Loans to Ireland Bill

Lord Dodds of Duncairn Excerpts

Wednesday 15th December 2010 Commons Chamber

[Mr Cash]

I happen to agree with that, which is why I did not vote against the Bill, but I must say that this is not a matter of merely academic interest, because the consequence that I mentioned at the beginning of my speech, which led me to abstain, is that there is no restriction on the greater amount. I wait with enormous interest to hear whether the Minister will differ from the Chancellor of the Exchequer on that, but when it is an open-ended provision for a greater amount, I would like to know what that greater amount’s limit would be.

In the context of the interlocking aspect to which I have just referred, I remain deeply concerned that the amount could be greater, and that this matter could get caught up in the complicated ongoing negotiations—I recognise that the Chancellor and his Ministers have had some very complicated negotiations. I remain worried about the direction in which we seem to be going, therefore. It would be so simple for the Government to give me either a direct assurance, which I would regard as a second-tier response, or a specific agreement to accept my amendment just to get me off their back. I would regard such an agreement as a useful way of dealing with the situation, but I bet I do not get that.

[Mr Dodds]

We will listen with interest to what the Minister has to say, but, just to be clear, is the hon. Gentleman’s argument that the greater amount under clause 1(4) could be used to increase not only the amount of the loan to the Irish Republic, but interweaved with the financial stability mechanism to provide money for other countries? Is that his argument, or is it specifically about the loan to the Irish Republic?

[Mr Cash]

The provision appears to apply to the Irish component, but because of the implications of what I am saying and the interlocking aspects in the kaleidoscope, it is extremely difficult to work out exactly what is intended by such opaque words. What I am asking for is very modest: simply the removal of all doubt by making it clear that any such loan would be

“other than a loan by virtue of any provision by or under the European Communities Act 1972.”

If all doubt were to be removed in that way, it would be the end of the story and there would be no problem, so why not do it? I look forward to the Minister’s response.

Another issue arises under paragraph 6 of the summary of key terms document. The paragraph covers events of default, and sub-paragraph (h) states that one event of default will be

“the Borrower”—

Ireland—

“not being or ceasing to be a member of the European Union”.

Why would such a provision be wanted if it were not integral to the fact that Ireland is a member of the European Union? I do not think I need to advance the case any further as it is very simple: if we would exclude Ireland from the arrangements by virtue of its ceasing to be, or not being, a member of the EU, that must have special significance, otherwise it would not be stated. That is another exceedingly worrying feature.

Paragraph 8 refers to the governing law, and it states:

“The credit agreement and any non-contractual obligations arising out of or in connection with it will be governed by English law.”

Paragraph 9 is on enforcement, and the document’s authors have clearly thought a lot about this matter, and the more they think about it the more worried I get, because they are transposing their thinking into the provisions of the Bill and this document:

“The English courts will have exclusive jurisdiction in relation to any dispute including a dispute relating to non-contractual obligations arising out of or in connection with the credit agreement.”

That gets to the heart of the problem, because anything that within law is under the jurisdiction of the European Union and within the framework of the European Court under the European Communities Act 1972 cannot be excluded from that jurisdiction by such words in a document of this kind that is “for information purposes”—hence our European Scrutiny Committee report on the relationship between parliamentary sovereignty and the judiciary. Therefore, merely writing in such a document that something will be governed by English law and that the English courts will have exclusive jurisdiction in relation to any dispute is not worth the paper it is written on.

If it is within the European Union legal framework, that means the European Court will get its hands on it. It may be that if there was a dispute or default or any of the other difficulties that could arise from the agreement in the Bill as enacted—as I rather suppose it will be—that will in no way alter the fact that ultimately, as long as parliamentary sovereignty prevails in the light of the European Communities Act, the Supreme Court will not prevent it from falling within the framework of the European Court of Justice.

