Tax Avoidance (HSBC)

Debate between Ed Balls and John Bercow

Monday 23rd February 2015 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

(Urgent Question): To ask the Chancellor of the Exchequer if he will make a statement about the HSBC tax evasion scandal.

[Mr Speaker]

Order. I do not wish to be pedantic, simply accurate, but I think the wording of the urgent question was “avoidance”—the tax avoidance scandal. The point is on the record.

[The Chancellor of the Exchequer (Mr George Osborne)]

The allegations about tax evasion at HSBC Swiss are extremely serious and have been the subject of extensive investigation by Her Majesty’s Revenue and Customs. Money has been recovered for the Exchequer, and HMRC continues to be in active discussion with our prosecuting authorities. The chief executive of HMRC and the Director of Public Prosecutions have confirmed that they have the necessary resources to carry out their work on this matter, and if they need more resources they will get them.

The House should know, however, that in each and every case the alleged tax evasion—both by individuals and the bank—happened before 2006 when the shadow Chancellor was the principal adviser on tax policy and economic affairs to the then Labour Government. News that the French had got hold of the files with the names of the bank accounts became publicly known in 2009 when the shadow Chancellor was sitting on the Government Benches, and the files were requested and recovered by HMRC before May 2010, when he was a member of the Cabinet.

The right hon. Gentleman has written to ask me five questions about my responsibilities. I will answer each one directly, and in return he can account for his own responsibilities. He asked about what he calls the selective prosecution policy pursued by HMRC, and whether that decision was made by Ministers. Yes, that decision was made by Ministers, and the Inland Revenue’s overall approach to prosecuting cases of suspected serious tax fraud was set out in the Official Report on 7 November 2002, column 784W, in an answer by the then Chancellor of the Exchequer, the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown). That was confirmed again when HMRC was created in 2005—again by the right hon. Gentleman. I have increased resources for tackling tax evasion, and as a result prosecutions are up fivefold. I have answered for my responsibility on that question; perhaps the right hon. Member for Morley and Outwood (Ed Balls) will answer for his and tell us whether he drafted that policy.

Secondly, the right hon. Gentleman asked when I was first made aware of the HSBC files, what action I took, and whether I discussed them with the Prime Minister. I first became aware of the existence of the files in 2009 when a story appeared in the Financial Times. I was shadow Chancellor at the time so I could take no action, and I could not discuss it with the then Prime Minister because I was not on speaking terms with him. That is what I knew. The right hon. Member for Morley and Outwood was a Cabinet Minister. When he heard about these revelations, did he speak to the Prime Minister about them?

Thirdly, the right hon. Member for Morley and Outwood asked why we appointed Stephen Green to the Government. We appointed him because we thought he would do a good job as trade Minister, as did the Labour party, which welcomed the appointment. The trade job was not Stephen Green’s first public appointment. That was when he was appointed by the previous Government to be not just a member of the Prime Minister’s business council but its chair—a post he continued to hold after the existence of the HSBC files became public and after HMRC negotiated to recover them under the previous Government. I have explained why we appointed Stephen Green. Perhaps the right hon. Member for Morley and Outwood will explain why he appointed Stephen Green.

Fourthly, the right hon. Gentleman asked about discussions with Stephen Green on tax evasion. I can confirm that the Cabinet Secretary and the director general of ethics at the Cabinet Office carried out the background checks for ministerial appointments that were put in place by the previous Government. Stephen Green’s personal tax affairs were examined by HMRC on behalf of the House of Lords Appointments Commission, again using the procedures put in place by the previous Government. Those are the procedures we followed when we appointed Stephen Green. What procedures did the right hon. Gentleman follow?

Finally, the right hon. Gentleman asked me why I signed a deal with the Swiss authorities in 2012. He does not need my explanation. Listen to what the shadow Chief Secretary at the time, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), said:

“We support the agreement signed by the UK and Swiss Governments to secure billions in unpaid tax.”––[Official Report, Finance Public Bill Committee, 26 June 2012; c. 655.]

