Eurozone Crisis

Debate between Bernard Jenkin and Mark Hoban

Thursday 3rd November 2011 Commons Chamber

[Mr Hoban]

I am afraid that I am reminded of “Groundhog Day” every time I hear the hon. Gentleman speak.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Why are the Government advocating fiscal union? I put it to the Minister that the words “remorseless logic” are, in fact, a cover for a policy preference, and that the remorseless logic of the present situation is that fiscal union will be economic dictatorship, that it will fail and that we had better be planning for something else.

[Mr Hoban]

I think my hon. Friend would recognise that if a monetary union is to be successful, it requires closer fiscal integration. That is a precondition of the success of monetary union. When the decision was made to opt out of the Maastricht treaty and to keep sterling, one reason for doing so was that monetary union had to be underpinned by fiscal integration. One follows the other as surely as night follows day. That is why I think we were right to take that position then and we are right now to encourage the eurozone, if it wants the euro to be successful, to move towards closer fiscal integration. Frankly, if it does not, it will cause huge economic damage to all of us.

European Union Fiscal Union

Debate between Bernard Jenkin and Mark Hoban

Wednesday 14th September 2011 Westminster Hall

[Mr Hoban]

No. My hon. Friend—[Interruption.] May I continue? My hon. Friend spoke for nearly an hour; I have 10 minutes and want to cover a wide range of topics.

The UK would not agree to the introduction of any financial transaction tax that damaged competitiveness and growth and, in the absence of a global agreement, the UK sees no evidence that a transaction tax would maintain EU competitiveness. Of course, that does not prevent other countries from introducing a transaction tax if they wish to do so.

My hon. Friend is quite keen to ensure, given his legal background, that words are used carefully. I think that he said that my right hon. Friend the Chancellor of the Exchequer had said that there would be a new treaty. Let me give the quote, so that we do not set any hares running. The Chancellor said in Marseilles this weekend:

“I think it is on the cards that a treaty change may be proposed.”

That is a very conditional statement. It is not saying that there will be a treaty. Before we let the argument run away with itself, I point out that there is no proposal at the moment for a treaty.

My hon. Friend the Member for Northampton South asked whether the Treasury was monitoring the situation in the eurozone. Yes, it is. We are working closely with the Financial Services Authority and the Bank of England to monitor what is happening in the eurozone and to understand its potential impact on the UK economy and banking system. We take that particularly seriously because of the interconnection between financial markets and our economy.

Let me be clear: the responsibility for sorting out the problems of the euro area ultimately rests with the euro area Governments. We are not members of the euro and will not join it in the lifetime of this Parliament. Being outside the euro area has clearly given us the flexibility to adapt our fiscal and economic policy to manage the crisis. It is not our responsibility to deal with their problems.

However, no one should be under any misapprehension about the importance of the euro area to the UK economy—a point that my hon. Friend the Member for Northampton South made very powerfully. A strong euro area means a growing market for our goods and services; a weak euro area puts at risk jobs and businesses in our constituencies. We should not lose sight of that. A weak euro area is not in our interest: it puts jobs and businesses at risk. More than 40% of our exports go to the euro area. Hon. Members will know that we export more goods and services to Ireland than we do to Brazil, Russia, India and China combined. No one should be under any illusions about the importance of the euro area to our continued success. Britain wants a successful euro area that can deliver growth and stability, so we want the euro area to have the rules that it needs to prevent future crises.

[Mr Jenkin]

Will my hon. Friend give way?

[Mr Hoban]

No. I am sorry, but I am going to continue. As the Chancellor has said, the eurozone must accept the remorseless logic that leads from monetary union to fiscal union. That is why Conservative Members have consistently opposed joining the euro—we recognise that fundamental link. There can be a successful single currency only if there is a fiscal policy to back it up. We are seeing in the current crisis the consequences of not having that link between monetary policy and fiscal policy in the eurozone. Recognising that remorseless logic, we cannot stand in the way of closer fiscal integration in the eurozone. Clearly, our status—

[Mr Jenkin]

Will my hon. Friend give way?

[Mr Hoban]

Let me just finish the point. Clearly, our status as a euro “out” has implications for our influence over the outcome of the discussions. None the less, we should be engaged in the debate on closer fiscal integration. It is very much in our interest to have a say in the design of any new structures or processes that may be required.

[Mr Jenkin]

Precisely because our economic interests are so intertwined with our European partners, my hon. Friend is making the case for our having a clear position to ameliorate the crisis that is developing in relation to the euro. To light on one little piece of remorseless logic, which is that there cannot be a currency union without a fiscal union, but then abandon logic on every other part of his argument is not remorseless logic; it is putting his head in the sand. Does he actually think that a fiscal union can work?