Of course, it would be open to any future parliamentary Bill to try to unravel the arrangement, but what a pity it would be if we found that the fast-track arrangements we are experiencing today led us to the situation that I have described, simply because we were not prepared to listen to the argument that could resolve the problem by excluding the European jurisdiction. The legal advisers, the Treasury officials and the Minister may well be wrong. If they are wrong, we are in deep trouble. If they are doubtful, perhaps they could listen to those of us who have been proved right on a number of past occasions.

These are my final words—not from Cassandra, but from me. When things go wrong, it is much better to have taken advice beforehand and keep ahead of the curve, rather than allowing the curve to catch up with us.

Loans to Ireland Bill

Lord Dodds of Duncairn Excerpts

Wednesday 15th December 2010 Commons Chamber

[Mr Osborne]

I give way to the right hon. Member for Belfast North (Mr Dodds).

[Mr Nigel Dodds (Belfast North) (DUP)]

I am grateful to the Chancellor, whose comments have clearly provoked a big reaction.

Corporation tax is a big issue in Northern Ireland. It worries people there that the Irish Republic wishes to retain its 12.5% corporation tax rate. We in Northern Ireland are arguing for a cut in our rate, but the Secretary of State for Northern Ireland tells us that that will cost us some £310 million of our block grant. In a way, we will be subsidising the Irish Republic to keep its corporation tax low, and penalising Northern Ireland if it wants to reduce its corporation tax. The Chancellor must take that into account in the context of this package of measures.

[Mr Osborne]

As I said to the House on a previous occasion, I did not think it right—others may take a different view—for one sovereign nation to try to dictate the tax rates of another sovereign nation. I did not think that that was a precedent that we particularly wanted to set. I entirely understand the competitive pressure that the Irish corporation tax rate puts on Northern Ireland, but ultimately it must be for the Irish Parliament to determine its own tax rates. It is, of course, having to take some very difficult measures to preserve the corporation tax rate in the Republic.

I know that there is a discussion to be had about the corporation tax rate in Northern Ireland, and about other measures that might be taken there. A document has been submitted this week. I hear what the right hon. Gentleman says, but let us have that discussion with the Secretary of State for Northern Ireland and Northern Ireland Members.

--- Later in debate ---

[Mr Nigel Dodds (Belfast North) (DUP)]

It is a pleasure to follow the hon. Member for Christchurch (Mr Chope). He mentioned corporation tax, which I shall come to shortly. However, it is worth saying first that what is proposed is a generous act on the part of the Government and the people of the United Kingdom. Of course there are good, economic reasons why what is proposed should be considered in the national interest. As has been pointed out, there are strong arguments about Northern Ireland’s position, the involvement of banks from the Irish Republic in Northern Ireland’s economy, the exposure of British banks to Irish banks, and so on, which are reasons why we should engage in the loan.

However, it would be remiss of me and the people for whom I speak not to point out that the loan is being made merely months before the 90th anniversary of the secession of the 26 southern counties from the United Kingdom. For probably the vast majority of that time, and certainly in the past 30 or 40 years, politicians and others in the Irish Republic have spent most of their time denying the relationship between southern Ireland and the United Kingdom. However, the loan and all that has been said prove the interdependence of the Irish economy and the Irish Republic with—and, to a large degree, their dependence on—the United Kingdom. There are those who go around saying that the United Kingdom should keep out of their affairs and all that, but I think they now realise that in many ways the dependence is very great, and not just on Europe, but on the United Kingdom in particular.

It is also worth spending a minute or two recapping how we came to this position. For many years, people referred to the great Celtic tiger that was the Irish Republic’s economy, and that includes those now in government, as has been pointed out. Those who raised issues about the way in which that economy was lauded were criticised as being driven by petty political considerations and told that their criticisms were not justified. There were those of us who pointed out that there were domestic issues to do with the great concentration on property. However, a recent editorial in The Guardian summed up the position well:

“Politicians kept consumer demand buoyant with generous public spending, while rewarding developer friends with public works contracts. Ireland’s narrow elite ran the economy like a casino and awarded itself free chips. No one, save a few lonely economists, had much incentive to call time on the party. By 2007, around one in five Irish jobs depended in some way on the property market.”

