Amendment of the Law
Debate between Ed Balls and Brian Binley(9 years, 7 months ago)
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Ed Balls
People say that empty vessels make the loudest noise. I will set out clearly our approach to deficit reduction, but before I do let us go back to the ineffective right-hand man, who apparently is now standing in front of Downing street holding a yellow Budget box—less reality, more “Midsummer Night’s Dream”. What a shambles! Yesterday we had the Budget, today we had the farce of the alternative Budget from the Chief Secretary, the Liberal Democrats’ new economic spokesman, and now, with the Business Secretary shortly to come to the Dispatch Box, I presume we are to get the alternative alternative Budget from the man the Chief Secretary displaced from the job.
One has to feel sorry for the Business Secretary. He lost a job and still has to turn up to give the speech, sitting there beside one of his Treasury nemeses, with the other outside Downing street. Another Shakespeare quote comes to mind:
“Misery acquaints a man with strange bedfellows.”
How true. Let us not forget that the Business Secretary and the Chief Secretary served with the Chancellor in the Cabinet for five years. Together all three of them voted to put up VAT. The Liberal Democrats voted with the Tories to raise tuition fees to £9,000. They voted with the Tories for the hated and iniquitous bedroom tax. The fault is not in their stars, but in themselves, and the British people will not let them forget it.
Mr Brian Binley (Northampton South) (Con)
Will this ploy of much ado about nothing delivered in a tempest form continue for the whole of the right hon. Gentleman’s soliloquy, or will he come to some points of import shortly?
Jobs and Growth
Debate between Ed Balls and Brian Binley(12 years, 5 months ago)
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Ed Balls
The hon. Gentleman might need to go back to the drawing board because the Institute for Fiscal Studies has shown that last month’s measures will, as a result of cuts to tax credits, mean tax rises for the average family with children in his constituency—and that is even before taking the rise in VAT into account and it does take the personal allowance rises into account. The fact is that taxes have gone up for low-income families, they are going up for the middle classes, and it is only the highest earners in the hon. Gentleman’s constituency that are getting the tax cuts.
Mr Brian Binley (Northampton South) (Con)
Is it not true—the shadow Chancellor is a straightforward man—that the previous Government set out a trap for this Government, not really wishing for a rise to 50%, but carrying it out just before the last election in a crude attempt to catch this Government out?
Ed Balls
I am always a close student of the hon. Gentleman, and I noted that he did not advocate the reversal of the 50p rate as the right thing to do, so I am not sure what his constituents thought about that. I recently read some of his other remarks. In March, for example, the hon. Gentleman said:
“The Chancellor has been consistently advised of the importance of macro-measures to stimulate growth in the private sector. So why are these not being implemented?”
Why, indeed? He continued by saying that the Prime Minister
“needs to wake up and smell the coffee. This is a major setback for the Conservative party.”
That is quite right.
Ed Balls
The right thing to do after the financial crisis was to do things in a fair way. That is why the 50p tax rate was right at the time. The reason why the Budget has gone down so badly is that lowering the 50p rate was seen as so unfair. The hon. Gentleman was right just a few days ago when he said in his blog that the Government have a communication problem and are over-confident. He said:
“The manner in which Downing Street fires out policies and expects us to agree and applaud without question certainly smacks of a sense of superiority.”
Quite right again—a very interesting remark.
Financial Services Bill
Debate between Ed Balls and Brian Binley(12 years, 9 months ago)
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Ed Balls
The Chancellor does not listen. He wants to play this game so much that he does not hear. I agree with the increase in his powers. He is right to take them, but he cannot use them unless the Governor comes to him and says, “I fear a crisis may be building,” having made a judgment about moral hazard outwith the views of the heads of the PRA, the FCA and the FPC.
In the structure set out in the Bill, the statutory office holders will be formally kept out of the room under the Chancellor’s own memorandum of understanding, which is foolish. I understand why it has happened—it will be easier to negotiate. In all the years when previous Chancellors wanted clarity, it was hard to negotiate. However, negotiating the wrong clarity in a way that keeps information away from the Chancellor is not stabilising and in the public interest but destabilising, opaque and against the public interest. The Chancellor should take some advice from people who have seen that not working and ensure that he hears the views of the people to whom he is giving statutory responsibility in the Bill. That is my very strong advice, and I hope he will listen to it.