She is right: billions of unpaid tax never collected under a Labour Government. Under this Government, tax evasion is at the top of the G8 agenda. We have collected more money and prosecutions have increased five times over. Ahead of the Budget, I set the Treasury to work on providing further ways to pursue not just the tax evaders, but those providing them with advice. So anyone involved in tax evasion, whatever your role, this Government are coming after you. Unlike the previous Government, who simply turned a blind eye, this Government are taking action now and will do so again at the Budget. So I am happy, any time, to answer for our record on tackling tax evasion. Now, let him account for his.

--- Later in debate ---

[Mr Speaker]

Order. These exchanges are not, frankly, to the advantage of this House. They will be conducted in a more decorous atmosphere. I say to Members on both sides who are calculatedly trying to whip it up and are shouting at the tops of their voices, some holding very senior positions in this House: cut it out or get out.

[Ed Balls]

We know when they shout that it is because they have something to hide, Mr Speaker. That is the truth.

First, let me ask the Chancellor about what he knew and when. Two weeks ago, Downing street announced that no Minister found out about the HSBC issues until two-and-a-half weeks ago. At the weekend, the Chancellor said that he should not be involved in the tax dealings of any individual bank. Today, he has told us he knew in 2009. If he knew about systemic abuse on this scale in 2009, why did he not act when he became Chancellor? That is the first question.

Secondly, given that the Chancellor says he knew about this in 2009, why, five years on, has there been only one prosecution after the provision of 1,100 names? We know that in November 2012 HMRC confirmed that the Government had adopted a selective prosecution policy. Let me ask the Chancellor: given he knew what was happening at HSBC, did he confirm he wanted a selective prosecution policy in these cases?

Thirdly, why in 2012 did the Chancellor sign a deal with the Swiss authorities that has prevented the UK from actively obtaining similar information in the future? The agreement states that the UK and Swiss Governments will

“not actively seek to acquire customer data stolen from Swiss banks”.

Why sign up to a declaration that clearly impedes HMRC’s and the Government’s ability to act in the future? Two weeks ago, they told us it was because they did not know, but we now know that the Chancellor has known for six years. Why did he sign that deal?

Fourthly, if the Chancellor and the Prime Minister knew what was happening at HSBC in 2009, why, one month after the Government received these files, did they appoint the chair of HSBC during the period in question as a Conservative peer and Minister? What due diligence did the Government carry out in advance, and did the Prime Minister and the Chancellor see the details? Fifthly, did Lord Green have any involvement in the Swiss tax deal when he was a trade Minister? Did he ever advise the Treasury on it? Did the Chancellor discuss what happened at HSBC with Lord Green in the almost three years he was a Conservative Minister? Two weeks ago, the Prime Minister was unable to answer that question. Did the Chancellor discuss the Swiss deal and those past events at HSBC with Lord Green, who was appointed as a Minister after this scandal came to light?

It is not good enough for the Chancellor to shout and bluster, and to try and sweep these questions under the carpet and claim he did not ask the questions. Since the Government were given the files, he has been the Chancellor for five years. Is it not clear either that he and the Prime Minister were negligent in failing to act on the evidence the Government received, including about HSBC and Lord Green, or, just as with the appointment of Mr Coulson, that they deliberately turned a blind eye?

Autumn Statement

Debate between Ed Balls and John Bercow

Wednesday 3rd December 2014 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The House has not yet seen the detailed—[Interruption.]

[Mr Speaker]

Order. I made it clear that the Chancellor must be heard with courtesy and the same goes for the shadow Chancellor—[Interruption.] Order. I am grateful, Mr Robertson, for your intended helpful gesticulation. I am well aware of the old ruse of people sitting below the Gangway where they think I cannot see them and yelling their heads off, either on their own initiative or because they are rather stupidly following instructions. Either way, it does not work. They should pipe down, and if they will not pipe down, it is very simple—three words that are easily understood: “Leave the Chamber.”