The international mistake was to join the euro. Of course the problems are not entirely down to that, but the economic tools that could have helped to control some of the economic excesses, and some of the issues that arose as a result of the bursting of the property bubble, were not available to the Irish Republic as a result of its membership of the euro. Those tools include devaluation and the ability to cut interest rates. So when the crisis came, the Republic was virtually powerless to do anything in that context. That is well known.

We in Northern Ireland have had our disputes with the Irish Republic, but relations are now much better than they used to be, and we do not take any satisfaction from the crisis that has enveloped it. Someone asked where the Irish Republic stood in relation to recent debates on Europe. People will remind us in this House of the Irish Republic’s attitude during the long years of terrorist activity in Northern Ireland, when the Republic became a safe haven for terrorists and refused to extradite wanted criminals to Northern Ireland for justice. Some of our constituents are now saying, “Why should we help them now that they are in this situation?” They also remember the Irish Republic’s role in the formation of the IRA, back in 1969. They say, “We see all these inquiries, but what are we doing about that?” That is understandable, because lives were lost and families were bereaved as a result of the activities of Governments of all shades and opinions in the Irish Republic. All of them played a role, whether Fine Gael, Fianna Fáil, Labour or the rest of them.

Having said all that, we recognise that the Irish Republic needs to receive this loan at this critical time, for the reasons that have been set out. Two of the banks are owned by the Irish Republic and are active in Northern Ireland, and a quarter of all the personal accounts of people in Northern Ireland are in those banks. We have also heard about the exposure of British banks to Irish Banks, as well as the wider trade issues, given that 40% of trade in Northern Ireland is carried out with the Irish Republic. All of that means that, if the situation were to deteriorate even further, we would be in a very difficult situation in Northern Ireland. On balance, therefore, we will not vote against the Government, and we have made it clear that we support the Bill.

There are wider issues relating to the implications of the bail-out of other countries, which we shall discuss in Committee. On corporation tax, the Irish Republic should of course have the right to set its own tax rates; that is not the argument. The argument is that Northern Ireland is at a competitive disadvantage as a result of the lower rate in the Republic, because of the land border. The Irish Republic is our greatest competitor for foreign direct investment. For us to get the equivalent benefit, we are told that we would have to take a further cut in public expenditure of £310 million. In these circumstances, when a subsidy loan is being provided to the Irish Republic, the case for Northern Ireland should be looked at. Why should we be hit immediately with that cut when the Republic will be given years to pay back its loan, giving it a competitive advantage?

Loans to Ireland Bill (Allocation of Time)

Lord Dodds of Duncairn Excerpts

Wednesday 15th December 2010 Commons Chamber

[Mr Nigel Dodds (Belfast North) (DUP)]

I shall be brief. I want to commend the hon. Member for Wellingborough (Mr Bone) for his absolute consistency. The speech that he has just delivered is one that he would have delivered, and perhaps did deliver—certainly the gist of it—many times when he sat on the Opposition Benches. The points that he raises are extremely important in the general context of how Parliament operates.

I do not want to say a great deal about the Bill because we shall come to Second Reading shortly, but I will say this. We are used to having Northern Ireland business rushed through—sometimes for good reasons, sometimes for not so good reasons. I have had various discussions with the Secretary of State for Northern Ireland and others relating to important matters that we believe require legislation, not least an issue that was extremely important during the run-up to the general election—the fact that Members of this House who do not take their seats continue to claim lots of money for parliamentary purposes—and we were told that time would be made available to debate that, and for the House to have its say. We were also told that legislation on the issue of dual mandates would appear. Yet I am now told that the Government cannot do any of that because “there isn’t any time”.

