Equitable Life Payments Scheme

Harriett Baldwin Excerpts

Tuesday 23rd June 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

As of 31 May 2015, the scheme has now issued payments totalling over £1.06 billion to 902,508 policyholders. The scheme will today be publishing a further progress report, which can be found at www.gov.uk/equitable-life-payment-scheme.

Eighty-seven per cent of eligible policyholders have now been traced and had a payment issued; this represents nearly 92% of the total amount estimated to be due to policyholders.

The scheme encourages any policyholders who believe themselves to be eligible to call the scheme on 0300 0200 150. The scheme can verify the identity of most policyholders on the telephone, which means any payment due can usually be received within two weeks.

[HCWS48]

EU Payment Accounts Directive

Harriett Baldwin Excerpts

Tuesday 23rd June 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

I am today publishing a consultation on the draft payment accounts regulations 2015.

The regulations make provision regarding the transparency and comparability of fees charged in relation to payment accounts; payment account switching and access to payment accounts with basic features for all consumers legally resident within the EU.

The regulations are required in order to implement the requirements of the payment accounts directive (2014/92/EU) (“PAD”) which was adopted on 23 July 2014. In order to meet treaty obligations, EU member states must implement the majority of the measures set out in PAD by 18 September 2016.

The Government have already taken forward a number of initiatives for the purposes of improving the experience of UK current account customers. For example, the seven-day current account switch service (CASS) supports current account switching and basic bank accounts have been available in the UK for over 10 years, most recently augmented by the December 2014 agreement concluded by the nine largest providers of current accounts in the UK. That new agreement clarified and improved the terms upon which basic bank accounts are offered.

To complete the transposition of PAD, the UK must establish these initiatives in legislation and amend existing legislation related to the provision and regulation of payment accounts. However, due to the measures that the UK already has in place, the proposed regulations aim to minimise any negative impact on structures and services that are working well.

PAD allows member states to extend provision in a number of areas. Under the draft regulations, application will not be extended beyond what is necessary.

The exception to this is chapter IV of PAD—payment accounts with basic features—where UK policy on basic bank accounts is more developed than that set out in the directive. As a result, the Government intend to implement PAD in such a way as to preserve the UK’s existing basic bank account policy, while creating the necessary legal certainty for consumers required by PAD.

The consultation closes on 3 August. The consultation document is available online at: https://www.gov.uk/government/latest?departments%5B%5D=hm-treasury

[HCWS51]

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 16th June 2015 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

13. What steps his Department is taking to (a) support savers and (b) promote home ownership.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Government stand firmly on the side of people who want to work hard, save up, buy their own homes, and retire with dignity. We have increased allowances for individual savings accounts, introduced the Help to Buy scheme, pensioner bonds and pension freedoms, and taken 95% of people out of tax on their savings.

[Alan Mak]

Alongside the support that has been introduced over the last five years, maintaining a strong economy and low interest rates is one of the most important ways of helping home owners. Can my hon. Friend assure my constituents in Havant that the Government will continue to ignore the Opposition’s calls for more taxes and more spending, which put our economy at risk and make it harder for people to get on to the housing ladder?

[Harriett Baldwin]

What a pleasure it is to welcome my hon. Friend to the Chamber. He is absolutely right: more people are employed than ever before, and mortgage rates are extremely low. As a result of our long-term economic plan, my hon. Friend’s constituents in Havant, and constituents elsewhere, can now aspire to own their own homes one day.

[Iain Stewart]

Policies such as Help to Buy have proved very popular in my constituency, but may I urge my hon. Friend to be more ambitious in the longer term? Will she consider expanding the shared-ownership model, which enables people to take an initially small equity share in a property at the start of their careers, and then save up in order to expand it as their careers progress?

[Harriett Baldwin]

I congratulate my hon. Friend on the strong endorsement he received from the voters of Milton Keynes to return here and express their interests. I am very pleased to hear Help to Buy is so popular in Milton Keynes. The town tops the charts for the attractiveness of buying versus renting. Shared ownership is indeed an excellent way to help people take their first steps on the property ladder, and the Government remain committed to it.

[Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

The Minister talks about housing topping the charts in Milton Keynes, but in my constituency we are in danger of topping the charts in house prices, with the average price now £606,000. That is being fuelled in part by overseas buyers who purchase a property and either rent it out or do not live there. Have the Government any plans to tackle this and help my constituents get on the housing ladder?

[Harriett Baldwin]

My hon. Friend the Member for Milton Keynes South (Iain Stewart) topped the chart in Milton Keynes personally as well, but the hon. Lady raises an important question: London house prices are a key issue for her constituents. That is why the Government have brought in so much support to increase the number of affordable homes. The number of social homes and affordable homes increased by over 200,000 in the last Parliament. We are committed to continuing that great work and to bringing in the concept of starter homes, which we hope will add further to housing supply.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I genuinely welcome the Minister to her post, but I ask her to be very careful about the right to buy housing association properties. Will she look across at cities such as Paris, where people on low incomes have been driven out and live in ghettoes many, many miles outside the city? If we do not build more social housing that is available to lower-income people, that will happen in our cities.

[Harriett Baldwin]

I am sure the hon. Gentleman—who kindly welcomes me to my place—will welcome the fact that more social housing was built in the last Parliament than in the entire 13 years of the last Labour Government. He rightly raises a point about housing associations: we must allow more supply of housing association properties. That is why this Government will bring in the right to buy for housing association tenants, which will enable more capital to come into that sector and more housing association properties to be built.

[Mrs Maria Miller (Basingstoke) (Con)]

11. What steps his Department is taking to promote home ownership.

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Government are taking a range of steps to promote home ownership, including helping almost 100,000 households through the Help to Buy scheme. The Government have extended the Help to Buy equity loan to 2020, introduced a Help to Buy ISA and extended the right to buy, and we are delivering 200,000 new starter homes.

[Mrs Miller]

Hundreds of Basingstoke residents have a home of their own because of this Government’s Help to Buy policy. What assurances can the Minister give today that Help to Buy will continue into the future, because we are currently putting together our local plan, which includes a commitment to more affordable housing?

[Harriett Baldwin]

I can give my right hon. Friend the assurance that the Government want people who work hard and want to buy their own home to enjoy the security of owning their own home. The equity loan scheme will last until 2020, which should support another 120,000 households in Basingstoke and elsewhere to get on to, and up, the housing ladder. In addition, as my right hon. Friend the Chancellor announced in his recent Budget, the Help to Buy ISA is expected to help over 1 million first-time buyers save for a deposit.

[Wes Streeting (Ilford North) (Lab)]

The Government’s policies were not popular in every part of the country, in particular in my constituency. May I therefore ask the Minister, as this has been a week for U-turns, to listen to the National Housing Federation, the CBI and the Institute for Fiscal Studies and revisit right to buy for housing association stock, which will lead to a decrease in the availability of affordable homes for rent, and to deal instead with the fundamental problem of housing supply?

[Harriett Baldwin]

I welcome the hon. Gentleman to the House. This Government are firmly on the side of those people who want the right to buy their own properties, and that includes extending the right to buy to housing association properties. Perhaps he will agree with the right hon. Member for Birkenhead (Frank Field), who published a report with the Institute for Public Policy Research in recent years calling on his party to do exactly the same thing.

[Julian Knight (Solihull) (Con)]

Many hard-working homeowners in my constituency take in lodgers to meet their mortgage repayments. However, the rent-a-room tax-free threshold has remained unchanged at £4,250 a year since 1997. Now that the deficit is being paid down, would it not be a positive step to help aspirational homeowners by raising the rent-a-room tax-free threshold?

[Harriett Baldwin]

I welcome my hon. Friend to the Chamber. He clearly brings a wealth of experience in this area, and he is right to highlight the fact that people who rent out a room can receive the first £4,250 tax-free. I note the point that he has made. My right hon. Friend the Chancellor of the Exchequer is sitting beside me and he will no doubt take that as a Budget submission and consider it as part of that process.

[Fiona Mactaggart (Slough) (Lab)]

Following on from that question, one aspect of the tax gap that everyone admits is part of the problem is the collection of tax on rental properties. Will the Minister confirm that there will be a Treasury study on how to deal with the tax gap on rental properties, in order to find out how big it is and how we can challenge it?

[Harriett Baldwin]

The right hon. Lady is right to highlight that point. It is important to recognise that although the first £4,250 of rent is covered by the allowance, once it goes above that level it becomes taxable income. HMRC is constantly looking at ways in which it can improve the collection rate in that area.

Prudential Regulation Authority

Harriett Baldwin Excerpts

Monday 15th June 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The annual report and accounts 2014-15 of the Prudential Regulation Authority has today been laid before Parliament.

The report forms a key part of the accountability mechanism for the Prudential Regulation Authority under the Financial Services and Markets Act 2000, and assesses the performance of the Prudential Regulation Authority over the past 12 months against its statutory objectives.

Copies are available in the Vote Office and the Printed Paper Office.

[HCWS35]

Royal Bank of Scotland

Harriett Baldwin Excerpts

Thursday 11th June 2015 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

With permission, Mr Speaker, I would like to make a statement regarding the Chancellor’s speech at Mansion House last night.

