Business and the Economy

Duncan Hames Excerpts

Monday 14th May 2012 Commons Chamber

[Martin Vickers (Cleethorpes) (Con)]

It is a pleasure to take part in this Queen’s Speech debate. I am particularly pleased that the Queen’s Speech produces a framework that will allow Government Members to give a narrative to the Government’s aims and objectives, from which we have been somewhat derailed in recent weeks. My experience campaigning in local elections in north-east Lincolnshire highlighted the fact that between the Budget and polling day, we had lost the debate about what the Government were trying to achieve with their economic policies. We lost the argument, for example, that we were taking millions of people out of income tax, because of the Opposition’s effective campaign on the 50p tax rate.

I not only campaigned in the Cleethorpes area of north-east Lincolnshire but went into the Scartho ward in Grimsby, which I represented until last year. It epitomised the need for a new narrative from Government Members. It was classed as the safest Conservative ward in Grimsby, although anyone who knows Grimsby will know that it was the only Conservative ward, so that it is perhaps not a great achievement. Over the 30 years when I lived in the ward, it was represented by all three major parties at some time or other, and in the mid-1990s I had an enforced rest from my council experience thanks to new Labour, as it was then, sweeping all before it. The seat that was up for election a couple of weeks ago went to the UK Independence party, and that is an important message to all our parties. There is strong anti-EU sentiment in the Grimsby and Cleethorpes area, mainly for historical reasons to do with fishing, but the message should go to all parties that there was something of an anti-political feeling.

Before I move to praising the Government—I assure Ministers that I intend to do so—I take this opportunity to say that static caravans are a big part of the Cleethorpes economy. Indeed, the Lincolnshire coast is the largest centre for static caravans in the UK. The consultation period on the imposition of VAT on static caravans concludes at the end of this week. I appeal to the Government to take careful note of the damaging impact that the measure could have on my area. Static caravans are used as second homes and holiday homes, and because they are occupied for nine or 10 months, they effectively extend the season and boost the local economy.

I was particularly pleased that the emphasis of the Queen’s Speech, right from line one, was on

“economic growth, justice and constitutional reform.”

As an aside on constitutional reform, I hope that we move ahead with an elected House of Lords as quickly as possible. I would prefer a 100% elected House, but let us at least get an elected element into the upper House as soon as possible. It is a scandal that the only way of getting into one of our Houses of Parliament is by an appointment that my constituents would regard as very lucrative.

[Duncan Hames (Chippenham) (LD)]

I generally support the hon. Gentleman’s observations on House of Lords reform, but does he agree that one lesson of constitutional reform is that we should not allow the best to be the enemy of the good, and that we should not take an all-or-nothing attitude?

[Madam Deputy Speaker (Dawn Primarolo)]

Order. May I remind Members that they are not supposed to face the back of the Chamber? They are supposed to address the Chamber, and particularly the Chair.

Oral Answers to Questions

Duncan Hames Excerpts

Tuesday 24th April 2012 Commons Chamber

[Mr Hoban]

I just point out to the hon. Lady that the last Labour Government ruled out introducing a bank levy. That levy is raising £2.5 billion, and it will raise £10 billion over the lifetime of this Parliament. I think it is right that banks should pay a fair contribution for the risks they have posed for the UK economy, and I would have thought she would have welcomed both the bank levy and the fall in youth unemployment last month.

[Duncan Hames (Chippenham) (LD)]

Youth unemployment is clearly more acute in some parts of the country than in others. Why does the Minister think youth unemployment over the last two years has fallen in over a third of the country, including Bolsover, but not in some constituencies, such as Bradford West, where it has increased by 500?

[Mr Hoban]

My hon. Friend makes the important point that the pattern of youth unemployment varies across the country. It is important that the necessary support is in place to help young people looking for work, and the Work programme is likely to help 100,000 young people this year. That is just one of the practical measures we are taking to tackle the problem of youth unemployment—which, as the right hon. Member for South Shields (David Miliband) said, started under the last Labour Government.

Budget Leak Inquiry

Duncan Hames Excerpts

Thursday 22nd March 2012 Commons Chamber

[Mr Speaker]

It is not really a matter for the Minister. These matters are dealt with in a very specific and orderly fashion—the submission of a request, the consideration of the matter at the appropriate time of the day by my colleagues and me, and the disclosure of the result of the request to the interested parties. All was done—I know the hon. Member for Kingswood (Chris Skidmore) will be satisfied that it was—in an absolutely orderly way on this occasion as it is on every other.

