Financial Policy Committee

Greg Clark Excerpts

Wednesday 26th June 2013 Written Statements

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

The June 2013 “Financial Stability Report” of the Financial Policy Committee (FPC) and the FPC’s response to the Chancellor’s “Remit and Recommendations for the Financial Policy Committee” have today been laid before Parliament.

The “Financial Stability Report” includes the committee’s view of the current stability of the UK financial system, its assessment of the outlook for stability, a summary of the activities of the committee over the previous five months, and any new policy decisions by the committee by way of recommendations and directions.

The report forms a key part of the accountability mechanism for the FPC under the Bank of England Act 1998 as amended by the Financial Services Act 2012.

On 30 April 2013, the Chancellor wrote to the Governor of the Bank of England, as chair of the FPC, to specify the Government’s economic policy and to make recommendations to the committee concerning its objectives and functions.

The FPC is required to respond to the Treasury setting out any action it has taken or intends to take in accordance with the Treasury’s recommendations and, if it does not intend to act in accordance with a recommendation, why not.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 25th June 2013 Commons Chamber

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

9. What his Department’s estimate is of the likely level of public sector net debt as a share of GDP in 2015-16.

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

Public sector net debt is forecast to be 85% of GDP in 2015-16, compared with 94% of GDP and accelerating had the policies of the previous Government continued to be pursued.

[Steve McCabe]

Let us hope that that estimate proves more reliable than previous efforts. In the interests of transparency, and given tomorrow’s comprehensive spending review, is the Minister now ready to admit that the national debt has risen from £828.7 billion to £1.19 trillion under his watch? If we eliminate the Royal Mail pension fund, as we have been advised to do, and the Bank of England gilts from quantitative easing, is it not true that borrowing in 2012-13 is up, and not down as the Chancellor told this Chamber?

[Greg Clark]

Like you, Mr Speaker, I take a great interest in the hon. Gentleman’s speeches in this House, and I know that he is deeply interested in fiscal policy. Since the beginning of the year, he has spoken 102 times on the subject of public spending cuts, but in each and every intervention he has opposed spending cuts. To cut the debt, we have to cut spending. He should learn that, and the Labour party should as well.

[John Stevenson (Carlisle) (Con)]

Does the Minister agree that one reason why our debt is such an issue is that the previous Government ran budget deficits in the good times as well as the bad and that the only way to reduce debt is to get the deficit down?

[Greg Clark]

My hon. Friend is absolutely right. We know that between 2001 and the time they left office, the previous Government trebled the national debt, yet when the shadow Chancellor was asked whether they were too profligate and had too much national debt, he said no. Labour’s new policy is the old policy: more spending, more borrowing, more debt. It is time they learned.

[Chris Williamson (Derby North) (Lab)]

The Prime Minister assured us that by 2015 the books would be balanced. Is it not a fact that as a consequence of the Chancellor’s abject economic failure we are now looking at the deficit reaching £96 billion by 2015? What does the Financial Secretary have to say about that?

[Greg Clark]

I have followed the hon. Gentleman’s interventions over time and he should be familiar, as we all are, with the study from the Institute for Fiscal Studies that made it very clear that if the policies of his party had continued, the debt would be £200 billion higher.

[Mr Julian Brazier (Canterbury) (Con)]

Does my right hon. Friend agree that if we look across the channel to countries such as Italy, we see what can easily happen if a Government lose control of public spending?

[Hon. Members]

That is not across the channel.

[Greg Clark]

The channel is not very far from my hon. Friend’s constituency, so it is possible to look across. He will know that the UK cut its structural deficit by more than any other G7 country over the past three years, whereas Labour racked up the largest structural deficit in the G7. The shadow Chancellor confirmed on Sunday that he would borrow more money in 2013, 2014 and 2015. Labour says it has a new policy, but it is the old policy—to borrow more and to go further into debt.

[Andrew George (St Ives) (LD)]

10. What progress he has made on implementing the housing market measures announced in Budget 2013.

Financial Transaction Tax and Economic and Monetary Union

Greg Clark Excerpts

Thursday 20th June 2013 Ministerial Corrections

The following is an extract from the response given by the Financial Secretary to the Treasury, the right hon. Member for Tunbridge Wells (Greg Clark) to the hon. Member for Nottingham East (Chris Leslie) during the Financial Transaction Tax and Economic Monetary Union Debate on 18 June 2013.

[Greg Clark]

The US Government also have serious misgivings: the Treasury Secretary, Jack Lew, has said that, despite objections from financial and non-financial trade associations and Government officials in the United States, Canada, Australia, Japan, Korea and other countries regarding the global reach and negative impact of the proposal, their concerns remain unanswered.

[Official Report, 18 June 2013, Vol. 564, c. 790.]

Letter of correction from Greg Clark:

An error has been identified in the response provided during the Financial Transaction Tax and Economic and Monetary Union Debate.

The correct response should have been:

[Greg Clark]

The US Government also have serious misgivings and the Treasury Secretary, Jack Lew, has received a letter from Congressmen saying that, despite objections from financial and non-financial trade associations and Government officials in the United States, Canada, Australia, Japan, Korea and other countries regarding the global reach and negative impact of the proposal, their concerns remain unanswered.

ECOFIN

Greg Clark Excerpts

Thursday 20th June 2013 Written Statements

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

A meeting of the Economic and Financial Affairs Council will be held in Luxembourg on 21 June 2013. The following items are on the agenda to be discussed.

Contribution to the European Council meeting on 27-28 June 2013—European semester 2013

Council will consider the fiscal and economic elements of the country specific recommendations (CSRs) for member states. The UK’s CSRs are broadly in line with domestic reform priorities. The Council recommendations are non-binding and there are no sanctions for non-compliance.

Implementation of the stability and growth pact

Council will discuss the implementation of the Commission’s recommendations related to the excessive deficit procedure (EDP) for a number of member states.

Commission/European Investment Bank (EIB) report to the European Council

Following the March European Council, the Commission, together with the European Investment Bank, are expected to report to the June European Council on the implementation of the ElB’s capital increase. The Commission/EIB will present their initial findings to Council.

Financial assistance to Ireland and Portugal

Council will consider two Council implementing decisions amending previous implementing decisions on granting Union financial assistance to Ireland and Portugal.

ECB/Commission convergence reports and enlargement of the euro area

The euro area member states will make a recommendation to the Council on Latvia’s euro adoption. The UK does not have a vote on the decision by EU member states to adopt the euro. ECOFIN will also prepare a letter for the President of the Council to send to the European Council summarising discussions.

