Economy: Overseas Trade Deficit
Lord Pearson of Rannoch Excerpts(8 years, 5 months ago)
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The Lord Privy Seal (Baroness Stowell of Beeston) (Con)
My Lords, I hesitate to intervene, but the House does seem to be calling for the noble Lord, Lord Pearson.
Lord Pearson of Rannoch
Do the Government accept that, according to their own Pink Book, we have had a growing trade deficit with the EU for the last five years totalling some £358 billion but a growing surplus with the rest of the world of £61 billion? Does not this also mean that the EU has many more jobs dependent on its free trade with us than we do on our free trade with it, which will therefore be in its interest to continue if we come to leave the European Union itself?
Lord O'Neill of Gatley
My Lords, the numbers that the noble Lord referred to in the Pink Book are broadly accurate but I do not share his interpretation of them. As shown in the timely piece from EY yesterday, the number of jobs being created by foreign direct investment in the UK is substantial.
Economy: Productivity
Lord Pearson of Rannoch Excerpts(8 years, 7 months ago)
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Lord O'Neill of Gatley
My Lords, I suspect that there is a broader theme in that very interesting question from my noble friend. We have to be careful that in the justified and appropriate desire to boost productivity, we do not do anything untoward to reverse the remarkable success in raising employment levels. I say that on a day when we have hit yet another new high. Although people from my background and many others are aware of the importance of productivity, most individuals in our country want to have jobs, and that is what is increasingly taking place.
Lord Pearson of Rannoch (UKIP)
My Lords, do the Government accept that a falling 9% of our economy trades in deficit with the single market, that a growing 11% goes in surplus to the rest of the world, that 80% stays right here in our domestic economy, but that 100% is strangled by EU overregulation? What does this situation do for our national productivity, and how much would it improve if we left the EU and traded freely with the single market and the rest of the world?
Lord O'Neill of Gatley
My Lords, again, that was quite a long question with many different aspects to it. We are heavily focused on doing things to boost our productivity in many areas, including our export performance. However, I highlight—again, I would like the chance to come back to this issue—that the best exporting sectors are not necessarily always the most productive. Some of the regional data available from around the UK show that the services sectors appear to be doing better than that question implies.
Convergence Programme
Lord Pearson of Rannoch Excerpts(10 years, 7 months ago)
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Lord Newby (LD)
My Lords, I welcome this opportunity to discuss the information that will be provided to the Commission this year under Section 5 of the European Communities (Amendment) Act 1993.
As in previous years, the Government inform the Commission on the UK’s economic and budgetary position in line with our commitments under the EU stability and growth pact. The Government plan to submit their convergence programme by 30 April, with the approval of both Houses. The convergence programme explains the Government’s medium-term fiscal policies as set out in the 2013 Autumn Statement and Budget 2014, and includes the OBR forecast. As such it is drawn entirely from previously published documents that have been presented to Parliament.
With the Budget on 19 March this year and the Easter Recess timings as they are, I appreciate that the timetable for this debate has been particularly tight. Against this backdrop, the Treasury has made every effort to provide early copies of the convergence programme document in advance of the debate today, and did so last Thursday. The document makes clear that this year’s Budget reinforces the Government’s determination to return the UK to prosperity and reiterates the Government’s number one priority—tackling the deficit.
Stability or convergence programmes form part of the European semester, which provides a broad framework for the co-ordination of the monitoring and surveillance of member states’ fiscal and economic policies, including necessary structural reforms across the EU. The positive value of the European semester is that it is a useful means to encourage other member states to grip the urgent growth challenge across the EU.
The Budget 2014 set out the Government’s assessment of the UK’s medium-term economic and budgetary position. In 2010 we set out clear, credible and specific medium-term consolidation plans to return the public finances to a sustainable path. Our plan makes clear that we will fix the economy and deal with the deficit, cut tax to encourage investment, back businesses, control welfare and invest in skills. We put that plan in place and adhered to it, and we are delivering results with it. The Government’s fiscal strategy has restored fiscal credibility, allowing activist monetary policy and the automatic stabilisers to support the economy and ensure that the burden is shared fairly across society. This long-term economic plan has protected the economy through a period of global uncertainty and has provided the foundations for the UK’s economic recovery, which is now well established.
