Financial Transaction Tax and Economic and Monetary Union
Debate between Lindsay Hoyle and Greg Clark(11 years, 5 months ago)
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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.
Financial Services Bill
Debate between Lindsay Hoyle and Greg Clark(11 years, 11 months ago)
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Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to consider the following:
Lords amendment 60, and amendments (a), (b) and (c) thereto.
Lords amendment 61, 62, 79, 115 to 121, 139, 140, 142, 146, 182, and 203 to 205.
Greg Clark
I come now to the Government’s implementation of the independent review of LIBOR conducted by Mr Martin Wheatley. I announced the Government’s response to the Wheatley review in mid-October and three sets of amendments to the Bill have been made to implement those recommendations that require legislation. The first is to enable activities in relation to benchmarks, such as LIBOR and potentially others, to be brought within the scope of regulation under FSMA. The second is to create criminal offences designed to tackle misconduct in the financial sector, including a new criminal offence for making false or misleading submissions in connection with the determination of a benchmark. The third is to provide the FCA with a rule-making power to require banks to submit to LIBOR and other benchmarks. Those amendments complement the market-led reforms to LIBOR as recommended by the Wheatley review. Martin Wheatley recommended that submission to, and the administration of, LIBOR become regulated activities, and amendments 59 to 62 create a framework to enable activities in relation to benchmarks to be specified as regulated activities under FSMA.
Amendment 60 defines “ benchmark” as an “index, rate or price”, defined from time to time by reference to the state of the market and used in relation to investments. A benchmark is capable of being regulated only if it meets that definition. The precise benchmarks that are subject to regulation will be specified by way of statutory instrument. The Government recently published a consultation paper on this legislation. Initially, the activities to become regulated will be LIBOR submission and administration, as recommended by the Wheatley review. However, further benchmarks can be added and the Government are considering and consulting on whether additional benchmarks should be brought within the regulatory perimeter. The types of benchmarks that could be eligible include equity or bond indices, derivatives and commodity or energy benchmarks. The definition of benchmark, as drafted, requires that it be used for one or more purposes that relate to section 22 of, and schedule 2 to, FSMA.
The hon. Member for Nottingham East (Chris Leslie) has tabled an amendment that would extend that definition to include commodities. Let me say first that I totally understand the requirement that we should be able to address some of the alleged abuses that have taken place and have the powers in statute to include those benchmarks that are relevant to some of the concerns that have been expressed recently. We do not believe that there is any requirement to extend the legislation on that. In fact, the Bill was drafted to anticipate the Wheatley review and the work going on in other benchmarks. Benchmarks can represent many things, including commodities or energies, provided that they are traded financially in the way we often see. Under the definition, regulation by the FCA extends to benchmarks that involve financial matters consistent with FSMA and the objectives of the FCA as the financial services regulator.
The Wheatley review also recommended that banks should be encouraged to participate in LIBOR—participation is currently voluntary. In the absence of such submissions, LIBOR would cease to be a representative benchmark and, in an extreme scenario, would not be published at all. Therefore, Lords amendment 79 allows the FCA to require firms to participate in particular benchmarks, while making reference to a “code or other document”. That allows the detail of the requirement to be determined by the benchmark administrator, not by the FCA. It might not be necessary for the FCA to use that power immediately, if at all, and it has recently opened a discussion on how and when the use of that power could be considered.
The Wheatley review also recommended the creation of a new criminal offence in relation to the manipulation of benchmarks such as LIBOR and the re-examination of the criminal sanctions for market manipulation under FSMA. Although such conduct could already be a criminal offence under legislation, this is a helpful clarification of some of the powers. There will be three criminal offences: first, we are re-creating the offence of making a false or misleading statement; secondly, we are widening the offence in section 397(3) to include creating a false or misleading impression as to the market in, or the price or value of, an investment for the purposes of making a profit or avoiding a loss; and thirdly, we are creating a new criminal offence related to misleading statements and impressions in respect of specified benchmarks.
The amendments also replicate the penalties for existing offences: a person found guilty might face a prison sentence of up to seven years and an unlimited fine. The detail of the investments, agreements and benchmarks for which those criminal offences apply will be set out in secondary legislation. That is included in the public consultation currently under way.
Under the current arrangements, where enforcement action results in a firm paying a financial penalty, that is applied as a discount to fees paid by other firms the following year. Without reform, unprecedented fines, such as those relating to the attempted manipulation of LIBOR, would have represented a significant windfall to regulated firms. In future, regulatory fines revenue in excess of enforcement case costs will go to the Consolidated Fund. The hon. Member for Nottingham East and I had an exchange about that earlier. The regulators will be able to net off enforcement case costs before handing over the penalties to the public purse. The new arrangements will apply to FSA fines received from 1 April 2012, so the measure will include the penalty imposed on Barclays in relation to the attempted manipulation of LIBOR.
The Government have announced that £35 million of fines imposed from attempted LIBOR manipulation and other unacceptable behaviour received this year will be used to support Britain’s armed forces community. In addition, £5 million will go to the creation of new, groundbreaking first world war galleries at the Imperial War museum. I hope that the House will agree to these amendments but, of course, I stand ready to respond to any points Members make.