Development of policy options in the climate/energy field—follow up to the May European Council

At the request of Poland, Council will hold a state of play discussion on this item.

Code of conduct (business taxation)

As with each presidency, the Council will be asked to endorse conclusions accompanying the code of conduct group report on progress made under the Irish presidency.

ECOFIN report to the European Council on tax issues

This is the six-monthly report which ECOFIN forwards on to the European Council, summarising the progress made under each presidency on tax issues.

Report by Finance Ministers on tax issues in the framework of the euro plus pact

This is the six-monthly report which summarises progress made under each presidency on tax issues in relation to framework of the euro plus pact.

Proposal for a Council directive amending directive 2011/16/U as regards mandatory automatic exchange of information in the field of taxation

The Commission will present a proposal on amending the existing administrative co-operation directive. The UK will look to ensure that any amendments do not conflict with or undermine the embedding of a new global standard in the automatic exchange of tax information.

Banking recovery and resolution directive

The presidency will seek a general approach on the banking recovery and resolution directive (BRRD). The UK supports the concept of a strong framework in Europe for bank recovery and resolution and broadly welcomed the Commission’s proposal. It will be important that any agreement on the BRRD delivers a credible and useable bail-in tool. Domestically, the UK has already taken tough action to reform the banking sector. This includes implementing a new resolution regime, the largest bank levy in Europe and structural reforms to the banking sector (for example, the Vickers ring-fencing).

Any other business

The presidency intends to give a state of play update on the deposit guarantee schemes directive.

Financial Transaction Tax and Economic and Monetary Union

Greg Clark Excerpts

Tuesday 18th June 2013 Commons Chamber

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

I beg to move,

That this House takes note of European Union Document No. 16988/1/12, a Commission Communication on a Blueprint for a Deep and Genuine EMU: Launching a European debate, an Un-numbered European Document dated 5 December 2012, a Report from the President of the European Council: Towards a Genuine Economic and Monetary Union, European Union Documents No. 15390/12, a draft Council Decision authorising enhanced co-operation in the area of financial transaction tax, and No. 6442/13 and Addenda 1 and 2, a draft Council Directive implementing enhanced co-operation in the area of financial transaction tax; observes that the European Scrutiny Committee has reported on these documents and concluded that they raise questions relating to parliamentary sovereignty and primacy as well as fiscal and monetary issues; notes that the European Commission Communication states that ‘Interparliamentary co-operation as such does not, however, ensure democratic legitimacy for EU decisions. That requires a parliamentary assembly representatively composed in which votes can be taken. The European Parliament, and only it, is that assembly for the EU and hence for the euro’, and that the report from the President of the European Council concludes that ‘further integration of policy making and a greater pooling of competences at the European level should first and foremost be accompanied with a commensurate involvement of the European Parliament in the integrated frameworks for a genuine EMU’; further notes that the proposals for the Financial Transaction Tax have been challenged by the Government in the European Court of Justice; notes that recent European Treaties and protocols have emphasised the role of national parliaments throughout the European Union as the foundation of democratic legitimacy and accountability; and believes that this role is the pivot upon which democracy in the United Kingdom must be based on behalf of the voters in every constituency.

I am grateful for the opportunity to discuss these important issues and thank the European Scrutiny Committee for recommending them for debate. I shall focus on the financial transaction tax before turning to the matter of economic and monetary union. As many hon. Members, and certainly members of the European Scrutiny Committee, will know, the Government have applied to the European Court of Justice for the annulment of the Council decision authorising an FTT under the enhanced co-operation mechanism. I am pleased to be able to set out our concerns about the initiative.

Many Members will know that we have been here before, in 2011, when the European Commission proposed a wide-ranging financial transaction tax that would have applied across the entire European Union. Just like the current proposal, that tax would have applied to all trades, market participants and financial instruments; it would have applied to Government bonds, corporate bonds, equities, derivatives and other financing instruments, and to long-term and short-term transactions. Just like the current proposal, too, that tax would have affected the entire financial system, reducing returns to pension funds and savers, increasing companies’ and Governments’ financing costs and reducing European competitiveness at a time when the EU, frankly, needed competitiveness and growth. It might have been conceived as a way of raising revenue from a small number of people in the financial industry, but it would in fact have been paid by savers and by companies. The Commission itself forecast an impact—a negative impact, I need hardly say—on EU-wide gross domestic product of 1.76%.

The Chancellor made it clear that we would not accept the measure—certainly not at a time when the EU was trying to grow and attract business. He said the UK would have no part in it, and partly as a result, the proposal was dropped. Sadly, however, it was not dead, and this January, under a procedure known as “enhanced co-operation”, 11 member states chose to resurrect it. We believe that member states should be free to set their own tax policies, and if they choose to co-ordinate their tax policies, that, too, is their right. Although we believed and continue to believe that the proposed FTT is a bad idea, it is of course open to member states to pursue it—provided it is lawful, complies with the EU treaty and respects the rights and competences of those member states that choose not to participate.

[Bill Esterson (Sefton Central) (Lab)]

I am grateful to the Minister for apparently making the argument for international co-operation in order to overcome the concerns that he has raised. President Obama has made the point that Wall street was responsible for the financial crisis, so Wall street had a responsibility to solve the problem. Does not the same apply here, provided that there is an attempt at international co-operation?

[Greg Clark]

I will come on to the hon. Gentleman’s point. I would point out that President Obama and his Treasury Secretary are deeply concerned about the progress of this financial transaction tax, which does not meet any of the in-principle ambitions that people have had for some time. It is a cause of a great alarm among those who believe in free trade around the world.

The proposal under the enhanced co-operation procedure is modelled substantially on the 2011 version. It contains a feature known as the “establishment rule”, under which a UK financial institution would be deemed to be established in the FTT area for the purpose of the tax by virtue of the mere fact that its trading counterparty is headquartered in a country participating in the tax. So in practice, a UK pension fund purchasing a UK Government bond from a UK branch of a German bank would be obliged to pay the tax, and it would pay the tax not to the Exchequer in this country, as would have been the case if we had signed up to the FTT, but to an overseas authority. Likewise, a UK company with significant Treasury operations would potentially be in scope of the FTT when its counterparty happened to be headquartered in the FTT area.

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

What obligation would the British Government be under either to enforce or to collect this tax if the FTT were adopted as proposed?