First, I turn to the Royal Bank of Scotland. The £45 billion that the previous Government paid for the Royal Bank of Scotland represents the largest single bank bail-out in the world. The bank employs over 60,000 people in Britain and provides over a quarter of all small business lending in Britain. Its problems and its slow recovery have been one of the biggest drags on our economy, as many smaller firms know all too painfully. The restructuring of the Royal Bank of Scotland and the work that Ross McEwan and his team have done since have brought us to a decision point. This Government were not responsible for the bail-out of the Royal Bank of Scotland or the price paid then for shares bought by the taxpayer, but we are responsible for getting the best deal now for the taxpayer and doing whatever we can to support the British economy.

As the Chancellor set out, there is no doubt that starting to sell the Government’s stake in RBS is the right thing to do on both counts. That is not just our judgment—it is the judgment of the Governor of the Bank of England, whose views the Chancellor sought and whose letter on this issue we published last night. In the Governor’s words, “it is in the public interest for the government to begin now to return RBS to private ownership.”

He goes on to say that this

“would promote financial stability, a more competitive banking sector, and the interests of the wider economy.”

Indeed, he adds that

“there could be considerable net costs to taxpayers of further delaying the start of a sale.”

That is also the conclusion of the independent review that we commissioned from Rothschild and that was published last night. It says that beginning sales now, and increasing the free float, will improve the marketability of our remaining stake, and it means that we can expect to see larger sales on better terms in the future—but only if we start now. This independent report confirms that taking into account all the sales we have authorised of our bank assets, and the fees we have received, at the current valuations taxpayers can expect to make £14 billion more than they paid out.

In the coming months we will therefore begin to sell our stake in RBS. It is the right thing to do for British businesses, British taxpayers and the British economy. Taking all the bank interventions in total—Lloyds, Northern Rock, and the scheme fees—we are making sure that taxpayers get back billions of pounds more than they were forced to put in. Of course, given the size of our stake in RBS, the sales will take some years and are likely to involve all types of investors. With such a complex investment case, we have to start with institutions, but, as the Chancellor said, there is no reason why ordinary investors—in other words, members of the public—should not take part in due course.

I now turn to Royal Mail. As the Chancellor set out last night, the first sale of our remaining stake in Royal Mail has begun. The Government have today sold half of the 30% stake they retained in Royal Mail plc at a price of 500p per share. This sale has raised £750 million, and that money can be used to reduce public debt. We have said that we will dispose of all our shares in Royal Mail in this Parliament. We will continue to review the options in the light of our stated sale objectives, but there is no rigid timetable. Value for the taxpayer remains the priority. The Chancellor also announced last night that the Government intend to gift up to 1% of the shares of the company to Royal Mail’s UK employees, in recognition of their work in turning Royal Mail around.

Finally, the fair and effective markets review yesterday published its final report. The report sets out 21 recommendations to help to restore trust in the wholesale fixed-income, currency and commodity markets. The review was established by the Chancellor of the Exchequer and the Governor of the Bank of England in June 2014 to help to restore trust in those markets in the wake of a number of recent high-profile abuses. The review is centred on four principles: first, individuals must be held to account for their own conduct; secondly, firms must take greater collective responsibility for market practices; thirdly, regulators should close gaps in regulatory coverage and broaden the regime holding senior management to account; and fourthly, given the global nature of these markets, co-ordinated international action should be taken wherever possible to improve fairness and effectiveness. As the Chancellor set out in his Mansion House speech last night, there is no trade-off between high standards of conduct and competitiveness. Implementing the reforms set out in the review will ensure trust in our markets and strengthen London’s global leadership position.

This Government have a long-term plan to make the UK economy the most prosperous of all the world’s major economies in the coming generation and for that prosperity to be shared widely across our one nation. The steps we are announcing today are a key part of achieving a new settlement for our public finances and for our financial services industry, and they will help us secure that bright future for all. I commend this statement to the House.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I welcome the new Minister to her role, but where is the Chancellor of the Exchequer? Should he not have the courtesy to come to House of Commons and answer questions on what might be one the most important financial decisions of this Parliament? Taxpayers deserve to know more about what is going on here. Why is it that when there are difficult questions, the Chancellor always blames someone else or sends someone else?

Taxpayers who bailed out RBS during the global financial crisis want their money back and will rightly be suspicious of any rush to sell. When RBS is still restructuring the business and awaiting a US settlement for the mis-selling of subprime mortgages, would a premature sale not pose a risk for the taxpayer? The Chancellor said two years ago that he would countenance a sale of RBS only when

“the bank is fully able to support our economy and when we get good value”.

Does the Minister really think that those tests have now been met?

Although we have always supported the eventual return of RBS to the private sector, is it not essential that the Treasury get back as much money as possible to help pay down the national debt? Why the rush when the share price is so far below the break-even point? RBS had to be bailed out urgently, but it does not have to be sold off at the same speed. The Minister should not give the impression, either, that the Governor of the Bank of England is telling Ministers that the price is now right, because he makes it very clear in his letter that questions of valuation are entirely for the Government.

Before Government Members start pretending that the RBS rescue was somehow not a matter of consensus at the time, we are not going to let them re-write history. The truth is that the Chancellor did not oppose the urgent rescue of RBS at the market price back in 2008. The National Audit Office says that the rescue price was “justified” and the Institute for Fiscal Studies says it was

“not obviously unfavourable to taxpayers”.

They know full well what the consequences would have been if the bank had gone under.

On the specifics, will the Minister clarify for the record exactly what the Government accept the break-even share price for the bank to be? The figure of a potential £7.2 billion loss might be understating things, because the Rothschild calculation she mentioned nets off the fees the Government have received from the bank since 2008.

On Lloyds, the Treasury has already pledged that shares sold through the Government’s trading plan will not be sold for less than 73.6p—the price the Government paid for them. What is the equivalent red line below which the Treasury would not sell an RBS share? Why can the Minister not give us more detail about precisely when the sale will commence and what impact she predicts it will have on debt reduction?

As for the extremely dodgy claim that if we roll everything together, stand on one leg and squint a bit, losses at RBS do not really look that bad after all, is not that a bit like saying, “I’ve sold the house and lost a fortune, but don’t worry because I got a great deal on the car”? Come off it! The Government cannot pretend they are not making a loss on RBS just because they are making a gain on completely separate assets elsewhere. At a time when the Chancellor is reportedly on the brink of axing £5 billion from tax credits for children of working parents, should not the Government be far more careful not to lose billions more by rushing a sale on RBS? Everyone knows that when it comes to getting value for money, they have poor form: just look at the fire sale of Royal Mail.

We have to ask what the real reasons for this hasty sell-off are. We saw in the March Budget that the Chancellor rushed forward asset sales in order to just about meet the Treasury’s debt target. Is he repeating the same thing before the emergency Budget, regardless of the best price for the taxpayer? Or perhaps this is the Chancellor trying to prove his ideological credentials as part of his leadership bid, to impress all those new Conservative Back Benchers. Taxpayers need to know that there are sound reasons for this and that he is not doing it just to suit himself. We have a hidden Chancellor and a hidden agenda. It is now for the Government to justify the claim that they are putting taxpayers’ interests first.

[Harriett Baldwin]

Clearly, the Chancellor is not dodging any difficult questions because I did not hear any difficult questions from the hon. Gentleman. It is a bit rich that the new shadow Chancellor has chosen to make his first attack on the Government’s economic policy by drawing attention to his party’s woeful track record on bank regulation and by publicly disagreeing with the advice of the Governor of the Bank of England.

Last week the hon. Gentleman told this Chamber:

“I have had plenty of time to reflect on the result of the general election. Obviously, we are disappointed with it and we will review our policies accordingly”.—[Official Report, 4 June 2015; Vol. 596, c. 789.]

Clearly, that reflection does not include apologising for the lax regulation of our banking sector or realising that the British people do not want a Government who are committed to borrowing more, spending more and nationalising more. Above all, the hon. Gentleman’s reflection clearly does not include recognising that his mentors, Gordon Brown and Ed Balls, paid a high price for their intervention in the Royal Bank of Scotland. I will take no lectures on economic competence from an Opposition party that in office sold off the country’s gold reserves at an all-time low, crashed the banking system and the economy, and left us with the biggest peacetime deficit in our nation’s history.

I will answer the hon. Gentleman’s questions. He asked whether the Government will publish a break-even share price for RBS. I do not know whether he is Mystic Meg, but I do not know exactly at what price the sales will be made. The hon. Gentleman will have seen the Rothschild report that we have published today. Under his Government, it was forecast in 2009 that the bank interventions would result in a total loss of between £20 billion and £50 billion. We have turned the economy and the banking sector around, and as of this week the Rothschild report estimates that the overall sum total of the interventions will benefit the taxpayer by £14 billion.

[Mr Andrew Tyrie (Chichester) (Con)]

First, may I warmly welcome the Minister to her new role? She has a great job and I congratulate her on obtaining it. May I also warmly welcome her statement? We need to grasp that the loss has already occurred: it took place in 2008. It was made possible by poor regulation and it was made certain by shocking incompetence by the RBS board.

The Rothschild report was made available in the Vote Office only a few minutes before the end of the previous statement, so I have had only a brief chance to look at it. The overall surplus identified from the total sales of financial sector interventions is £14 billion, but a footnote makes it clear that that excludes the cost of funding. I gave the Minister only a few moments’ notice that I would raise this issue, but I would be extremely grateful if she could say what the cost of funding is and what the number would be, were it included in the table.

