than 12 months—a more difficult area—have reduced by 37%. Are we doing something right?

[Mr Bain]

The hon. Gentleman cites figures that demonstrate that in the last month—[Interruption.] Well, I will give him figures from the Office for National Statistics. In the past month, unemployment in my constituency rose by nearly 50 people. He does not cite the International Labour Organisation figures. If he genuinely believes that unemployment of 2,500 people in my constituency should be tolerated by any Government, he misjudges not just the attitude of my constituents, but the good sense of the British people.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

It is a pleasure to speak in this debate. I must first mention the Register of Members’ Financial Interests and point out that I am attempting to create two banks in the north-east at present. My life savings, virtually, are in the Atom bank, which is an internet start-up that has been set up by individuals just outside Durham. We are also attempting to merge the Tynedale community bank with the Prince Bishops bank in Stanley in County Durham, with a view to creating an enhanced credit union.

Having made that declaration, I would like to take the House on a journey. The very first constituent who came to me after I had been elected in 2010 had had his bank finance taken away and, for that reason, his business had failed. It was not through any fault of the business, but because of the bank lending provisions at the time. The bank was local, in Newcastle and then London, and was one of the large banks. That case made it patently clear to me that we needed greater competition. To that end, we have spent much time in this Parliament, both as the Government and individually, trying to create that greater competition.

When we assess the quality of the Labour proposals—I confess that I have not had the great joy and pleasure of reading the shadow Chancellor’s proposals for banking reform, to which the hon. Member for Kilmarnock and Loudoun (Cathy Jamieson) referred, but I have glanced at some of the issues—we must look at the record over the last few years. That must start—and I twice raised this with the hon. Lady and did not get a reply—with the Financial Services Act 2012. On 23 April 2012, I spoke in the debate on the Bill. To the Labour party’s eternal shame, it tabled amendment 28, which sought to delete clause 5 of the Act. That would have removed “The competition objective”. Labour claims to be in favour of competition, but I find it utterly illogical and wrong that it should have sought to vote down the specific proposals in the Act that encourage competition. The proposals are simple and I would have thought that those who profess to want competition in banking would be in favour of them. They include

“the ease with which consumers who obtain those services can change the person from whom they obtain them”—

bank switching, and

“the ease with which new entrants can enter the market”.

That is challenger banks and local banks. The clause also includes

“the ease with which consumers who may wish to use those services…can access them”.

I could go on.

I refer to clause 5 because the House and the country will have to judge Labour on what it has done in the past. I have looked briefly at the grave and weighty tome—I speak ironically, I am afraid—published by the shadow Chancellor and the shadow Financial Secretary on proposed banking reform. It says that Labour wants to see

“At least two new challenger banks”.

I hate to say it, but over the last four years some 20-plus new challenger banks have been created under this Government. I have met many of them, including Metro, which is the biggest and the best, Aldermore and Virgin. Those of us who have been trying to increase competition would view the hon. Lady’s argument—which is, presumably, that 20 is good but we want two more—as illogical. I want an awful lot more than two more. Why she chose two, rather than one or 10, I am at a loss to understand, but doubtless when I read the grave and weighty tome, all will become clear.

We need to assess the way in which the Government have addressed the creation of greater competition. The creation of a new bank faces four fundamental challenges—I know because I have attempted to navigate my way through them over the last four and three quarter years. The first was a lack of legislation to facilitate such change. My hon. Friend the Member for Chichester (Mr Tyrie) and I went to see Sir Hector Sants, the then chairman of the regulatory authority, and he agreed and changed the rules. Previously, if I wished to create a challenger bank or new local bank, I would have been judged on the same basis as Barclays or the other big banks. I would have to have capital up front massively in excess of £50 million and my board would have to be set up years in advance—to say it was bureaucratic would be an understatement.

The point I was trying to make to the hon. Member for Kilmarnock and Loudoun was that, in some respects, for the creation of local challenger banks, regulation had to be tweaked slightly so that it was not light-touch—to return to the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) who, as usual, is not in his place—but different and better. First, we introduced the Financial Services Act 2012, which provides the framework for the regulatory authorities to encourage greater competition. Secondly, having passed that legislation, notwithstanding Labour opposition, we tackled the length and complexity of the authorisation process. Setting up a new bank traditionally took years and a huge amount of money. We all want greater competition, and for the FSA to abbreviate the process—in planning, this is done through a pre-authorisation process—and help a potential new bank through it. The long and short of it is that the FSA has dramatically reduced the bureaucratic process and the number of years it took to set up a new bank. As a result, some extraordinarily successful new banks—for example, the Hampshire Trust and the Cambridge and Counties bank, which is effectively a local authority utilising its pension fund to do LEP-style investments in local businesses and communities—have come forward in the past few years.

