Charter for Budget Responsibility

David Rutley Excerpts

Wednesday 11th May 2011 Commons Chamber

[David Rutley (Macclesfield) (Con)]

It is an honour to speak in this debate. It may not be the best attended debate, but I believe that in future years we will look back at the charter and the creation of the Office for Budget Responsibility as a major step forward in the way we manage this country’s fiscal policy.

Mark Twain once said that prophecy—or, in this case, economic forecasting—is

“a good line of business, but it is full of risks”,

and in respect of certain Governments it is sometimes said that statistics, and even forecasts, can be used in the same way as

“a drunken man uses lamp posts—for support rather than illumination.”

I therefore welcome the creation of the OBR, as I believe it will bring far greater transparency to the forecasting process and the management of our public finances.

I want to refer back to what my hon. Friend the Economic Secretary said in her opening remarks, and to talk a little about why the charter and the OBR needed to be set up. The sheer scale of the recent economic crisis led many people to recognise the need to rethink how forecasting is conducted. It was also clear that Governments can be tempted to indulge in wishful thinking, and there was too much of that in the run-up to the credit crunch. Even Lord Turnbull in evidence to the Treasury Committee spoke about how it had existed during successive quarters of economic growth. Despite what has been claimed, it is the case that promises were made about an end to boom and bust, yet there was a boom and there certainly was a bust. As a result, we clearly need to improve our approach to forecasting.

In the current digital age, there is greater demand for transparency in many areas, and that must include in the development of forecasts for our economy and public finances. I therefore welcome the Chancellor’s bold and important move to transfer the power to create such forecasts to the OBR. That will bring greater objectivity to bear, and the forecasts will hold Governments of all shapes and sizes to account, which is definitely in the long-term interests of our economy.

The creation of the OBR has also strengthened the credibility of the Government’s efforts to tackle the current deficit and bring the UK economy back to sustainable economic growth, and I have been encouraged by the comments of some highly respected bodies in this field. The Institute for Fiscal Studies says:

“The decision to transfer responsibility for official economic and public finance forecasts from ministers to economic experts is a very welcome one. It does not guarantee that the forecasts will be accurate, but it will reassure people that they reflect professional judgement rather than politically motivated wishful thinking.”

That is important. The OECD says:

“The OBR will support the consolidation process, improve the quality and credibility of information and lay a sound basis for the forward-looking framework.”

Finally, the International Monetary Fund says:

“The OBR complements the government’s commitment to fiscal discipline by enhancing the transparency and credibility of the budget process and helping inform policy decisions.”

The “credibility” that is mentioned in just about each of these quotes is a vital commodity. It will build confidence in the debt markets and help to address the costs of funding our enormous burden of debt, and it will build confidence in businesses, and in their investment decisions. It will be vital in helping to bring about significant and sustained growth.

As a former member of the Treasury Committee, I was fortunate enough to have been able to participate in the appointment of Robert Chote as chairman of the OBR and the other members of the budget responsibility committee. Giving the Treasury Committee the power of consent over appointments and dismissals was another welcome move by the Chancellor, and has given Parliament a far greater say in these all-important matters.

The good news is that there has been very encouraging initial progress. The OBR has created thorough forecasts and supporting analysis, which has been welcomed on both sides of the House. It has become an important reference point in a very short period of time. It is vital that it builds on that reputation. I am pleased to see that more forecasts and reports are planned, including, as the Economic Secretary mentioned, the fiscal sustainability report that will be published later this year to give a truly long-term view of the future of our public finances. That is most welcome.

In conclusion, I hope that these short remarks have conveyed my strong support for this charter, and for the creation and clear processes of the OBR. It is a vital achievement which will bring about greater transparency, credibility and confidence in the forecasting process, and it represents a structural change in the management of our fiscal policy. The OBR will play a vital role in helping to bring the deficit back under control and to move this economy to sustainable growth. I wish the OBR every success in its endeavours, and I trust that the Treasury Committee will ensure that it gets the support it needs to carry out its important tasks and hold future Governments to account for many decades to follow. I fully support the motion.