[Duncan Hames (Chippenham) (LD)]

Has the Minister discussed this matter with his colleague the Chief Secretary to the Treasury? I have found the earliest published source of information on the Budget. It was written by my right hon. Friend the Chief Secretary—on the front page of the Liberal Democrat election manifesto nearly two years ago.

[Mr Gauke]

And it was all going so well. I confess that I have not spoken to my right hon. Friend the Chief Secretary this morning and that I have not read all that manifesto. But I would say that the Budget has Liberal Democrat policies and Conservative policies. It is a coalition Budget that is good for the whole country.

Oral Answers to Questions

Duncan Hames Excerpts

Tuesday 6th March 2012 Commons Chamber

[Mr Osborne]

As the hon. Gentleman well knows, the Government’s shareholding in the Royal Bank of Scotland is managed through United Kingdom Financial Investments Ltd, an institution created by my predecessor, another Member for Edinburgh, the right hon. Member for Edinburgh South West (Mr Darling), and we have no plans to change those arrangements.

[Duncan Hames (Chippenham) (LD)]

Last week was indeed a triumph for those in the Treasury tackling tax avoidance, but can the Chancellor tell us whether those tax receipts, which will have not been budgeted for, are going to be used to set against the deficit or to put money back in the pockets of ordinary working people?

[Mr Osborne]

I am afraid that my hon. Friend will have to wait for the Budget to see what we propose to do across the board, but last week we demonstrated that we are prepared to take decisive and swift action where we find unacceptable tax avoidance—by a bank in that case, which we felt was incompatible with the code of practice that we asked the banks to sign and which they have signed. I hope that he and his constituents take it as a signal of our seriousness about tackling tax avoidance and, indeed, tax evasion.

Oral Answers to Questions

Duncan Hames Excerpts

Tuesday 24th January 2012 Commons Chamber

[Miss Smith]

I certainly do agree with my hon. Friend, and on a couple of counts. First, poverty is not about income: it is about work. I am sure that she will agree that it is a crying shame that under the previous Government the number of children in workless households reached one in every six. I also agree with the chief executive of The Big Issue, who says in The Times today that

“You don’t help the poor by making them dependent on handouts”.

[Duncan Hames (Chippenham) (LD)]

Grandparents often play an important role in supporting their children’s children. So why is it that the Government’s welcome commitment to a more generous state pension bizarrely has the effect of increasing the number of children statistically said to be living in poverty? What is the sense in that?

[Miss Smith]

My hon. Friend is absolutely right. If I can, I would be happy to provide him with the workings that create that situation. That measure can have perverse effects, but we believe in measures that genuinely take children out of poverty, such as early intervention policies, rather than moving them over an imaginary line.

Youth Unemployment and Bank Bonuses

Duncan Hames Excerpts

Monday 23rd January 2012 Commons Chamber

[Lisa Nandy]

I share that sentiment, but I am concerned. Those young people are turning to a Government who said, “If you work hard and try hard, we will support you” but they see poverty of aspiration from the Government. They are angry, because the Government have broken the deal and the pact that, if young people tried hard, they would have the chance of a better future.

[Duncan Hames (Chippenham) (LD)]

The hon. Lady is making a typically impassioned and impressive speech. On the question of whether the Government broke the deal, would she not, given her experience before coming to the House, acknowledge that youth unemployment has been rising consistently since 2004? In my constituency, unemployment trebled in the previous Parliament, so the Government need to be prepared to look at proposals and solutions other than those that did not work in previous Parliaments.

[Lisa Nandy]

I am afraid that the facts do not bear that out. I agree, however, about the stubborn problem of structural youth unemployment, which I shall come on to.

I want to use the last few minutes of my speech to discuss what more must be done if we are serious about giving young people hope for the future. I have made the case that, although the Work programme is a welcome step, it is tinkering when we need fundamental change in the system. Job preparation, while worth while and extremely important for some of my constituents, who need support, confidence and help to get a job, is not enough if there are no jobs to go to.

That is why I believe that growth, growth and growth have to be the Government’s priority. In my constituency, and across the country, as we have heard from my hon. Friends, there are simply no jobs to go to. I have argued that increases in youth unemployment under the previous Government were caused by an increase in labour supply. The increase in youth unemployment under this Government is the consequence of a collapse in labour demand. The focus on youth unemployment masks a rapid fall in youth employment, which is partly accounted for by the abolition of full-time education places. If Ministers are serious about this issue, they must speak to their hon. Friends in the Department for Education, and make the point that it does not make any sense to cut education places at a time like this.