The third big change was the reduction in the capital requirement. Huge amounts of money were needed to create a local or any kind of bank, but local banks are not now being judged on the scale of Barclays, because they do not want to be like Barclays or any other high street bank. Finally, the scale and complexity of the infrastructure and the information exchange between all the bank authorities was changed, as it needed to be.

I will be nice to the hon. Member for Kilmarnock and Loudoun: of course I would welcome two more new challenger banks. The consequence, however, of the past four and three quarter years of change in the regulatory, legal and bureaucratic process and in the general climate of FSA behaviour is that we have in excess of 20 new start-ups. For the first time, we have new banks taking people on in the high street. I see that myself, because not only am I able to play a tiny part in the creation of a significant new bank in the north-east based in County Durham, but we are trying to fill a gap in the high street in my community in Northumberland.

The Government have changed the rules on credit unions to make it possible to have two types of credit union. You and I, Mr Deputy Speaker, will know that the traditional credit union model requires people to borrow for a very long period of time. The credit union is a very laudable and good thing and we should continue to support it, but there is a gap in the market. That gap has been filled, in my community and up and down the country, by payday lenders. As a result of high street banks not being able to lend in one way and credit unions being relatively restricted, there is a gap. The gap can be filled by community banks, which would effectively be bulked-up credit unions. There is a fantastic number of examples. Several are in large Labour areas, such as Glasgow. The Salford credit union is going from strength to strength. I have spent considerable time getting to know the Prince Bishops bank, which is based literally on the high street in Stanley in County Durham. It competes with what we would think of as high street banks and is, effectively, a bulked-up credit union. That surely shows that the Government are taking things in the right direction.

[Chris Evans (Islwyn) (Lab/Co-op)]

Many credit unions, which are run mainly by volunteers, are the victims of their own success, as they become too large and usually disband because they cannot handle the administration, the back-office work, that comes with it. How does the hon. Gentleman envisage credit unions being able to manage themselves as community banks and, potentially, as building societies? What legislation would help with that?

[Guy Opperman]

The legislation is already there. The hon. Gentleman should speak to the hon. Member for North Durham (Mr Jones), who is doing a fantastic job on the board of the Prince Bishops bank. I happily praise him for the work he is doing with the local community—with the church, the local authority and the housing association. To improve the quality of a credit union and make it viable, one has to, for example, ensure that payments to local authorities and housing associations go through the credit union, so it becomes a clearing bank in the normal way. There must be a greater degree of lending on a long-term basis. To put it bluntly, the credit union needs to go after middle-class lenders, because they are the ones who will make the deposits.

In Northumberland, a large proportion of my constituents are off-grid and have to purchase 500 litres of oil at a time. That costs approximately £350, now about £275. Banks will not give the lending facility to many unbanked people, because the number is too low, but if they were to save with a bulked-up credit union or community bank, that community bank could be the lender of choice for that specific purpose. Such people would, because they are mostly homeowners, be the sort of new lenders and new depositors who can provide the critical mass and the clout for the enhanced credit union-community bank to be more viable. The traditional problem with a credit union is that it does not have the deposit savings unless it has a white knight or a very strong church or trade union backing it.

We can discuss this another time—Mr Deputy Speaker will say that I am straying from the substance of the motion—but opportunities are out there. The point goes to the substance of the motion, which is competition. A credit union should provide competition on the high street to high street banks. Traditionally, credit unions have struggled. The Government’s changes have made it easier for them.