--- Later in debate ---

[Greg Clark]

That goes to the heart of our concern, because under the mechanism set out, we would be under such an obligation, which we consider to be a breach of the protections we enjoy, in particular not to have to incur costs when the benefits do not flow to a non-participating member state. That is precisely one of our objections.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Does the proposal not expose the beguiling attraction of allowing enhanced co-operation as a gesture of good will to our European partners, when in fact it is a trap enabling them to exercise powers through qualified majority voting, without our participation, which then creates obligations in relation to our own financial transactions, even though they might be taking place outside the EU? My right hon. Friend expresses support for co-operation between free, sovereign states in their tax affairs, but that is not what we are talking about here, because enhanced co-operation is likely to result in obligations that are enforceable in European Community law, even though we have not had a chance to vote on them.

[Greg Clark]

My hon. Friend makes a powerful point. That is precisely why we are challenging the legitimacy of the proposal. The enhanced co-operation procedure is available to member states provided it is legal and compliant with the treaty, and our view is that it is certainly not. In particular, the extra-territorial effects—exactly what my hon. Friend is concerned about—are contrary to article 327 of the treaty on the functioning of the European Union, as it fails to respect the competences, rights and obligations of the non-participating member states. Furthermore, the decision to proceed with the FTT has extra-territorial effects for which there is simply no justification in customary international law. The Select Committee has been prominent in its scrutiny of that, and no doubt its Chair will have something to say about it.

We should consider the economic effects of the tax as well as the legal issues. What we are discussing is obviously very important to the economy of the United Kingdom, where 2 million people are employed in financial and related professional services. That sector has created a trade surplus for the country at a time when I think all nations should be trying to increase their trade, and its activities are highly integrated with those in other EU countries. Our best estimate is that 30% of over-the-counter derivatives trading in London involves a counterparty in a proposed FTT zone country; similarly, about 30% of investors in UK gilts are located overseas, which means that the FTT is even likely to affect UK Government funding costs.

However, it is not only the financial sector that would be affected. The European Association of Corporate Treasurers, which represents those who manage companies' finances throughout Europe, has said, very explicitly, that the FTT

“will fall on companies in the real economy, and compound the negative effects of the financial crisis.”

In this country, the CBI agrees.

[Alison Seabeck (Plymouth, Moor View) (Lab)]

What would be the implications of the UK’s rejection of the FTT? Would the Government raise the bank levy rate for what I believe would be the sixth or seventh time?

--- Later in debate ---

[Greg Clark]

As the hon. Lady helpfully points out, we, unlike many other European countries, have a bank levy. The levy is targeted to raise £2.5 billion a year, but it will raise more than that this year, because we said we would increase it to ensure that it raised the amount it was targeted to raise. It is rather higher than the French and German levies.

The CBI has said that the FTT proposal “discourages important business activities” and

“undermines the ability of the financial sector to promote economic recovery”.

The European fund managers association, which is responsible for the welfare of millions of pensioners throughout Europe, has described the FTT—again, very explicitly—as a tax on savers, which will threaten the operation of capital markets and have a damaging impact. I am interested to note that the hon. Member for Nottingham East (Chris Leslie) appears to be sanguine about the effects on savers. I should have thought that the views of pensioners and others with an interest in a prosperous retirement would concern us all.

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

I am not entirely clear about the Government’s policy. I think that, once upon a time, the Chancellor said that he was in favour of the principle of a financial transaction tax. Is that no longer the case?

[Greg Clark]

In fact, we already have a financial transaction tax. It is called stamp duty, and it has existed for a long time.

Let me say something about the opinions of markets outside the European Union. Representatives of other jurisdictions are appalled by the plans, particularly our major trading partners. In the United States, the Investment Company Institute says that the tax would “crash across borders”, and that

“All investors would be hit.”

The US Government also have serious misgivings: the Treasury Secretary, Jack Lew, has said that, despite objections from financial and non-financial trade associations and Government officials in the United States, Canada, Australia, Japan, Korea and other countries regarding the global reach and negative impact of the proposal, their concerns remain unanswered.[Official Report, 20 June 2013, Vol. 564, c. 5MC.]

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

The Financial Secretary mentioned stamp duty. Stamp duty has an extra-territorial application, which he used as a reason for not introducing a financial transaction tax. Further to the point raised by my hon. Friend the Member for Nottingham East (Chris Leslie), may I ask why, following a G20 meeting in Pittsburgh back in 2009, the then shadow Chancellor supported the principle of a financial transaction tax, and why he is opposing it now while not coming up with an alternative?

[Greg Clark]

I shall say more about stamp duty shortly, but I am sure the hon. Lady, who I am sure is a student of these matters, will be aware that it was agreed at Pittsburgh in 2009 that the International Monetary Fund should conduct a study to establish whether there was an international basis for proceeding. It conducted that study, and found that there was no such basis.

I hope that, given the international concern about the proposed tax, the House understands that we have no choice but to challenge it. Not only are there numerous problems with the design, but the proposal flagrantly disregards the position of those who choose not to participate.

The hon. Member for Nottingham East pointed out that the Chancellor had said that we had no objection to the principle of a financial transaction tax. Of course that is the case. How could we possibly have an objection to a financial transaction tax, given that we in the United Kingdom have had one since 1694? It is called stamp duty, and it is very different from the proposed design of this tax. It contains, for instance, an exemption for intermediaries to avoid the “cascade effect”, whereby at every stage of a transaction a tax racks up throughout the chain. That has a very negative impact on the costs faced by savers and companies. We have no objection to levelling the playing field with countries, including France, that have recently adopted stamp duty-type taxes of one sort or another, but other countries, particularly the United States, are far from being close to a consensus. If the hon. Gentleman has taken an interest in the matter, he will know that President Obama and his Administration have described this development as very troubling.

Of course Britain will play a leading role in promoting global standards when it comes to taxes, but I think the whole House would acknowledge that, in international negotiations, we should focus on what will give us a realistic chance of making a big difference to people, rather than choose to divert effort and negotiating capital into what, given the views of others, would be simply a gesture.

[Andy Sawford (Corby) (Lab/Co-op)]

The right hon. Gentleman is a fair-minded Minister when it comes to most matters on which I have dealt with him. I think he is right to say that it would be in the interests of this country to pursue a financial transaction tax—indeed, he has acknowledged that his party views it as such. Can he tell us how many times Ministers from our Government have made representations to the American Government on this matter, given the importance of financial services to both our economies?