[Harriett Baldwin]

I congratulate my right hon. Friend on his unopposed re-election as Chair of the Treasury Committee. That he asks a question about the footnote illustrates his forensic reading of the published materials. As he knows, at the end of 2009 the estimate was that the cost of bank interventions would range between a £20 billion loss and a £50 billion loss. As of last week, the Rothschild report estimates that that situation has completely turned around, and that the overall recovery from the bank interventions is in the order of a £14 billion magnitude. The overall cost of funding on our Treasury issuance is at record lows thanks to the prudent economic management of my right hon. Friend the Chancellor.

[Roger Mullin (Kirkcaldy and Cowdenbeath) (SNP)]

I welcome early sight of the statement.

The Government are fond of talking about long-term economic plans—[Hon. Members: “Hear, hear!”] Absolutely. However, a sell-off is not a strategy, and a strategy for the banking sector is completely missing from the statement. My first question is this: is it not the case that there remains scope for a proper review of the options for the future of RBS, such as the consideration of creating challenger banks out of it? Secondly, yesterday I asked the Secretary of State for Scotland about the branch closures the length and breadth of the country that are being announced by RBS. Is that part of the price that people are expected to pay for this rushed sell-off? Thirdly, the statement mentioned concern about the drag on the economy and the poor performance in supporting small and medium-sized enterprises, so will the Minister explain precisely how the policy will further strengthen the SME sector?

[Harriett Baldwin]

I welcome the new hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin). What a refreshing change it is.

The hon. Gentleman asks about Royal Bank of Scotland in particular. I gently point out that if the Scottish National party had won the independence referendum, there would be no ability to intervene in the banking sector in the way that the UK Government intervened.

The role that Royal Bank of Scotland plays as the most significant lender in the SME sector is critical. It has not been able to play its full part because of public ownership. The Bank of England letter states that a phased return of RBS to private ownership would promote financial stability and lead to a more competitive banking sector, in the interests of the wider economy.

[Dr Liam Fox (North Somerset) (Con)]

I welcome my hon. Friend to her long-overdue promotion. Will she confirm that any cost calculation will have to take into account the fact that the sale will reduce the deficit, and therefore prevent any extra debt interest that would otherwise be incurred by this country? Will she tell the House that putting the banks into the private sector is not a matter of ideology, but simply because, as previous privatisations have shown, when companies are free in the private sector they make more profit, pay more taxes and serve their customers better?

[Harriett Baldwin]

My right hon. Friend is absolutely right, and I thank him for his kind words of welcome. He is correct to say that we are not doing this purely for price reasons. It is important to take into account the wider economic impact. That is why I am grateful to the Governor of the Bank of England for highlighting the ways in which a banking sector free of public ownership will allow more capital, more restructuring and more competitive characteristics in our economy.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

I, too, welcome the Minister to her post. In her statement, she rightly draws attention to the scale of the bail-out of RBS. For the avoidance of doubt, will she give the House a quote from the Chancellor, who was shadow Chancellor at the time, criticising either the bail-out in principle or the share price paid by the Government of that time?

[Harriett Baldwin]

I thank the right hon. Gentleman for his kind words.

As the Chancellor made clear in his Mansion House speech last night, he was responsible for the decision point yesterday and for articulating a future path away from the situation he inherited. The right hon. Gentleman will remember that the Treasury predictions at the time of the interventions were that they would cost the taxpayer between £20 billion and £50 billion overall. The situation has moved on and the economy has recovered substantially from the largest recession in our peacetime history. It is time to put the banking sector into a new settlement, and to have a new settlement for our financial services.

[Antoinette Sandbach (Eddisbury) (Con)]

Sir Mervyn King, the former Governor of the Bank of England, said:

“Why…did the Bank of England not do more to prevent the disaster? We should have. But the power to regulate banks had been taken away from us in 1997. Our power was limited to…preaching sermons.”

Will my hon. Friend confirm that the Bank of England now has the power to do more than just preach sermons?

[Harriett Baldwin]

I welcome my hon. Friend to the House and congratulate her on an excellent question. The tripartite arrangements for bank regulation put in place by the former Member for Kirkcaldy and Cowdenbeath let the country down. The work of the last Parliament was to reframe our financial services regulation, so that the Bank of England could take responsibility, and so that we have a single point of regulation for the financial sector overall, supplemented by the important work of the Financial Conduct Authority on behaviour, and by the Prudential Regulation Authority. It is incredibly important that we have moved on from the tripartite arrangement. We do not want another situation in which the British taxpayer has to bail out a bank.

[Mr Dennis Skinner (Bolsover) (Lab)]

Is it not just conceivable that this mad rush is being perpetrated because the Government know that, with more than 50 rebels on the Back Benches, they are likely to lose their majority sooner rather than later, and lose credibility in the process? This is coming from a Chancellor who has added more in five years to the national debt than all the Labour Chancellors put together. He has been blaming Labour for bailing out the banks, but he supported it. He is now bailing out his friends in the City.

[Harriett Baldwin]

What can I say? It is extraordinary. I do not suppose we heard that kind of rant when the former Member for Kirkcaldy and Cowdenbeath was intervening in the banking sector. Perhaps the hon. Gentleman has not noticed that, in the single vote on legislation on Second Reading we have had in this Parliament, the Government won by a majority of 491. [Interruption.]

[Mark Garnier (Wyre Forest) (Con)]

When the hon. Member for Bolsover (Mr Skinner) has finished, may I welcome the Minister to her place? She brings with her a great wealth of experience from the City. Part of that wealth of experience is a full knowledge of the sunk cost fallacy. Does she agree that it is completely ludicrous to say that an investment decision made in 2015 should be based solely on the information known in 2008, and that that view betrays a staggering lack of knowledge about the investment process among those opposed to selling the stake in RBS at potentially a loss?

[Harriett Baldwin]

I thank my hon. Friend and constituency neighbour for his question, which shows his depth of knowledge. He is right. In my years of managing portfolios, what I paid for investments in the first place was a fact, but managers also have to factor in the future. None of us has a crystal ball. My hon. Friend’s words are wisely taken.

[Helen Goodman (Bishop Auckland) (Lab)]

I welcome the hon. Lady to her new role at the Dispatch Box. Everyone agrees and understands that the RBS shareholding needs to be transferred to the private sector. The Rothschild report states that if shares were sold at the current share price there would be a paper loss of £7.2 billion, which by anybody’s standards is a lot of money. What the report does not show, however, is why the public benefits add up to £7 billion. Could the Minister explain that please?

[Harriett Baldwin]

I thank the hon. Lady, who has great knowledge of these matters, for her question. Any estimate—and the one in the Rothschild report is no different—will be based on the current market conditions. The number that the report cites is, I think, as at 5 June. I note that the share price of RBS has performed well today; there will be different prices in the years to come. The Government have made it very clear that this will not be a quick process; it will take time. We can only project as at today’s prices the £7 billion figure, but it may or may not be a bigger number in the future.

[Alan Mak (Havant) (Con)]

Does my hon. Friend agree that the only reason we can start selling off our stake in the bank is the growing demand in our economy thanks to our long-term economic plan?

[Harriett Baldwin]

I welcome my hon. Friend to his place. I know he has a great deal of experience in these matters. He is absolutely right that this is a key part of the long-term economic plan. We cannot have a healthy economic recovery without a healthy financial sector. I do not think that anyone in this place would argue that we can have a healthy banking sector when a large chunk of it, as my right hon. Friend the Chancellor has said, is in taxpayers’ hands.

[Mr David Hanson (Delyn) (Lab)]

Does the Minister think it would be prudent to have pre-scrutiny by Parliament, either through the National Audit Office or the Treasury Committee, of the Government’s objectives in the sale and the money they could be seeing? Will she also say a word about RBS’s liabilities? For example, there is currently a mis-selling inquiry into the enterprise finance guarantee scheme, which my constituents are facing. Who will ultimately be responsible for those liabilities?

[Harriett Baldwin]

The right hon. Gentleman asks a good question. I am sure the relevant Committees will take a close interest in this matter, because it is obviously a very large public investment. In terms of the liability side of the equation, he will be aware that there are a number of different pending regulatory matters that affect RBS. He will also be aware, as I think it says in the Rothschild report, that the market is aware of these things and will factor them into the price of the shares.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

May I, too, welcome my hon. Friend to her post? I also welcome the shadow Chancellor, although I think we rather miss the more rambunctious approach of his predecessor. My hon. Friend the Member for Wyre Forest (Mark Garnier) illustrated the fundamental investment fallacy of not selling things on the basis of an historic price. Does my hon. Friend the Minister agree that the only reason the Opposition can take this foolish position is that clause IV may be out of their rulebook but it remains within their hearts?

[Harriett Baldwin]

I thank my hon. Friend for a very good point, very well made. It is absolutely the case that we are responsible for ensuring that, as we go forward from this decision point, we get the best possible value irrespective of what the previous Government paid, which was, in retrospect, too high.

[Mike Kane (Wythenshawe and Sale East) (Lab)]

I welcome the Minister to her post. One would expect that the duty of the Chancellor would be to sweat the assets as his disposal, but with the fire sale of Royal Mail and now RBS, the taxpayer is being let down, having had to endure all the pain of the worldwide economic crash caused by the banks with none of the gain in this case.

[Harriett Baldwin]

I really will not take any lectures on letting the country down in terms of economic management. The people who suffer the most when the banks fail, the regulatory system fails and the economy fails are the very poorest in our society. It is outrageous for the hon. Gentleman to suggest that the economic recovery, the clear turnaround in this portfolio of legacy assets and clearing up the mess that his party left behind is anything other than progress.