I will touch on two further points and then bring my remarks to a close. The sins of the bad, all of which we deprecate, are now paying for the good works of the good. We cannot have this debate without talking about LIBOR and about the terrible things that happen. However, the Government have done a wonderful thing in saying that the 96 military charities should receive the funds of the LIBOR fines and that air ambulances should receive a considerable amount of money. Last night, I was at No. 11 Downing street with the Chancellor. Representatives of many of the air ambulances throughout the country, including from Essex, were there. They are receiving significant sums of money by reason of the Chancellor’s decision on LIBOR funds. That is a fantastic thing. It was first announced in the 2012 autumn statement, originally for just military charities. It has now developed into other areas—the Minister spoke of GPs and other health services. The great work done by the air ambulances should be noted. The support we are giving to them is crucial.

I want to make one final point on the motion, which refers to tackling unemployment and youth unemployment as the purpose behind everything that it proposes. It is hard to read the House of Commons Library unemployment statistics and find a single Member of Parliament who has not benefited from a dramatic reduction in unemployment.

[Helen Goodman]

That’s not true.

[Guy Opperman]

I know the hon. Lady reasonably well and presumed she would be quite chirpy in her usual fashion. The House of Commons’ “Unemployment by Constituency” research paper 1509, published on 18 February 2015, shows that there has been a 34% reduction in unemployment in her constituency of Bishop Auckland. The reduction for those aged 50 and over is 24%. The 12-month unemployment figure, which of course is the very difficult area to address, has seen a 45% reduction in the past year. Youth unemployment is often prayed in aid by the Opposition—and understandably so, as we all agree that we need to address it.

[Helen Goodman]

Will the hon. Gentleman give way?

[Guy Opperman]

No, let me provide the figures—

[Helen Goodman]

The hon. Gentleman is talking about my constituency.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Whether or not the hon. Gentleman is talking about the hon. Lady’s constituency is not the question. It is a question of whether Mr Opperman wishes to give way.

[Guy Opperman]

I am afraid that I will not give way—first, because I have already gone on too long and, secondly, because I want to enlighten the hon. Member for Bishop Auckland (Helen Goodman), who would surely welcome the fact that unemployment for 18 to 24-year-olds in her constituency has reduced over this last year by 40.2%. I could say much more, Mr Deputy Speaker, but I think you would stop me doing so.

--- Later in debate ---

[Helen Goodman (Bishop Auckland) (Lab)]

I am very pleased to follow the hon. Member for Redcar (Ian Swales), and to have listened to the hon. Member for Hexham (Guy Opperman). It is clear that Members representing constituencies in the north-east are extremely interested in the debate, and that in itself is significant. The fact is that the banking system is currently not serving our region well. What the hon. Member for Redcar said about the Handeslbanken was absolutely right, and the work that the hon. Member for Hexham has been doing with Atom bank is necessary because of the failure of the current banking system. I would almost go so far as to say that his concern about finance for small and medium-sized enterprises and about tackling financial exclusion would make him a far better junior Minister in the Treasury dealing with this industry than the complacent former banker who currently seems to fulfil the role.

I agree with what the hon. Member for Redcar said about the need to regulate crowdfunding. He is absolutely right: it is a fashionable new thing, and people just leap into it, just as—as he pointed out—they leapt into the free market in 1986, without thinking about the consequences. Both hon. Gentlemen pointed up the inadequacies of banking in this country, but neither of them defended bonus levels and the method of paying them that we can see in most of the financial sector. I do not understand why they will not come into the Lobby with Labour Members at 4 o’clock, because that is where the logic of their position should take them.

In the north-east it is true that unemployment is down—we had the highest unemployment in the country at 10%—but cuts and the depression in the economy of the north-east mean that earnings are down between 4% and 9%. It is not a thriving region, and no one is happy about that.

[Guy Opperman]

Clearly more needs to be done in the north-east—no one disputes that—but does the hon. Lady not agree that the autumn purchasing managers index survey showed that we had the fastest private sector growth? We have the largest exports, and the largest export growth of any part of the country. After London, the north-east has more tech start-ups than any region in the country. There is more to be done, but I would not want her to paint a picture of doom and gloom for a second.

[Helen Goodman]

The hon. Gentleman is absolutely right: we are indeed a successful exporting region, but the Government are spending 520 times as much on the transport industry in London as they are in our region, which does not make sense. That is one reason why the Opposition want to set up a business investment bank.

Charter for Budget Responsibility

Guy Opperman Excerpts

Tuesday 13th January 2015 Commons Chamber

[Ed Balls]

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

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

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

[Guy Opperman (Hexham) (Con)]

Will the shadow Chancellor give way?

