Oral Answers to Questions

Debate between Sajid Javid and Stephen Timms

Thursday 3rd July 2014 Commons Chamber

[Stephen Timms (East Ham) (Lab)]

The analyst, Redburn, has pointed out that claims that the UK is doing well on superfast broadband are

“only true using a rather unambitious definition of superfast”.

A number of European countries now have over 20% fibre- to-the-home penetration, with symmetric 100 megabits- per-second services. The Under-Secretary of State, the hon. Member for Wantage (Mr Vaizey), told me in a written answer on 23 June that he does not know how much of that we have in the UK, but the industry estimates penetration to be about 0.5%. Surely we need to be doing much better.

[Sajid Javid]

The right hon. Gentleman will be pleased to know that superfast coverage in the UK is the highest among the EU5 countries; it is higher than Germany, higher than Spain, five times higher than Italy and three times higher than France.

Oral Answers to Questions

Debate between Sajid Javid and Stephen Timms

Tuesday 25th June 2013 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

I can tell the hon. Gentleman that the answer is none. He is passionate about the issue, which he has raised before. I can also confirm that the Treasury implements the policy of the Government—to make sure that all reservists who request a 10-day special leave on a paid basis get it.

[Stephen Timms (East Ham) (Lab)]

On infrastructure investment, there is widespread disquiet—including in the National Audit Office, it seems—about the management of the Government’s broadband investment programme. Does the Chancellor agree that it is essential to harness competition effectively in delivering infrastructure investment?

Oral Answers to Questions

Debate between Sajid Javid and Stephen Timms

Tuesday 11th September 2012 Commons Chamber

[The Economic Secretary to the Treasury (Sajid Javid)]

My hon. Friend is passionate about this issue, and she will be pleased to hear that the Government are removing unnecessary obstacles to investment in nuclear power plants and that new power stations will come forward. For example, the Government are undertaking electricity market and planning reforms and introducing an energy Bill. As it happens, I am meeting representatives of EDF later this afternoon, and I would be happy to share her concerns with the company.

[Stephen Timms (East Ham) (Lab)]

T5. Why is Britain in a double-dip recession when France and Germany are not?

Equitable Life (Payments) Bill

Debate between Sajid Javid and Stephen Timms

Tuesday 14th September 2010 Commons Chamber

[Stephen Timms]

That is precisely what happened.

I just wish to tell the House the main amendments that we will table in Committee. I hope that the first will meet no opposition, because it directly picks up on a point in the EMAG pledge. It will require that the payments scheme be independent of government. The Bill does not say that, but our view is that it should; indeed, the Minister has confirmed that he intends it to be independent.

The Minister made a slightly puzzling point in his statement to the House on 22 July, when he said:

The ombudsman…concluded that the design of the scheme should be independent of the Government.”—[Official Report, 22 July 2010; Vol. 514, c. 577.]

That is of course true, but the ombudsman concluded that the scheme itself should be independent—that is the point that should be in the Bill, and it is crystal clear in the EMAG pledge. We will doubtless see lots of wriggling by those on the Benches opposite about exactly what was meant by the phrase “proper compensation” in the pledge once the figures are announced on 20 October; many Members will explain that they did not think it meant what EMAG members think it meant. But on scheme independence there is no wriggle room in the pledge, so we will table an amendment to make that a requirement.

[Sajid Javid]

I am grateful that the right hon. Gentleman started his speech by saying that his party would not oppose the Bill this evening. Many victims of the scandal will wonder why his party did not propose a similar Bill when it had the opportunity to do so. My question is a specific one; I am asking him to make something clear for the benefit of everyone watching this debate tonight. His party commissioned the Chadwick report and set the terms of reference. Chadwick said that his final loss figure is £400 million to £500 million. Does the right hon. Gentleman’s party accept that amount or not?

[Stephen Timms]

Our intention, as I have said on a number of occasions, would have been to proceed on the basis that my right hon. Friend the Member for Birmingham, Hodge Hill set out before the election. He did not set out an amount, but he did set out a process, and we would have published within two weeks of the submission of the Chadwick report the timetable for the payments and the scheme itself.

Finance Bill

Debate between Sajid Javid and Stephen Timms

Monday 12th July 2010 Commons Chamber

[Stephen Timms]

Was the hon. Gentleman surprised that the Office for Budget Responsibility reduced its estimate of future growth in the British economy following the Budget?

[Sajid Javid]

That is a misleading question, and it does not go to the heart of the matter. It is a nice try, but the right hon. Gentleman will really have to try harder than that.