Amendment of the Law

David Rutley Excerpts

Wednesday 23rd March 2011 Commons Chamber

[Sir Stuart Bell]

That is the point that the Leader of the Opposition made. I was reminded by those on the Front Bench—I had not got so far in my speech—that if growth is down, inflation is up. The Chancellor made a point about commodity prices going up. They are going up in France, where inflation is 2%. We have higher inflation because of the Government’s policy. We have depreciated the value of our currency over a period of time by 25%. We have increased our exports but we have also increased our imports. Our imports are still greater than our exports. We are now importing inflation. The difference between French inflation at 2% and our inflation, which will run between 3.5% and 5%, is that we are importing it, because of Government policy.

Unemployment is going up; it is at a 17-year high. The Chancellor made a great thing about 3,000 jobs in the manufacturing sector, but he did not refer to all the jobs that have been lost. How many more jobs will be lost when we move into the cuts to local councils that will start on 1 April? How will Middlesbrough council cope with a 28% deficit reduction? How will the national health service cope? We know that we will lose at least 1,000 jobs in Middlesbrough and unemployment in my constituency is disgracefully high. We have the fourth highest unemployment rate in the country and that is wrong. It happened under a Labour Government and under a Tory Government. The cuts that are being announced and those that have been made through the massive deficit reduction programme announced by the Chancellor in his previous Budget will push us further down.

No reference was made, as I have said, to the welfare state. What happened to the welfare state? What happened to the balance between the public and private sectors? What happened to those who are unable to look after themselves? Where was all that in today’s Budget?

[David Rutley (Macclesfield) (Con)]

The hon. Gentleman has talked about what is happening in the north-east. In the north-west, we have seen public sector jobs increase by 100,000 between 1999 and 2009, whereas in the private sector, we have seen growth to the tune of 10,000 jobs in the same period. That is completely unsustainable. What are the Opposition’s proposals to address that situation?

[Sir Stuart Bell]

That might be the figure in the hon. Gentleman’s part of the world, but it might not be a figure in other parts of the world.

Let me get back to the point—we created a balance between the public sector and the private sector and we believed that that balance was right for our country. In the north-east of England, when we lost manufacturing jobs, steel jobs, coal jobs and shipbuilding jobs, they were absorbed into the public sector. Those who worked in the public sector created careers for themselves. My hon. Friend the Member for North Durham (Mr Jones) made this point: there was a relationship between the public and private sectors. They worked together.

Budget Responsibility and National Audit Bill [Lords]

David Rutley Excerpts

Monday 14th February 2011 Commons Chamber

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

In this debate on the Bill and the Office for Budget Responsibility, I would like to focus on the word “responsibility”. Interestingly, Members in other parts of the House have focused on the downgrading of the growth forecast from 2.6%, to 2.3%, to 2.1% and possibly lower, but at no point has it been said that this allows the Chancellor to ensure that we have a Budget that is based on facts rather than on what he would like the growth figures to be. That is the problem of previous years that led to a bunker scenario.

[David Rutley (Macclesfield) (Con)]

I wonder whether my hon. Friend has noticed that the Institute for Fiscal Studies has said:

“If an OBR had been in existence over recent years it might have discouraged Gordon Brown from persevering with fiscal forecasts that most independent analysts thought over-optimistic from 2002 onwards”.

[Alec Shelbrooke]

I am most grateful for my hon. Friend’s intervention, which makes my point. If the OBR had been there in the past, it would not have been possible to proceed with the bunker mentality that I mentioned. Alternatively, the Chancellor could still have moved forward with the same forecast, but everybody would have known exactly where the blame lay and got rid of the arguments that we hear time and again whenever we talk about the horrific financial mess that this country is in—the chorus from Labour Members saying, “It’s the banks, it’s the banks.”