Since last year, economic growth has exceeded forecasts and has been balanced across the main sectors of the economy, inflation is below target, and the deficit has been reduced year on year. Over 1.5 million private sector jobs have been created and employment is at record levels. Interest rates are at near record lows, helping to keep costs down for families and businesses. The Government are also making significant progress in reversing the unprecedented rise in borrowing between 2007-08 and 2009-10. The deficit has been cut by one-third as a percentage of GDP over three years and is projected to have fallen by a half as a percentage of GDP by 2014-15. The OBR has also forecast public sector net borrowing to reach a small surplus in 2018-19, and has judged that the Government remain on track to meet the fiscal mandate one year early. While the OBR forecast that the underlying structural deficit is falling, it is doing so no faster than was previously forecast, despite higher growth. The persistence of this structural challenge supports the Government’s argument that economic growth alone cannot be relied upon to eliminate a structural deficit, and while we are meeting the supplementary debt target one year late as before, the OBR has revised down national debt in every year of the forecast.
This year’s Budget is fiscally neutral despite lower borrowing across the forecast period, with an overall reduction in tax funded by a reduction in spending. The OBR has revised the UK’s growth forecasts upwards, as has the IMF, and they are now among the highest, if not the highest, in the developed world. However, as the Chancellor has said, the job is not yet done, and the same is true for the rest of the EU. Without sustainable economic growth, the EU will be unable to repay its debts, create jobs or maintain its standard of living. Much of the answer to these problems lies in national level reforms such as creating flexible labour markets. Clearly, the European semester has a key role to play in encouraging member states to make ambitious reform commitments, and the UK has an interest in making these reforms happen. However, an ambitious EU-level reform agenda is also a key part of this equation and an essential counterpart to national level reforms. Recent European Councils have underscored the strong commitment of Heads of State or Governments to supporting growth and competitiveness, and I know that the Prime Minister has been driving forward this agenda along with leaders from a substantial group of like-minded member states.
As I reminded the House a year ago, deploying EU-level policies in support of economic growth, such as the single market, regulatory reform and EU-level free trade agreements, can achieve maximum growth impact at the least cost. The need to address Europe’s growth challenge comprehensively by tackling overall low productivity, lack of economic dynamism and flexibility is more pressing than ever before, and it is in our interests to make urgent progress. That is why the UK will continue to push this agenda at the highest levels and encourage the new Commission to take structural reforms seriously. I am today requesting that, in line with Section 5 of the European Communities (Amendment) Act 1993, this House approves the economic and budgetary assessment that forms the basis of the convergence programme. Following the House’s approval of the assessment, the Government will submit the convergence programme to the European Commission. It will make its recommendations to all EU member states in early June. These recommendations will then be considered by the ECOFIN Council on 20 June and agreed by Heads of State or Governments at the European Council on 26 and 27 June.
To reiterate, the convergence programme contains no new information, only information that has previously been presented to Parliament—information from the OBR’s economic and fiscal outlook and from the Budget, which sets out the Government’s strategy to return the UK to sustainable growth. I commend the assessment to the House.
Lord Pearson of Rannoch (UKIP)
My Lords, can the noble Lord remind the House of what exactly is the UK’s convergence programme? With what is the United Kingdom economy supposed to be converging, and why? As we are never going to join the euro, are we not wasting time? While I am at it, could the noble Lord remind us what is the European semester? But above all, why do we go on submitting the state of our economy to an institution which has not had its own accounts signed off, even by its own internal auditors, for the past 18 years? By its own estimation, at least £120 billion per annum goes walkabout and in each of its institutions the Mafia is rife and active.
In short, what is the point of this debate and, more generally, what is the point now of the European Union at all?