[Greg Clark]

I am grateful to the hon. Gentleman for his kind words, but when we have a chance to participate in and lead international gatherings, we must decide where our negotiating capital or authority can best be deployed. The Prime Minister decided, correctly in my view, to pursue tax transparency at international level, through our leadership of the G8 and in other forums. I think that the hon. Gentleman, who is as fair-minded as he considers me to be, would be churlish not to acknowledge the considerable breakthrough achieved by the Prime Minister in recent months, and by the Chancellor before him in Mexico, in respect of tax transparency. I believe that that is an example of the palpable progress that even the Opposition should applaud.

[Andrea Leadsom (South Northamptonshire) (Con)]

In the context of transparency, does the Financial Secretary agree that creating an unlevel playing field in which some countries participate and others do not, which is what this financial transaction tax will do, could fall foul of the second markets in financial instruments directive, which requires best execution in all transactions? In an essentially international if not global business like financial services, might not those wishing to conduct transactions on behalf of their customers struggle with the idea of using a jurisdiction that had imposed an unlevel financial transaction tax?

[Greg Clark]

My hon. Friend is right. This runs contrary to the whole direction of the reform that we have been promoting and think it essential for the EU to promote, namely movement towards a single market in which operating across borders becomes progressively easier and more transparent. I do not think it sensible to do what the hon. Member for Nottingham East would prefer to do, which is make a global financial transaction tax a greater priority than what we are achieving in terms of tax policy, at a time when we are making great progress.

Nor would it be right to leave out of the motion the reference to the UK’s legal challenge to the current proposed FTT, which it is widely acknowledged would hit British pensioners—we know the Opposition have them in their sights at the moment—and which is the whole basis of this Committee’s scrutiny of the proposal.

[Bob Stewart (Beckenham) (Con)]

If an FTT were imposed on us, where would the money be sent? Would it be sent to the EU, a country or some quango? Where would the money go?

[Greg Clark]

It would go to the country which was liable for the transaction tax that fell due there, but it would not go to this country, despite the fact that we would incur the costs of enforcing it and collecting the money. There would be no benefit whatever to the UK taxpayer. It would be unfortunate if at a time when we should be enhancing Her Majesty’s Revenue and Customs’ ability to collect taxes, we were, in effect, requiring extra resources to be expended on something that was of no benefit whatever to UK taxpayers.

[Neil Parish (Tiverton and Honiton) (Con)]

Does my hon. Friend agree that in the context of the City of London needing to be attractive for financial transactions, all this tax would do is add yet another burden? We want more people to come to the City of London and trade, not fewer, and I feel that this tax would drive people away.

[Greg Clark]

I agree. It is not only the London economy that would be damaged; the whole European economy would be damaged, too. That cannot be in the interests of EU members, but members are, of course, sovereign and can make their own decisions, provided that that does not interfere with our competences and rights.

[Andrea Leadsom]

The hon. Member for Nottingham East (Chris Leslie) says, “Ah, the Financial Secretary is against it all together!” However, the European Commission itself has done an assessment that shows how extraordinarily costly this will be in terms of jobs and revenues to the member states who introduce it.

[Greg Clark]

That is absolutely right, although one of the unsatisfactory aspects of the FTT proposal is that it has been frustrating trying to obtain an accurate view of its impact from the Commission. Not enough analysis has been conducted. We know that the original estimate of the impact was a reduction in EU GDP of 1.76% and a loss of half a million jobs across the EU. Mysteriously, those figures have changed, but we have had no rigorous explanation for that.

In the limited time available to us today, I should address the other documents that are the subject of this debate, in particular the one on economic and monetary union. Late last year, the European Commission published its blueprint for a deeper EMU, and the President of the European Commission provided a report called “Towards a Genuine Economic and Monetary Union”. Those reports put forward ideas for possible steps to a more integrated euro area. They are of particular concern to the European Scrutiny Committee, chaired by my hon. Friend the Member for Stone (Mr Cash), and I am sure he will want to speak about the implications for the primacy of this House and this Parliament.

So far these are not formal proposals but contributions to a wider debate in Europe about what may be needed to bring long-term stability to the euro area. I am sure that further documents will be referred to the Committee and we will have the opportunity to debate them in this House, but I want to emphasise very clearly that the UK will not be part of these arrangements, and although leaders at the December 2012 European Council agreed on a more limited work programme than that set out in these reports, they do raise important questions that need to be addressed.

The European Council December 2012 conclusions were very clear that any new steps towards strengthening economic governance would need to be accompanied by further steps towards stronger legitimacy and accountability. The European Parliament has a role at the EU level as further integration of policy making and greater pooling of competences take place among the euro-area countries, but this does not mean the European Parliament has primacy over national Parliaments, whose role is absolutely essential and inviolate.

As my right hon. Friend the Prime Minister said in this House on 12 December in his post-Council statement —and in response to my hon. Friend the Member for Stone, I think—we believe that national Parliaments are closest to people across the EU and that is why they should be at the heart of providing democratic legitimacy within the EU.

[Mr James Clappison (Hertsmere) (Con)]

I am pleased to hear my right hon. Friend make those comments, but the vision so clearly set out in the motion about where primacy in the EU should lie is completely different from the EU vision that the van Rompuy report sets out, which proposes a step change with the European Parliament having primacy over national institutions. Does my right hon. Friend agree that we need to face up to this, and decide whether or not we want to be part of that vision?

[Greg Clark]

My hon. Friend is right, and that is why I was keen to have this debate and make sure the Committee’s concerns on this matter can be aired at an early stage. As I said a few moments ago, the proposals so far do not cohere into proposals that will come forward to be scrutinised, but this debate offers an opportunity for this House to send a clear message, as my hon. Friend may be able to do later, during this process of working-up ideas as to what this House’s clear expectations are with regard to the role of national Parliaments. That is very important.

[Mr William Cash (Stone) (Con)]

I hear what my right hon. Friend says, but in the light of the assumption, based on what the Chancellor has said, about the remorseless logic of allowing the core member states to go ahead with proposals for monetary union—which are implicit in the 52 pages of the blueprint alone—does he accept that our policy is allowing this to happen, and although we may not, it appears, be directly involved, we will certainly be affected by it?

[Greg Clark]

We have taken the view that the problems in the euro area that require resolution should be resolved by its members, and it is in the interests of the international economy that that should be so. My hon. Friend is right to point out, however, that our interests are engaged in this, and we will make use of our powers and rights in the EU to insist that those interests are protected. An early example of that is in the single supervisory mechanism, where through repeated interventions and insistence by the Chancellor and me at ECOFIN meetings, the Prime Minister was ultimately able to secure agreement by way of a text in the regulation of that mechanism explicitly stating that there should be no discrimination against any country or currency as a result of these arrangements.