[Mary Robinson (Cheadle) (Con)]

It is right for the shadow Chancellor to say that the taxpayers want their money back. It is also right, and I hope my hon. Friend agrees, that people should listen to the Governor of the Bank of England when he warns that delaying the sale of our stake in RBS would lead to a considerable net cost for the taxpayer.

[Harriett Baldwin]

I welcome my hon. Friend to her place. I agree with her. She points out an important passage in the letter from the Governor of the Bank of England. He believes, for all sorts of reasons from where he sits as our overarching economic regulator, that it is important that we come to this decision point and staging post. I also emphasise that this process will take some time. It is not something that will happen today, tomorrow or the next day. The process of clearing up the mess left behind by the previous Government is a lengthy one.

[Caroline Lucas (Brighton, Pavilion) (Green)]

I, too, welcome the hon. Lady to her post. Will she tell us whether the Chancellor intends to make a habit of announcing policy to a roomful of bankers, based on a secret review by an investment bank with no public consultation? Did he even consider the alternatives, such as turning RBS into a network of local stakeholder banks, like they have in so many other countries, as a perfect example of localism in practice?

[Harriett Baldwin]

I think my right hon. Friend was delighted to be invited back to the Mansion House to make a speech again this year. The question the hon. Lady asks about locally owned banks indicates that she favours a system of public ownership of our banking sector which, overall, the Government disagree with.

[Jeremy Quin (Horsham) (Con)]

Having worked on the sale of Northern Rock—I refer the House to my entry in the Register of Members’ Financial Interests—may I congratulate the Government on their successful asset sale programme to date? As referenced in paragraph 2.2.2 of the Rothschild report, the benefits of these sales are not just direct for the taxpayer; they are indirect as well. They may result in increased lending and more mortgage approvals. Will my hon. Friend confirm that those indirect benefits will be taken into account when we judge the success of this programme?

[Harriett Baldwin]

I welcome my hon. Friend to his place, and also welcome his wealth of experience and knowledge in this matter, which he ably demonstrates in his question. The sale will bring wider benefits to the overall economy. It will help us to continue to make progress in making the banking sector more competitive, and may result in a more competitive financial services sector and mortgage sector. That position is echoed not only in the Rothschild report, but in the Governor of the Bank of England’s letter.

[George Kerevan (East Lothian) (SNP)]

May I take the Minister back to page 11, table 2 and the footnote, because we did not get an answer when this was first asked? The table lays out not the forecast recoveries but just a statement of where we are at the moment, which could change. It does not include the cost of the funding of the interventions; in other words, the cost of the Treasury paper that was created to buy the assets in the first place and on which interest is being paid. Will the Minister please answer the question—what was the cost of funding the interventions?—so that we know the true cost, not the £14.3 billion?

[Harriett Baldwin]

The hon. Gentleman is absolutely right that the table is a snapshot of a moment in time. As time progresses, we will no doubt be able to pin down exactly the overall costs of clearing up the mess that Labour left behind.

[David Rutley (Macclesfield) (Con)]

I welcome today’s statement and the steps being taken to return RBS to private ownership. Will my hon. Friend confirm that the steps set out in the markets review will help to tackle what the Governor of the Bank of England has called a “culture of impunity”, which has been too prevalent in investment banking?

[Harriett Baldwin]

My hon. Friend is absolutely right to highlight a very important part of the Governor of the Bank of England’s announcement last night—the “Fair and Effective Markets Review”; bringing a range of fixed income, currency and commodity markets within the regulatory perimeter; and aspiring to be not only the most competitive country in the world in which to locate a financial services business, but the one with the best, cleanest and most competitive regulatory system.

[Mr Adrian Bailey (West Bromwich West) (Lab/Co-op)]

I join others in welcoming the hon. Lady to her new role. The sale price of Royal Mail shares last night— £5 per share—totally vindicates the cross-party conclusion of the former Business, Innovation and Skills Committee that Royal Mail shares were underpriced in the original sale. One reason was the over-reliance on institutional investors and the under-participation of the public. Will the Minister assure us that that lesson will be learned in the sale of RBS?

[Harriett Baldwin]

I have to disagree with the hon. Gentleman. A long time has passed since the initial flotation, during which the markets have done a lot better. The markets have welcomed the re-election of a strong Conservative Government who have turned the economy around and made huge improvements in our public finances. It is largely due to that that the price is so much higher.

[Bob Blackman (Harrow East) (Con)]

As we return RBS to the private sector, there are three alternatives. One is for the Government to hold on to the shares for as long as possible in the hope that the share price increases. The second is to sell the whole lot in one go and hope that we get the right price. The third is a phased sale that maximises the income for the taxpayer. Which does my hon. Friend believe is the right option?

[Harriett Baldwin]

My hon. Friend ably summarises a range of options. Today’s statement clearly illustrates that we have rejected his first option of doing nothing. The Government have never shrunk from making difficult decisions that are in the right interests of the country’s economic future. On the second option of selling everything in one go, it is not our opinion, given the size of the holding and as the reports make clear, that the sale can be done in short order; it will take a period of time—which leaves us with the third option.

[Peter Dowd (Bootle) (Lab)]

Has the Minister read, “Freeing Britain to Compete”, produced by her party in 2007 and endorsed by the Prime Minister and, I believe, the Chancellor, which called for a vast range of regulation in financial services to be abolished or watered down, including in relation to money laundering? In particular, has she read the part that says that the Labour Government

“claims that this regulation is all necessary. They seem to believe that without it banks could steal our money”?

--- Later in debate ---

[Harriett Baldwin]

No, I have not read that report.

[Robert Jenrick (Newark) (Con)]

Is not the reason it is difficult to get our money back from RBS that, other than the Greek banks, no other major bank in the world is in such a parlous, unprofitable state, the root causes of which go back to the last Labour Government—a poor loan book, terrible misconduct, resulting now in catastrophic fines, and ill-judged mergers? Even if we sell the shares at a loss, would that not merely be a tragic reminder to the British public of the failure and economic incompetence of Labour?

[Harriett Baldwin]

I could not put it better myself.

[Kevin Brennan (Cardiff West) (Lab)]

As I understand it, the stake was originally acquired for £5 a share and the Government are selling them for about £3.50 a share and claiming that the taxpayer is making a profit. On that basis, with the weekend approaching, is the hon. Lady prepared to lend me £20? I will give her a tenner back next week.

[Harriett Baldwin]

I have just been informed by my hon. Friend the Member for Croydon Central (Gavin Barwell) that the hon. Member for Cardiff West (Kevin Brennan) still owes him a fiver, which he lent him last week.

[Huw Merriman (Bexhill and Battle) (Con)]

Having spent the last seven years working on the Lehman Brothers unwind and repaying creditors in full, I pay tribute to the thousands of RBS staff across the nation, including those at Cotton Street, Bolsover, for returning the bank to health. Will the Minister confirm that selling the initial stake will make it much easier and more efficient to sell the remainder of the stake?

[Harriett Baldwin]

I welcome my hon. Friend, who has a wealth of experience in insolvency practice that he has clearly put to good use in his first question. Rothschild and the Bank of England Governor have said that one of the challenges facing this stake is the illiquidity of the float—the stock is not liquid enough to be in any of the major indices, for example—so there are liquidity benefits and potential price benefits from putting an initial float in the private sector.

[Kelvin Hopkins (Luton North) (Lab)]

May I welcome the hon. Lady to her post and say how much I agreed with the measured, sensible and absolutely correct points made by my hon. Friend the Member for Bolsover (Mr Skinner)? I can confirm to the hon. Member for North East Somerset (Mr Rees-Mogg) that the old clause IV is certainly alive in my heart. In 1983, I was pleased to stand for election on a manifesto that called for the nationalisation of the banks. Had the banks been nationalised—in public ownership and accountable to the public—all the profits would have accrued to the public purse and they might have been shielded from the world banking crisis. By giving RBS back to the private sector, are we not simply inviting more gambling, more greed, more irresponsibility and more crises in future?

[Harriett Baldwin]

May I express my thanks to the British people for ensuring that we have a Government focused on the economic future of this country, not on the failures of the past and the longest economic suicide note in history?

[Graham Evans (Weaver Vale) (Con)]

I am delighted to welcome my hon. Friend to her place. Will she remind the House who gave Fred “the Shred” Goodwin a knighthood for services to banking?

[Harriett Baldwin]

I thank my hon. Friend for a good question that reminds us not only of the failure of the banking regulatory system under the previous Government, but of the rewards for failure. Labour allowed Fred Goodwin to walk away with an enormous pension and a knighthood.

[Debbie Abrahams (Oldham East and Saddleworth) (Lab)]

I welcome the hon. Lady to her new role, but gently remind her that the current debt to GDP ratio is 80%, which is 20% higher than it was after a global economic crisis and our recapitalisation of the banks. On the current RBS share price, there would be a loss to taxpayers of £13 billion, if all the shares were sold today. Is this not incredibly insensitive to the millions of disabled people waiting for personal independence payments and to the carers who have seen £3.5 billion cut from social care and who are really struggling in this, carers week, and will she confirm that the Government will sell RBS only at a profit to the taxpayer?

[Harriett Baldwin]

The hon. Lady’s question started off very well by acknowledging the risks of high public debt. It is incredibly important for those people whom she rightly draws our attention to that we have a strong and healthy economy, and a strong and healthy financial sector is part of the solution. I am not sure, however, whether she is arguing that we should borrow more for longer by holding on to the shares for longer.