The only point that I want to raise is this. The hon. Member for Wellingborough has spoken at great length, but the bottom line is that the Government will do what they will. The notion that “there isn’t any time” to do the necessary things and important things that have been laid out by the Government in relation to Northern Ireland is simply not tenable, given the fact that here we are today, setting time aside to rush through all stages of a Bill—I will not get into the merits of it; we will come to those—in one day. I say to the Government, especially the senior Members on the Treasury Bench, that they should reflect on the fact that we are being told that other important things cannot be done. It is clear that they can be done and should be done, and I urge the Government to take action as soon as possible.

Equitable Life (Payments) Bill

Lord Dodds of Duncairn Excerpts

Wednesday 10th November 2010 Commons Chamber

[Mark Durkan]

I do not believe that the hon. Member for Harrow East, for example, is trying to sow or fertilise long grass. This is about getting something that is credible, competent and reliable and the Committee should try to help in that regard. That is the spirit of these amendments.

There has been much criticism of the underperformance, to put it mildly, of the previous Government on this issue over more than one Parliament. Let us remember that those Ministers were not deliberately ignoring the plight of their own constituents who were coming to them or the problems highlighted by many of us from constituencies across the United Kingdom. They were constrained by the advice that they were getting from the same Treasury that people are now so happy with. The Treasury was advising that serious precedents and problems would be created.

[Mr Nigel Dodds (Belfast North) (DUP)]

I understand what the hon. Gentleman is saying, but Ministers are there to take decisions. They listen to advice but it is up to them to make things happen. He and I, as former Ministers, know that only too well, so why is he making an excuse for the inaction of the previous Government and their failure to respond to the needs of Equitable Life policyholders?

[Mark Durkan]

If the right hon. Gentleman had been here for the debates on earlier amendments, he would know that I made no such excuses then. Indeed, in all previous debates, I have been very critical of the performance of previous Governments. We have both been the Finance Minister in Northern Ireland, as he says. When I held that position, I used the line, “I’m the Minister of Finance; I don’t suffer from depression but I am a carrier.” That is the effect: Treasury Ministers are put in that sort of position. They become aware of constraints and difficulties that they then have to put before everyone else and impose on them as well.

My point is not that Ministers were right or wrong to listen to the advice but that we, as a Committee, must choose whether to go along with the Bill and say that the scheme will proceed only according to Treasury lights or whether to say instead that it should go according to wider lights and be informed by the sort of considerations reflected in the various amendments that hon. Members have tabled and by the many good observations made by Members on both sides of the Committee. Either we want to trust the Treasury and leave the scheme entirely in its hands, with its considerations and constraints alone, or we want to honour the spirit of what we have all pledged to those who have lost out with Equitable Life and to act in the light of the sad experiences that we have heard about.

I commend the amendments to the Committee. I shall wait to hear what the Government say about their amendment, but it seems to reinforce the Treasury’s whip hand over the whole scheme.

Comprehensive Spending Review

Lord Dodds of Duncairn Excerpts

Thursday 28th October 2010 Commons Chamber

[Danny Alexander]

No, I am not going to give way.

There will be reform, too, in the justice system. A prison population that is rising out of control is not right, let alone affordable. The guilty must be punished, but rehabilitation must be the priority.

There are major reforms in other policy areas. Across all that we do, reform is the keystone to delivering better for less.

[Mr Nigel Dodds (Belfast North) (DUP)]

I thank the Government for their work in rescuing savers in the Presbyterian Mutual Society in Northern Ireland; they are very grateful. The Government have built on the work of the previous one, but they have brought a solution to fruition. However, may I remind the Minister of the agreement—the settlement—that was made at the time of devolution for Northern Ireland? Will he look at that again to ensure that the challenges unique to Northern Ireland are faced with confidence?

[Danny Alexander]

I am grateful for the right hon. Gentleman’s intervention—my hon. Friend the Financial Secretary, who did a great deal of work on that issue, will have heard his compliments. I believe that we will introduce a growth paper on Northern Ireland soon, and the right hon. Gentleman’s points on that are very important. I know that questions have been asked, for example, on capital spending between June 2005 and 2018. We believe that we are on track to meet those commitments, which were made some years ago.

