Surplus Target and Corporation Tax

Debate between Andrew Gwynne and George Osborne

Monday 4th July 2016 Commons Chamber

[Mr Osborne]

I thank my hon. Friend for his remarks. I should point out that I did not identify where the additional runway should be in the south-east of England, although I cannot but note that his constituency is next to Gatwick, so that may have been a loaded question.

As for my hon. Friend’s broader point, he is right to point to the stability of the banking system. Although we remain vigilant, we are not, today, talking about a banking crisis, despite a very significant adjustment in financial markets. That is because of difficult decisions made by this Government and their coalition predecessor to strengthen the capital requirements, so that banks have 10 times as much capital as they had seven or eight years ago, and to strengthen the oversight of our banking system by putting the Bank of England in charge. I think that those decisions have been justified by what has happened in the last 10 days, but that does not mean that we can ease up; of course we remain vigilant.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Chancellor referred to his fiscal charter, which, of course, has three pillars: the welfare cap, debt reduction in every year of this Parliament, and his target of deficit reduction by 2019-20. We know that he is not going to meet the last one, but can he update the House on the other two pillars?

[Mr Osborne]

The fiscal charter was explicitly designed to ensure that the House of Commons could hold Ministers to account for their fiscal policy, and, indeed, maintain controls on welfare policy. However, it also provided for a specific requirement, in the event of a negative shock, for them to come back to the House of Commons with a new proposal. That, it seems to me, is thinking ahead, and it has been required because of the challenges that we now face in the economy.

Oral Answers to Questions

Debate between Andrew Gwynne and George Osborne

Tuesday 19th April 2016 Commons Chamber

[Mr Osborne]

Of course I respect my hon. Friend’s views. We are having a referendum, and his vote and my vote count equally. I would make the point that our membership of the European Union enhances our national security—that point was also raised by the Secretary-General of NATO last week. Not one of this country’s allies or friends abroad are recommending that we leave the EU.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The number of people sleeping rough on our streets has doubled since 2010 and increased by 30% in the past year alone, which is a shocking indictment of Government policy and society as a whole. Will the Chancellor step in and intervene in the shambles that is the Housing and Planning Bill, and ensure that support for homeless people such as hostels and specialist accommodation is protected?

[Mr Osborne]

In the Budget we provided more than £100 million extra to help with the problem of homelessness and the particular problem of rough sleeping. We have provided money for second-stage accommodation for people as they leave hostels, to ensure that they have secure accommodation to go to. I am always happy to listen to further representations or ideas from the hon. Gentleman or any other Member.

Greece

Debate between Andrew Gwynne and George Osborne

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

My hon. Friend is right. We have reduced our exposure, as I said, to the Greek economy and, absolutely crucially, the Prime Minister made sure we were out of the bail-out funds for Greece that existed when we came to office. With hindsight, that looks like one of the most important decisions we took.

[Andrew Gwynne (Denton and Reddish) (Lab)]

The form of any contagion is not yet known, but surely one of the dangers is capital flight from the poorer southern eurozone economies to the richer northern economies. That would not just be a disaster for Greece, Italy, Portugal and Spain, but it would have ramifications for the wider European Union, which are political, as the Chancellor has intimated. Given that, what discussions are he and his officials having with European Finance Ministers to make sure that the European single market is not undermined?

[Mr Osborne]

The hon. Gentleman is right that capital flies from countries in distress. That is why the Greek Government have had to impose capital controls. We see German bund spreads coming down today. That is a consequence of an open and free market and, as I said in reply to an earlier question, it is difficult to defy that market, as Greece is seeing. More broadly, we want to make sure that the eurozone finds some sustainable way forward so that we avoid these tensions, which spill out into the political system.

Greece

Debate between Andrew Gwynne and George Osborne

Monday 29th June 2015 Commons Chamber

[Andrew Gwynne (Denton and Reddish) (Lab)]

The Chancellor said in his statement that eurozone authorities

“stand ready to do whatever is necessary to ensure the financial stability of the euro area”.

That may well be tested to the full in the coming weeks. Given that the lesson of the exchange rate mechanism is that pressure will undoubtedly be mounting on other European currencies and economies, what contingencies does he have in place to make sure there is no domino effect?

[Mr Osborne]

As I say, the primary responsibility lies with the eurozone and the European Central Bank, and they have put in place better mechanisms than they had three or four years ago. The European Central Bank has its outright monetary transactions mechanism, we have the European stability mechanism—in other words, bail-out funds—and the European Central Bank is also taking a supervisory role, so they are better prepared. However, I was very clear in my statement that however well prepared they are, a Greek exit from the euro would be a substantial financial shock, which would have an impact on the European financial system and on us. That is why we have taken steps to make sure our banking system is better prepared than it was seven or eight years ago.