[Mr Hoban]

I think that there is a great deal of work to be done on this and that it is my hon. Friend who is putting his head in the sand. We need a successful euro area if we are to protect jobs and businesses in this country. We can see some of the impact on the economy today as a consequence of the uncertainty in the eurozone. We have seen the impact in the form of growth in France and Germany being below the rate of growth in the UK in the second quarter. These issues have an immediate impact on what happens in our constituencies and businesses. We need to ensure that the eurozone is successful if we are to continue to have a successful economy.

Eurozone (Contingency Plans)

Debate between Bernard Jenkin and Mark Hoban

Monday 20th June 2011 Commons Chamber

[Mr Hoban]

The OBR will take into account the state of the eurozone economy in its normal forecasting. However, let me be clear to the House that the Treasury, the Bank of England and the Financial Services Authority work closely to monitor the strength of the financial system, and the exposure of UK banks to the Greek Government and the wider eurozone economy. The actions taken to date have ensured that our banks are well capitalised, have strong balance sheets and are less exposed to the Greek economy than, say, French or German banks. British banks can still access funding in international markets, which is a sign of the UK banking system’s strength.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I urge my hon. Friend to bear it in mind that the nearer we get to the inevitable break-up of the euro, the faster the denials will be made that it is not going to happen? Will he urge the European Union to design a policy that creates a legal framework for an orderly departure of Greece from the euro? Can he name a single reputable economist who believes that the Greek economy can recover without a devaluation?

European Summit

Debate between Bernard Jenkin and Mark Hoban

Thursday 24th March 2011 Commons Chamber

[Mr Hoban]

The hon. Gentleman makes an important point. It is vital that there is stability in the eurozone and that agreement is reached on the ESM. My understanding is that the issues raised by the German Government and German Chancellor are not about the fundamental design of the mechanism, but about its detailed terms. We will discuss that at this weekend’s European Council, on which the Prime Minister will report to the House on Monday, as is customary.

The hon. Gentleman asked about the UK economy’s exposure to Portugal. Our exposure is relatively small—smaller than that of a number of other European countries. Our bilateral trade in 2010 was about £4 billion, so we do not have a significant exposure, although Portugal is of course an important trading partner.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Can we just have a reality check? There will be no stability in the euro area until at least some of the countries currently in it leave. There seems to be little doubt about that.

May I remind my hon. Friend that we have just had an austerity Budget—another one? In my constituency, people are talking about having to make NHS savings of £84 million over the current planning period. Can he imagine how absolutely furious British voters will be if it turns out that the British taxpayer must continue to contribute to the bail-out of euro countries even though we are not a member? Why does he not take the opportunity—before agreeing to the new stability mechanism—to get our European partners to agree that we shall be released from any obligation to the temporary stability mechanism for which we are currently liable?

Loans to Ireland Bill (Allocation of Time)

Debate between Bernard Jenkin and Mark Hoban

Wednesday 15th December 2010 Commons Chamber

[The Financial Secretary to the Treasury (Mr Mark Hoban)]

I beg to move,

That the following provisions shall apply to the proceedings on the Loans to Ireland Bill:

Timetable

1.–(1) Proceedings on Second Reading, in Committee, on consideration and on Third Reading shall be completed at today’s sitting in accordance with the following provisions of this paragraph.

(2) Proceedings on Second Reading shall (so far as not previously concluded) be brought to a conclusion three and a half hours after the commencement of proceedings on the Motion for this Order.

(3) Proceedings in Committee, on consideration and on Third Reading shall (so far as not previously concluded) be brought to a conclusion at the moment of interruption or six hours after the commencement of proceedings on the Motion for this Order, whichever is the later.

Timing of proceedings and Questions to be put

2. When the Bill has been read a second time—

(a) it shall (despite Standing Order No. 63 (Committal of bills not subject to a programme order)) stand committed to a Committee of the whole House without any Question being put;

(b) proceedings on the Bill shall stand postponed while the Question is put, in accordance with paragraph (1) of Standing Order No. 52 (Money resolutions and ways and means resolutions in connection with bills), on any financial resolution relating to the Bill;

(c) on the conclusion of proceedings on any financial resolution relating to the Bill, proceedings on the Bill shall be resumed and the Speaker shall leave the Chair whether or not notice of an Instruction has been given.

3.–(1) On the conclusion of proceedings in Committee, the Chair shall report the Bill to the House without putting any Question.

(2) If the Bill is reported with amendments, the House shall proceed to consider the Bill as amended without any Question being put.