Lord Tunnicliffe (Lab)
My Lords, the Minister will be pleased to know that I shall not be resisting the Motion. I am reassured by his assurance that there is no new information in the documentation being provided, but will just spend a few minutes commenting on that information and what it says.
We have been presented with a quite a glowing picture. In particular, if one did not listen too carefully, one could be left with the impression that the reduction in the deficit has been achieved as per the 2010 emergency Budget and the subsequent Autumn Statement. My recollection is that the intention was to have eliminated the deficit by now. The noble Lord can correct me if that is not the case.
We have heard that things are going well, but this is not how people up and down the country are feeling. They are facing a cost of living crisis. Working people are £1,600 a year worse off. The OBR has confirmed that people will be worse off in 2015 than they were in 2010. Energy bills are up almost £300 since the election, while childcare costs have spiralled since 2010. The number of young people out of work for 12 months or more has nearly doubled since this Government came into office. We have a record number of people who want to work full time but are being forced to work part time. Families will be £974 worse off by the next election as a result of tax and benefit changes. After three years of flatlining, it is good that we finally have some growth. However, for millions of people, this is no recovery at all. There is much more that could be done to help working people but the Budget was just another missed opportunity.
We should be getting young people back into work. Despite the Government’s rhetoric on full employment, there are no new policies to deliver this. The Work Programme is so unsuccessful that people are more likely to go back to the jobcentre than find work. Only 5% of disabled people on the Work Programme have found work through it. We need a compulsory jobs guarantee to ensure there is a paid job for every young person under 25 who has been out of work for a year.
We also need practical measures to tackle the cost of living crisis, such as tackling rising energy bills or helping families with childcare costs, within this Parliament. We would expand free childcare for working parents of three and four year-olds from 15 to 25 hours a week.
We should be cutting business rates for small and medium-sized enterprises. The Government are focusing their help on the 2%—the largest multinationals—and not doing enough for 98% of British businesses, the small and medium-sized enterprises. We need action from the Government to ensure a strong, sustained and balanced recovery. Manufacturing, construction and infrastructure investment are all down. Consumers are having to dip into their savings, and the OBR predicts that growth may well slow in the future when those savings run out. Indeed, the OBR sees households’ gross debt to income ratio rising from 124% in 2014, which was a 10-year low, to 165% in 2019, which is near to pre-crisis levels of indebtedness. Exports are falling, not rising. Nothing in the Budget tackles the productivity crisis that has emerged in recent years.
Lord Tunnicliffe
I hope the Minister will forgive me, but I put a little bit of study into this. Article 103 of the Maastricht treaty—which may have been elaborated at Lisbon—states pretty bluntly:
“In order to ensure closer co-ordination of economic policies and sustained convergence of the economic performances of the Member States, the Council shall, on the basis of reports submitted by the Commission, monitor economic developments in each of the Member States and in the Community as well as the consistency of economic policies with the broad guidelines referred to in paragraph 2, and regularly carry out an overall assessment. For the purpose of this multilateral surveillance, Member States shall forward information to the Commission about important measures taken by them in the field of their economic policy and such other information as they deem necessary”.
I thought today that we were responding to that part of that treaty. I want to draw out the point that our being here this afternoon at this late hour is the fault of all Governments, not perhaps just one.
Lord Pearson of Rannoch
Before the Minister replies, perhaps I may say that I support the noble Lord, Lord Tunnicliffe. He is of course right that the whole process in the Maastricht treaty was, I am afraid, waved through by the Conservative Government under Mr John Major when, if your Lordships remember, he was winning game, set and match. I am grateful to the Minister for his answer, but I would still like to press him on why the United Kingdom has to take part in this demeaning and absurd process. I understand that it might be useful for the countries which have unfortunately joined the extremely destructive process of the euro and everything that goes with that, but why should we, if indeed our economy is recovering in the way that the Government claim, have to go cap in hand to Brussels and discuss with them anything that we want to do, especially as we are, luckily, thanks to the Treasury, not in the euro?