These matters will come up from time to time, and protecting our interests requires eternal vigilance. The work that the Committee does in scrutinising and bringing matters to our attention in advance of discussions at European level is crucial to that, which is why the importance of this Parliament needs to be underlined, and will be by this debate.

[Mr John Redwood (Wokingham) (Con)]

Monetary union is like having a bank account with the neighbours, and now the neighbours who have put the money in are panicking about the other neighbours who are taking the money out. We see in these documents that EMU is going to progress with much tighter fiscal and banking controls. Is the Minister going to want to keep all British banks out of the extra controls, as we would then no longer be in charge of them, or does he think that the euro activities of our banks must be part of this new centralised scheme from Brussels?

[Greg Clark]

We have been very clear, and the single supervisory mechanism is a good example, as I have said. We have our arrangements for the supervision of our banks, which are centred around the Bank of England, and it is absolutely right that they should continue in that way, but as each of these proposals is made, we will need to look to our national interest and make sure that our rights are protected.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

That was a specific point, but I want to say that it is not only Members of the right hon. Gentleman’s party who have serious questions about primacy. On the European Scrutiny Committee, there is a cross-party problem in particular with the President of the EU’s report “Towards a Genuine Economic and Monetary Union”, which talks about contracts written by the EU—by the Commission—that will be binding on the countries that sign them, and that will then have penalties if they do not carry them out, taking power away from those countries. There is also the question of what happens then with the impact—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. Mr Connarty, you were late coming in, so then to make such a long intervention is not good for the Chair either, especially as you will want to speak, as will a lot of other hon. Members. Short interventions are required.

[Greg Clark]

The hon. Gentleman makes a powerful point, and I was wrong in seemingly indicating that it was only Government Members who share some of these concerns. He has a long and distinguished record of being not only concerned but an active force in drawing attention and suggesting remedies to some of these matters.

On the proposals before us, one suggestion that has been made is that there should be new mechanisms to increase the level of co-operation between national Parliaments and the European Parliament to contribute to this process—it certainly will not be the end of the matter. It has been stated that how it is done is a matter for the Parliaments to determine themselves. I understand that the Conference of Speakers of EU Parliaments agreed in April to set up such an inter-parliamentary conference to discuss EMU-related issues. The conclusions of that meeting state that the conference

“should consist of representatives from all the National Parliaments of Member countries of the European Union and the European Parliament”.

That reflects one of the recommendations in the Select Committee’s report.

The Government have consistently highlighted the importance of these issues since the December European Council. For example, it was highlighted by the Prime Minster in his Bloomberg speech in January, when he set out his agenda for EU reform. He was clear that the future European Union we need must entail a bigger and more significant role for national Parliaments. He said:

“It is national parliaments, which are, and will remain, the true source of real democratic legitimacy and accountability in the EU”.

My right hon. Friend the Foreign Secretary has said that

“if the European Parliament were the answer to the question of democratic legitimacy we wouldn’t still be asking it.”

He went on to outline a concrete set of ideas, including the proposal to have an EU “red card” system that would allow national Parliaments, working together, to block legislation that should not be agreed at the European level. Furthermore, we have said that we would support calls by this House to summon a European Commissioner to explain a proposal directly to this Parliament if the Committee demanded it.

[Mr Jenkin]

I wholeheartedly support the principles set out on the primacy of national Parliaments in the Prime Minister’s Bloomberg speech, but neither of the proposals that the Minister has just mentioned—the red card and the summoning of an EU Commissioner—addresses the primacy issue. The red card just creates another opportunity for our national Parliament to be outvoted by other national Parliaments, and summoning an EU Commissioner has no legislative effect whatsoever. What are the Government going to table in concrete terms that will assert the primacy of national—

[Mr Deputy Speaker]

Order. Mr Jenkin, I have mentioned that we want short interventions. That was your second intervention and you are hoping to speak as well. If you want Members to get in, we are going to have to use the time well—it is going very quickly.

[Greg Clark]

Thank you, Mr Deputy Speaker, I will be brief. Of course these are not panaceas; they are not solutions to the problem. I have said that when these proposals come forward in a more coherent form than they exist in these discussion documents, we will need to ensure that this House—rather than the European Parliament—unambiguously is the body we look to for the endorsement and the legitimacy of these things.

These are important debates. We are at an early stage of the discussions of economic and monetary union, but I applaud the desire of my hon. Friend the Member for Stone, on the part of the Committee, to discuss them at an early stage. I am sure that we will come back to them time and again. We are not expecting major decisions to be made in the weeks ahead, but as with the financial transaction tax and as always, we are very aware of the national interest and will always staunchly pursue and promote it. We will very much have in mind the importance of safeguarding the primacy of this House. Mr Deputy Speaker, I see from your look that both the Chair of the Committee and many other hon. Members are keen to contribute to our discussion, and I look forward to hearing their advice and guidance on both these important issues.

--- Later in debate ---

[Chris Leslie]

The Minister was talking about the European variant of the FTT, but of course he was forced then to admit that we have already got a partial FTT of sorts—the stamp duty that is in place. I will discuss that in a moment, but it was very instructive that he was vehemently against the extra-territoriality aspects of the European version. Of course the EU version does need to change, and I am not saying in any way that it is perfect. His argument is, “They should stop extra-territoriality aspects in their financial transaction tax”, but our stamp duty contains many of those characteristics, and individuals—those trading UK shares and UK equities—are liable wherever that trade takes place in the world. So the Government clearly have not thought through their position on these things.

[Greg Clark]

The hon. Gentleman will know that stamp duty follows the issuance principle—in other words, the tax follows where the instrument is originated. The proposed FTT contains that and a residence principle, so it captures a far wider range of transactions, as well as this cascade point which stacks up and racks up the impact. So it is a very different FTT from, and a very much inferior FTT to, the stamp duty.

[Chris Leslie]

Why on earth then does the Minister not engage in the process, change people’s minds, get a better design, deal with this residence principle properly and let us have a financial transaction tax that is in all of our best interests, particularly across those global centres?

The Minister talked about not having objections to an FTT on equities, but he did not say anything about bonds or derivatives in that context. So I challenge him again on the principle: is he absolutely against any sort of FTT on bonds or derivatives? It sounded as though he was, but I say to him that he has to start waking up and engaging with other jurisdictions on these particular points rather than trying to stop it.