Localism Bill
Debate between Lindsay Hoyle and Greg Clark
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss Lords amendments 51 to 94, 227, 228, 230, 234, 241, 244, 246, 247, 250, 252 to 254 and 260.
Greg Clark
The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Hazel Grove (Andrew Stunell) should count himself lucky to have had an invitation from the parish clerks. The Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bromley and Chislehurst (Robert Neill) recently spoke at the annual general meeting of the British Toilet Association. I gather that he was flushed with success after making that speech.
I approach the Dispatch Box with some trepidation, because I was about to say that we had achieved “consensus in the House of Lords”, but on the basis of the earlier contribution from the hon. Member for Warrington North (Helen Jones), I fear that all six of those words make her see red. It seems that this Chamber should make a unilateral declaration of independence from the House of Lords, that nothing good can come from there, and that all decisions have to be made here. So I should be careful. As for consensus, the hon. Lady would pick a fight in an empty room. She managed to be warlike on amendments with which she wholeheartedly agreed, so goodness knows how we are going to get on with this group. None the less, we have achieved a degree of consensus and listened to the representations that were made in our own Public Bill Committee and in the other place.
We need to devolve power to local authorities, but there is clearly a risk that when we do, the powers that formerly resided with central Government could expose the nation to the risk of infraction proceedings if they put us in breach of EU obligations. This was a matter that needed to be addressed. It is only fair that council tax payers should not pay for poor behaviour on the part of local authorities in areas other than their own. That was the purpose of introducing the provisions on EU fines. We have had some useful conversations about those.
The concerns raised both in Committee and in the other place were that Ministers should not be the prosecutor, judge, jury—and, in some cases, the co-defendant too—on some of those matters. Thanks to representations from the Local Government Association and the Greater London authority, we have thought carefully and hard about how we can allay some of those concerns.
I would like to put on the record my appreciation of the work of the late Sir Simon Milton, who, in evidence to the Localism Bill Committee when we first met, not only raised concerns about those procedures, but suggested a way forward that would satisfy all our concerns. He went away with his officials and reflected on that. During that process, very sadly, Sir Simon died. All of us in this place greatly regret his passing. We have appreciated his good counsel in these matters over the years. His colleague Daniel Moylan took up the work that Sir Simon had begun, and the fruit of that work is reflected in the Lords amendments, particularly amendments 57, 234 and 246. They provide that there should be a new stage of designation for authorities that might be subject to a fine.
I owe particular thanks to Lord Tope and Lord McKenzie, who introduced amendments to that effect in the other place. What these amendments will require is that Ministers should designate any authority that might be at risk of fines by affirmative order. Such an authority can be identified only if the infraction is the responsibility of the local authority, only if the actions follow its designation, and only in relation to specific infraction cases. There should be no retrospectivity.
The second set of amendments involve the creation of an independent advisory panel before any fines can be recovered from a local authority. Baroness Gardner of Parkes suggested this approach in amendment 58. It would mean a public report being made to the Minister by an independent panel, and it would include a fair apportionment of the culpability of any local authority so fined.
Amendments 59 et al enable the local authority to plan how it would meet the costs, and it is clear through these amendments that the authority’s responsibility for any fines ends when its culpability ends. The fines cannot continue beyond the point at which the authority has corrected its behaviour.
Some minor and technical amendments cover non-devolved matters in devolved areas. They proceed with the full agreement of each of the devolved Administrations. There are mirror powers for Welsh Ministers to pass on fines in their own area.
These changes sent to us by the House of Lords deliver on our commitment to introduce fines for councils only when they are responsible for the United Kingdom being fined, only when they can remedy the situation, and only when they can afford to pay. I commend the Lords amendments to the House.
Mr Deputy Speaker (Mr Lindsay Hoyle)
With this it will be convenient to discuss the following:
Lords amendments 152 and 153.
Lords amendment 154, and amendment (a) thereto.
Lords amendments 155 and 156.
Lords amendment 157, and amendment (a) thereto.
Lords amendments 158 to 165, 237, 238, 240, 257, 262, and 350 to 368.
Lords amendment 369, and amendment (a) thereto.
Lords amendment 370, and amendment (a) thereto.
Lords amendment 371 to 382, and 418 to 425.
Greg Clark
Among the areas where centralisation has increased over the years is in the planning system. The regional spatial strategies, whatever their intentions, clearly took power from local communities. We made good progress in Committee in addressing the replacement for regional strategies in dealing with larger than local matters. The Bill introduces more opportunities for neighbourhoods through neighbourhood planning, and brings in compulsory pre-application scrutiny.
As we have worked through, we have established a good deal of common ground. The Committee debate focused on the duty to co-operate. Informed by the Royal Town Planning Institute and discussions across the Front Benches, we listened to the Committee and, as we indicated on Report, made various changes that have been reflected in the Bill as it left the House. We said on Report that the neighbourhood planning section would be amended in the House of Lords. We considered carefully suggestions made from all parts of the House, and the amendments before us today reflect that.