[Julian Knight (Solihull) (Con)]

Is my hon. Friend aware that just prior to the financial crash, the then Labour Government were running an underlying fiscal deficit equivalent to 6% of GDP—twice the level recommended for the EU? Is it not a bit rich, therefore, for Labour Members to dish out advice on both the management of the banks and government finances?

[Harriett Baldwin]

I welcome my hon. Friend to his place, and he is right that I am not prepared to take any lectures on bank regulation, fiscal responsibility or economic management from the Labour party.

[Clive Efford (Eltham) (Lab)]

I welcome the hon. Lady to her position, but only the Conservative party could come here and say that this is a benefit to the taxpayer when it is selling this bank at a cost to the taxpayer. This may represent another cash injection, but on this occasion there is nothing left to get taxpayers’ money back further down the road. Can she recall any time when her party criticised the price paid for those shares at the time we bailed out HSBC?

[Harriett Baldwin]

I simply do not accept the hon. Gentleman’s line of argument. If he is such a Mystic Meg, perhaps he will tell me the date on which the price of this bank, which has been completely restructured over the last few years, will change. Rothschild has provided an estimate of the current state of the overall portfolio of bank interventions. I remind the hon. Gentleman that while in 2009 everyone—including Her Majesty’s Treasury—expected that these interventions would cost the taxpayer between £20 billion and £50 billion, evidence today suggests that it will be of overall benefit to the taxpayer.

[Several hon. Members]

rose—

[Heidi Allen (South Cambridgeshire) (Con)]

It strikes me that the concern is about the process at the beginning of the sale. All the advice—from the Bank of England and Rothschild—is about phasing, which is part of the journey to return to profitability. May I suggest a rebranding exercise? Perhaps we should call this something different—I know what: a long-term economic plan!

[Harriett Baldwin]

I welcome my hon. Friend and her excellent question. She is absolutely right that today’s statement announces a decision point on the journey of implementing our long-term economic plan. Part of that is returning the financial sector to its normal state of health.

[Tom Blenkinsop (Middlesbrough South and East Cleveland) (Lab)]

The £3.50 share float price relies on pension fund managers who run Abbey Life, Aberdeen Management, AXA, Clerical Medical, Scottish Widows, six councils, Whitbread, Lloyd’s of London, BAE, Boeing and, of course, Legal and General and the university superannuation schemes, which have already ruled out buying any RBS shares. What they all share is litigation with RBS. Why would they use their customers’ money to buy shares in a company or a bank such as RBS, against which they are taking litigation?

[Harriett Baldwin]

The hon. Gentleman points out something that appears in the Rothschild report—that the bank still faces a range of uncertainties, particularly regarding regulatory action from America. The price today therefore reflects that information.

[Bill Wiggin (North Herefordshire) (Con)]

I welcome my friend and parliamentary neighbour to her new role—she has a tremendous wealth of City experience. My constituents would like to know whether the Government expect the share price to go up, in which case they ought to buy some, or whether it will go down, in which case we should sell considerably more.

[Harriett Baldwin]

I thank my constituency neighbour for his question. As he rightly acknowledges, neither he, his constituents, the Government or the market have perfect foresight into whether the shares will go up or down. They will go up or down, and it will be a phased programme for reducing the holdings. Today we are announcing the decision point and the potential for an initial sale.

[Diana Johnson (Kingston upon Hull North) (Lab)]

I, too, congratulate the Minister on her appointment. The Government have consistently talked about banking reform. I am particularly concerned about the small start-ups that find it difficult to access credit, especially in areas such as Hull where there is low private wealth. With the return to the institutional investors, will the Government now decide to have a national investment bank with a regional base that focuses specifically on small and medium-sized enterprises?

[Harriett Baldwin]

I thank the hon. Lady for her kind words. She is absolutely right to highlight this country’s challenge on access to finance, particularly for the small and fast-growing sector for which bank finance might be appropriate, but it might want to move on to something else. My right hon. Friend the Secretary of State for Business, Innovation and Skills is looking at a package of measures to make sure that businesses in Hull and elsewhere are able to have a wider range of choice in accessing finance.

[David Mowat (Warrington South) (Con)]

As far as I can make out, the position of the Opposition is that if we delay this sale, the shares might go up by 35%, and they might break even, which would be a good thing. Of course, though, they might go down. Does the Minister agree that they have no right to speculate with other people’s money, particularly when financed by an overdraft? If they believe this, they should buy some shares themselves.

[Harriett Baldwin]

There seems to be no pleasing Opposition Members. They are not happy when Royal Mail shares go up and we sell them for more money; and they are not happy when the RBS share price is where it is today. They seem to argue that the best thing to do, in all these situations, is to borrow more, spend more and invest more in the banking sector.

[Geraint Davies (Swansea West) (Lab/Co-op)]

I welcome the Minister to her post and offer a sobering thought to the Chancellor, who might need it after his Mansion House speech. Given that the nationalisation of RBS was in response to an unforeseen sub-prime debt crisis in America, does the Minister agree that changes to the law to require a budget surplus every year might reduce the fiscal flexibility we need to respond to such a crisis in the future—even by renationalising the banks, if necessary?

[Harriett Baldwin]

I am sorry that the hon. Gentleman’s invitation to yesterday’s dinner got lost in the post—or perhaps he was not invited. What I do not understand about his question is why he seems to argue for ongoing fiscal irresponsibility, which is what got us into this mess in the first place.

[Henry Smith (Crawley) (Con)]

I congratulate my hon. Friend on her appointment as Economic Secretary, and I congratulate the Government on further recovering our economy on behalf of taxpayers. Mention has already been made of the Governor of the Bank of England saying that, for the sake of the taxpayer, we need to get on with the sale sooner rather than later. Mark Carney also mentioned the need for stricter custodial sentences for those convicted of financial mismanagement. Although this is not my hon. Friend’s brief, will the Government consider it?

[Harriett Baldwin]

I welcome my hon. Friend’s question, and he is absolutely right that the Governor made a powerful speech yesterday, outlining the steps he and the regulators are taking to end the age of irresponsibility. The Government welcome the recommendations of the FEMA—fair and effective markets—review and hope that they will be taken forward internationally via the Bank for International Settlements and under the Governor’s leadership.

[Kate Green (Stretford and Urmston) (Lab)]

I warmly welcome the Minister to her new post. In a week when he have heard that the Hong Kong and Shanghai Bank is planning to refocus its investment and attentions away from Europe to the far east, what implications does the Minister think this sell-off could have for the long-term headquartering of the Royal Bank of Scotland in Edinburgh?

[Harriett Baldwin]

I thank the hon. Lady for her warm words. The Government noted the points made by HSBC in its report this week. We are proud of the fact that the UK remains one of the most attractive and competitive places in which to locate a financial services company and a bank. It is essential, in making us fully competitive in that regard, that we take the steps we are announcing today.

[Barry Gardiner (Brent North) (Lab)]

I, too, congratulate the hon. Lady on her appointment. She said in her statement that the Government were not responsible for the bail-out of RBS, but does she not agree with the Governor of the Bank of England that public ownership

“prevented enormous financial contagion at a time when the UK financial system was extremely fragile”?

Will she also confirm that the Chancellor is on record as insisting that the money spent on saving RBS from collapse would be recouped in full? Can she explain why he has changed his mind, by telling us how the perceived public benefit from the sale to which she referred will exceed the £7 billion quantified loss that has been calculated in her own report?

[Harriett Baldwin]

The hon. Gentleman has failed to apologise for the regulatory system that allowed us to get into this position in the first place. The letter from the Governor of the Bank of England is on the record. The hon. Gentleman must accept that this is part of the improvement in the overall long-term economic outlook—[Interruption.]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Gardiner, you must come back and wait for the next Member to speak. You know the courtesies of the House. Members must not do that. It is all about respect, and we must have tolerance as well, on all sides.

If the Minister has finished her answer, I will call David Nuttall.

[Mr David Nuttall (Bury North) (Con)]

The Minister experienced the singular disadvantage of being my Whip in the last Parliament. I am pleased to welcome her to her new position.

I regard this share sale as a tremendous opportunity for the Government to widen share ownership, just as the Government of the late Lady Thatcher did in the 1980s. May I urge the Minister to make as many shares as possible available to small investors, to make the application process as simple as possible, and to set the minimum level as low as reasonably possible?

[Harriett Baldwin]

I welcome my hon. Friend back to this place. Let me say what a joy it was to be his Whip for so many years. One always knew where one stood with him, and that also applies to the very sensible question that he has just asked. I think, though, that he needs to hold his horses in relation to RBS. As he will know, the manifesto on which he stood committed us to a wide retail offer of Lloyds Bank shares at some time in the not too distant future, and we will be dealing with that sale first.

[Craig Williams (Cardiff North) (Con)]

Will my hon. Friend assure me that we will never return to the system of light-touch regulation that was advocated and encouraged by the former shadow Chancellor when he was City Minister?

[Harriett Baldwin]

I welcome my hon. Friend to the House. He is right: over the past five years, we have taken painstaking steps to establish a system of regulation in the financial services industry that will ensure that never again will the taxpayer be forced to bail out a bank.

[Richard Fuller (Bedford) (Con)]

As my hon. Friend will know, there is a direct connection between the tolerance of reckless and illegal activities in financial institutions and the destruction of valuable banks such as RBS. Will she confirm that she will allow the Government to give full force to any recommendations concerning the fair and effective markets reform that was announced by the Governor of the Bank of England yesterday? Will she also confirm that unlike the last Government, who showered honours on bankers who were reckless, this Government will bring the full force of the law to bear?