Will Ministers commit today to using every lever at their disposal? There are so many things that a Government can do, and it is distressing for young people to hear that the economic situation dictates inaction, when in fact we could have action and we could have it now. The Government could use their procurement power to ensure that young people have apprenticeships—it is immoral to award public contracts to firms that will not give apprenticeships and opportunities to our young people. The Government could also use their procurement power to make sure that those contracts go to firms that provide real, lasting, paid jobs with a decent career structure, to give those young people the resilience in the labour market that they need. That is why I urge Ministers to think again about the future jobs fund. I know that that has become a political issue, but I and my colleagues have seen the dramatic long-term difference that it was beginning to make for young people in our constituencies.

Structural youth unemployment remained stubbornly at around 10% under the previous Government, despite huge efforts, particularly by my right hon. Friend the Member for Morley and Outwood (Ed Balls), to do something about it. The only way to tackle structural youth unemployment is through partnership working, with the public, the private and the third sectors. I have seen recently some attempts to focus on the most disadvantaged young people—for example, in young offenders institutions—and a focus on education to lead young people into employment.

Ministers should be very careful about how they set targets and measure progress. For some of the young people with whom I have worked, with the extremely serious problems that they have had, simply getting up in the morning and eating breakfast has been a challenge. Ministers must be careful not to throw away real progress for some of the most disadvantaged young people in this country, or they will not tackle the structural problem of youth unemployment, which we tried so hard to deal with. Ministers know that some young people—disabled young people, young carers, those with transport difficulties—need extra help. I am sure Ministers know that, and I hope that help will be forthcoming.

Inaction on this issue is a moral choice with lasting consequences for a group of young people whom those on the Government Benches may never meet, but to whom they owe a heavy responsibility.

Communities and Local Government

Duncan Hames Excerpts

Tuesday 20th December 2011 Commons Chamber

[Valerie Vaz (Walsall South) (Lab)]

It is always a pleasure to follow the hon. Member for Wirral West (Esther McVey). I thank everybody in the House who has looked after us over the year and wish them a very happy Christmas and a happy new year. I hope that this Christmas gig will become as popular as the “Doctor Who” Christmas gig.

I want to raise some planning issues that have upset my constituents, because I do not like to see my constituents upset, and then to discuss the national planning policy framework, which the hon. Member for Chippenham (Duncan Hames) will also mention. I am a member of the National Trust and have dealt with planning litigation. I have had to read planning policy guidance and planning policy statements, so I understand why some people want to streamline them. However, that should not be done to the extent that they are non-existent. They are comprehensive and, together with the local plans and unitary development plans, they came about as a result of careful consultation. Word is already out that the national planning policy framework will be a lawyers charter. Lawyers are rubbing their hands in glee.

Turning to Walsall South, I hear stories in my surgery of intimidation, threats and broken windows, all because some people oppose an application. I had many specific cases to raise, but sadly time has been cut short, so I will deal with just two. In my constituency, the green belt is already under threat. For example, officers said that the proposal for the Three Crowns inn site would involve unacceptable development in the green belt and there were no special circumstances to outweigh that. However, the planning committee let it go through, so three detached houses have been built on the green belt. That is a great cause for concern. My constituents told me that a substantial amount of time was taken up by speakers in favour of the development, but that they were allowed only three minutes.

That brings me to the long-suffering folk who live around 1 Woodside close. All previous applications have been refused by the inspector on the basis that development would have an adverse impact on the character of the local area. My poor constituents have had to put up with six applications of a similar nature. Of the last two applications, one for the construction of 13 flats was dismissed on 28 October 2010 and one for the construction of 14 flats was dismissed on 20 August 2011. Still the applicant persists without any response from the council. Clearly, the Planning and Compulsory Purchase Act 2004 needs to be revisited by the council. The residents in Cottage Farm residents association feel that their views have not been taken into account. I will present a petition to the House at the end of the debate this evening on behalf of those residents. I admire their resilience and stamina.

That brings me on to the national planning policy framework. The Government want to promote well-being, but they put it at risk by putting the green belt under threat. The Chancellor wants to use planning to stimulate growth, but town centres are crying out for development. The Government appointed Mary Portas to look at what is wrong with our town centres and she has told them to make explicit in the wording of the NPPF a presumption in favour of town centre development. In Walsall town centre, 15.8% of shops are empty—an increase of 20% since February.

