Section 5 of the European Communities (Amendment) Act 1993

Debate between Kelvin Hopkins and Greg Clark

Monday 22nd April 2013 Commons Chamber

[The Financial Secretary to the Treasury (Greg Clark)]

I beg to move,

That this House approves, for the purposes of section 5 of the European Communities (Amendment) Act 1993, the Government’s assessment as set out in the Budget Report, combined with the Office for Budget Responsibility’s Economic and Fiscal Outlook, which forms the basis of the United Kingdom’s Convergence Programme.

I welcome this opportunity to listen to Members’ views on the British Government’s submission to be made this year under section 5 of the European Communities (Amendment) Act 1993. It is nice to see the hon. Member for Nottingham East (Chris Leslie) in his place. I think we have spent more time opposite each other than we have with our respective spouses in recent weeks.

As in previous years, the Government will provide information to the European Commission on the UK’s economic and budgetary position in line with our commitments under the EU stability and growth pact. This submission, known as the convergence programme, is a legal requirement under agreements this country has entered into, and of course the British Government take such commitments seriously. One must also say, however, that its very name represents something of a relic from a past age—a time when Britain was still ruled by a Government committed in principle to joining the single currency. I can assure the House that that era is well and truly dead and buried.

Members might well ask what purpose is served by this annual exercise and the associated debate in the House. [Interruption.] I thought that this might find an echo in the Chamber. Without wishing to anticipate Members’ contributions, which I look forward to, I would like to suggest three areas for this afternoon’s discussion. I wish first to debate British economic policy within the still relevant context of Europe; secondly, to consider the co-ordination of national economic policies across the EU; and thirdly to reflect on our great good fortune in not having joined the single currency, despite the siren voices heard in this place and elsewhere—thanks, in no small measure, to those who had the courage and foresight to speak against British involvement at a time when their warnings were subject to such derision.

[Kelvin Hopkins (Luton North) (Lab)]

I remember a time when all three major parties, the TUC and just about every good and great person across the land supported joining the exchange rate mechanism. I was one of those who from the beginning said that we should not do so. At the moment, we are all against the single currency, but I remember a time when even the Minister’s party was moving in that direction.

[Greg Clark]

I do not think that that is entirely right, although I happily acknowledge that the hon. Gentleman was on the side of right throughout. I remember working for the Foreign Secretary when he was leader of our party. In November 1997, when, as the hon. Gentleman said, the received opinion was that our joining was inevitable, my right hon. Friend made the courageous decision to set out in a lecture to the conference of the CBI, which then was in favour of joining, the forensic reasons why it would not be in our interests. He committed then, right at the beginning of the parliamentary process that resulted in these measures, to campaign for Britain to stay outside it. While I acknowledge the hon. Gentleman’s distinguished record, I think he would acknowledge that the Conservative party was the first party to commit itself to oppose these measures.

The Government plan to make their submission by 30 April, with the approval, we hope, of both Houses of Parliament. It explains the Government’s medium-term fiscal policies, as already set out in the 2012 autumn statement and Budget 2013, and includes the Office for Budget Responsibility’s forecasts. We think it right and proper to draw from previously published documents presented to Parliament, rather than incur the cost and time to produce bespoke documents for this purpose.

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[Greg Clark]

In fact, some countries are recognising that, but we want to set an example. It is important that we stick to our plans and continue to benefit from the confidence that the markets have shown through the level of interest rates. We also say in our deliberations in Brussels, as well as making the point in budget discussions, that when times are difficult, belts need to tightened.

[Kelvin Hopkins]

I must say that I am astonished. It is almost as if no one in the Chamber has read the newspapers over the weekend and seen the IMF report that it got the premise for austerity completely wrong. Owing to a mistaken figure in a spreadsheet, we are all going for austerity, which is a terrible mistake. Is that not the reality?

[Greg Clark]

I do not agree with that. The hon. Gentleman will be aware that the IMF recommends to many countries around the world, not least in Europe—this is the point my hon. Friend the Member for Bury North (Mr Nuttall) referred to—that they should get their public finances in order.

When the Office for Budget Responsibility revised its forecast for global economic growth—and eurozone growth in particular—and world trade downwards, that had an inevitable impact on UK growth, given that the euro area is the destination for 40% of UK exports. Over the past year, net trade was the key factor in the underperformance of the economy relative to earlier OBR forecasts, as well as in the downward revision of the forecasts this year and the year after. Fiscal consolidation, on the other hand, has not had a larger drag on the economy than the OBR expected in June 2010. Indeed, the UK’s fiscal situation argues strongly in favour of maintaining our commitment to deficit reduction.

Opposition Members sometimes accuse us of going too far, too fast, but there is further to go and we must get there as fast as we sensibly can, not least because so much rests on the market-tested credibility earned by this Government. The near historic low gilt yields that underpin the low interest rates that are so important to millions of households and businesses cannot be put at risk. As shown by global developments, the consequence of losing market confidence can be sudden and severe. A sharp rise in interest rates would be particularly damaging to an economy weighed down by the burden of so much public, corporate and personal debt, built up during a time when it should not have been.

Cyprus

Debate between Kelvin Hopkins and Greg Clark

Monday 18th March 2013 Commons Chamber

[Greg Clark]

My hon. Friend raises an important point. I have made a commitment to the House to provide further statements once we have more detailed information on how all these arrangements are likely to apply.