[Ed Balls]

As I was saying, the House has not yet seen the detailed documents from the Treasury and the Office for Budget Responsibility tables—I am sure that they will arrive shortly—but I listened carefully to the Chancellor’s statement. To establish the facts, I want to start by asking him questions about issues that are vital to our country’s future: living standards and wages; tax receipts and borrowing; growth and immigration; taxation; and the national health service.

First, on living standards—[Interruption.] These questions about living standards, wages and tax receipts are important, so I advise Conservative Members to listen to them carefully, and then we will hear the answers.

Wages have not kept pace with prices for 52 of the past 53 months. Today’s OBR forecasts confirm that wage growth is once again weaker than expected. Working people are now £1,600 a year worse off than in 2010. Someone in full-time work is now £2,000 a year worse off. For working people, there is a cost of living crisis, and the squeeze on living standards not only is hitting family budgets, but has led to a shortfall in tax revenues. The OBR confirms that stagnant wages and low-paid employment have hit revenues, saying that

“weaker-than-expected wage growth so far in 2014-15”

is

“depressing PAYE and NIC receipts.”

Does the Chancellor agree with the OBR’s analysis? Will he tell us how much tax revenue has been lost this year because of stagnating wages and forced part-time employment?

The result of that shortfall in tax revenues is that, once again, the Chancellor has had to revise up his forecasts for Government borrowing. He told the House today that the deficit for this fiscal year is now expected to be £91.3 billion—[Interruption.]

[Mr Speaker]

Order. Mr Opperman, you are normally a well-behaved young boy. Try to be a good boy. If you can be a good boy, you can stay; if you cannot restrain yourself, leave the Chamber. Go and have a cup of tea; take a pill—whatever is necessary.

[Ed Balls]

I am trying to establish the facts about the deficit from the Chancellor. He told the House that the deficit for this fiscal year is now expected to be £91.3 billion, but he did not set out in detail how much worse things are since the Budget. Will he tell the House by how much borrowing this year has been revised up compared with his Budget forecast?

Back in 2010, the Chancellor and the Prime Minister pledged to balance the budget by the end of this Parliament and that we would see the national debt falling this year. The Prime Minister said in 2010:

“In five years’ time, we will have balanced the books.”

Today the Chancellor has, I believe, announced that the deficit next year is forecast to be £75.9 billion. Will he confirm that number and the fact that the national debt next year is forecast not to fall, but to rise? While he has clearly missed his targets, he did not tell us the scale by which he has missed them. How much more will he have borrowed in this Parliament than he planned back in 2010?

Wages, income and borrowing have been hit so hard because productivity growth has been so weak. Today the Chancellor announced that he is forecasting that growth will not accelerate but—[Interruption.] The Prime Minister’s Parliamentary Private Secretary will be interested to know that the Chancellor forecasts that growth next year will slow down. I know that the Chancellor wants to blame poor growth performance and poor productivity growth on the eurozone. I share the concerns about the eurozone—we need a plan for stronger growth in Germany and across the continent—but the weakness of the eurozone cannot explain why, despite the notable successes of a number of our companies, our export performance has been so poor, and so much worse than that of other eurozone countries. Since 2010, our export performance has been 16th in the G20. In the EU, we have been 22nd out of 28 countries; three quarters of EU countries have done better than us.

Business investment, which has also lagged behind that of our competitors, fell in the last quarter. Bank lending to small businesses is falling. The number of apprenticeships for young people is falling this year. House building under this Government is at its lowest level since the ’20s. On infrastructure, for all the Chancellor’s preheated re-announcements, barely a fifth of projects are in construction, and infrastructure output is down over 11% since 2010.

On business rates, the research and development tax credit and air passenger duty, we welcome the action that the Chancellor has taken. We will support what he has proposed on APD, but let me ask him—[Interruption.]

--- Later in debate ---

[Mr Speaker]

Order. There is far too much noise in the Chamber. Mr Opperman, I have told you three times, and I do not want to have to tell you again: be quiet, sit and listen. If you do not wish to do so, get out. The same goes for the Government’s Deputy Chief Whip, the right hon. Member for Chelsea and Fulham (Greg Hands); I have been looking at and listening to him. Let me make it clear to him that he ought to know better. Behave or get out, man.