The NPPF will weaken the test that is applied to town centres. Under the sequential test, developers have to show that there is no suitable alternative site in the centre, but that does not apply to offices. The NPPF will relax brownfield targets; relax the requirement to plan for the efficient and effective use of land; reduce the protection of the green belt; remove the direction to direct offices to the town centre; and reduce sustainable economic development. The combination of those things will push development away from where it is most needed.

[Duncan Hames (Chippenham) (LD)]

Will the hon. Lady give way?

[Valerie Vaz]

No. I am sorry, but I do not have time.

Walsall has a history of protecting employment land and has a sustainable settlement pattern. Manufacturers who are experiencing growth have not asked me to raise planning issues; they have asked for money for apprentices so that they can train them and fill the skills gap. This is not about housing either, because the Home Builders Federation holds more than 280,000 units with planning permission that are ready for development. Planning permissions do not deliver new homes. The problem of there being not enough homes is more to do with the stagnant property market, banks not lending and the boom in overseas investors investing in housing, not affordable housing.

Paragraph 16 of the NPPF states that the development of sites protected by the birds and habitats directive would not be sustainable. However, in the autumn statement, the Chancellor said that he wants to relax the habitats directive. I am on the side of the Royal Society for the Protection of Birds, the National Trust, the Prince of Wales, the campaign by The Daily Telegraph, the Campaign to Protect Rural England and the people of Walsall South. Whose side are the Government on? With respect to you, Mr Deputy Speaker, I have a special phrase: this is not about being a nimby, but about being a NIGEL—“Not In the Garden of England”. We are all NIGELs now.

Finally, once land has been sold and developed, it is lost for ever. That is our heritage. That is what we leave to the next generation. I urge the Minister to think again.

--- Later in debate ---

[Duncan Hames (Chippenham) (LD)]

May I wish you, Madam Deputy Speaker, and all the staff of the Houses of Parliament a very merry Christmas?

I speak today in support of increased local decision-making in the planning system. Specifically, I would like to encourage the Government to ensure that the neighbourhood plans made possible by the Localism Act 2011 give local people enough power to have a real say over what development takes place in their area, where it takes place and, crucially, whether it meets the sustainable development test.

There are many cases in my constituency that illustrate not only the ways in which people currently feel disengaged from the planning system, but the great potential in communities when they get organised. A great number of my constituents have contacted me about large housing developments proposed near Birds Marsh woods and the Avon floodplain in Chippenham. They have emphasised the importance of preserving the countryside around the edge of the town, and many have expressed their frustration at their apparent inability to affect the decisions being made. One lady made the point that,

“the voice of ordinary residents does not seem to be heard, and decisions are made by people for whom this is not their home”.

Similarly, the expansion of an edge-of-town Sainsbury’s superstore has recently been approved by the council, leading to the resignation in dismay of the chair of the Chippenham Vision group.

Earlier this month, I asked the Minister with responsibility for decentralisation what advice he would give to councils that face such developer interest in out-of-town sites. He assured me that the “town centre first” policy remains firm, but that development in Chippenham would suggest otherwise, as Wiltshire council felt free to ignore it. There will be no public confidence in a "take it or leave it" attitude to planning policy, with some councils proceeding with development that is neither sustainable nor what local people want, for fear of paying for expensive appeals by developers.

[Glyn Davies (Montgomeryshire) (Con)]

I intend to speak on much the same issue later in respect of wind farms. Does the hon. Gentleman take the view that when the Government impose massive development on an area where the people simply do not want it, it poses a huge threat to people’s faith in democracy?

[Duncan Hames]

The imposition of development plans that are not owned by the local community was exactly what we had in the regional spatial strategies—the grand regional plans left to us by the previous Government —and I applaud this Government for abandoning them. The RSS in the south-west of England never actually took legal force, and I am glad that it will never do so. It is important that people feel that decisions are made locally and democratically.

In Wiltshire, the council has not yet adopted its core strategy—its local plan—and we of course await the final version of the national planning policy framework in the spring. In the interim, our system is not robust enough to balance the competing interests in the planning process, and development too often seems inevitably set to proceed.