Economic Governance (EU)

Lord Dodds of Duncairn Excerpts

Wednesday 27th October 2010 Commons Chamber

[Mr Hoban]

I believe that this Parliament should hear news about this country’s finances before the EU does. We have secured that situation and that was the right thing to do.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Minister also mentioned the increase in the EU’s budget by 6%. Does he agree that many people in this country—in fact, the vast majority—will be deeply disappointed by the Prime Minister’s reply to the hon. Member for Vauxhall (Kate Hoey) during Prime Minister’s questions, in which he seemed to be limiting his ambition to reduce the size of the increase in the EU budget? Should not the Government just go there and argue for, and deliver, a cut in the EU budget?

[Mr Hoban]

The right hon. Gentleman needs to remember that we voted against the budget increase in Council. We have taken a tough line, not only by arguing against it but by voting against it as well.

Draft EU Budget 2011

Lord Dodds of Duncairn Excerpts

Wednesday 13th October 2010 Commons Chamber

[Mr Cash]

As a matter of fact, it is pretty obvious that I am not a member of the coalition Government, so let us dispense with that idea straight away. In my votes over the past few weeks, I have probably demonstrated that I have certain reservations about the situation, but I am not going further down that path now.

If the European Parliament is allowed to get away with this, it will add fuel to fire of the riots and demonstrations that are already sweeping many cities in different countries throughout Europe. Those countries face problems of immigration, economic stress and high unemployment, and wilfully to attempt to increase the EU budget when the whole thing needs to be rejected is, to my mind, irresponsible. If the EU Parliament persists, it cannot be regarded as a serious and responsible Parliament. That is my concern.

[Mr Nigel Dodds (Belfast North) (DUP)]

rose—

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

rose—

--- Later in debate ---

[Mr Cash]

Mine is not an absolutist position in the sense in which the hon. Gentleman puts it. My amendment (a) says that an increase is simply not justifiable. What is justifiable could also be described as what is fair and right. I have just described what I suspect will happen throughout Europe if people continue to increase the budget irrespective not only of our spending review, but of the crisis in Greece and of the situations in other member states, including very high levels of unemployment, the rise of nationalism that goes with that, and the populism that will emerge from those who want to agitate and create trouble. We want a stable Europe and a stable United Kingdom, which is precisely why I take the view that we need to act responsibly and ensure that the UK Government have every opportunity to achieve their objectives. I assure the House that nobody can accuse me of being in any way reluctant to speak my mind on matters relating to the EU, and I am sure that no one would presume to do so.

[Mr Dodds]

I commend the hon. Gentleman for his long years of campaigning on this issue and his work as Chairman of the ESC. Given the provocative behaviour of the European Parliament and its attitude to a budget increase, which he outlined, should this House not put down an equally strong marker by strengthening the Minister’s negotiating hand and saying, “Far from increasing or freezing the budget, we want a reduction”?

[Mr Cash]

I do not want to enter into an unnecessary altercation about this with my hon. Friend the Member for Clacton, but if the wording had been put to me, I would have included the words “and if the European Parliament and its committee persist in the behaviour that they are now engaged in, we would have to call for a reduction in the budget.” It would be on that basis, not on the basis of requiring the Government to respond when they are in the process of negotiations. Perhaps the distinction comes at that point, although I agree with my hon. Friend’s sentiments.

--- Later in debate ---

[Mr Carswell]

I am grateful to my hon. Friend, and to the other 32 hon. Members—many of whom are present—who supported the amendment. The £380 million increase comes at a time when there will be costly cuts in my hon. Friend’s constituency and in others—cuts that none of us wants to see—and when it is surely wrong to reduce spending on public services in order to increase the money that we give to EU institutions.

[Mr Dodds]

The hon. Gentleman said that some of the increase would fund the External Action Service. Does he recall that when the service was debated in the House, it was promised that it would be budget-neutral? That was bad enough—there should have been a decrease—but can the hon. Gentleman explain why we are now being asked to finance an increase in its funding?