[Ed Balls]

We’ll get him out next year, Mr Speaker.

I would like to ask the Chancellor about the air passenger duty proposal. We will support what he has proposed, but following the Smith commission proposal to devolve air passenger duty to Scotland, will the Chancellor urgently lead work across Government, with the Scottish Government, on a mechanism to ensure that English airports, particularly in the north of England, are not disadvantaged by that devolution?

On business rates, while the review is welcome, it will not report, I believe, until 2016. Why can the Chancellor not take immediate action and adopt our plan to cut business rates for small companies? Why will he not increase the bank levy now and increase free child care for working people? Why will he not properly capitalise the business investment bank? Why will he not raise, as a proportion of earnings, the national minimum wage? Why will he not repeat the bank bonus tax and guarantee a compulsory job for all people? On regional devolution, why will he not devolve full growth in business rates to all city and county regions, to give them real control? We need a real plan for good jobs and more balanced growth.

On the subject of growth, the figures that the Chancellor announced reveal that growth has been revised downwards in 2016 from 2.6% to 2.2%, in 2017 from 2.6% to 2.4%, and in 2018 from 2.7% to 2.3%. Why is growth being revised downwards year after year? This is an interesting fact from the OBR: if our economy grew by just 0.5% a year faster than forecast, Government borrowing would come in more than £32 billion lower in the next Parliament. Does the Chancellor not see that those downgrades to growth are bad news? Without decisive action to sustain growth and raise living standards, and without a recovery for the many, not the few, he will carry on missing his deficit targets year after year.

Let me ask the Chancellor about another missed target. Over the past 12 months, net migration to the United Kingdom has been 260,000 people. Can he tell the House—this will be an interesting question to many Back Benchers in all parts of the House—the OBR estimate for net migration over the next 12 months that underpins the growth and public finance forecasts? It seems highly unlikely that it will be anywhere near the Prime Minister’s forecast, which is for tens of thousands. Will it be over 100,000 next year? Over 150,000? Over 200,000? This time, did the Chancellor remember to tell the Prime Minister the facts?

Turning to spending and taxation, the Prime Minister claimed in The Times a month ago that 80% of the planned spending cuts had been made. The Institute for Fiscal Studies says that it is less than 50%. Can the Chancellor clarify who is right and who is wrong? He claims that in the next Parliament he can cut welfare spending by over £10 billion, but in this Parliament, spending on social security is over £20 billion higher than he planned in 2010 because of what happened to housing benefit in particular. He is planning a £3 billion real-terms cut in tax credits that will hit 3 million working people on middle and lower incomes, and once again he is hitting women harder than men.

The Prime Minister rather let the cat out of the bag earlier when he referred to “masosadism”. As I understand it, masosadism is when someone enjoys having pain inflicted on them and enjoys inflicting pain on other people. We know the Chancellor’s views on the first; it seems, from the way he smiled when he announced the tax credits cuts, that he is rather enjoying the second as well. How can it be fair to hit working people with a £3 billion cut to their tax credits when he has spent £3 billion giving a tax cut to people earning over £150,000?

When families are paying £450 more in higher VAT, does the Chancellor really think that people will fall for the Prime Minister’s latest promise of a £7 billion unfunded tax cut in the next Parliament, which even the Business Secretary has called a “fantasy”? Two months on, the Chancellor gave us no details at all of where he will get the money from—not a single penny. Is he planning to pay for that with a further rise in VAT? He said at the weekend that he has no plans to raise VAT. That is what he said before the last general election, and then he raised it after the election. He should stand at the Dispatch Box today and promise that he will not raise VAT again for families and pensioners.