To return to banks and how to get our economy going, as well as restoring incentives we need to get banks lending again. That was the only vaguely accurate or factual point that I could pick up from the speech of the hon. Member for North Durham (Mr Jones). If we are to do that, we need to understand why they are not lending at the moment, and the major reason is a lack of capital for British banks. Banks across the world face the same problem. As a Government, we need to work out a way to restore the capital positions of banks so that they are willing to take the risks that are a necessary part of making lending decisions.

There are only three ways for banks to try to raise capital. The first is through the free capital markets, but today those markets are effectively closed to virtually all banks. Prior to the financial crisis, there were many instruments that banks could use to try to raise capital, including types of subordinated debt, hybrid equity instruments, tier 1 and 2 securities and common equity. Not only are those markets closed to banks today, but if Opposition Members have watched carefully what has happened in the financial markets over the past three or four months, they will know that banks cannot even raise senior debt effectively, let alone capital. Banks throughout Europe—especially those on the continent, but British banks included—are in many cases unable to raise that type of debt, let alone equity. The capital markets as an avenue to raise capital are closed.

The second option is for the Government themselves to give capital to banks. After the £70 billion-odd injection made by the previous Government, I do not believe that any Member of any party is advocating the Government injecting more capital into the banking system.

There is one final way left, which is to allow banks to hold on to some of their profits, if they are in a position to generate profits. No matter what Opposition Members would like to think, unless we create the conditions inside a bank that make it want to lend, there is no way to force it to do so.

[Sajid Javid]

No, not at all. We have to separate the two issues. The levy is about working towards a way of taking something back from the banks to build an insurance-type system, so that if things such as happened during the financial crisis happen again, the Government will have a mechanism to withdraw some capital from the banks. However, if we are to cut corporation tax on all companies, it would be madness to leave out the banks. They need to be allowed to build capital, not just for the sake of getting them lending again by putting them in a comfortable enough position to make that decision, but because of the impact on their competitiveness.

Whether we like it or not, our financial sector is a huge part of our economy, and it is much bigger as a percentage of GDP than that of many of our international competitors, even after the financial crisis. It accounts for thousands of jobs up and down the country, not just in the City but probably in each and every constituency. If we are to restore some health to our financial sector, it makes no sense to make it uncompetitive when compared with other sectors in our economy and with other countries. The banking and financing sector is one of the most mobile of all our economic sectors. If we have differentiated tax rates for one sector of the economy compared with others, that will only make matters worse. I therefore oppose the amendments.

[Stephen Timms]

I am grateful to the Exchequer Secretary for his kind remarks on my return to the Dispatch Box. He, along with many Members of all parties, was good enough to write to me after I was attacked and injured. I greatly appreciated all the messages of good will that I received, and I would like to put on record my thanks to all those from across the House who got in touch; I think that those messages have accelerated my recovery. I am grateful to the Exchequer Secretary for his words.

My hon. Friend the Member for Nottingham East (Chris Leslie), in an excellent speech when moving the amendment, raised some important points. I was also encouraged by the comments of the hon. Member for St Ives (Andrew George). I am pleased that he described himself as free ranging, and I hope that his freedom of ranging includes joining us in the Lobby. I am particularly keen to have the opportunity to vote on amendment 34.

The Chancellor told us in his Budget speech that he was being tough on the banks. Listening to some Conservative Members’ speeches, I wonder whether they heard that part of his speech. He explained rightly:

“The failures of the banks imposed a huge cost on the rest of society, so I believe that it is fair and right that in future banks should make a more appropriate contribution, reflecting the many risks that they generate.”

At that stage, it could well be that the Chancellor’s words were consistent with the comment in the Red Book, to which the hon. Member for West Suffolk (Matthew Hancock) drew our attention. It states:

“The levy will result in a rebalancing of the burden of taxation between banking and other sectors.”

Who knows to what a “rebalancing of the burden” amounts? It could mean something pathetic and small. However, the Chancellor went further in his Budget speech. He said that the introduction of the bank levy would entail

“a greater contribution from the banking sector—one that far outweighs any benefit that it will receive from the lower tax rates that I have just announced.” —[Official Report, 22 June 2010; Vol. 512, c. 175.]

The Chancellor told the House that the cost of levy to the banks would “far outweigh” any benefit that the banking sector received. Listening to the speeches of the hon. Member for West Suffolk and the hon. Member for Bromsgrove (Sajid Javid), I do not think that they heard that part of the Chancellor’s speech.

My hon. Friends the Members for Nottingham East and for North Durham (Mr Jones) queried whether the levy, in so far as we know about it—the hon. Member for St Ives told us something about it—would fulfil the Chancellor’s words and far outweigh any benefits that the banks receive from the reduction of corporation tax. It is odd, as my hon. Friend the Member for Nottingham East pointed out, that for all the appearance of toughness in the Chancellor’s speech, bank shares actually went up after his announcement.