[Harriett Baldwin]

I am pleased to welcome my hon. Friend back to the House. He has made an important point. In his speech, the Governor said that it was right to fine many financial services organisations that had behaved badly in both the recent and the distant past, because such behaviour reduces banks’ capital. Responsibility needs to fall on the individuals who are culpable, and also on the management of those individuals. Reducing the capital that is available through regulatory actions contracts the supply of lending to small businesses.

[Scott Mann (North Cornwall) (Con)]

May I draw attention to my entry in the Register of Members’ Financial Interests? I am a former Royal Mail employee, and a small shareholder.

How does my hon. Friend think posties up and down our great country will have responded today to the announcement of a 1% gift in shares, and the announcement of the continuation of our universal service obligation?

[Harriett Baldwin]

I welcome my hon. Friend to the House. He speaks with great knowledge and eloquence about the real experience of the hundreds and thousands of men and women up and down the land on whom we rely every day for our post. I am delighted to be part of a Government who have enabled them to own shares in the organisation for which they work.

European Union (Finance) Bill

Harriett Baldwin Excerpts

Thursday 11th June 2015 Commons Chamber

[The Economic Secretary to the Treasury (Harriett Baldwin)]

What a pleasure it is to see you in the Chair, Madam Deputy Speaker, and to respond on behalf of the Government to the debate on the European Union (Finance) Bill. I welcome the hon. Member for Wirral South (Alison McGovern) to her position as shadow Economic Secretary.

We have had a good-humoured debate today on this important topic. I have noticed that a large number of former university professors chose to speak in the debate. I welcome the eight new Members who made their maiden speeches during the debate. As my opposite number pointed out, they have been shrewd—they know that Thursday afternoon business on a Bill that takes up all of one page and has general cross-party support is an excellent opportunity to enjoy less stricture from Madam Deputy Speaker in respect of a time limit.

We were privileged to hear a range of maiden speeches, first from the hon. Member for East Lothian (George Kerevan), who shocked us by revealing that he already has his bus pass. He tempted us all with the information that his vegetable garden is ambitious and painted a delightful picture of East Lothian. My grandmother, Flora Maclean Macleod Morison, was born in Dunbar in his constituency, so he will forgive me if I take an entirely different view from him of our United Kingdom, but I enjoyed his maiden speech very much none the less.

We then had the pleasure of hearing from my hon. Friend the Member for Tonbridge and Malling (Tom Tugendhat), who emphasised the fact that his interest in European finance was related to the fact that his wife is French. He took us on a very interesting tour of his constituency that involved Wimbledon strawberries. He also spoke of his valuable and important tours of Iraq and Afghanistan, for which the nation is deeply grateful.

We heard from my hon. Friend the Member for South Ribble (Seema Kennedy) who, I think it is fair to say, is the first person of Iranian-Irish heritage to serve in this place. She took us back to the wars of the roses. The atmosphere seemed to get quite heated on the Conservative Benches at times during the afternoon, but my hon. Friend made a very funny speech and took us on a metaphorical open-top bus tour in a Leyland bus around South Ribble. The House was alarmed to hear that she reversed into her first constituent. We would all like to hear in her subsequent contributions what happened to that constituent. I was left worrying about what happened next.

We had an excellent speech from the hon. Member for Glenrothes (Peter Grant), who complemented the strawberries from Tonbridge and Malling with some Pimm’s from Glenrothes to add to our summer delights. We also heard from the hon. Member for Ealing Central and Acton (Dr Huq), who has been not only a university professor but, I understand, a DJ. She took us around the musical highlights of Ealing Central and Acton. She clearly knows her area extremely well from having lived there for so long, and she paid a well deserved tribute to her excellent predecessors, Angie Bray and Sir George Young. I only regret that Sir George Young’s letter to her when she was 18 failed to persuade her of the virtues of voting Conservative, but a place is reserved for her, should she ever wish to cross the Floor.

We heard a remarkable speech from my hon. Friend the new Member for Corby (Tom Pursglove), who enchanted us with his description of some of his perhaps less successful outings on the cricket pitch. I think it fair to say that he is already one of the most famous new Members, as his name has been mentioned on numerous occasions by his constituency champion, our hon. Friend the Member for Wellingborough (Mr Bone). We are delighted to meet him in the flesh. He was elected as the youngest councillor in the country in 2007, which we in Malvern Hills were slightly annoyed about, as we had only the second youngest. None the less, I congratulate him on being here so early in his life and look forward to his being here for many years to come.

We then heard from my hon. Friend the Member for Richmond (Yorks) (Rishi Sunak), who has a very tough act to follow. Not only has his predecessor left a lasting legacy in this nation’s politics by ensuring that we kept the pound and remained strong in our approach to a wide range of foreign policy issues, but he turned up at his advice surgeries in a Harrier jet—a tough act to follow indeed, but the new Member for Richmond (Yorks) clearly shares the oratory, wit and intelligence of his predecessor. I am sure that his speech today gave us the first inkling of the great contribution he will make.

Today, the House has also had a picture painted for us of a spa. What could be nicer on a Thursday afternoon in the House of Commons than to hear about the city of Bath and its place in European tourism? It was an enchanting picture of an historic and famous place. My hon. Friend the Member for Bath (Ben Howlett) shared his pride in the fact—we all agree with him on the great news—that, after 23 years, Bath is once again a blue city. He told us about the innovative and prosperous place that he represents. He, too, will be a great champion for his area in the years to come.

A stable, prosperous society is possible only if the Government spend citizens’ money wisely. We have before us a Bill that is an eloquent rebuttal to all those who claim that we cannot get a better European settlement. Back in 2013, people said we could never do something as ambitious as cutting the EU budget—it was unheard of. But we worked with our partners, we negotiated hard and we did not give in, and that work paid off handsomely. The seven-year deal we secured represents the first ever real-terms cut to the EU budget, at the same time as protecting our hard-won rebate. That is what happens when we stand our ground, fight hard against unwelcome proposals and defend the interests of the British taxpayer. That is exactly the sort of leadership that is needed in Europe.

[Barbara Keeley]

I want to ask the hon. Lady a question that is important for the next stage of the Bill. Does she think that “standing our ground” will be extended to what the Labour party has suggested and Labour Members have talked about today, which is cutting the CAP and funding for agriculture even further and spending more on growth and jobs? Does she think that that switch of priorities is possible?

[Harriett Baldwin]

The hon. Lady mentioned that earlier and I was going to get to that point in a moment, but yes, we do accept that expenditure on the CAP is still too high both in absolute terms and as a proportion of the overall budget. As she will know, this settlement reduces the amount we spend on the CAP by 13%, but as the Prime Minister said at the time of the deal, reform of EU spending is a long-term project. I will say more later in my speech.

Before I reply to points made in the debate, let me remind the House what the Bill covers and what it does not cover. It relates to the mechanism by which member states finance the EU budget. The mechanism was agreed unanimously by member states in 2014, in a Council decision that fully and accurately reflects the historic deal that the Prime Minister secured. The Bill therefore gives UK approval to that Council decision, finalising the Prime Minister’s historic deal in 2013, which the Government worked hard to achieve and which received widespread praise from both Houses as delivering a good deal for taxpayers.

The hon. Member for Worsley and Eccles South made a number of points, including on the common agricultural policy and the overall enthusiasm her party now feels for reform of the European Union. We welcome that new-found enthusiasm, but I encourage her to induct into that feeling her colleagues in the European Parliament, who play a vital role every year by scrutinising the European budget. I look forward to her being able to engage with them and ensure that there is a good deal of scrutiny, and not only on the points she raised about the common agricultural policy, but on the payment gap, because clearly the Commission has committed to publishing more frequently its analysis on payment forecasts. We welcome the greatly enhanced level of information on the budget but recognise that there is still a great deal more to do.

[Barbara Keeley]

It is worth saying for the record that in the latest round of CAP reforms, covering the six-year period from 2014 to 2020, Labour MEPs voted against the final outcome, because we believe that the reforms were not far-reaching enough. The Minister mentioned talking to those MEPs, but they have already voted against it.

[Harriett Baldwin]

As I said, I welcome the hon. Lady’s European colleagues’ new-found enthusiasm for rigour and reform in the European Union, and I look forward to working closely with them to ensure that happens.

My hon. Friend the Member for Daventry (Chris Heaton-Harris) made an excellent speech that revealed his deep knowledge of the subject. As a former MEP who sat on the Committee that scrutinised the European budget, he has been assiduous in his scrutiny of this legislation—no doubt the Whips will have noted his enthusiasm to take part when the Bill goes to Committee. He asked a range of questions about the ESA reporting and the accuracy of the EU budget. The UK agrees that more can be done to improve compliance, including simplifying the rules that member states have to comply with to release their funds. We believe that the Prime Minister’s deal on the multi-annual financial framework shows that EU spending can be improved, but that will require a strong UK voice to be heard.

[George Kerevan]

Again, does the Minister understand that the OBR analysis shows that in 2020 the net contributions in cash terms from the UK will be similar to what they are now? When the Prime Minister negotiated a reduction in the EU budget, it was a reduction in the global budget, not in the British contribution in cash terms.

[Harriett Baldwin]

I accept that the OBR has published figures that clearly show that there is a real-terms reduction in the overall envelope for the settlement period.