[Kelvin Hopkins (Luton North) (Lab)]

This is clearly deeply worrying for the people of Cyprus, and we have to condemn what is being done to them, but it is also worrying for millions of working people across the whole eurozone. Is this not just the beginning of a situation in which Cyprus and other countries withdraw from the eurozone and, indeed, the euro itself may be wound up? Are the Treasury, the Government and the Bank of England making preparations for that eventuality?

[Greg Clark]

The Treasury and the Government always make contingency plans for many eventualities. It is important to reflect on the statements made by the German Government and by the ECB that the situation in Cyprus is very dissimilar to that prevailing in other countries. It would not be right to draw a parallel between what is happening in Cyprus and the situation that exists elsewhere.

Financial Services (Banking Reform) Bill

Debate between Kelvin Hopkins and Greg Clark

Monday 11th March 2013 Commons Chamber

[Greg Clark]

I should have thought that the hon. Gentleman would reflect on the fact that the Chancellor has many serious responsibilities and he is discharging them at the moment.

Let me talk about the process that we have followed, then I will address in some detail the particular aspects of content. The process that we have followed has sought to come up with the best possible way to address the dilemma that I described, and to do so by building, as far as possible, a broad consensus. That may not be there—yet—on every particular, but I think most Members would concede that Sir John Vickers’ commission has come closer to achieving that than many people thought possible.

The Independent Commission on Banking was established as soon as possible after the general election, in June 2010. It took extensive evidence before publishing an issues paper in September 2010 and an interim report in April 2011, on which it consulted, before publishing its final report in September 2011. The Government gave, and consulted on, an initial response in December 2011, before issuing a White Paper for consultation in June 2012. In the light of the responses to the consultation, a draft Bill was published last October and the Parliamentary Commission on Banking Standards was asked to subject it to pre-legislative scrutiny. The parliamentary commission’s report was published on 21 December last year and many of its recommendations were accepted in the Bill published in February and laid before the House.

At the time of introduction, I made it clear from the Dispatch Box that we would table further amendments in response to the commission’s future recommendations as the Bill proceeds through both Houses. I hope that Members on all sides would agree that this has been an exceptionally extensive process of both policy development and scrutiny of emerging proposals, and I repeat what I said to the right hon. Member for Wolverhampton South East (Mr McFadden) last month, that I will personally insist on taking a constructive and open-minded approach to the views of this House throughout the Bill’s passage. To the extent that the Bill reflects the unanimous views of Parliament, it is immeasurably strengthened.

[Kelvin Hopkins (Luton North) (Lab)]

Does the Minister accept that one of the major factors in the 2008 crisis was the complete failure of the auditing sector to get a grip on what banks were doing? Will he be putting forward proposals for strengthening audit for the future?

[Greg Clark]

That was not a set of particular recommendations in the reports that were commissioned, but I know that it is of some interest to members of the parliamentary commission and, as I will go on to say, we stand ready to consider their further recommendations, and I dare say they might have something to say in that respect.

Multiannual Financial Framework

Debate between Kelvin Hopkins and Greg Clark

Wednesday 31st October 2012 Commons Chamber

[Greg Clark]

Every budget negotiation under the seven-year framework has resulted in an increase. That must now stop. The next seven years must see an end to the perpetual ratcheting up of EU spending. The Prime Minister will be looking to achieve precisely that. As far as the Government are concerned, what remains of the rebate, after the predations of the Labour party, is absolutely non-negotiable. That means that even talking about it is a waste of time. Without it, our net contribution would be by far the largest in the EU, twice as big as that of France and more than one and a half times that of Italy or Germany as a percentage of gross national income.

[Kelvin Hopkins (Luton North) (Lab)]

Earlier in his speech the Minister said that the Government are opposing a real-terms increase. The figure involved would be significantly different from a money-terms increase. Would the Government not do better by asking for a freeze in money terms, not real terms?

[Greg Clark]

Our position is very clear: we want to see a cut in the EU budget. That is what all of us on the Government side of the House want. I will come on to explain the negotiating mandate that the Prime Minister has agreed with European leaders.

National Planning Policy Framework

Debate between Kelvin Hopkins and Greg Clark

Tuesday 27th March 2012 Commons Chamber

[Greg Clark]

I am grateful to my hon. Friend for her contribution to the consultation. We have listened broadly. I know that people are cynical about consultation exercises, but I think they will find that practical and sensible suggestions have been listened to and incorporated. The community infrastructure levy will be introduced, and we are about to publish some regulations regarding the conduct of it. I will update her in a few days about when they will take effect. Among other things, the levy will provide funding for neighbourhoods for the first time, so that communities that host developments will get to share in the proceeds at a very local level.

[Kelvin Hopkins (Luton North) (Lab)]

My right hon. Friend the shadow Secretary of State touched on the fact that there are thousands of acres on which there is already planning permission for homes but the developers and builders are not building. What are the Government going to do to get them to build?

[Greg Clark]

Two things. First, the framework will allow those sites to be included in the housing assessment that is required. Secondly, as the hon. Gentleman knows, the new homes bonus is available for homes that are brought back into use as well as those that are built. That is a powerful incentive for councils to bring back into use homes that are not being used at the moment.