[Ed Balls]

In a second; not in the middle of a sentence. That 0.2% a year improvement in the underlying growth of the economy would, by the end of the period, bring in £15 billion a year more in tax revenues. So the trend of growth has gone in the wrong direction under this Chancellor and the key for the next Parliament, as well as spending cuts and tax rises, is to improve the underlying growth of the economy. If we can do that, we can bring in the revenues. If, on the other hand, we fall short in the next Parliament under the same Chancellor in the same way as we have in this Parliament, that would lead to over £110 billion in extra borrowing. If we are going in the wrong direction on growth and wages, the revenues do not come in and the deficit does not come down. We have got to improve the underlying growth potential of the economy. The right hon. and learned Member for Rushcliffe and I agree on that, but I do not think that this Chancellor understands the point.

--- Later in debate ---

[Ed Balls]

The problem is that the Chancellor said he would make people better off, and they are actually worse off at the end of this Parliament; he said he would balance the books, but he has not got the deficit down, and the reason is that trend growth and productivity have been weaker than he expected in 2010, which means the tax revenues have not come in. So in fact the opposite is true. It shows that we need a proper plan for jobs and growth to turn around the underlying growth of the economy. On that, he has totally failed to deliver.

[Guy Opperman]

Will the shadow Chancellor give way?

[Ed Balls]

In a second. First, let me turn to the fiscal mandate, because this is where the Chancellor’s position becomes, to be honest, farcical. The current fiscal charter says:

“The Treasury’s mandate for fiscal policy lapses at the dissolution of this Parliament.”

Rather than lapses, I would say that it has totally collapsed in this Parliament. It is totally discredited. Even the TaxPayers Alliance can now see how discredited the Chancellor’s forecasts are for this Parliament, but the Chancellor has a bail-out clause, because in the old charter it says that he has a

“duty to set out a fiscal mandate”

which

“will require the Treasury to set out a revised mandate for fiscal policy as soon as possible in the life of the new Parliament.”

This Chancellor, always alive to trying to find a new gimmick, decided—and has told every Tory commentator going—that this is a new trap for Labour. That is what we are going to get. It is not a stunt; it is not a gimmick; it is a trap for Labour. The problem is that, as we have seen today, this has been an opportunity for us, him and the TaxPayers Alliance to highlight to the country how much he has totally failed in this Parliament on fiscal policy. It is not only a chance to show how extreme his plans are for the next Parliament—and I will come to that—but he has not even managed to deliver the trap he promised.

[Guy Opperman]

Will the shadow Chancellor give way?

[Ed Balls]

In a second. Actually, go on; let’s get it over with.

[Guy Opperman]

I did not want to disrupt the shadow Chancellor’s flow, because I know he is easily distracted. Is it not because of the Chancellor’s support for the north-east by way of city deals, manufacturing and business support that the north-east now has the fastest rate of growth in private sector business in the autumn quarter, and the highest rate of growth in exports? Surely that is evidence that this economy has been turned around by a Chancellor who cares about business and manufacturing?

[Ed Balls]

Maybe we could form a consensus on the way forward on devolution for the regions—I am in favour of that and so is the hon. Gentleman—and that is not the only thing we could form a consensus on, because this is what he told ConservativeHome just recently:

“A bit of extra tax on properties over £2 million seems perfectly fair to me.”

I am with him all the way. Maybe we should get together on that one as well—you shouldn’t have let that one through, George!

Let me come back to the vote and what the Chancellor said at the time of the Budget. He said:

“Britain needs to run an absolute surplus in good years…To lock in our country’s commitment to this path of deficit reduction, we will seek the support of Parliament in a vote, and I will bring forward a new charter for budget responsibility this autumn.”—[Official Report, 19 March 2014; Vol. 577, c. 784.]

The vote was supposed to be on an absolute surplus. That is what the Chancellor was talking about. The Prime Minister on 15 December—the day the new charter was published—attacked Labour for our proposal for two or three years to get the current Budget into surplus. What was surprising about that speech was that the Prime Minister made it, did the Q and A, and got off the stage before the Treasury published the new charter. That was an odd thing to do when he was talking up the charter. Why would they not put it out in advance? It turned out to be because the Prime Minister had just finished a speech attacking Labour and our plan to get the current Budget into surplus, and then the Treasury published a new fiscal charter committing the Government to get the current Budget into surplus. No wonder he got off the stage so quickly.