It is important to say that we want to see more planning, not less. We feel that over time the imposition from above has stood in the way of local communities expressing their own vision of the future of their community. That is what we want to give them a greater chance to do. At the heart of that is the need to achieve sustainable development. Section 39 of the Planning and Compulsory Purchase Act 2004 provides a duty on those preparing local plans to do so with the aim of contributing to the achievement of sustainable development.
Amendment 370 extends that principle to neighbourhood planning, with an explicit condition that it should contribute to the achievement of sustainable development. The duty to co-operate will require that public bodies should co-operate effectively on sustainable development. We debated in Committee whether to include the definition of sustainable development on the face of the Bill or whether it should be in guidance. I made a commitment to think seriously about that, which we did. We had various discussions in the other place involving Members on both sides of the House.
Let me say at the outset that there is no issue in principle with the definition proposed by the hon. Member for Birmingham, Erdington (Jack Dromey) and the right hon. Member for Leeds Central (Hilary Benn) in their amendment (a). It reflects the 2005 sustainable development strategy, which has not been repealed. In evidence not to the Select Committee chaired by the hon. Member for Sheffield South East (Mr Betts), to which I shall be giving evidence later in the week, but to the Environmental Audit Committee I and a DEFRA Minister made it clear that the 2005 strategy remains extant and we have no difficulty with the content of it. Of course, that has been captured in previous guidance—PPS1 in particular—and was updated from the first iteration of the sustainable development strategy in 1999.
There was a serious debate in the other place about whether the best place to reflect the shared view of sustainable development is on the face of the Bill, or whether that should be, as it always has been, in guidance. On Report there was some concern that a statutory definition makes it difficult to capture the full range of aspects of sustainability, which may include but go beyond some of the provisions in the sustainable development strategy. I happen to think, and I have said to the Environmental Audit Committee, that some of the thinking in the natural environment White Paper makes some helpful suggestions that one should be looking for a net gain for nature. It is important to be open to that.
In the other place, Baroness Andrews, the chairman of English Heritage and a recent former planning Minister, made some of the same arguments about heritage. She said:
“I feel strongly that one of the elements that is not in this amendment”—
the amendment before us is similar or even identical to the one that was considered in the other place—
“. . . is including something about our vital cultural and heritage needs, including those of future generations.”
She went on to say that
“one might add, for example, ‘meeting the diverse social, cultural, heritage needs of all people in existing and future communities and promoting well-being and social cohesion and inclusion’.”
The noble Lady said that
“if we are to debate the amendment”,
the Minister should consider whether the definition could be sufficiently flexible to include
“the new elements of the definition.”—[Official Report, House of Lords, 12 October 2011; Vol. 730, c. 1750.]
I cite that as an example of someone who shares our good will on that point and has recent experience in government of planning and of some of the difficulties.
National Planning Policy Framework
Debate between Lindsay Hoyle and Greg Clark(13 years, 1 month ago)
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Mr Deputy Speaker (Mr Lindsay Hoyle)
What I can say is that it is up to the Secretary of State to decide whether to make a statement. The point has been noted and everybody is aware of it. Has the Minister finished?
Greg Clark
That was more hope than expectation, Mr Deputy Speaker. I will finish shortly. I did not think anything more interesting would happen today than our discussion of the national planning policy framework, but I was clearly mistaken.
The Government have not revoked the sustainable development strategy of 2005. Members of the Environmental Audit Committee who interviewed me last week asked some questions about it and it is the subject of one of the suggestions that have been made in the consultation. Let me explain why it was not included in the draft as it stands. As I say, it has not been revoked or repealed in any way. It is simply a matter of whether a document produced in 2005 has the timelessness of the Brundtland definition.
It was necessary to update the 1999 strategy in 2005. Six years on, there are some respects in which thinking on sustainability has progressed. For example, there is the idea that the separate pillars of the economy, the environment and the social aspects of sustainability can be traded off, one against the other. Some people argue—and I think there is some merit in doing so—that that is a rather defensive position and that one should be looking for positive improvements to the environment, not simply to trade-off. That is very much the thinking in the Government’s natural environment White Paper, which talked of a net gain for nature. In response to the consultation we could listen to such representations, but let me say simply that our intention was to make sure that we are not stranded in our thinking when we might have a more progressive approach to sustainability.
Greg Clark
I am not taking any more interventions, as Mr Deputy Speaker has indicated that he thinks I have spoken for long enough.
Mr Deputy Speaker (Mr Lindsay Hoyle)
It was the Minister himself, not me, who said that he would be brief in order to allow Back Benchers to contribute. The Minister may carry on.
Greg Clark
You are correct and punctilious, Mr Deputy Speaker, in holding me to my commitment.
Let me deal with another issue of concern—transitional arrangements.
Localism Bill
Debate between Lindsay Hoyle and Greg Clark
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. It is up to the Member speaking whether they wish to give way. The hon. Gentleman has given way once, and if he wishes to do so again, I am sure that he will let the Minister know.