--- Later in debate ---

[Chris Leslie]

Oh dear, oh dear, oh dear! The hon. Gentleman cannot seriously be suggesting that he is going to vote against the amendment because we have to leave out the reference to further noting that there is a Court challenge. I would have been quite happy to have tabled an amendment that did not leave out that bit of terminology, but—I am sure that you can confirm this, Mr Deputy Speaker—we did not do so because the Clerks tell me that a motion can only have 250 words. Of course, the Government use up their 250 words in the motion, so we needed to find space to insert the reference to the principle of the financial transaction tax. The hon. Gentleman should trust me: I have been considering the point and I did not want to leave anything out of the motion, but we wanted to put that reference in. I hope that with that assurance, he will think again, because the amendment is eminently supportable.

[Greg Clark]

Well, of all the ingenious ways to concoct a rationale. It is very instructive that out of all the 250 words, he chose to leave out the reference to the challenge to the European version of the financial transaction tax. He could have chosen many others. It is revealing that that is the part of the motion that he thought should be removed.

[Chris Leslie]

It is a sentence that takes note of something self-evident. Of course there is a challenge—we all know that there is a challenge and that the Minister’s agenda is to try to throw a spanner in the works and do what he can to stop that European variant of the FTT. He should consider what is in the motion; we did not particularly want to remove any of those other aspects of it. Taking note of the challenge was quite a good bit to leave out. Let me restate the case on which we must focus.

--- Later in debate ---

[Chris Leslie]

I think that any financial institution that could have a systemic impact on our economy and UK financial services needs to be regulated from within the Bank of England and by our regulatory structures. I hope that there will be a match between our arrangements and the European arrangements. That has been part of my anxiety about the Government’s design of the Prudential Regulation Authority and the Financial Conduct Authority in the context of the Bank of England and how they fit together with the supervisory structures in Europe. We have had that debate and I think it will continue to be played out over the longer term.

For the time being—for today—the time has come for the Government to get serious about a financial transaction tax. Doing whatever they can to put a spanner in the works and turning their back on the idea is just not good enough. At a time when deficits are persistently high because of rock-bottom growth, leading economies, including those of Britain and the United States, need alternative revenue measures from continuing financial market speculation to relieve pressures on lower and middle-income households and the public services they use.

There are many lessons from the banking crisis, the most obvious of which is that the sheer globalised might of financial trading can overpower the plans and defences of individual nation states. Governments should not just shrug and accept that fate, which is why the Opposition urge Conservatives and Liberal Democrats actively to champion a financial transaction tax and the reform agenda to harness international financial markets so that they serve our societies and our economies.

If ever there was a time to seek international consensus on a financial transaction tax it is now, as countries continue to deal with the aftermath of the global financial crisis and the large deficits it created. Deducting a tiny fraction of 1% of the value of trades in equities, bonds and derivatives could raise significant sums if introduced in a concerted way across the principal world financial centres.

The House of Commons Library has considered what would happen if we applied the EU variant of the tax in the UK and says that it would yield some £10 billion annually. I do not stand by that figure—I do not think that it is necessarily convincing or viable—but it prompts the question of what could be achieved in the UK by a tax with a more modest and sensible design.

I do not decry the 11 EU countries for forging ahead on the issue—it is a brave decision for those EU countries to go it alone. Even with the participation of Germany, France and Italy, there are still risks involved, and although we are not participating at present we should not withdraw from the debate, not least given the size and importance of the City of London.

[Greg Clark]

I am intrigued by what the hon. Gentleman has just said. He cites the House of Commons Library, which has said that the tax could raise £10 billion, and says that that would be useful. Is he arguing that such a financial transaction tax would be in addition to stamp duty? Is he proposing such a tax?

[Chris Leslie]

I think that we need to have a financial transaction tax, ideally in concert with other international centres, in addition to stamp duty. That would be a sensible and modest reaction to the modern circumstances of the financial services sector. As I said to the Minister earlier, he has got to snap out of his “no can do” attitude and to wake up and realise that the public want alternatives. They want different ideas, and the financial transaction tax could offer a good way forward.

Opposition Members support the principle of a financial transaction tax with the widest global participation. London and New York City are the two largest global financial centres. Our view is that enforcement of the FTT needs both to move in concert. The Government ought to support our amendment, which is totally unobjectionable. We should not have to wait for a change of Government to move this agenda forward. We should be building those alliances, especially with the United States. That is a very important task.

--- Later in debate ---

[Greg Clark]

In the couple of minutes available to me, I will attempt to respond to what has been a spirited debate on both sides. It has been so spirited that the speech of the hon. Member for Nottingham East (Chris Leslie) rather startled the hon. Member for Blackley and Broughton (Graham Stringer), who did not expect to hear anything so—

[Chris Leslie]

Good.

[Greg Clark]

It was fainter praise than good.

I am grateful to my hon. Friend the Member for Stone (Mr Cash) for his kind words. I am glad that we were able to accommodate the two debates that he was keen to have. I welcome the contribution of the hon. Member for Brent North (Barry Gardiner), the characteristic tour de force on Waterloo day from my hon. Friend the Member for North East Somerset (Jacob Rees-Mogg) and the flinty contribution of the hon. Member for Linlithgow and East Falkirk (Michael Connarty), who shares many of the views of my hon. Friend the Member for Stone on the primacy of this place.

This has been a fascinating and enlightening debate. We have discovered that the policy of the Opposition in calling for a financial transaction tax turns out to be to call for an additional financial transaction tax. As has been clear from the exchanges across the House, we already have a financial transaction tax in this country; it is called stamp duty. The hon. Member for Nottingham East made it very clear that he proposes an additional tax on British savers, pensioners, mortgage holders and business of up to £10 billion. He said that that would come not from the magic—

[Chris Leslie]

Will the Minister give way?

[Greg Clark]

No, I only have a couple of minutes.

[Chris Leslie]

On a point of order, Madam Deputy Speaker. It is important that the Minister’s misinterpretation of what I said should not be allowed—

[Madam Deputy Speaker (Dawn Primarolo)]

Order. That is not a point of order, but a point of debate. Resume your seat, Mr Leslie.

[Greg Clark]

I am grateful, Madam Deputy Speaker. It will be clear for people to see on the record that this is another proposed tax from the magic money tree that the hon. Gentleman frequently has recourse to.