--- Later in debate ---

[David Rutley (Macclesfield) (Con)]

Like other hon. Members, I will focus my remarks on the measures that will put the Office for Budget Responsibility on a statutory footing, where it needs to be. I will talk about how important it is to take forecasting out of the Treasury and to give Parliament a greater role in maintaining the independence of the OBR, which will be vital, as everybody has said.

Above Bollington stands one of the most loved landmarks in the Macclesfield constituency: White Nancy. This unique, brilliant white summerhouse was built by the Gaskell family in 1815 and it stands proudly on top of Kerridge hill. Some think that it was built to commemorate the battle of Waterloo. Whatever the reason, White Nancy is today a well known and trusted reference point. When someone sees it, they know exactly where they are. That is what I hope the OBR will become in the landscape of the UK economy.

The Economic Secretary mentioned several reasons for the creation of the OBR, and spoke of the importance of creating it at this moment in time. I think that it will provide better forecasts, address the “judge and jury” issue that we have heard about and effectively hold Governments of all persuasions to account. That is exactly what is required.

To begin, I will give a few thoughts on better forecasts. I was reminded recently of an observation made by the American economist John Kenneth Galbraith:

“The only function of economic forecasting is to make astrology look respectable.”

I am not a great fan of his economics, but his one-liners were pretty good. Like many Members, I accept that economic forecasting is not a precise science. However, it is vital that our expert forecasters are allowed the objectivity and independence that are needed to do the best possible job. They must be able to look into their crystal balls outside the Treasury building and free from Treasury influence. The ability to recruit economic talent from outside the Treasury will be a great help. I believe that the OBR is well placed to provide better forecasts.

The creation of the OBR can address the fundamental conflict that we have seen in successive Governments of the Chancellor and the Treasury being both judge and jury, through setting fiscal policy and making the forecasts for the economy and public spending. By their nature, economic forecasts are based on assumptions, opinions and judgments. The temptation for Treasury Ministers to make a judgment or prepare a forecast that helps the Government of the day presents a clear challenge to the credibility of the forecasting process. The OBR is an important and positive step in removing that temptation.

I was struck by Lord Turnbull’s response to me on this subject when I served on the Treasury Committee some months ago:

“What happens is that there’s a sense of giving yourself the benefit of the doubt, of wishful thinking. That is what the OBR is there to correct.”

He went on:

“The OBR is important because it is an antidote to and a constraint on wishful thinking. It will bring more rigour, and it has already begun to do so”.

When I asked him more about the wishful thinking during his time at the Treasury, he said:

“I think that there was wishful thinking all the way through. If you had experienced 60 quarters of uninterrupted growth, it wasn’t surprising that you tended to think that somehow something fundamental had changed.”

That is exactly the type of thinking that the OBR has been designed to review, scrutinise and challenge, which is an urgent priority.

The OBR can provide better forecasts, it will tackle the judge and jury dilemma, and it is empowered to hold this Government and future Governments to account. That will be a vital task at this challenging time and for future generations. So what of the OBR’s priorities? In its short life, it has demonstrated its independence, the professionalism of its personnel and the high quality of its output. In its first forecast on the economy back in June, it brought some realism back to the growth forecasts. It was pretty clear that those published by the previous Government in the run-up to the election contained too much wishful thinking. The markets were openly sceptical, which in itself was an unsustainable position. In that sense, the OBR has scored a notable success already by helping to restore confidence in the forecasts for public spending and the performance of the UK economy.

It is vital that we build on that promising start and put the OBR in an unrivalled position. I was pleased to see the recent publication of a report by the OBR that detailed how it sets out to co-ordinate its activities with other Government Departments to produce fiscal forecasts, and the processes that it will follow. That transparency will help further strengthen the organisation and its standing. Its chair, Robert Chote, said recently that he wanted the process of fiscal forecasting to be as accessible as possible. In his words, he wants to

“let people see inside the forecasting sausage machine”.

That is not quite how I would have put it, but I agree with the sentiment.