[Jeremy Corbyn]

For the hon. Gentleman’s information, I was born in Chippenham, thus I have an interest in it. I applaud what he is trying to do. Out-of-town developments not only disfigure beautiful landscapes in a beautiful area; they also create vastly increased traffic and environmental consequences for everyone else, as well as a complete hollowing out and destruction of the town centre, which becomes the home for charity shops and banks—and very little else.

[Duncan Hames]

I completely agree with the hon. Gentleman, and I am delighted to learn of his interest in Chippenham. In fact, it was that very concern about the hollowing out of the town centre that prompted the resignation last week of the chair of the Chippenham Vision group, who had sought, in a voluntary capacity, to work with different parts of the community to build a vision for the future of our town centre. However, that was fundamentally undermined by the decision to grant a dramatic increase in the retail floor space of an edge-of-town superstore, which will no doubt be expanding into non-food items, threatening the businesses in our town centre, to which I shall return later.

Given the Government’s new presumption in favour of sustainable development, and given the record of other councils in agreeing permissions on unallocated “white land”, which does not benefit from the protections in the draft framework, I see a need for robust mechanisms to ensure the rigorous application of that presumption according to clear tests. I was encouraged by a recent response that I received from the Under-Secretary of State, Baroness Hanham, who, without pre-empting the consultation responses, acknowledged that the meaning of “sustainable development”, as well as its application, was an area where the Government needed to look again more closely in the consultation. I would suggest that a crucial part of any mechanism for deciding whether an application qualifies for that presumption should be input from the local community. The question should not end up being decided in the courts through case law, or by planning inspectors. If that happens, the Government will not achieve their objective of greater localism.

Instead, I suggest that we should look to the examples offered by communities in Wiltshire that are working with the Government’s framework for neighbourhood plans in the Localism Act 2011. Woolley, in Bradford-on-Avon, and Malmesbury, in north Wiltshire, are two communities that are seizing this opportunity. In their impressive document, “Plan for Woolley 2026”, residents have come together in an entirely voluntary capacity as Friends of Woolley to draw up a framework for Woolley’s physical, community and economic development for the next 25 years. Meanwhile in Malmesbury, Councillor Simon Killane is spearheading the neighbourhood planning pilot scheme. That includes a neighbourhood forum, which will bring residents and community organisations to meet potential developers to discuss their plans and what they might mean for the local community and the infrastructure it needs. Those plans will be assessed against the neighbourhood plan, based on residents’ own aspirations and ratified by a local referendum.

I was pleased to read Baroness Hanham’s assurance that such neighbourhood plans will have to be “given a fair hearing” against other local authority plans or, indeed, the national planning policy framework. The 2011 Act gives neighbourhood plans statutory force. As she points out, such plans will have to be

“in general conformity with strategic policies in the local plan”.

However, the word “general” is very important. It reminds me of the old planning policy statement 12, whose definition stated that

“the test is of general conformity and not conformity.”

That means that it should be possible for a neighbourhood plan to conflict with land allocations in existing core strategies or local plans, as long as the general aims of development can be achieved, perhaps by bringing different land into use. The Government need to be clear about what “sustainable development” is taken to mean in that context. In my view, sustainability encompasses the impact of development on carbon emissions, travel-to-work journeys, the conservation of wildlife and the preservation of our countryside.

I would not oppose housing development, but I believe that local plans need to propose development that accommodates the needs of the local population and the understood demographic changes that are envisaged, and not be about accommodating outflow or overflow from other towns. To do so would be to allow a council’s settlements to become dormitories, which is something that we are vigorously fighting against in Wiltshire. Members should be aware that the Select Committee on Communities and Local Government is due to publish its report on the draft national planning policy framework tomorrow. I look forward to reading its recommendations and contributing to further debates on this subject, so that we might harness the power of genuinely local decision making in our planning system.

Banking Commission Report

Duncan Hames Excerpts

Monday 19th December 2011 Commons Chamber

[Mr Osborne]

If the hon. Gentleman examines what the Government and I have done over the past 18 months, he will see that we want proper regulation that works, enabling consumers to make choices and market forces to operate where appropriate while protecting the British taxpayer, with the Government stepping in where necessary. The report that we commissioned from John Vickers sets out a very important point about the regulation of bank structure that the previous Government did not examine. It represents a significant advance by this Government.

[Duncan Hames (Chippenham) (LD)]

The public are impatient for reform and proper regulation of our banks, so I applaud the Chancellor’s dexterity in separating the timing of the loss absorbency requirements from that of the requirements for increased competition and the introduction of a ring fence on high street banking. Having decided to introduce that ring fence, what is preventing him from doing so before 2015?