We are not against a financial transaction tax in principle. We have one in stamp duty. The idea that we should not refer this matter to the ECJ is totally inappropriate. I commend the motion to the House.

Question put, That the amendment be made.

Loan to Ireland

Greg Clark Excerpts

Monday 10th June 2013 Written Statements

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

I would like to update the House on the loan to Ireland.

Ireland completed the ninth quarterly review of its International Monetary Fund and European Union programme of financial assistance on 22 April 2013, following which, the utilisation period for the seventh instalment of the UK bilateral loan began.

Upon request, the Treasury disbursed the seventh instalment of £403.37 million on 6 June 2013, with a maturity date of 7 December 2020.

The interest rate charged on the loan is calculated as set out in the loan agreement as the UK’s cost of funds plus a service fee of 18 basis points per annum, creating an effective per annum interest rate on this tranche of the loan of 2.331%. The UK more than covers its cost of funds.

The Treasury will provide a further report to Parliament in relation to the bilateral loan as required under the Loans to Ireland Act 2010 as soon as is practicable following the end of the next reporting period, which ends on 30 September 2013.

The Government believe that it is in our national interest that the Irish economy is successful and its banking system is stable. The Government continue to support Ireland’s efforts to improve its economic situation.

Oral Answers to Questions

Greg Clark Excerpts

Tuesday 14th May 2013 Commons Chamber

[Helen Goodman (Bishop Auckland) (Lab)]

Q6. What recent assessment he has made of the performance of the economy in the north-east; and if he will make a statement.

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

Last year, the north-east was Britain’s biggest destination for inward investment, after London and Greater Manchester, it doubled its trade surplus in goods to the highest in England and saw unemployment fall faster than in any other region of the country. The north-east independent economic review, published last month, shows the region’s further huge potential, which the Government are determined to support.

[Helen Goodman]

In fact, after the £2.8 billion of cuts that the Government have imposed, unemployment in the north-east is 10%, which is the highest in the whole country. I am pleased that the Minister mentioned the independent review, which recommended a doubling of apprenticeships, significant investment in transport infrastructure and the locating of major public institutions, such as the business bank, in the north-east. Have the Government put forward any resource to make any of those things happen?

[Greg Clark]

First, I congratulate the hon. Lady’s team of Spennymoor on, I am afraid, beating my team of Tunbridge Wells in the final of the FA Vase at Wembley 10 days ago. If she was there—I am sure she was—she will have seen that Spennymoor’s approach was characterised by very positive play, and she would do well to pay tribute to the efforts made in the north-east in much the same way. Exports are growing, employment is growing and the number of apprenticeships has doubled since we came into office. I will visit Newcastle in two weeks to discuss the implementation of the economic review, which I hope she will support.

[Sir Alan Beith (Berwick-upon-Tweed) (LD)]

Will the Minister go a little further north when he goes to Newcastle and have a look at Northumberland, where we are proud of our record on exporting manufacturing businesses? Will he also continue the good work of Treasury Ministers in encouraging the Department for Transport to consider a properly dualled A1 to link us to the markets and places where we can do business in this country and abroad?

[Greg Clark]

I shall certainly do that. One of the bright spots in the north-east is its exporting of manufacturing goods, particularly in areas of high technology. Exports in specialised manufacturing were up 24% in the last year and power-generating machinery was up 20%. I shall certainly visit some of the businesses in the north-east, including in Northumberland, to encourage them to do more.

[Pat Glass (North West Durham) (Lab)]

Despite what the Minister says, the north-east’s unemployment is the highest in the country and continues to rise, with youth unemployment having reached dangerously high levels in constituencies such as mine. When will he introduce those recommendations in the economic review targeted at helping young people in the north-east?

[Greg Clark]

I welcome the hon. Lady’s support for the economic review and its proposals. She will know that under the city deal that we negotiated with Newcastle, which is already being implemented, sites are being prepared for new businesses to move in, creating valuable jobs. I hope that she will maintain that support for the proposals as we implement them.

[Richard Graham (Gloucester) (Con)]

rose—

--- Later in debate ---

[Katy Clark (North Ayrshire and Arran) (Lab)]

Q12. If he will introduce a statutory code of conduct for the banking industry.

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

The Parliamentary Commission on Banking Standards was established to consider and report on professional standards and culture in the UK banking sector. The Government look forward to considering the commission’s report and we will make decisions on the need for further action in the light of its recommendations, including on whether there should be a code of conduct.

[Katy Clark]

A recent survey by Which? showed that 87% of the public wanted an independent code of conduct for bankers. Does the Minister agree that such a code would restore trust? Does he also believe that he should look again at the amendments on banking reform tabled by Labour proposing a licensing system that would enable bankers who broke the rules to be struck off?

[Greg Clark]

As the hon. Lady knows—her colleague the right hon. Member for Wolverhampton South East (Mr McFadden) might also like to comment on this—the commission has been hard at work considering various representations, including those from Which? and the British Bankers Association, on whether there should be a code of conduct. I am sure that the House would expect us to wait for the commission’s recommendations and then to respond to them.

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

Does the Minister agree that it was politically unwise for the Treasury to brief that it hoped the Parliamentary Commission on Banking Standards would endorse its politically motivated attacks on the previous Chancellor’s bail-out of the Royal Bank of Scotland? Does he further agree that the uppermost criterion for the reprivatisation of RBS must be the interests of the taxpayers who bailed it out, rather than any political or electoral timetable?

[Greg Clark]

It goes without saying that the interests of the taxpayer must be paramount, and I am not aware of any of the briefing that the right hon. Gentleman refers to.

[Paul Goggins (Wythenshawe and Sale East) (Lab)]

Q13. What assessment he has made of the obligations owed by Yorkshire bank to investors in Arck LLP.

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

A Serious Fraud Office investigation into Arck is under way, and the Government cannot comment specifically on any ongoing investigations. However, lawyers acting on behalf of Arck investors have themselves announced that the Financial Ombudsman Service is investigating complaints about Yorkshire bank’s role as custodian to Arck LLP. If the FOS were to determine that there had been any regulatory breach or failure by Yorkshire bank, and that that had led to investor detriment, it would be able to set an appropriate level of restitution.

[Paul Goggins]

I am grateful to the Minister for that reply. A constituent of mine is one of the 750 investors who placed about £60 million of their pension funds and savings into a ring-fenced, segregated account at Yorkshire bank. When Arck LLP went into liquidation, it was discovered that there was just £25 left. The Minister must agree that Yorkshire bank has some serious questions to answer. Will he raise this case with the Financial Conduct Authority and do everything he can to ensure that those investors are properly compensated?