Beyond the transparency and accessibility of the OBR, which is pivotal, it is essential for it to become a respected and trusted reference point. That is a big ambition that will require the highest standards to be maintained, and constant vigilance will be needed to ensure that we get the OBR where it needs to be.

Having served on the Treasury Committee, with hon. Members who were present earlier in the debate, when the creation of the OBR was debated and key officers were appointed, I commend the work that the Committee undertook at that time and the role that it continues to perform today. I also wish to take the opportunity to commend the Chancellor for his decision and for the inclusive approach that he adopted during the creation of the OBR. By giving the Treasury Committee a meaningful role, he has gone a long way towards empowering Parliament and demonstrating the need for the OBR’s independence. That established from the very start its credibility as an independent body and will help build that credibility in Parliament. By giving the Committee the power of consent over appointments and dismissals, the Chancellor is giving Parliament greater power. The Committee also has the important power to carry on vetting those who are appointed, as it did last year and will continue to do. It is important that the OBR has the ability to prevent Ministers from removing people who might be perceived as being a bit too objective for their liking.

The Government have gone further and even given the OBR the power to submit to the Treasury Committee its own additional estimates memorandum, which will enable it to undertake scrutiny of funding for the OBR. As the Committee’s report set out clearly, it will take a much stronger role in observing the OBR’s work. It states that

“it is vital that it commands confidence across party boundaries. We will take evidence from the organisation regularly as part of the budget process. We will intervene if we believe the OBR’s independence is threatened. We expect the members of the Budget Responsibility Committee or the nonexecutive directors to report any concerns they have to us. Only if it is independent will the OBR be successful.”

There is a clear role for the Committee. It has the OBR in its sight and will continue to involve the OBR in its important work.

Some Members, such as the hon. Member for Glasgow North East (Mr Bain), mentioned international comparisons, and other countries have indeed had bodies similar to the OBR established for decades. One of them is the Central Planning Bureau in the Netherlands, which he mentioned. That body has responsibility for scrutinising not only Government but opposition spending plans. I am sure that Labour Members’ heartbeat fluttered briefly as they thought about the implications of that, but perhaps if the CPB operated in the UK it would not have too much work on its hands right now. We will see what develops on the Opposition Front Bench over the decades ahead. The serious point is that the OBR could learn from such international comparisons. A huge amount of learning can be done from other countries, and I hope that the OBR will examine them in developing its functions and work in the years ahead.

The permanent creation of the OBR is an overdue step. It will bring more transparency and greater confidence to economic forecasts, and it has already begun to build a solid reputation as an objective and authoritative voice as well as gaining respect in all parts of the House. The Bill represents an important structural change in how the Treasury works. It will take the politics out of economic forecasting and give Parliament greater powers of scrutiny. Personally, I want to ensure that the OBR becomes the trusted, respected reference point that I talked about earlier, and I will do all in my power to support it in that work. This country needs it. We must put such institutions in place to ensure that our public finances are never allowed to get into this mess again.

--- Later in debate ---

[Stephen Williams]

I thank my hon. Friend for that intervention.

Predictions and forecasting are at the heart of the Bill. I slightly disagree with my hon. Friend the Member for Cities of London and Westminster (Mr Field), my coalition colleague, who has now gone off to his black-tie dinner, because the crash—if not its scale—was forecast by my right hon. Friend the Member for Twickenham. I remember him being derided and sneered at in the House at the time, including by the hon. Member for Wallasey (Ms Eagle), who today led for the Labour party.

I welcome the setting up of the OBR, and particularly the appointment of Robert Chote from the Institute for Fiscal Studies as its first permanent chair. I am sure that all hon. Members have cited IFS reports in support of our policies at various times, and that we have all been on the receiving end of its critiques, which are not always welcome. Nevertheless, everyone recognises that those reports were arrived at independently, and therefore that they had authenticity and credibility about them. I also welcome the appointment for five-year terms of Mr Chote’s fellow board members and the ongoing Treasury Committee scrutiny, of which my hon. Friend the Member for Macclesfield (David Rutley) spoke. As we heard, the Bill is not a panacea for dealing with economic ills, but I am sure that the OBR will none the less restore credibility to our statistics and give a sound basis for decisions.