[Mr Osborne]

We have made a clear commitment—Sir John Vickers set the back-stop at 2019, but we have said that we want the legislation to go through by 2015. My hon. Friend has to appreciate, and I am sure he does, that it is about passing not just the primary legislation but the secondary legislation through Parliament. That is a very complex matter, because we do not want the banks to find a way around secondary legislation and we do not want to come up with rules that turn out to be full of holes. It is detailed, technical work, but we are absolutely determined to do it and have given ourselves a clear timetable for delivering it.

Arch Cru Compensation Scheme

Duncan Hames Excerpts

Wednesday 19th October 2011 Westminster Hall

[Alun Cairns]

I am grateful for that valid point. Clearly, IFAs cannot be excluded from all responsibility, but we need to bear in mind the context in which they are working. If they are looking at the strategy and pricing of a fund classified as cautious managed, we need to recognise the context in which that advice is being given. Therefore, the failure of the FSA to set the right context in which an IFA can make recommendations is fundamental to the issue.

There is another conflict. The FSA regulates the authorised corporate directors and Capita acts as the authorised corporate director for more than 300 firms. Taking action against Capita could create difficulties, leading to panic in the marketplace. The FSA has powers under section 166 of the Financial Service and Markets Act 2000 to instigate an independent investigation into organisations that take such responsibilities. Will the Minister tell us whether any such action has been taken by the FSA?

The Arch Cru affair is a minefield of accusation and counter-claim. My hon. Friend the Member for Hexham (Guy Opperman) referred to the Serious Fraud Office. I was alarmed to discover that two of the three main directors or partners who established the Arch Cru funds—Robin Farrel1 and Robert Addison—are still operating, albeit under a new name of Arch Global. Allegations have been made to the Serious Fraud Office about how Arch funds were invested in a property company with common directors. Student accommodation was bought on the open market at one price, only to be sold to the Arch investors shortly afterwards for an inflated sum. I have no knowledge of whether or not those points are true, but they clearly need to be investigated.

As for compensation issues, the auditors and the Guernsey Financial Services Commission certainly need to be pursued by some authority, be it the FSA, the Minister or other parties.

Finally, in view of the FSA’s actions and the associated conflicts, I am troubled that section 404 of the 2000 Act can bind the financial services ombudsman to the FSA’s judgment on the level of compensation. The FSA has made its view of the 70% figure quite obvious in its statement. Therefore, even if investors seek to make a claim involving the financial services ombudsman, or if they follow other routes, the FSA can limit the compensation to 70% at a later stage.

[Duncan Hames (Chippenham) (LD)]

Clearly, my constituents will wonder what the point of a financial services ombudsman is if they cannot seek redress through it to get a better deal than Capita is already offering.

[Alun Cairns]

I am grateful to the hon. Gentleman. He underlines the power of the FSA to limit compensation, rather than to uncover and to provide just compensation for people who have been ill-advised and ill-treated throughout this whole process.

These issues need to be reconsidered in an equitable way and without conflict.

--- Later in debate ---

[Duncan Hames (Chippenham) (LD)]

I shall certainly be brief, Mr Owen, as I, too, look forward to the Minister’s speech about cleaning up the mess of financial scandals that arose long before he took office. I am not alone; it is worth reiterating that we have heard this morning from MPs from six political parties, and 5% of all MPs have turned up for a debate lasting only 90 minutes, knowing full well that barely a fifth of them would get to make speeches. My first point to Capita and all the bodies involved is that there is a lot of interest in this House and that their reputation in all parts of the United Kingdom is therefore at stake. I hope that they do not wish their companies to become the household names that others have in disputes that this House has unfortunately had to deal with.

Officials in the building across the road will have urged the Minister to bat questions away to the Financial Services Authority, and will have suggested that he speak of the FSA’s independence and of how this matter is for that authority and not for the Government. Our collective presence here this morning will have made it clear to him that the public interest is too strong to accept that. In addition to the complaints about the companies involved, many of our constituents are asking: who regulates the regulators? They do not trust the regulators’ handling of the matter. This morning, we have come here with reasonable questions that have not been answered in our correspondence with the FSA on constituents’ behalf. How did the FSA authorise the fund in the first place? Why did it not respond sooner to the informed criticism of experienced fund managers? Does the scope of the FSA’s investigation extend to questions about its own conduct, and does the review team have the independence to do that effectively? Even clearer are our constituents’ concerns about how the payment deal is being agreed, and about how the FSA is able to bind the Financial Ombudsman Service so securely to Capita’s proposals.