The Chancellor promised in the last Budget a vote to balance the overall budget. Now the Government have done a U-turn and are proposing a vote on the current Budget excluding capital investment, which is the same measure we have been committed to for three years. Can he confirm that in the last Budget he promised a vote on an absolute Budget surplus and this charter before us is a vote on the current Budget? Is that right?

Also, when we study the fine print of this fiscal mandate, we find that it turns out to be even more different from the old one than I expected. The old fiscal mandate talked about having a target to balance the current Budget in 2015-16 and a target to have the national debt falling. We can see why this Chancellor has got a little worried about setting targets because they have not gone very well. It turns out that in this new document it has been downgraded from a target to an aim. Why have the words changed? Would the Chancellor like to explain?

--- Later in debate ---

[Mark Reckless (Rochester and Strood) (UKIP)]

Her Majesty’s Opposition bear a heavy responsibility, because they set the dividing line in this debate. They chose to attack the coalition Government for cutting too far, too fast and to set up the Chancellor as if he were the author of austerity. The reality is four years—it is coming up to five years—of fiscal incontinence and a borrowing binge greater than any this country has seen in peacetime. In the run-up to the last election, a number of Conservative voices drew attention to the Labour Government having borrowed in three or four years more than the country had borrowed in the previous 300. Since then, however, the coalition Government have borrowed even more.

Both Labour and the Conservatives seek to reduce our deficit with at least one hand tied behind their back. Their excuse is crisis in the eurozone, yet they failed to explain, despite the claims, particularly from Conservative Members, that the economy is supposedly doing so well, why we are borrowing so much. Why are we borrowing so much more than France, Italy, Spain and Greece? The answer is that the Government have failed to keep their promise to deal with the deficit, let alone to pay down our debts. They have tied their hands behind their back in the way that every other party in the Chamber has, except my own. There is a consensus commitment across the House—it is not in the country and it is not shared by my party—to spend between £10 billion and £20 billion each year on a budget contribution to the European Union, to spend a sum rising to £13 billion on a net transfer of overseas aid, and to spend a sum rising from £2.3 billion in 2012 to £9.8 billion in 2020, partly classified as spending, through the levy control framework. There is also the vow the party leaders made in Scotland to carry on the commitment to the Barnett formula for as far as the eye can see. With those spending commitments, the Government are enormously handicapped in reducing the deficit.

[Guy Opperman]

Given his policy on Europe, what would the hon. Gentleman say to my farmers in Northumberland? Is it his proposal that on withdrawal from Europe, there will be a reduction in support to the farmers?

[Mark Reckless]

The common agricultural policy operates with such fantastical inefficiency that there is enormous scope for treating farmers better while spending less money. The problem is that the Government and the country are spending money that we do not have. The problem is not just the level of the commitments I described, which my party does not endorse and would make savings from, but that the spending has been allocated on the basis of forecasts by the Office for Budget Responsibility. When this Parliament started, the OBR was essentially one man: Professor Sir Alan Budd. Instead of relying on the electoral mandate and authority of the Government—or the institutional ability of the Treasury, as the right hon. and learned Member for Rushcliffe (Mr Clarke) did—the Chancellor based his whole economic and fiscal strategy on the forecast of one man, Professor Sir Alan Budd.

The right hon. and learned Gentleman rightly said that GDP evolved in a way that was worse than almost anyone predicted, but he did not say that the OBR’s forecast was far more optimistic than that of most economists at the time. That forecast was made even more optimistic in October 2010, and we are paying the price for that. The Chancellor has come to realise that he needs to restrict benefits growth to 1% a year for at least two years—it is perhaps now three years or more—in the same way that public sector pay has been restricted, but back in 2010, 2011 and 2012, he raised benefits by inflation when at times it was more than 5% and wage growth was only 2%.

It is those fiscal commitments—to the EU, to overseas aid, to energy and to Scotland—combined with putting so much trust in the one individual and the three men and a dog in the OBR and its approach to economic forecasting that has led the country into this terrible fiscal position. The OBR forecasts that the fiscal position will go back into balance, with more than £20 billion of surplus in 2019-20, but that reduction in Government borrowing must be predicated on a combination of an increase in private sector borrowing and a reduction in the current account deficit.