Lord Newby
My Lords, perhaps I may deal with the point made by the noble Lord, Lord Tunnicliffe. Obviously, the Motion that we are debating today stems from Maastricht, but the codification of how it was to be done is to be found in Articles 121 and 126 of the Lisbon treaty—I am sorry that I do not have them before me to read out to the House.
The noble Lord, Lord Pearson, describes the process of submitting the forecasts as “demeaning”. Certainly, there is nothing demeaning about the state of the British economy. We are very happy to send the forecasts to anybody. However, as I said, just as we depend in no small measure on the economic success of the rest of the EU, so the rest of the EU, as he is very fond of reminding the House, depends on our economic success. We are part of a single market and, again as the noble Lord often reminds the House, we contribute to a budget one of the main purposes of which is to promote growth across the EU. So it is only sensible that the EU as a whole looks at how Governments are meeting their commitments by running a successful, stable and growing economy.
The noble Lord, Lord Tunnicliffe, raised some pretty familiar criticisms of the state of the economy. I always find it slightly amusing when members of the Labour Party, which consistently wanted to spend more at every point during this Parliament, object to the fact that the deficit is higher than it might be. If they had spent £12 billion a year by cutting VAT, as they proposed, the accumulated deficit would by now almost certainly have been greater. It is bizarre for the Labour Party, which has been pushing for higher expenditure—that would necessarily mean a bigger deficit, certainly over the period we are discussing—to upbraid us for following a policy that allowed the economic stabilisers to work and ensured that we did not have further cuts in the face of the European crisis. We allowed the stabilisers to operate in a way that minimises the impact of the crisis on employment—and on growth—and formed the basis for the creation of 1.73 million additional private sector jobs during the course of this Parliament.
The noble Lord says that we have done nothing to get young people back into work. I remind him that youth unemployment fell by 29,000 in the quarter, in the three months to January, and by 81,000 in the year. Excluding people in full-time education, there was a decline of 16,000 in the number of 16 to 24 year-olds who were unemployed over the quarter. The youth claimant count has fallen for 21 consecutive months. On the latest figures, the reduction in the youth claimant count is falling at the fastest pace since 1997. The number of those claiming for more than one year has fallen for the 15th consecutive month, down by 2,300 on the month to 53,400. Youth employment in the quarter rose by 43,000, which is an extremely significant number. Those 43,000 young people who now have a job who did not before would find it extremely difficult to recognise the Opposition’s description of what is happening to the economy.
I absolutely understand the noble Lord’s criticism that some people have suffered in their standard of living. Sadly, that is what happens to some people during a recession. However, I remind him that the Government have taken a wide range of steps to mitigate that fall. Of course, the increase in the income tax allowance to £10,000 is the single most significant one, but I also remind him of the freeze on fuel duty. On jobs, I remind him of the £2,000 national insurance allowance, which will make it easier for small businesses, in particular, to retain or take on additional staff.
The noble Lord also criticised the Government on the basis that the recovery was unbalanced. He will know that manufacturing output was up last year. The forward surveys of manufacturing are more positive than they have been for many years. He will probably be aware that the figures from the RAC, I think, yesterday suggested that in the past month, the area with the highest growth rate in permanent placements was the north. He will also be aware of today’s figures showing that the balance of payments on the latest deficit is down, so we do not have unbalanced growth. Every sector of the economy is growing. Forward forecasts in services and manufacturing are at record levels; in some cases, they are higher than ever before. So the prospect for the period ahead is of not just growth but a greater degree of balance in growth than we have seen for a considerable time.
Ultimately, such sustainable growth is the only way for both the UK and EU member states to pay down their debts and exit what has been, by common consent, a very difficult economic period. The UK is leading the EU growth agenda and making the case for ambitious EU reform. On that basis, I am pleased to commend the Motion to the House.
EU: Money-laundering Directive
Lord Pearson of Rannoch Excerpts(10 years, 7 months ago)
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Lord Pearson of Rannoch (UKIP)
My Lords, I declare an interest in that I set up a family trust in 1984. It is on the point of expiry, so it is not much of an interest.