When such questions are being raised about the regulator, it falls to the Minister to reassure Members that he is totally on top of their concerns. I hope that he addresses the plea for a full inquiry that has been made across the House this morning, and I look forward to him throwing his weight behind the demands for a section 14 inquiry.

Jobs and Growth

Duncan Hames Excerpts

Wednesday 12th October 2011 Commons Chamber

[Ed Balls]

Our constituents are seeing growth in VAT and in unemployment as well. The only thing that they are not seeing is growth in growth.

The markets are not the real reason why the Chancellor is determined to cling on to his failing economic policy. There are two obstacles in his way. The first is the coalition agreement. We know how desperate the Chief Secretary and the Deputy Prime Minister are for the Chancellor to stick to the deficit reduction plan, because they steamrollered their colleagues into signing up to a manifesto that explicitly rejected it. The Liberal Democrats’ manifesto stated:

“If spending is cut too soon, it would undermine the much-needed recovery and cost jobs.”

They were right, which is why there are so few of them here for this debate. They all know that their leaders graphically predicted before the election the very calamity that has happened after the election. The fact is, any successful coalition has to have the flexibility to change course when things go wrong.

“When the facts change, I change my mind. What do you do?”

Wise words from Lord Keynes, and he was a Liberal. He must listen to the current incoherent, confused and contradictory ramblings of the Business Secretary and turn in his grave.

[Duncan Hames (Chippenham) (LD)]

The shadow Chancellor is certainly showing flexibility in concluding that in time, it would be acceptable for VAT to reach 20%. When did he reach that decision, and will he be able to persuade his colleagues, whom we know are so adamantly against VAT at 20%?

[Ed Balls]

When I became shadow Chancellor six months ago, I said that I could not responsibly come along here and make commitments on what would be in our manifesto in four years’ time. What I can do is give the Chancellor good advice, and a temporary cut now is the right thing for growth and jobs in our economy.

It is not just Labour Members who support me on this. Listen to the former Liberal Democrat leader, the right hon. Member for Ross, Skye and Lochaber (Mr Kennedy), who said on “Question Time” last Thursday that he was

“more at the Ed Balls end of the argument than the George Osborne end of the argument.”

In saying that—Superman will like this—he joined me and the Mayor of London, Boris Johnson, in urging a change of course. Charles Kennedy, Boris Johnson and me—now that would be a coalition.

It is clear that the plan is not working. The markets know it, and so, increasingly, do the Chancellor’s coalition colleagues, but there is a second reason why this very political Chancellor will not budge. The clue was in the Prime Minister’s speech last week in Manchester. What did he say of the Chancellor? How did he describe his closest political friend? As “the man who would be king”. It was a very strange choice of book, because it is the story of two fantasists who end up stripped, beaten, tortured and forced to beg for their lives. That is some people’s idea of a good night out, but the idea that the Prime Minister should say that of the Chancellor is somewhat odd.

Anyway, there we are—“the man who would be king”. It was not in the printed text of the Prime Minister’s speech but was another slip from him. However, it is so revealing, because those words show why the Chancellor just cannot admit that he has got it wrong, even at a time when, at the weekend, The Sunday Times doubted his judgment. To change course now would be to admit that the Chancellor has got the key economic judgment of this Parliament wrong, and that would be a terrible blow to his ambitions. We therefore see him putting politics before the national economic interest.

Ploughing on with a failing policy is not leadership; it is the antithesis of leadership. It is not the making of King George; it is the madness of King George. A Chancellor without the strength to change his mind is a King Canute Chancellor, who says that he will stay the waves even as the tide turns before him. A man who would be king? He is a Chancellor exposed naked before the crowd, an emperor with no clothes, a Chancellor heading for a fall. I give him some good advice. For his sake, for his party’s sake and in the national interest, he needs to change course and do so quickly. It could be the making of the man.

In the face of the new global slowdown, we desperately need the Chancellor to rise above the here and now and see the need to change course, have a plan for growth and jobs, kick-start our economy and get us out of the slow lane. We need a balanced and credible plan on jobs, growth and the deficit, and action now before it is too late—Labour’s five-point plan for jobs and growth. I commend the motion to the House.