On the national health service, we welcome the Chancellor’s belated recognition that there is a funding crisis. Everyone knows—other than the Prime Minister, it seems—that our health service is going backwards. Accident and emergency department waiting times and GP waiting times are going up, thanks to the Government’s £3 billion reckless reorganisation. The Chancellor announced £2 billion for, he said, every year into the future—paid, it seems, by an underspend every year into the future. I have never heard of a prospective forecast of an underspend being made in quite that way. Will he confirm that that is £2 billion a year for the national health service over a flat, real baseline? We need to know the answer to that one. It seems that the Chancellor has also confirmed that £700 million of the crisis cash is a re-announcement of a re-allocation from within the existing Department of Health budget.

In the Chancellor’s stamp duty reforms, he is accepting that high-value properties are under-taxed, which is welcome. But rather than taxing them only on sale, why does he not have the courage of his conviction? The average person pays 390 times more in annual council tax as a percentage of their property than the billionaire buyer of a £140 million penthouse in Hyde park. Why will the Chancellor not have an annual charge on the highest value properties and use that for a £2.5 billion a year investment in the NHS so that we can have 20,000 nurses and 8,000 GPs every year? Why will he not match that commitment? Our national health service deserves a proper funded long-term plan, not just more short-term sticking plaster.

We then heard the Chancellor’s diversionary stunt. He had to admit today that he has failed to balance the books in this Parliament. He is now trying to divert attention with a vote on balancing the books in the next Parliament. At the time of the Budget, he talked up a vote on the overall budget surplus, but I understand from reports in the Financial Times that he has done a U-turn and retreated to a vote on a current budget surplus in the next Parliament. Will he explain what is going on with that vote and the nature of the problem that he is dealing with? We want to get the current budget back into surplus as soon as possible in the next Parliament, and get the national debt falling, but the lesson of this autumn statement is that a plan to balance the books will work only if it puts good jobs, rising living standards and stronger growth at its heart.

The Chancellor’s diversionary tactics will not work. Since he sat down, I have received the Office for Budget Responsibility’s forecasts. Table 1.2 on page 15 sets out in detail how the latest forecast compares with the forecast at the time of the Budget. It gives us the numbers that the Chancellor failed to tell us in his autumn statement. I will give the country and the House those numbers. Compared with his Budget target—it is here on page 15 in table 1.2—borrowing this year has not gone down. It has been revised up by £4.9 billion. Next year it is revised up by £7.6 billion. Over two years the Chancellor has revised borrowing up by £12.5 billion.

The answer to my other question, which I did not have when I started, is that those figures mean that in this Parliament the Chancellor will have borrowed £219 billion more than he planned in 2010—£219 billion. It is all here in black and white—hard evidence from the Office for Budget Responsibility. The Chancellor’s borrowing targets are all in tatters. We all know that he has changed the way he styles his hair, but he cannot brush away the facts. People are worse off and he has failed to balance the books in this Parliament. For all his strutting, all his preening and all his claims to have fixed the economy—he promised to make people better off—working people are worse off. He promised that we were all in this together, then he cut taxes for millionaires. He promised to balance the books in this Parliament, and that commitment is now in tatters—every target missed, every test failed, every promise broken.

We need a recovery for the many, not just a few. We need to balance the books fairly. We need a long-term plan to save our NHS. That is the autumn statement that we needed. It will take a Labour Government to deliver it.

EU Budget (Surcharge)

Debate between Ed Balls and John Bercow

Monday 10th November 2014 Commons Chamber

[Ed Balls]

If this is such a good deal, why did the Chancellor not offer to make a statement? Why was he dragged to the House this afternoon? Talk about smoke and mirrors, Mr Speaker—I can barely see you through the Chancellor’s fog and bluster!

Is not the truth that the Chancellor failed to reduce our contribution by a single penny? All he is doing is simply counting the rebate that was due anyway—a rebate that was never in doubt—in an attempt to fool people into thinking that the bill has been halved. His so-called victory is nothing more than a con trick.

The Chancellor claims that the rebate was somehow in doubt, but that claim has been contradicted by everyone else. The EU Budget Commissioner was very clear when he said, on 27 October, in a statement on the backdated gross national income revisions,

“the UK will benefit from the UK rebate for the additional payments”.