I intervene briefly to press the Minister for detail on a question put by my noble friend Lord Willoughby de Broke. In view of the letter from the Prime Minister that my noble friend quoted, can the noble Lord confirm that the Government remain unhappy with this latest intrusion by the EU into our national life? If that is so, will the Government advance the doctrine of subsidiarity? Does the noble Lord not agree that this sort of thing should be left to our national Parliament and that this would be rather a good opportunity to test that doctrine, useless though it has always proved in the past?
Failing that, what chance do the Government think they have of avoiding this directive? Could the noble Lord tell us, just for the record, whether the eventual decision will be taken by majority voting or whether the Government can, in fact, block it? I look forward to the noble Lord’s answers.
Lord Newby (LD)
My Lords, I thank the noble Lord, Lord Willoughby de Broke, for introducing this debate and all noble Lords for their contributions. I will try to answer some of the broad concerns expressed and lay out the steps that the Government are taking to ensure the effective and proportionate treatment of trusts under the fourth money-laundering directive.
Proposals for the directive are aimed at improving the transparency over who owns and controls companies and legal arrangements, such as trusts. The World Bank estimates that between 2% and 5% of global GDP is subject to money laundering, with some estimates showing that global illicit outflows from developing countries dwarf the amount that they receive in official development assistance. Furthermore, the UN Office on Drugs and Crime estimates that less than 1% of that is currently being seized or frozen. Tackling these illicit flows was therefore a key priority for the UK’s presidency of the G8 last year. As the Prime Minister said at the October 2013 Open Government Partnership summit,
“transparency needs to extend beyond the public sector and into the private sector ... but there are also many wider benefits to making this information available to everyone. It’s better for businesses here ... developing countries ... and ... the more eyes that look at this information the more accurate it will be”.
That is why the UK has committed to establishing the world’s first publicly accessible registry of company beneficial ownership.
The EU’s fourth money-laundering directive is an opportunity to build on that momentum. The directive seeks to implement the revised standards of the Financial Action Task Force and the European Commission’s review of the implementation of the third money-laundering directive. We are committed to ensuring that the directive implements the FATF standards in full. As the Prime Minister wrote to European Heads of Government last year, our first collective step should be to mandate public central registries of company beneficial ownership as the benchmark for transparency of ownership and control. At the same time, the UK recognises that it is equally vital to prevent the potential misuse of trusts and similar legal arrangements.
The FATF sets the global standards to improve the transparency of the beneficial ownership of corporate and legal entities, including companies, and legal arrangements such as trusts. In setting those standards, the FATF recognises that preventing the misuse of trusts is critical but also explicitly recognises that trusts are different from companies. In particular, it is vital to understand that, unlike companies, common law trusts, such as those established under English and Welsh law, are not created by the state. Furthermore, trusts, unlike companies, are used for a range of purposes, such as benevolence, inheritance, protecting vulnerable people and family support. As such, the implications for privacy are far greater, and trusts therefore warrant different treatment.
Measures placed on trusts must therefore be different from those that apply for companies in order to be proportionate and effective. The Government support a mandatory requirement for trustees to know the beneficial ownership of their trusts. That, together with tax reporting to HMRC, to which the noble Lord, Lord Willoughby de Broke, referred, and future automatic exchange of tax information agreements, will offer more transparency on trusts than ever before. In particular, through automatic exchange agreements, financial institutions will report information to national tax authorities on trusts holding accounts with them where the beneficiary is a resident of a partner jurisdiction. That information is then automatically shared with the partner jurisdiction. There are already 44 signatories to this international standard on automatic exchange, which creates a web of information exchange that will provide greater transparency on trusts than ever before.
This approach provides a proportional and effective means of enhancing transparency on trusts holding financial assets, given that they pose the greatest money- laundering risk. The Government oppose the mandatory registration requirement for trusts, which, together with the creation of central registries of trusts, was recently adopted as the European Parliament’s position on the directive. Given the transparency afforded by automatic transfer of information agreements, we consider registration of trusts to be a disproportionate approach and, in particular, one which undermines the common-law basis of trusts in the UK. As such, we continue to work with other member states, civil society and the private sector to ensure effective treatment of trusts.