The second part of the Bill, which has not been mentioned much, deals with the National Audit Office. As I have mentioned Disraeli, I will mention in balance Gladstone, who set up the NAO. All Members of Parliament will recognise that the reports produced by the NAO are excellent and well informed across the range of policy issues. As the hon. Member for Stretford and Urmston (Kate Green) said, it is the role of the NAO to review the impact of Government policy especially in financial areas, and to examine whether money has been spent efficiently according to the original remit of the policies. Although the NAO formally reports to the Public Accounts Committee, of which I was briefly a member in the last Parliament, its reports and its work are fundamental to the operation of the House of Commons itself.

I welcome the statement made by the board of the NAO and the professional qualifications now held by some of its board members. I remember going to a briefing by the NAO not long after I became a Member of Parliament and being astonished by the lack of financial qualifications of many people in the civil service—I shall avoid looking in their direction—who none the less managed the purse strings of billions of pounds of public money. Professional qualifications should also be rolled out around Departments.

[David Rutley]

As hon. Members have said, one of the opportunities provided by the OBR will be more expertise from people outside the Treasury, who will put their views, thoughts and experience to work on forecasting. Does my hon. Friend agree?

[Stephen Williams]

Indeed, I do agree and the OBR as it develops will be able to draw on the expertise in the Treasury, although its forecasts must be its own, not the Treasury’s. Over time, the OBR will develop its own in-house expertise, although it will hopefully not grow into too large a quango—if we are still allowed to use that word.

The Bill is an important hallmark of coalition Government. It shows that the Government are interested in transparency and evidence-based policy making, as well as in listening, especially to advice. It will certainly provide confidence in our national statistics and economic forecasts, underpinning the Government’s overriding aim of restoring confidence and stability to our national economy and public finances.

Banking

David Rutley Excerpts

Wednesday 9th February 2011 Commons Chamber

[David Rutley (Macclesfield) (Con)]

I welcome the announcement on the increase in funding for the business growth fund and the new lending agreements. Does my right hon. Friend agree that those steps will help to establish a new generation of wealth creators, which is an urgent priority in regions such as the north-west, where private sector growth has to be the focus?

[Mr Osborne]

My hon. Friend is right, which is good as he is my local MP. One of the weaknesses in the British economy over recent years has been that small and medium-sized businesses have not had access to venture capital and other sources of funding, as they have had in countries such as the United States and Germany, so that they can become larger companies. The regional business growth fund that I have spoken about will provide more access to such funding. I will also return to this issue in the Budget.

Bank Bonuses

David Rutley Excerpts

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

I have made it very clear that I want to see bonuses lower this year than they were in the last year of the Labour Government. That is the objective. The Labour party either supports that or it does not, but that is what we are seeking to achieve with the banks.

[David Rutley (Macclesfield) (Con)]

I share and understand the concerns that people have about the sheer scale of bankers’ bonuses, but it is also vital to look at how bankers are measured. When the Governor of the Bank of England came to the Treasury Committee in November, he said that he felt it was better to reward bankers according to return on assets rather than return on equity. I wonder whether the Chancellor believes that that view merits further consideration.

[Mr Osborne]

That is one of the issues being considered, and I noted the Governor’s comments. The code of practice has a number of constraints on how bonuses are paid. It is a vast improvement on last year’s situation, and will help create a better regulated banking sector.