The OBR tells us that there will be an explosion in household debt and at the same time a big fall in the current account deficit. It made that forecast on a risible analysis. It looks at what has happened to our investment balance. For 300 years, the country has earned its way through a surplus on investment income. That has disappeared because of the combination of the fiscal incontinence of both the Labour party and the Conservative party, which have borrowed such enormous amounts of money, and what the banking crisis has done to impair the quality and quantity of our net asset base. The OBR simply assumes that that investment income will magically come back. If it does not, things will be a lot worse. If we are to carry on giving 0.7% of GDP to overseas aid, £10 billion to £20 billion to the EU—perhaps 2% net of Government transfers—then unless the Government run a surplus to pay that, the private sector has to borrow more. These two parties have left us in a fiscal mess.

--- Later in debate ---

[Guy Opperman (Hexham) (Con)]

I support the charter for budget responsibility. I think it is a good thing and a vital part of the long-term economic plan. For four and a half years we have been faced with a Labour Opposition who have opposed every single budget reduction, and I have no faith in Labour choosing fiscal discipline in future years. As various Members have eloquently explained, the Labour party is effectively France in all but name. It wishes to have a socialist Government with higher taxes, and all the financial and economic consequences that that would bring.

This coalition Government have turned around manufacturing—we have seen tremendous increases in manufacturing, particularly in the north-east. We have infrastructure support, city deals, regional devolution on a scale not seen before, support for apprenticeships, fuel duty frozen, increases to the fairer funding formula on education, and reductions in unemployment in every constituency across the north-east, including by 50% in my constituency. We should be proud of that genuinely good record.

The consequences need to be addressed, too. The shadow Chancellor, as usual, did not answer my question. I put it to him that the north-east has the fastest rate of growth of private sector business in the autumn quarter and the highest growth in the value of exports, and it is the No. 1 exporter, with a positive balance of payments.

[Gordon Birtwistle (Burnley) (LD)]

My hon. Friend mentions manufacturing. Has he heard anything from the Opposition about how they intend to expand manufacturing? He will remember that they managed to reduce it from 22% of GDP to 11%. Has he heard anything about how they plan to reverse that trend, if they come to power?

[Guy Opperman]

Absolutely nothing whatever. My hon. Friend and I are leading lights in the all-party apprenticeships group, which has seen fantastic work. I should probably make a declaration that I am the first MP to hire, train and then retain an apprentice as an office manager—not as an MP, I hasten to add—because she was doing a fantastic job.

On what the Opposition intend to do, we have to address the deficit. The Chancellor eloquently put it that the Leader of the Opposition is practising Basil Fawlty politics by not mentioning the deficit at every opportunity. We also have to look at fiscal consolidation. We all heard what the shadow Chancellor said today, but what did the Leader of the Opposition say only on Sunday on “The Andrew Marr Show”? He said that

“if we…cut our way to getting rid of this deficit, it won’t work”.

So there goes fiscal tightening in any way whatever. To the clarification put to him that

“that requires a £30 billion fiscal tightening”,

he replied, “I don’t accept that.” Whatever the Opposition say today, the reality will always be that the Labour party will introduce greater taxes and greater borrowing, and greater difficulties for our children.

On attempts to address the deficit, other Members have made the point, including my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), that raising the tax rate to 50% will not increase the tax take by any margin and will actually decrease investment. On the minimum wage, tax credits from the coalition have already addressed that in a very successful form and we intend to raise it. I heard on the BBC “Daily Politics” today the hon. Member for Nottingham East (Chris Leslie) proposing that his plan for addressing the deficit was an increase in gun licences. That may be laudable, I do not know, and I am sure he has fiscally costed this matter in great detail, but if that is his plan to address the entirety of the deficit, we really are in more trouble than we thought.

We were indeed fortunate to hear from the hon. Member for Rochester and Strood (Mark Reckless). It is always a pleasure to comment on his speech. I will not cast aspersions on his honour, but I will attack his memory and grasp of economics. He supported the coalition as we did the tough work from 2010.

[Steve Baker]

Will my hon. Friend give way?

[Guy Opperman]

I will not. I am so sorry, but I have zero time. The hon. Gentleman supported us then, but he does not support us now.