My hon. Friend the Member for Daventry also asked about the additional costs compared with the existing decision and any offsetting benefits. He raised a number of technical points about the VAT-based contributions, which are calculated by applying a call rate to a hypothetical harmonised VAT base—are not we glad we have him in this House, knowing all the information and all the right questions to ask on the details of the financial settlement? He also asked about the impact of the switch from ESA 95 to ESA 2010. It was taken into account in the own resources decision, but it does affect all countries’ GNI, so the effect on the contribution depends on how all countries’ GNI is revised. For the UK the key determinant of contributions is, in fact, the VAT base, thanks to our rebate, which the Labour party did not succeed in giving away fully in the early 2000s. Changes in the UK’s GNI are corrected in the rebate calculation.

The hon. Member for Luton North (Kelvin Hopkins) mentioned a number of negotiating red lines that he has, although he is in a slightly different position. He asked what are the Prime Minister’s red lines. The Prime Minister has clearly set out areas where he wants change, including reforming welfare to reduce the incentives that have encouraged such mass migration from Europe; increasing economic competitiveness to create jobs and growth for hard-working families; and protecting Britain’s interests outside the euro. They also include halting the constant flow of powers to Brussels, including by ensuring a stronger role for national Parliaments, and dealing with the concept of ever-closer union. That may be what some others want, but it is not for us.

In 2010, this Government took the tough decisions that were needed to pull this country back from the brink. We can have a stable, prosperous society only if a Government spend their citizens’ money carefully, and it is right that we took that approach to the European level of government as well.

[Alison McGovern]

Can the Minister confirm how the deficit is going?

[Harriett Baldwin]

I would be delighted to confirm that. When we took office in 2010, the deficit was the largest in our peacetime history, at well over 10%. It has more than halved over the past five years and will be eliminated during this Parliament.

[Alison McGovern]

The Minister says that the deficit has halved. Will she confirm the Government’s pledge in 2010?

[Harriett Baldwin]

The deficit halved—more than halved—over the course of the previous Parliament. Is the hon. Lady now arguing that she would like to have cut spending more? I have not heard that from Labour Members in this Chamber over the past five years. I have heard constant bids for more borrowing, more spending and more taxation, and nothing at all about reducing the deficit.

[Alison McGovern]

The Minister challenges me on what I would pledge. I did not write the Chancellor’s emergency Budget that set the Government on the wrong course. So let me ask her this: how did the pledge go to get debt falling, not rising, for most of the previous Parliament?

[Harriett Baldwin]

I must be living in a parallel universe. I have walked through the opposite Lobby from the hon. Lady on numerous occasions when we have taken the tough decisions on spending that we needed to take in order to clear up the mess that her mentor, Mr Gordon Brown, left behind.

In the negotiations on the European budget in 2013 we achieved real, historic change. We got a great deal for the United Kingdom, we proved that we can achieve reform in Europe, and we protected taxpayers’ interests. That historic agreement will be formalised with the passing of this Bill, and I commend it to the House.

Question put and agreed to.

Bill accordingly read a Second time.

European Union (Finance) Bill (Programme)

Motion made, and Question put forthwith (Standing Order No. 83A(7),

That the following provisions shall apply to the European Union (Finance) Bill:

Committal

(1) The Bill shall be committed to a Committee of the whole House.

Proceedings in Committee, on Consideration and Third Reading

(2) Proceedings in Committee, any proceedings on Consideration and proceedings on Third Reading shall be completed at one day’s sitting.

(3) Proceedings in Committee and any proceedings on Consideration shall (so far as not previously concluded) be brought to a conclusion one hour before the moment of interruption on the day on which those proceedings are commenced.

(4) Proceedings on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption on that day.

(5) Standing Order No. 83B (Programming committees) shall not apply to proceedings in Committee and on Consideration and Third Reading.

Other proceedings

(6) Any other proceedings on the Bill (including any proceedings on consideration of any message from the Lords) may be programmed.—(Margot James.)

European Union (Finance) Bill (Money)

Queen’s recommendation signified.

Motion made, and Question put forthwith (Standing Order No. 52(1)(a)),

That, for the purposes of any Act resulting from the European Union (Finance) Bill, it is expedient to authorise the charging on, and payment out of, the Consolidated Fund or the National Loans Fund of any sums which, by virtue of the amendment of the European Communities Act 1972 made by that Act, fall to be charged on or paid out of either of those Funds.—(Margot James.)

Financial Services

Harriett Baldwin Excerpts

Thursday 11th June 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Chancellor announced yesterday, following advice from the Governor of the Bank of England and N M Rothschild, the Government’s independent advisor, that the Government plans to initiate share sales of RBS in the coming months. Copies of the advice have been made available on HM Treasury’s website.

As Rothschild noted, the UK is currently in a position where alongside the United States, the taxpayer can comfortably expect to secure proceeds which exceed what they put in to overall banking sector interventions.

The Chancellor was advised that it is in the interests of the taxpayer to begin sales soon, with decisions on specific details of a sale to be made in due course.

[HCWS32]

Government's Shares in Lloyds Banking Group

Harriett Baldwin Excerpts

Tuesday 2nd June 2015 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

Further to the statement provided to the House on 18 December, the Chancellor announced yesterday that the trading plan to sell part of the Government’s shares in Lloyds Banking Group will be extended and will now end no later than 31 December 2015.

Under the plan, a broker has been appointed to gradually sell shares in the market over a period of time, in an orderly and measured way and in accordance with pre-agreed parameters.

The extension of the plan is a further step in returning Lloyds to the private sector and getting taxpayers’ money back. A statement will be laid before Parliament with further details at the end of the plan.

As part of its plan to return Lloyds to the private sector, the Government plan to launch a share sale which will be open to retail investors in the next 12 months. Further details will be set out in due course.

[HCWS10]

School Admissions Bill

Harriett Baldwin Excerpts

Friday 7th November 2014 Commons Chamber

[Mr Chope]

I agree with my hon. Friend, and I thank him for his intervention.

I have a great deal of respect for my hon. Friend the Member for West Worcestershire (Harriett Baldwin), who I see is sitting in the Minister’s place. I am not sure whether she is, in fact, now a schools Minister.

[The Lord Commissioner of Her Majesty's Treasury (Harriett Baldwin)]

Let me reassure my hon. Friend: I am not only a Minister in Her Majesty’s Government, but the Whip for the Department for Education.

[Mr Chope]

I am grateful to my hon. Friend for her clarification. As you will know, Madam Deputy Speaker, there is a difference between being a Whip and being a Minister. I am delighted to know that my hon. Friend, who is a very distinguished Whip, has the responsibility of being the Whip for the Department for Education. She has more credibility on the Front Bench than, for example, a Whip dealing with a different Department would have. When she responds to the debate, she will obviously be able to speak with more authority on behalf of the Secretary of State for Education, which is what I wanted to ensure would happen.

--- Later in debate ---

[The Lord Commissioner of Her Majesty's Treasury (Harriett Baldwin)]

It is a great honour for me to respond to the Bill on behalf of the Secretary of State for Education, who specifically requested that I do so. I thank my hon. Friend the Member for Christchurch (Mr Chope) for raising what is a very important issue. His constituents in Christchurch and Mudeford are fortunate to have as their MP someone who is a doughty champion of local issues on their behalf. We heard evidence of that in his opening remarks; he has already achieved a fantastic result for his constituents, Mr and Mrs Amey. I am sure they are delighted that their son, George, has been able to join his sibling at the Mudeford junior school, and I am pleased to hear that that constituency case was resolved on appeal.

I must also pay tribute to my hon. Friend for being legendary in this House for using the vehicles available to all Back Benchers in the form of private Members’ Bills to raise substantial and important issues on behalf of his constituents. Even today he has demonstrated his ingenuity in this regard by having not just this Bill on the Order Paper, but several further Bills: the Illegal Immigrants (Criminal Sanctions) Bill, whose Second Reading debate was adjourned on 24 October; the House of Lords (Maximum Membership) Bill, which he hopes will have its Second Reading today; and the EU Membership (Audit of Costs and Benefits) Bill, which is also due its Second Reading. That is just a small sample of the various different Bills on important issues he has been able to raise on behalf of his constituents through his great knowledge and understanding of parliamentary methodology.

As my hon. Friend said, the Bill before us is fairly short even by the standards of brevity we often see with private Members’ business. In its two short clauses it makes

“provision to ensure that pupils with a parent with a terminal or seriously disabling illness receive priority in the admissions process to maintained schools in England.”

The word “England” is used because my hon. Friend makes very clear in his Bill that his proposed changes would extend to England only. It is important to highlight that, as it shows how much proposed legislation, particularly on education, now comes forward that covers only England. I know he shares my enthusiasm for ensuring that we as a Parliament are in future able to ensure that those who represent English constituencies, such as Christchurch, can carry forward legislation that applies to England only.

I would like now to set out the Government’s views on the Bill before us. We believe my hon. Friend’s proposals are already covered by the existing provisions in the statutory schools admissions code and its supporting legislation. I have with me a copy of that code, published in February 2012, and I would like to draw his attention to paragraph 1.16, as it is important that we look at exactly what the code currently says. This effectively gives some discretion to local authorities but encourages them to take into account social and medical need in a situation such as the one he so eloquently described, where a particular set of circumstances needs to be taken into account.

Paragraph 1.16 of the school admissions code states that, if admission authorities decide to use social and medical need as an oversubscription criterion, they

“must set out in their arrangements the criteria against which places will be allocated at the school”.