Loans to Ireland Bill

David Rutley Excerpts

Wednesday 15th December 2010 Commons Chamber

[David Rutley (Macclesfield) (Con)]

As I watched a few minutes of the film “The Perfect Storm” recently, I could not help but reflect on the economic challenges encircling Ireland. The film buffs in the House today will recall how George Clooney tried his best to get his fishermen back to base through a once-in-a-generation storm, created by the coming together of three much smaller but still deadly storms. Just as in that story, we are seeing a clear convergence, and it is of economic crises engulfing the emerald isle. As we have heard, that confluence has far-reaching economic implications, not only for Ireland but for our trading partners in the eurozone and, as a result and most importantly, for the UK economy. That is why the Government are absolutely right to take this specific action in this specific situation to help steer us to a departure from that film’s finale and underpin a much more sustainable future for the Irish economy.

That is why it is important to reflect on some of the factors that have created this crisis, on why helping Ireland is so important to our national interest at that this point in time, and on why we are left with no option other than to make this bilateral loan to Ireland. We have talked about the three converging elements: the banking crisis, the sovereign debt crisis, and how the complicating factor of Ireland’s membership of the euro is exacerbating those issues. The credit crunch cruelly revealed the extent to which the Irish banks had overextended themselves, and the fact that they were no longer able to access funding on the open market. As a result, the European Central Bank had to step in. The Irish Government had sought to guarantee all the bank liabilities, and the €440 billion promise that they had put in place was twice the size of the Irish gross domestic product. Those losses brought about a complete loss of confidence in the markets, and finally the Government had no choice but to face up to a looming sovereign debt crisis and seek international assistance.

Joining the euro did not, in itself, cause the challenges that Ireland faces, but it exacerbated them; that is where I disagree with the hon. Member for Belfast South (Dr McDonnell). When the banks binge-borrowed on the back of lower interest rates, it created all sorts of problems that could not have arisen had the punt still been in place. Now, sadly, Ireland’s euro membership is acting as a straitjacket. Independent monetary policy and exchange rate flexibility are not an option; they are not available to help Ireland navigate its way out of this terrible crisis.

I am a confirmed Eurosceptic, and my mother happens to be Danish, so I am proud that when this country worked hard to save sterling, others with more Viking blood than me stepped forward to ensure that they kept their kroner—and quite right too. It is also important to note that both Denmark and Sweden will join the UK in offering loans to Ireland in this unique situation—loans of, I think, €1 billion, or £850 million in proper money.

Despite Ireland’s recent history and my views on the euro, I believe that in these unique circumstances the Chancellor is right to extend the bilateral loan to Ireland. The reason is simple: if the Irish storm gathers more momentum it will have major implications not just for the people of Ireland but for all of us in the United Kingdom.

We should help our neighbour in need, and it is in our national interest to do so. The recent Office for Budget Responsibility report underlined the strong contribution that will be required from net trade to help get us out of the crisis that we ourselves face. We have talked about the size of the UK’s exports to Ireland, but the report goes on to say:

“If recent events significantly reduced Irish demand for UK exports there would be a material impact on UK export growth.”

There is no question about that.

Furthermore, we must take the steps to protect UK banks. Again, the OBR estimates that the exposure runs at £82 billion, £4.6 billion of which is exposed in the Irish sovereign debt. In its November report, it states that its estimate of the direct net cost or benefit to the taxpayer of the Government’s interventions in the UK banking sector may be affected by the exposure of UK banks to Irish liabilities. There is a clear and important reason for us to take this step forward and mitigate the risk, as well as mitigating the risk of contagion. Given the lack of time available, I simply want to stress my belief that it is vital to support the Government in taking these steps.

Autumn Forecast

David Rutley Excerpts

Monday 29th November 2010 Commons Chamber

[David Rutley (Macclesfield) (Con)]

Despite the excessive nay-saying from the Labour party, is the Chancellor aware of a recent report from Barclays bank that outlined that the majority of businesses in the north-west—our region—are looking to expand in the year ahead? Will he tell the House what steps he is taking to support small and medium-sized enterprises, which, in the years ahead, will be the growth engine for job creation?