4. For the purpose of bringing any proceedings to a conclusion in accordance with paragraph 1, the Speaker or Chair shall forthwith put the following Questions (but no others)—

(a) any Question already proposed from the Chair;

(b) any Question necessary to bring to a decision a Question so proposed;

(c) the Question on any amendment moved or Motion made by a Minister of the Crown;

(d) any other Question necessary for the disposal of the business to be concluded.

5. On a Motion so made for a new Clause or a new Schedule, the Chair or Speaker shall put only the Question that the Clause or Schedule be added to the Bill.

6. If two or more Questions would fall to be put under paragraph 4(c) on successive amendments moved or Motions made by a Minister of the Crown, the Chair shall instead put a single question in relation to those amendments or Motions.

7. If two or more Questions would fall to be put under paragraph 4(d) in relation to successive provisions of the Bill, the Chair shall instead put a single question in relation to those provisions.

Miscellaneous

8. Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply so far as necessary for the purposes of this Order.

9.–(1) The proceedings on any Motion made by a Minister of the Crown for varying or supplementing the provisions of this Order shall (so far as not previously concluded) be brought to a conclusion one hour after their commencement.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to those proceedings.

10. Standing Order No. 82 (Business Committee) shall not apply in relation to any proceedings to which this Order applies.

11.–(1) No Motion shall be made, except by a Minister of the Crown, to alter the order in which any proceedings on the Bill are taken or to re-commit the Bill.

(2) The Question on any such Motion shall be put forthwith.

12.–(1) No dilatory Motion shall be made in relation to proceedings to which this Order applies except by a Minister of the Crown.

(2) The Question on any such Motion shall be put forthwith.

13. The Speaker may not arrange for a debate to be held in accordance with Standing Order No. 24 (Emergency debates) at today’s sitting before the conclusion of any proceedings to which this Order applies.

14.–(1) Sub-paragraph (2) applies if the House is adjourned, or the sitting is suspended, before the conclusion of any proceedings to which this Order applies.

(2) No notice shall be required of a Motion made at the next sitting by a Minister of the Crown for varying or supplementing the provisions of this Order.

15. Proceedings to which this Order applies shall not be interrupted under any Standing Order relating to the sittings of the House.

16.–(1) Any private business which has been set down for consideration at 4 pm at today’s sitting shall, instead of being considered as provided by Standing Orders, be considered at the conclusion of the proceedings on the Bill today.

(2) Paragraph (1) of Standing Order No. 15 (Exempted business) shall apply to the private business for a period of three hours from the conclusion of the proceedings on the Bill or, if those proceedings are concluded before the moment of interruption, for a period equal to the time elapsing between 4 pm and the conclusion of those proceedings.

I do not wish to detain the House too long in moving the motion. It seeks the approval of the House to consider all stages of this important Bill in a single day. With the co-operation of the House, the Bill will make a major contribution to the United Kingdom’s declared international commitments.

Why do we need to expedite the Bill? The loan to Ireland is novel and large, and the Bill is needed to give the Treasury the necessary authority to advance funds to Ireland. The loan agreement will require the Government to obtain all necessary authorisations before the first draw-down on the loan can be made. The international package is to be discussed at the International Monetary Fund tomorrow, and it is important that the Government, the IMF and the other lenders can be sure that legislation will be passed so that they can assess the adequacy of the total support package, hence the desire to proceed as quickly as possible today. Passing the Bill will also provide certainty to financial markets that the UK’s funding package will be in place. It is in no one’s interest to create further instability.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

I do not think that anybody wants to waste time on the timetable motion unless necessary, but if my hon. Friend were to provide an assurance that the Bill can and will be used only for a single bilateral loan to Ireland, and that it will not be used for any other purpose, that might help it on its way.

[Mr Hoban]

I do not wish to pre-empt the remarks that my right hon. Friend the Chancellor of the Exchequer will make on Second Reading, but I can provide that assurance to my hon. Friend.

The Bill is needed to provide statutory authority for the Treasury to pay out the funds involved. Any loan agreement is contingent on obtaining that necessary authority. In improving the overall package of financial assistance to Ireland, our international partners need to be sure that the UK will have the necessary legislation in place to allow it to fulfil its part.

European Union Economic Governance

Debate between Bernard Jenkin and Mark Hoban

Wednesday 10th November 2010 Commons Chamber

[Mr Hoban]

The hon. Gentleman makes an important point, and I am about to come to that, so his intervention is timely. Given the degree of integration of the European economy, it is in our national interest to support work that looks at the causes of instability and to have in place action to help to tackle them. Over the summer, there have been two parallel processes in Europe. The Commission has its own work stream, which is summarised in the documents before us. However, member states have participated in a separate strand of work on the co-ordination of economic policies under the chairmanship of Herman Van Rompuy. Many of the issues covered are the same, but there are essential differences between the two streams. The Commission’s documents detail solutions, and the Van Rompuy work reflects the political agreements reached between member states. The next step is to bring the Commission’s proposals into line with the taskforce’s recommendations.