They must state how they will define the need and give clear details of any supporting evidence that will be required, such as a letter from a doctor or social worker. They must then make consistent decisions based on the evidence provided. In the example given by my hon. Friend, I believe it would have been possible for Mr and Mrs Amey to provide that level of medical detail in order to support the case of their son, George.

As I have said, the school admissions code was published in February 2012, and the Government consulted on further, limited revisions to the code this summer. I note that one of the respondents to the consultation was my hon. Friend’s own county council. He did not respond to the consultation in person, however, and I regret to tell him that it closed on 29 September. I confess I do not have a copy of the response of Dorset county council children’s services in front of me, but evidence will be available on the Department for Education’s website. I would be happy to let my hon. Friend know what his county council’s response was, if it did not send him a copy at the time, in order to reassure him that it is engaging fully with the Department and is keen to ensure, as he is, that his constituents are able to access their preferred school.

[Mr Nuttall]

My hon. Friend mentioned the fact that the Government carried out a consultation on the content of a revised code between 22 July and 29 September. Given that the Bill was ordered by the House of Commons to be printed on 7 July, which I think would have been the date of its First Reading, will she tell us whether the consultation took its content into account?

[Harriett Baldwin]

I thank my hon. Friend for his pertinent question. I understand that the Bill received its First Reading earlier this year. One would like to think that, although the views expressed in the Bill were not formally a part of the 444 responses to the consultation, they would none the less be taken into account by the Department. I am sure that my hon. Friend the Member for Christchurch will also have sent a letter on behalf of his constituents under the previous Secretary of State. The 444 responses are listed in the back of the Government document. I looked through it earlier to see whether the Bill was included in the responses, and I can confirm that it is not specifically mentioned in the Government’s documentation. However, he has used the mechanism of this proposed legislative change to make his views known.

I can summarise the results of the consultation for my hon. Friend. They have resulted in the Government proposing specific, limited revisions to the admissions code. As I have said, 444 written responses were received by 29 September, and the Government have held discussions with interested groups. The hon. Member for Cardiff South and Penarth (Stephen Doughty) asked whether discussions had taken place with people with specific caring responsibilities. Having looked through the list of 444 responses, I note that none of the organisations stood out as the kind of organisation that he would put into that category. I can assure him, however, that discussions are ongoing with all the interested groups with a view to meeting their needs for the admission code. I hope that that answers his question.

The overriding aim of the code is to ensure that admission authorities have clear, objective and fair oversubscription criteria. It is for the authorities themselves to decide which criteria to adopt, but the code sets out the most common ones, including giving priority based on social and medical need. I have drawn the House’s attention to the fact that that is set out in paragraph 1.16 of the code.

The Government want children to be able to attend a school of their parents’ choice whenever possible but, when a school receives more applications than it has places available, we believe that those places must be allocated in accordance with the school’s published oversubscription criteria. I am pleased to say that the vast majority of parents are offered a place for their child at their preferred school. In the most recent entry year, 2014, 86.5% of parents in England were offered a place at their first preference school. In addition, 95.6% of children—so nearly 97%—were offered a place at one of their top three preferences, and 96.6% were offered a place at any of their preferred schools.

The Government have just agreed to some specific, limited revisions to the code. They are designed to improve the fair and open allocation of places and, it is worth emphasising, to support fair access for the most disadvantaged children and provide additional clarity to some provisions that had not been found to be completely clear. The limited time scale did prevent more substantial changes from being considered but, subject to parliamentary approval, which we hope is imminent, the revised code will come into force on 19 December.

[Mr Chope]

Will my hon. Friend confirm that if the revised code includes the same expression of “social and medical need”, that will cover the need of a parent and not just of a child?

[Harriett Baldwin]

I thank my hon. Friend for, again, being assiduous on behalf of his constituents on that drafting. He has a copy of the code in front of him, as I do. I have read the wording from paragraph 1.16 into the record, and it is my view that individual schools would have some latitude on taking into account social and medical need because of the following wording:

“If admission authorities decide to use social and medical need”.

He would like things spelt out in statutory legislation, but the wording allows admission authorities some leeway without putting things on to a statutory footing. I reassure him that we will evaluate the impact of the new proposals once they have come into effect, and will certainly do that ahead of any future revision of the code. We will examine his proposal, along with any others made as part of the process. On the question raised by my hon. Friend the Member for Bury North (Mr Nuttall), one thing that my hon. Friend the Member for Christchurch has clearly done by highlighting this issue today is ensure that the circumstances he has described so eloquently are fed into that ongoing review of the code.

The hon. Member for Cardiff South and Penarth (Stephen Doughty) touched on other aspects of the code. The code requires only that priority be given to a specific group of vulnerable people: those with a statement of special educational needs or an education, health and care plan naming the school; looked-after children; and previously looked-after children. Beyond that, the code states that admissions authorities must have their oversubscription criteria clearly, objectively and fairly set out. It is for admission authorities to decide exactly which oversubscription criteria to adopt, but the code does set out the most common criteria.

The Government believe that paragraph 1.16 is a broad provision, which can be interpreted to cover the social and medical condition of the child, the parent or both. We have no definitive data on this, but we do know anecdotally and from correspondence to the Department that a number of admission authorities do use social and medical criteria in their oversubscription criteria. At this point, I cannot say from the Dispatch Box whether Dorset county council is one of those, but I would be happy to follow this up and write to my hon. Friend the Member for Christchurch about it. We believe it is for admission authorities to decide whether to adopt these criteria and, where they do, to decide what ranking they should have, based on local needs and circumstances.

Any proposal requiring that all admissions authorities must give priority to pupils with a parent with a terminal or seriously disabling illness would require a change to the statutory code and the supporting legislation. It is not the Department’s intention at the moment to do that, other than in terms of the minor adjustments the Government have agreed to in the consultation that has just been responded to.

The overarching aim of our changes is to improve the fair and open allocation of school places. The changes are intended to provide greater freedom to schools and to clarify some of the existing provisions. For example, they allow all state-funded schools to give priority in their admission arrangements to children eligible for pupil or service pupil premium funding. In this of all weeks, it is important to emphasise the way in which the Government have tried to make it easier for the children of our armed forces to get an education in the school of their parents’ choice.

The changes also allow all admission authorities of primary schools to give priority in their admission arrangements to children eligible for the pupil or service pupil premium who attended a nursery that is part of the school. As part of that change, barriers to schools offering optional wrap-around care will be removed or reduced by ensuring that any charges paid by parents for such child care would not prevent their children from being prioritised.

The Government intend to make the following minor changes: to revise the timetable for admission arrangements; to bring forward dates for admission authorities to consult locally and to reduce the duration of such a consultation from eight weeks to just six weeks; to require the admission authorities to amend their admission arrangements to comply with the code within two months of a decision by the school’s adjudicator where the adjudicator rules that the arrangements are unlawful; to clarify the provisions relating to the admission of summer-born children to aid decision-making for admission authorities. I am sure that everyone is familiar with the particular challenges faced by children who are born towards the end of August, and the question over which year at school they should be entered. Madam Deputy Speaker, I note that you are vigorously nodding your head in agreement. I am pleased to draw your attention to that particular clarification.

Other minor changes include: extending priority for admission to all previously looked after children—I am talking about children not only who are currently being looked after but who have previously, at any time, been looked after—and making a number of minor technical drafting changes to improve the clarity of certain existing provisions. For example, we wish to make it explicit to parents that their child is entitled to a full-time place in reception.

I have run through some of the minor changes to the admissions code that the Government will bring forward. I hope that I have reassured my hon. Friend the Member for Christchurch that his case is exactly what paragraph 1.16 of the code is designed to address. I know that he has been fantastically effective at not only representing his constituents in this particular case but using the vehicle of the private Member’s Bill and the full armoury of this House to raise, on behalf of his constituents as their voice in Parliament, these important matters. Having outlined the limited changes that we propose to make to the code, which will take effect on 19 December 2014, I hope that my hon. Friend will see that the case and the circumstances of his constituents are exactly those that the code is designed to cover.

I am happy to go through some more examples that would be covered by the school admissions code. I think I have answered the questions of the hon. Member for Cardiff South and Penarth, and of my hon. Friend the Member for Christchurch.

Given the comprehensive nature of my remarks, I hope that I have convinced my hon. Friend that we do not need to move forward on a legislative basis. The extensive school admissions code, which runs to more than 38 pages, covers the situation that he described on behalf of his constituents. I therefore urge him to withdraw the motion.

Oral Answers to Questions

Harriett Baldwin Excerpts

Tuesday 28th January 2014 Commons Chamber

[The Economic Secretary to the Treasury (Nicky Morgan)]

I think the hon. Gentleman raised this topic in the debate on the national minimum wage. I am very happy to take this away and to have a conversation once I have had a chat with Treasury officials.

[Harriett Baldwin (West Worcestershire) (Con)]

T4. This time last year, the shadow Chancellor said that the economy would get worse. Can I lob the following question to the Chancellor and ask him how that prediction turned out?

[Mr Osborne]

The economy has grown by 2.8 % over the past four quarters, which is the point. First, when the shadow Chancellor was in office, he predicted that there would be no more boom and bust—we had the biggest boom and the biggest bust—and secondly, he predicted that there would be no recovery unless we borrowed and spent our way into economic risk, which has turned out to be untrue. I do not know why anybody in the Labour party still listens to his predictions at all.