Mr Brian Binley (Northampton South) (Con)
The shadow Chancellor is telling us something illuminating—that if a Chancellor does not want to listen, no system will have any impact at all. Under the last Government, siren voices started in 2002, and the then Chancellor refused to listen. We had a systemic deficit problem, and again he did not want to listen. The shadow Chancellor has been through all this, so would he advise the current Chancellor to listen more than the last Chancellor did during the crisis?
Ed Balls
My very clear advice to the Chancellor is that when he gives people a clear statutory responsibility for a particular function and legislates for three deputy governors who are the heads of individual agencies, he should also design his crisis resolution and decision-making procedures so that his experts are in the room and he can hear the array of their views. The idea that it is better for the Chancellor to require the Bank to resolve such issues internally and come to him with one voice—one Governor, one decision maker—is a flawed structure of regulation. The point, however, is that that is not what the Bill intends. It intends for the FCA and PRA to be important institutions, in which case the Chancellor should get them in the room.
Amendment of the Law
Debate between Ed Balls and Brian Binley(13 years, 7 months ago)
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Ed Balls
It is a bit rich to have a lecture from the hon. Gentleman, who used to say that the national minimum wage would cost millions of jobs. We, unlike Members on the Government Benches, do not think unemployment is a price worth paying.
The Chancellor is going too far and too fast, and we are paying the price in lost jobs and lost growth. That is because a vicious circle is now taking hold in our economy. If the economy is not growing and hundreds of thousands of people lose their jobs, then fewer people pay tax, more people claim benefits and it is harder to get the deficit down. By cutting too far and too fast, the Chancellor is not solving the problem, he is making it worse. That was why yesterday, we heard from the OBR that growth had been downgraded for last year, this year and next year; that unemployment was forecast to be higher in every year of the forecast period; and that up to 200,000 more people would be unemployed than the Chancellor said last summer. Our borrowing was coming in £20 billion lower, but the Chancellor has now been forced to revise up his borrowing over the next four years by £45 billion.
The Chancellor said yesterday that he would put fuel in the tank of the British economy. Is not the truth that, as a result of his Budget, it is confidence in the British economy that is now tanking, and he who is running out of fuel?
Mr Brian Binley (Northampton South) (Con)
May I remind the right hon. Gentleman that in the mid-1990s my constituency was 440th in the jobseeker’s allowance list, but that by 2010 it was 132nd? Why should my constituents believe him having seen that record of unemployment under Labour?
Ed Balls
Because a year ago unemployment was falling, and now it is rising. [Interruption.] The Chancellor sits on the Front Bench and says, “This is so bad.” Does he mean growth being downgraded? Unemployment going up? I will take his intervention at any point he wants, but if he does not want to make interventions from the Dispatch Box, maybe he should not be doing it from a sedentary position. [Interruption.] If he wants to intervene, I will allow him. I have made my pledge.
None of what I am saying will come as any surprise to the Secretary of State for Business, Innovation and Skills. He warned of it a year ago. In fact, I remember standing with him on the green on Budget day a year ago, and he said:
“We must not cut Government spending too soon and risk plunging a fragile recovery back into recession. Cuts without economic growth will not deal with the deficit”.
Wise words, and how right he has proved to be. Even after the election, and even after his colleagues decided to bury their worries and go along with immediate spending cuts and a VAT rise, the Business Secretary was still warning of the risks to come. He said on “Newsnight” last May, after the general election, that the speed of the cuts had to be based on the condition of the economy. He said:
“These things will have to be judged at the time of the Budget, and of course I don’t present the Budget personally but I’ll make an input into it.”
He went on:
“Over the course of this Parliament judgments about the speed of cuts have got to take account of the changing conditions that are coming, and that is basic economic policy based on evidence, which is what I’m in favour of…We don’t know what the impact of these cuts will be on employment.”
Wise words again, and he was right. The cuts are too fast and too deep, confidence is tanking and unemployment is up. This Budget was the time to change course, before it was too late. Sadly, the Business Secretary has not been heard.