I shall deal in more detail with three aspects of the taskforce’s work.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

Is my hon. Friend giving an assurance that not only are there no sanctions—we understand that—but there is absolutely no increase in EU jurisdiction over the British Budget-making process?

[Mr Hoban]

No, there is not, and I shall come to that in more detail. As far as I am aware, there is no difference in the power that the House has to set the Budget for the United Kingdom.

[Mr Jenkin]

I am sorry, but I must insist on the Minister giving way again. Is there any increase in EU jurisdiction over the British Budget-making process as a result of these arrangements? Yes or no?

[Mr Hoban]

I do not believe that there is.

Let me deal with the three aspects. In every international economic debate, the issue of increased co-operation and co-ordination arises. At last month’s G20 Finance Ministers conference, the focus was on exchange rates and current account surpluses. At the IMF annual meeting in early October, there was considerable debate about tackling deficits. Those discussions of macro-economic policy are not a new feature of the crisis. For example, since its inception, the IMF has undertaken regular reviews under article 4 of macro-economic policies and made recommendations on policy response, but they are not binding. The EU has had similar procedures in place for a decade. It is in all our interests for there to be economic stability in Europe, and the process needs to be strengthened. What we are doing is simply renewing the existing framework in the light of the economic crisis and updating the tools that we have, to ensure that we can do what we need to do. The measure will broaden the scope of surveillance, but, as far as the UK is concerned, it will not weaken the sovereignty of this Parliament.

Risks to stability often flow from imbalances in the economy, and it is important to look at factors such as current account balances, labour market flexibility and competitiveness across the European Union and to be able to identify problems that could undermine stability. Macro-economic surveillance has an important role to play as an early-warning system.

Economic Governance (EU)

Debate between Bernard Jenkin and Mark Hoban

Wednesday 27th October 2010 Commons Chamber

[Mr Hoban]

Indeed, that is why we have secured a clear and explicit exclusion in the report from the Van Rompuy taskforce—an exclusion based on the Lisbon treaty, but also based on the opt-out that we secured from the Maastricht treaty—so that the sanctions do not apply to the UK. As I have said, at the moment there are no detailed treaty changes on the table. We will have to wait and see what the French and Germans put forward at the weekend.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

May I remind my hon. Friend that those of us who opposed the formation of the euro in principle warned that it would be a disaster, and that we have been vindicated by events? May I warn him now that the Government’s aspiration somehow to assist in creating a stable and strong euro area will be a vain attempt? The Government had better plan for the continuing disaster of a currency without a state, which is bound to be unstable in the long term.

[Mr Hoban]

My hon. Friend makes an important point. There are many sound arguments against the euro, and that is why we have ruled out joining it. However, it does us no favours to see a weak and unstable eurozone. It is important for eurozone countries to have strong fiscal discipline to ensure stability. The taskforce introduces a mechanism for eurozone countries to try to deliver that.

Equitable Life (Payments) Bill

Debate between Bernard Jenkin and Mark Hoban

Tuesday 14th September 2010 Commons Chamber

[Mr Hoban]

As I have tried to make clear, the decision about how much the taxpayer can afford will be taken in the context of the spending review, when we look at this bid for spending alongside other bids.

[Mr Bernard Jenkin (Harwich and North Essex) (Con)]

My hon. Friend will know that the Public Administration Committee, which I now chair, issued in the previous Parliament two reports on the subject, and unless we make progress discussing the Bill itself, it seems that much of this debate will turn on what exactly the ombudsman meant in her report. May I advise my hon. Friend and, indeed, the House that my Committee intends to hold a further inquiry as soon as the House returns in October in order to elucidate the exact differences between the ombudsman’s recommendations, Sir John Chadwick’s report and what the Government’s view may be at that time? We will issue a report on what we believe the ombudsman actually intended, and I hope that the Government will honour that interpretation.

[Mr Hoban]

I would be delighted to appear in front of the Committee to give the Government’s view. It is important that there should be scrutiny through the Public Administration Committee. My hon. Friend was right to highlight the work done by the previous Committee; I particularly commend the former Chair, Dr Tony Wright, who did a great deal, with other Committee members, to keep the issue in the public debate. They published two reports that were very critical of the previous Government. I am happy to take part in that process.