[Greg Clark]

I will certainly do that, but I happen to know that the Financial Conduct Authority is already well aware of the case, and it is obviously taking a close interest in the continuing police investigation.

[Mr John Baron (Basildon and Billericay) (Con)]

Q14. What steps he is taking further to reduce Government expenditure.

--- Later in debate ---

[Mr Graham Allen (Nottingham North) (Lab)]

Q15. What steps his Department has taken to promote the growth of a municipal bond market in the UK.

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

Under the prudential system, local authorities are able to borrow for capital projects, providing they can afford the borrowing costs. Local authorities can choose the source of these funds and they are free to use municipal bonds where they wish to do so.

[Mr Allen]

I thank the Minister for his warm welcome for my second report about the financing of early intervention, entitled “Early Intervention: Smart Investment, Massive Savings”. One of the report’s recommendations was to free up local authorities to issue early intervention social impact bonds in order to fund early intervention in the localities. Will he meet me to discuss how we can take this forward?

[Greg Clark]

I certainly will meet the hon. Gentleman, who has been a pioneer in these matters. I have been very taken with his report’s recommendations. He points to some initiatives taking place in the US to have social impact bonds, and the authorities in London are keen on this, too. I am sure that he will want to continue his campaign; he will find a receptive counterpart in me.

[Ian Austin (Dudley North) (Lab)]

Q16. What recent assessment he has made of the extent to which the rate of increase of average earnings has kept up with the rate of consumer price inflation.

--- Later in debate ---

[Paul Blomfield (Sheffield Central) (Lab)]

T3. In just over an hour, in an unprecedented move, the bishops of Sheffield and Hallam and a delegation of civic, community and faith leaders will present a petition to No. 10 from thousands of Sheffielders calling for a fair deal for our city. Will Ministers accept their argument that the unfair distribution of cuts is having a disproportionate impact on cities such as Sheffield, widening inequality, hitting those who have least the hardest, and weakening the capacity of the council and the voluntary sector to support them?

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

The hon. Gentleman should support the Sheffield city deal, which has been enthusiastically endorsed by civic and business leaders in Sheffield. The point of the deal is to improve the city’s record for getting people into work, thus ensuring that the growing businesses there can access a high-quality labour force.

[Damian Hinds (East Hampshire) (Con)]

T4. In the light of the Government’s commitment to helping families to save for their futures, can the Minister tell us when we will see the details of the consultation on the measure announced in the Budget to allow the transfer of savings from child trust funds to junior individual savings accounts?

--- Later in debate ---

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

Given the increasing evidence, such as last month’s Carbon Tracker report, showing that so-called unburnable carbon assets pose a serious risk to the financial system, will the Minister look seriously at the proposal that companies should be required to disclose the carbon emissions potential of their fossil fuel assets?

[Greg Clark]

The first requirement is to assess the risk that the hon. Lady has described, and it is for the Bank of England to consider the systemic consequences. Should the Financial Policy Committee of the Bank of England conclude that investment in high-carbon assets poses a risk, it would have to report and explain that risk in its financial stability report.

[George Freeman (Mid Norfolk) (Con)]

Our banking sector is suffering the consequences of a state-sponsored boom in bad loans under the last Government. Has the Minister seen the news of the Co-op’s bad debts, including to the Labour party, and noted the withdrawal of Labour party funding from Lord Sainsbury? Does he agree that nothing better exemplifies the risks of Labour’s addiction to borrowing and trade union funding?

[Greg Clark]

I understand that the Co-op has lent more than £3 million to the Labour party. I would assess that as not being a particularly good credit risk; the Labour party has a toxic credit rating, and the experience has been that when it starts to borrow, it never pays the money back.

[Mr William Bain (Glasgow North East) (Lab)]

The youth employment rate is lower now than in 2009, with a shortfall of nearly 400,000 jobs, so why are the Government continuing to resist a tax on bank bonuses that would help put young people back into work?

Counter-Terrorist Asset Freezing Regime

Greg Clark Excerpts

Thursday 9th May 2013 Written Statements

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

My noble friend the Commercial Secretary to the Treasury, Lord Deighton, has today made the following written ministerial statement:

Under the Terrorist Asset-Freezing etc. Act 2010 (“TAFA 2010”), the Treasury is required to report to Parliament, quarterly, on its operation of the UK’s asset-freezing regime mandated by UN Security Council Resolution 1373.

This is the ninth report under the Act and it covers the period from 1 January 2013 to 31 March 2013. This report also covers the UK implementation of the UN al-Qaeda asset-freezing regime and the operation of the EU asset-freezing regime in the UK under EU regulation (EC) 2580/2001 which implements UNSCR 1373 against external terrorist threats to the EU. Under the UN al-Qaeda asset-freezing regime, the UN has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under the Al-Qaeda (Asset-freezing) Regulations 2011. Under EU regulation 2580/2001, the EU has responsibility for designations and the Treasury has responsibility for licensing and compliance with the regime in the UK under part 1 of TAFA 2010.

Annexes A and B to this statement provide a breakdown, by name, of all those designated by the UK and the EU in pursuance of UN Security Council Resolution 1373.

During this period the Treasury response to the independent reviewer’s second report was laid in Parliament.

The following table sets out the key asset-freezing activity in the UK during the quarter ending 31 March 2013:

Loans to Ireland

Greg Clark Excerpts

Thursday 25th April 2013 Written Statements

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

HM Treasury has today provided a further report to Parliament in relation to Irish loans as required under the Loans to Ireland Act 2010. The report relates to the period from 1 October 2012 to 31 March 2013.

A written ministerial statement on the previous statutory report on the loan to Ireland was laid in Parliament on 15 October 2012, Official Report, column 1WS.

Payment and Settlement Systems

Greg Clark Excerpts

Thursday 25th April 2013 Written Statements

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

HM Treasury has today published a consultation document setting out its plans to change the way that systemically important payment and settlement systems are dealt with in the event of insolvency.

Under the proposed special administration regime, the administrator would have the overarching objective to maintain the continuity of the insolvent firm’s critical services, thereby ensuring that the failure of such a company would not threaten the stability of the wider financial sector.

The Government are determined to ensure that no firm, of whatever type, threatens financial stability in the event of failure. Today’s consultation is just the latest step in the Government’s efforts to learn the lessons of the past and to create a safer financial system for the future.

Copies of the consultation document have been deposited in the House Libraries.