On Friday, having been asked whether the rebate was in doubt, the Vice-President of the Commission replied, “No, absolutely not.”

On Friday, the Treasury was telling journalists that the Government had legal advice that the UK rebate somehow might not apply. If the legal advice exists, the Chancellor should publish it. Mr Barroso’s spokesperson, Mr Mark Gray, has directly contradicted the Treasury’s claims, saying:

“Commission position on this clear at European Council—rebate was never in doubt”.

The Conservative MEP Daniel Hannan agrees. He said—[Interruption.]

[Mr Speaker]

Order. There is far too much noise in the Chamber. I wish to hear the views of Mr Daniel Hannan. Let us hear them.

[Ed Balls]

I’ll tell you what Mr Hannan said. He said:

“it’s not credible to claim that it was ever in doubt”.

The Dutch Finance Minister said that of course this

“mechanism of the rebate will also apply”

on the new contribution:

“So it’s not as if the British have been given a discount today.”

The Austrian Finance Minister said that

“the amount cannot be put in question”,

and the Irish Finance Minister confirmed

“the UK will pay the whole amount.”

They are queuing up to contradict the Chancellor.

Let me ask the Chancellor this: can he name a single Finance Minister who is willing to go along with his desperate attempts to pull the wool over people’s eyes? And it is worse. The Financial Times reported:

“Officials involved in the closed-door negotiations between finance ministers said Mr Osborne did not complain about the overall bill.”

He didn’t even complain about the overall bill, Mr Speaker! I have here the minutes of Friday’s ECOFIN meeting: 21 pages, and not a single reference in those 21 pages to the UK rebate or the amount Britain owes being reduced.

Is it not now clear that the Chancellor totally failed to get a better deal for the taxpayer? He did not reduce Britain’s backdated bill by a single penny. The British people don’t like being taken for fools, and his attempts to fool them have totally unravelled.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Tuesday 24th June 2014 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The House and the Chancellor should know that the jury has just delivered its verdict and the Government’s former director of communications, Mr Coulson, has been found guilty of conspiracy to hack phones. Does the Chancellor now accept that it was a terrible error of judgment for—

[Mr Speaker]

Order. This may be a matter of great interest, but it does not relate to Treasury questions. [Interruption.] Well, it is not clear to me that it does, and if the question were to be judged to be in order, it would need to be clear by now. [Interruption.] I really think not. I cannot see what the relevance is to the responsibilities of the Chancellor of the Exchequer. The shadow Chancellor can try another sentence and we will see.

[Ed Balls]

Does the Chancellor accept that he has brought the office of the Chancellor and the Treasury into disrepute by urging the Prime Minister, for his own reasons, to bring Mr Coulson into government? Has the Chancellor not damaged his own reputation and that of the Government?

--- Later in debate ---

[Ed Balls]

On a point of order, Mr Speaker.

[Mr Speaker]

I apologise to the right hon. Gentleman, but points of order come after urgent questions and statements. [Interruption.] Well, that is the procedure, but I am always agog to hear the right hon. Gentleman. He can toddle back after the UQ and the statement, and I will be in the Chair to hear him. [Interruption.] I cannot have a conversation as we go along; we must have the urgent question.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Tuesday 28th January 2014 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

After three damaging years of flatlining in our economy—[Interruption.]

[Mr Speaker]

Order. Some people are slow learners, so I will say it slowly: keep calm, be patient; Government Members, you have got the man at the Box for whom you were waiting, and now you should just listen. In tennis, new balls come after the first seven games of a match and subsequently after every nine, so patience is required.

[Ed Balls]

After three damaging years of flatlining, today’s growth figures are welcome, but everything we have seen today from the Chancellor shows he just does not understand that for working people facing a cost of living crisis, this is still no recovery at all. Last week, the Chancellor and the Prime Minister tried to use dodgy figures to tell people they had never had it so good. Why will he not today admit the truth: he has failed to get the deficit down, and since he came to office, working people have been not better off, but worse off?