[Mr Carswell]

I cannot. I wish that I could, and I should have liked to hear an answer from the Minister. I am perplexed and puzzled about why we are now being asked for an additional increase in funding for a measure that we were told was budget-neutral.

The issue before us is indeed one of supply. It is a question of whether we think that our constituents’ money is being well and wisely spent. Do Members believe that, in our current financial circumstances, we should find more resources to pay for, among other things, high commissioners’ entertainment allowances and additional staff for Members of the European Parliament? Is that really the best possible use for this money? Is it better to spend it on that than on the 13,000 nurses whose jobs we might otherwise save, or on 22,000 servicemen? I do not think it necessary to be either Eurosceptic or fiscally conservative to believe that there are better ways to allocate our finite resources. When all the Governments in Europe are cutting their budgets, it cannot be right for the EU bureaucracy to be expanding.

If we do not think that this is the best use we can make of our constituents’ tax contributions, our duty is clear: we should support the amendment and reject the increase. Our predecessors fought a long and bloody civil war to establish that only this House might raise revenue for central Government through taxation. We are the inheritors of a sublime tradition, but also of a heavy duty. It is not for any outside agency, either our own Ministers or overseas Commissioners, to tell us how to dispose of this nation’s resources. We shall make that decision guided by our consciences, and in the interests of those for whom we speak.

I respectfully seek to press the amendment to a vote. Others have signed it, and I hope that they will speak in its support tonight.

--- Later in debate ---

[Chris Heaton-Harris]

That is a good question. I am not convinced that it is possible. There is only one way to get rid of any European Commissioner, and that is to get rid of the whole lot. That involves a process that an individual constituent— [Interruption.] No, I did not. I was way too young to be there.

[Mr Dodds]

May I suggest one way to address the particular issue of getting rid of some of those people? The British people should be allowed a referendum on the question of our relationship with Europe. Instead of having a referendum next May on the alternative vote system, which is not what people want to talk about, should we not have a referendum on this issue, which everybody is interested in?

[Chris Heaton-Harris]

The answer is yes.

I want to wind up by taking us back to the process that we are involved in. We are discussing the EU budget for 2011. Coming down the track is the EU budget for the next five or six years. If we do not make a stand now, we will be viewed as a pushover when we come to those negotiations next time round. We have done fantastic work. There has been no failure whatever by our Front-Bench team in already getting a bunch of countries to agree with what we are saying on the EU budget. I want the Economic Secretary to know that behind her she has so many friends wishing her to do well. We are just representing the British people in what they want as well.

PAYE Contributions

Lord Dodds of Duncairn Excerpts

Wednesday 8th September 2010 Commons Chamber

[Mr Gauke]

HMRC has faced many problems and challenges over recent years: a merger, coping with a complicated tax credits system, and a number of other issues. We need to be realistic about what can be done with our tax system—tax simplification is indeed important—and allow HMRC to focus on its key concerns and do the very important job that it has to do.

[Mr Nigel Dodds (Belfast North) (DUP)]

Can the Minister outline the costs of this entire operation, and may I endorse the call for people who have underpaid to have the opportunity of face-to-face meetings if there are big demands on them, so that their cases can be heard properly? Can he indicate whether interest will be paid on top of the money to be repaid to those who have overpaid?

[Mr Gauke]

On the last point, yes, interest is applicable and a statutory duty. We are not in a position to assess the costs to HMRC. It is worth putting the matter in perspective by saying that most people have had their tax calculated accurately through the PAYE system, and that more will receive repayments than will have to pay extra. People should wait until they receive their letters. It is worth pointing out also that the problem of underpayments has existed in previous years, and many hundreds of thousands of people have had to repay tax through the PAYE system, so the phenomenon is not entirely new, although the scale is somewhat greater now.