Beneficial ownership has proved to be the most contentious issue in discussions over the fourth money-laundering directive. We are under no illusions about the challenges ahead. Following agreement between member states, negotiations to reach a mutually agreed final text with the European Parliament are likely to be challenging, given the position adopted by MEPs, as has been described. I assume that among the small minority of those who voted against this directive was a full turnout of the British UKIP contingent.
What happens next is that we are working with the Council presidency and other member states to agree a compromise that would limit the scope of obligations on trusts to those holding financial assets, which the UK would satisfy through existing reporting obligations for trusts holding financial assets, domestic reporting requirements and automatic exchange of tax information agreements. Such a compromise would complement the UK’s advocacy of ambitious action on company beneficial ownership. Of course, such an approach would exclude, for example, wills from the implementation of the directive, as wills do not form that category of trust.
Negotiations are ongoing, and we expect the Greek presidency to seek agreement among member states over the next few months. The subsequent Italian presidency would then seek the conclusion of the directive during the second half of 2014, in co-operation with the European Parliament. In answer to the noble Lord, Lord Pearson of Rannoch, the decision in the Council will be by qualified majority vote.
A number of questions were asked of me—
Lord Pearson of Rannoch
Before the Minister leaves that point, it might be a good place to press him on the famous doctrine of subsidiarity. In view of the difference between our system and the other systems in Europe, would it not be a good idea to use subsidiarity?
Lord Newby
My Lords, the approach I set out would mean that we would have a different way of reporting the majority of trusts. Therefore, there would not be a common system across the EU. The Government’s view is that it is very important that, across all the EU, there is a requirement for both companies and trusts to be more transparently described than they are at the moment. That is why we put a huge amount of effort into pursuing the concept of the mandatory requirement on beneficial ownership of companies. We want to ensure that, as far as possible, information about trusts that could be problematic for money-laundering purposes will be more generally available. Our proposals would do that in respect of the UK without having a full mandatory register in the same way as we propose for companies. We accept that there is a difference in nature between the two, but we think we can have the best of both worlds by having that difference of approach between them.
In response to the question from my noble friend Lord Dykes, trusts would not become default alternatives to companies because there are the requirements to report financial information to HMRC and to pay tax where appropriate and also for the automatic exchange of information where the beneficiary is a foreign national.
EU: UK Contribution
Lord Pearson of Rannoch Excerpts(11 years ago)
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Lord Pearson of Rannoch (UKIP)
Does the Minister agree with two things about the net payment to Brussels of £12.2 billion for the past year alone? First, that it equates to the £30,000 per annum salaries of 1,100 nurses, policemen or any other public servant per day. Secondly, that there is no such thing as EU aid to us, because for every £1 they now send us back we have sent them £2.56.
Lord Newby
My Lords, I am not going to get into a statistical analysis with the noble Lord, but I revert to my earlier point. Our membership of the EU brings with it a whole raft of benefits which do not simply relate to the EU budget. One area of expenditure that we incurred some time ago was dealing with a war in the Balkans, which cost this country more than £1 billion. Since the Balkan wars finished, Croatia has joined the EU and other Balkan states will join. We will not fight other Balkan wars. That does not fit into the noble Lord’s narrow formula.
Banking: Regulation
Lord Pearson of Rannoch Excerpts(11 years, 3 months ago)
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Lord Newby
My Lords, as my colleague the Financial Secretary has made clear in another place, there are some aspects of the commission’s views on the speed and timing of ring-fencing that the Government are going to look at further and revisit when the issue comes back to your Lordships’ House. We have Second Reading of the Bill on 24 July, and my noble friend Lord Deighton will look forward to telling the House more about the provisions of the Bill at that point.