[Mr Osborne]

We avoided the increase in the small companies rate that the previous Government wanted to introduce even in a recovery. We have been able to avoid the damaging part of the jobs tax. Of course, my hon. Friend is absolutely right. The forecast in this report and the forecast from many other people is for jobs to be created in the private sector across the country, including in the north-west—a part of the country that both of us represent in the House. Frankly, one can see again today that the Labour party wants to talk down the economy, does not believe independent forecasts and talks down the regions. It is no wonder that people rejected it at the election.

Banking Reform

David Rutley Excerpts

Monday 29th November 2010 Commons Chamber

[Matthew Hancock]

They were not used, and that is the problem. A massive, heavy and expanding rulebook distracted the attention of regulators away from the big picture.

My third point about why discretion rather than rules is the best way for the future concerns the importance of the macro-economy, because we cannot separate monetary policy from banking policy. The size of banks’ balance sheets is crucial to regulating the supply of money in the economy. Having counter-cyclical rules rather than pro-cyclical capital rules, as we had under Basel II, is crucial. The exercise of judgment over a bank’s balance sheet is best done in the same place as the exercise of judgment over the macro-economy. Bringing those two things back together in one institution—the Bank of England—is a better long-term way of trying to wrestle with such difficult judgments than having them in separate organisations, which, as we heard in an earlier, eloquent speech, ended with the tripartite system, in which nobody was in charge.

[David Rutley (Macclesfield) (Con)]

I do not know whether my hon. Friend is aware of this, but last week the deputy Governor of the Bank of England appeared before the Treasury Committee and said that he felt that the new twin peaks approach would be a much better model. He felt that the advantage was that it would remove the problems of underlap that were so obvious in the previous system. Whereas there might be some overlap under the current proposal, that has to be much preferable to the previous arrangements.

[Matthew Hancock]

That is a valid and important point. Central to that point is the judgment of people who look forward and have a broad view, looking after the health not only of the banking system, but of the macro-economy, while also having the ability to change the way they regulate according to changes in the economy, so as to take into account new developments, which is critical. Far from being the simple renaming of the institutions, bringing together macro-prudential regulation with regulation of the economy and monetary policy more broadly is central to restoring the ability to prevent the build-up of credit, as happened over the past 15 years.

Financial Assistance (Ireland)

David Rutley Excerpts

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

Let me speak for Government policy. We will not join the euro. I believe that the Opposition’s official policy is to join the euro, but perhaps that will be discussed by their policy groups over the next two years.

[David Rutley (Macclesfield) (Con)]

The Chancellor is right to support Ireland, one of our important trading partners, at this critical time. Will he tell the House what steps he is taking to widen and deepen our trading relationships with fast-growing major markets such as China, India and Brazil? The Labour party missed a huge opportunity when it was in government.

[Mr Osborne]

The fact that we export more to Ireland than to Brazil, Russia, India or China is a statement of the interconnectedness of the Irish and UK economies, but also an indictment of our exports to the fast-emerging BRIC countries, which is precisely why, since taking office, the Prime Minister has led major trade delegations to India and China, and why we want to ensure that companies in Macclesfield and throughout the country can export more to those fast-emerging new markets.

Finance Ministers’ Meeting (Ireland)

David Rutley Excerpts

Wednesday 17th November 2010 Commons Chamber

[Mr Hoban]

As I said before, it is important that Britain stands ready to support the Irish Government to resolve those problems.

[David Rutley (Macclesfield) (Con)]

Will the Financial Secretary tell the House about the strong interest being shown across the world in the Government’s positive approach to tackling fiscal consolidation? Does not that further confirm that this country is now on the right path to tackling the economic crisis?

[Mr Hoban]

My hon. Friend is absolutely right. The crisis reminds us of the continuing focus on sovereign debt. The Government have taken clear measures to tackle our fiscal problems, and international bodies have recognised that. It is one of the reasons for Standard & Poor’s reporting our credit rating as stable compared with its negative outlook under the previous Government. We are taking the right steps to secure our fiscal position, bearing in mind that the crisis in Ireland is around banking, not the fiscal position.