Budget Resolutions and Economic Situation

Lord Dodds of Duncairn Excerpts

Tuesday 22nd June 2010 Commons Chamber

[Mr Redwood]

I was coming on to talk about the impact on incomes. The Red Book is quite explicit about that, and has some very helpful tables. I suggest that the hon. Gentleman gets a copy for his greater interests, as those tables make it very clear that the more one earns, the bigger will be the negative impact on earnings. As the Chancellor himself said, in that sense this is a very progressive Budget: he has shielded people on low incomes from part of the impact, and made those on higher incomes carry more of it. Although the hon. Gentleman represents a place with more people on lower incomes, they will be relatively protected.

[Mr Nigel Dodds (Belfast North) (DUP)]

The right hon. Gentleman listed a number of measures that the Chancellor is taking to promote the private sector. I am sure that he will agree that one of the most welcome proposals is to reduce the volume and complexity of regulation. However, does he accept—I am sure that he will—that a lot of regulations come from the EU? How can we grapple with the extent and complexity of regulation if a lot of it emanates from somewhere other than Whitehall?

[Mr Redwood]

The hon. Gentleman is right to say that we have much less power to reduce or improve regulation from Brussels than we do with what is homespun. However, so much crass and foolish regulation has been put on British businesses over the past decade by the home legislators—the then Labour Government—that we can get quite a long way by removing, amending or changing that. In the meantime, we need to summon up a bit of courage and tell those in Brussels that they, too, should join in the process, as that would benefit their businesses as much as ours.

I have often said in this House that, from the point of view of running a business, reducing regulatory cost is a good way of offering something that is just like a tax cut without reducing the public revenue. Indeed, it is even better: not only is there no revenue loss, but public sector costs can be reduced, as the enforcement and monitoring costs of needless or over-the-top regulation can themselves be reduced. That means that businesses get a cash flow benefit, and that there is a reduction in the costs of Government.

The previous Government regulated too many things, and they did so too much and too often. They often regulated in a way that made things worse rather than better. We often found ourselves opposing them, even though we did not disagree with their aims. Like them, we wanted people to have nice lives and decent jobs, and to be free from risk in the workplace and so forth, but we often found that the regulation that the former Government proposed was very expensive and did not achieve the required result.

A tick-box culture means that people get very good at ticking boxes and writing memos, but that they do not manage in the proper way. A factory can be made less safe if the process is merely bureaucratic. Instead, the notion that safety comes first, second and third must be inculcated in all the senior people in that factory. They must manage safety intuitively, as ensuring that a workplace is safe cannot be achieved by tick boxes, inspectors or regulators.

Safety must be inherent in every workplace, and what we can do is to set a tone by saying that it matters above all else. We can have laws at a high level on safety but we need not go into as much detail as the previous Government did. Their approach often made things worse, and much more expensive.

The most important table in the Red Book can be found on page 45. It is one that we must discuss and understand, as it sets out the expenditure patterns for the forthcoming period of Government. The information in the table will come as a pleasant surprise to many neutral people outside the House, although it may worry Labour Members, who seem to be in denial about it. The table shows that total expenditure in the last year of the Labour Government reached £669 billion, and that expenditure will rise steadily to £737 billion by 2014-15.

Economic Affairs and Work and Pensions

Lord Dodds of Duncairn Excerpts

Tuesday 8th June 2010 Commons Chamber

[Mr Osborne]

I have given way a great deal, and there are Members on both sides of the House who want to make their maiden speeches.

Let me say this to Labour Members: their response in this debate and in Treasury questions is pretty striking. The credibility of our country is put at risk by their borrowing decisions, and they do nothing. Higher debts threaten higher interest rates, and they do nothing. Every single measure that we have taken they oppose. They sign up to every pressure group complaint. They agree with every trade union protest in order to gobble up votes in their leadership contest. They now find themselves in the ridiculous position whereby the reductions in spending for this year are applauded by the G20 but opposed by the shadow Chancellor who used to attend it, and our clear commitment to accelerate the reduction in the deficit is supported by the US Treasury Secretary but opposed by the shadow Chief Secretary. Let them lurch off leftwards into the comfort zone of opposition, while the rest of us work together in the national interest to fix the problems that they left behind. Let me explain how we propose to do that.