The Chancellor of the Duchy of Lancaster (Lord Hill of Oareford)
Forgive me. If we could hear from the noble Lord, Lord Pearson, then we will hear from my noble friend Lady Kramer.
Lord Pearson of Rannoch
My Lords, is the Minister aware that his answer to the noble Lord, Lord Lawson, does not quite stack up in view of Written Answers from the previous Government on 21 July 2009, at col. 365 of the Official Report, which confirmed that they had passed overall supervision of our banks and financial institutions to Brussels? Given that the EU has not had its own accounts signed off for 17 years, and given that it deeply dislikes the City of London, was this wise and how do we get out of it?
Lord Newby
My Lords, the basic assertion that the noble Lord makes, that the Government are unable to put in place a satisfactory regulatory framework for banks in the UK, is, frankly, simply not true. We have taken a wide range of measures to strengthen the regulatory structure and the provisions with regard to remuneration and capital, and in all those areas what we have done is compatible with what has been happening at EU level.
G8: Eurozone and UK Growth
Lord Pearson of Rannoch Excerpts(11 years, 4 months ago)
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Lord Newby
My Lords, the Government support the efforts being made within the eurozone to develop closer economic co-ordination and they obviously also support some of the measures announced at the last EU summit, which will, to a limited extent, support the combating of youth unemployment.
Lord Pearson of Rannoch
My Lords, on the other hand, is not the only hope for economic growth to get our political class and its over-regulation off the backs of our productive industry and commerce? Therefore, are not the expressions “economic growth” and “eurozone” a contradiction in terms?
EU: Eurozone Financial Transaction Tax
Lord Pearson of Rannoch Excerpts(11 years, 8 months ago)
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Lord Newby
My Lords, we are engaged in discussions on this tax as it could have significant impacts not just on the City but across the EU. While the Government are not opposed in principle to a global FTT, with the lack of consensus on such a thing and faced with a proposal which we think could be damaging not just to the UK but to Europe as a whole, we are rather sceptical about it.
Lord Pearson of Rannoch
How do New York and other financial centres react to the international reach of this particular piece of EU lunacy?
EU: Budget
Lord Pearson of Rannoch Excerpts(11 years, 8 months ago)
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Lord Deighton
The noble Lord is correct that the devil is always in the detail and that it is our traditional practice year by year to negotiate very effectively on behalf of this country to bring about a better outcome in the annual budgets. However, it was extremely important to cap the overall size of the budget as a first step in the necessary reforms that we are all in favour of.
Lord Pearson of Rannoch
My Lords, do the Government yet know and have the public been told whether the EU’s so-called Parliament is going to vote in secret on this budget? Is not even the suggestion that it might do so yet further proof of the EU’s innately undemocratic and profligate nature? Is it not time that we closed the whole mistake down? What useful purpose does the EU now serve at such vast expense to all of us?
Lord Deighton
I will address the narrower question; so many noble Lords have much more experience on the broader question. I do not know whether the European Parliament intends to vote in secret. If it does, that is completely wrong.
Banking: Regulation
Lord Pearson of Rannoch Excerpts(11 years, 11 months ago)
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Lord Newby
Yes, my Lords, I agree. Basel is indeed that number of pages, while I think that the Dodd-Frank Act in the States is more than 2,000 pages and is so complicated that there are real questions about whether the institutions will ever be able to implement it. Getting back to what I was saying about banking reform here, one of the key reasons for having a ring-fence is to have a simpler structure under which the retail bank is segregated from the more complicated and casino elements of the system. We think that that will bring benefits for consumers as well as bringing greater stability to the system as a whole.
Lord Pearson of Rannoch
My Lords, are the Government aware of the previous Government’s Written Answer of 21 July 2009 to the effect that the overall supervision of our entire financial industry, including our banking industry, had already been handed over to Brussels, leaving the Government here with only day-to-day control? Does it therefore really matter much what the Government come up with here?
Lord Newby
My Lords, I am afraid that I was not aware of that comment by the previous Administration and I do not recognise it as a reflection of the way that we run our banking system.