Alongside other measures to support the recovery, the Budget on 22 June will set out the overall mandate for bringing the deficit under control, against which the Office for Budget Responsibility will judge the Government’s fiscal policy in future. It will set the overall envelope for spending, but it will not allocate spending between Departments. That is what the spending review will do this autumn.

Today I am placing in the Library of both Houses the document that explains how the review will work. The shadow Chancellor complained that he received the document only as he was coming into the Chamber. That was about an hour before I used to receive any document from him in the debates in this place.

Given the scale of the spending reductions required, the review needs to be quite different from any that this country has seen in recent years. For the past 13 years, spending reviews have not exactly been collegiate affairs—more of a one-way process. The Treasury told Departments what they were getting and precisely what they would do with the money—no room for innovation, no acknowledgement that some of the best ideas for doing things differently might come from the front line and not from the centre. The result of this top-down, centre-knows-best approach was falling public sector productivity and that large budget deficit—less for more. We cannot afford to continue in that direction.

As has been said in the Chamber today, we need to look at Canada and its experiences in the 1990s, when it too faced a massive budget deficit. It brought together the best people from inside and outside government to carry out a fundamental reassessment of the role of the state. They asked probing questions about every part of Government spending. They engaged the public in the choices that had to be made, and they took the whole country with them. That is what we will seek to do. We are committed to carrying out Britain’s unavoidable deficit reduction plan in a way that strengthens and unites the country.

The spending review will be guided by the principles of freedom, fairness and responsibility. It will deliver on the Government’s commitment that health spending will increase in real terms in each year of this Parliament, and we will honour the promise that we as a British people made to the developing world on overseas aid. It will limit as far as possible the impact of reductions in spending on the most vulnerable in society and on those regions heavily dependent on the public sector. It will protect as far as is possible the spending that generates high economic returns so that we build the economy of the future while cleaning up the mess of the past.

[Mr Nigel Dodds (Belfast North) (DUP)]

The Chancellor mentions those areas heavily dependent on the public sector and the impact on different regions of the United Kingdom. I welcome that commitment, but in order for it to be real, as opposed to simply rhetoric—he talks about the Finance Ministers quadrilateral meetings discussing the spending review—will there be a robust resolution mechanism, so that it is not just the Treasury that decides what happens with regard to the devolved Administrations, which, after all, have their own independent administrations, budgets and economic settlements?

[Mr Osborne]

The devolved Administrations have to be part of the wider spending review. With the best will in the world, we cannot let the three devolved Administrations simply determine what they will spend, particularly when most of them do not have significant tax-raising powers, but I give the hon. Gentleman the commitment that we will engage in an open and frank way and that we will listen to the concerns from Northern Ireland. I am well aware that one of the big challenges in Northern Ireland is how we can stimulate the private sector in Ulster, and we want to work with him on that. As I am sure he knows, the Secretary of State for Northern Ireland has some ideas in that area. We will engage not just with the Administration in Northern Ireland but with the Scottish Government and the Welsh Assembly and its Administration. For us, this is genuinely about trying to bind as many people as possible into a collective discussion which I hope other Opposition parties will be part of, even if the main Opposition party does not want to be.

Let me explain to the House how the review will work. First, we will build on the in-year savings that we have already made in order to drive for efficiency and value for money. We are creating a new efficiency and reform group at the heart of Government, which brings together a variety of bodies that are separate across Departments in order to try to bring to one place expertise on renegotiating contracts, maximising collective buying power and the like. We will ask for administrative spending in central Whitehall and quangos to be reduced by at least a third. Each Secretary of State will appoint a Minister with specific responsibilities in their Department over the next three months for driving that value-for-money agenda across their Department, and we will place a new obligation on public servants to manage taxpayers’ money more wisely by strengthening the role of the departmental finance director.