Autumn Statement

Debate between Ed Balls and John Bercow

Thursday 5th December 2013 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The whole country will have seen today that for all his boasts and all his breathtaking complacency—[Interruption.]

[Mr Speaker]

Order. I appeal to the House—[Interruption.] Order. I do not need any sedentary comments from either side of the House. What I said in respect of the Chancellor applies equally in respect of the shadow Chancellor. Let us have a bit of calm and a bit of order. Following the response, as usual, I will facilitate the widest possible opportunity for questioning. Let us have courtesy, please.

[Ed Balls]

The whole country will have seen today that for all his boasts and all his utterly breathtaking complacency, the Chancellor is in complete denial about the central fact defining this Government in office: under this Chancellor and this Prime Minister, for most people in our country living standards are not rising, but falling year on year.

Let me ask the Chancellor to demonstrate, because he did not mention it, that he is not completely out of touch with the cost of living crisis facing millions of people in our country. Can he confirm that, on average, working people in our country are £1,600 a year worse off than they were when the Government came into office in 2010, that prices will continue to rise faster than wages this year and into next year and that, as a result, people will be worse off in 2015 than they were in 2010? [Interruption.] Is not this the truth: after three damaging years of flatlining, after the slowest recovery for over 100 years—[Interruption.]

[Mr Speaker]

Order. However long it takes, the response—[Interruption.] Order. Mr Morris, I do not require your assistance. Calm down. Take up yoga, or whatever is necessary. However long it takes, the response, like the statement, will be heard. The sooner Members on both sides of the House grasp that very simple fact, the better.

[Ed Balls]

There is a cost of living crisis, even if Government Members will not admit it in this House, and we all know why: after three damaging years of flatlining and the slowest recovery for over 100 years, from a Chancellor and a Prime Minister who said that we were all in this together and then gave a huge tax cut to millionaires, do we not know the truth? Working people are not better off under the Tories, but worse off. For all their complacent boasts, after three damaging and wasted years for most people in the constituencies of hon. Members on both sides of the House there is still no recovery at all.

Let me ask the Chancellor about the promises he made to the House on growth and living standards three years ago. He said then that the economy would grow by more than 8.4% by the end of this year, but even after today’s welcome upward revisions, growth is set to be half that—lower growth than he forecast in 2010 this year, next year, and the year after as well.

Did not the Chancellor pledge to get the banks lending, yet net lending to business is now down by £100 billion compared with May 2010? Did he not make the No. 1 test of his economic credibility keeping the triple A credit rating, yet it has been downgraded not once but twice? As for his promise to balance the books by 2015, did he not confirm today that in 2015 he will not be balancing the books but borrowing £79 billion? For all his smoke and mirrors—[Interruption.] For all his smoke and mirrors, he is borrowing £198 billion more than he planned in 2010: more borrowing to pay for three years of economic failure; more borrowing in just three years under this Chancellor than under the previous Government in 13 years. He used to say that he would balance the books in 2015; now he wants us to congratulate him on saying he will do it in 2019. With this Government, it is clearly not just the badgers that move the goalposts.

On energy bills, after the Government’s panicked and half-baked attempt to steal Labour’s clothes, we know that they are not only not very good at shooting badgers, but not very good at shooting other people’s foxes either. What is the truth? For three months, the Leader of the Opposition has been calling for an energy price freeze, and did the Chancellor announce an energy price freeze? No, he did not. Can he confirm that while the energy companies have already announced price rises of £120 this year, his policy will still see energy prices rise by £70 this winter? Under this Chancellor, the only freeze this winter will be for millions of families and pensioners with rising bills struggling to heat their homes. Does he really think he can get away with tinkering at the edges, moving green levies his own party introduced off the bills and on to the taxpayer, and—surprise, surprise—letting the energy companies completely off the hook? They are not paying a penny. Does he not realise that for millions of hard-pressed families, pensioners and businesses across our country, nothing less than a freeze will do? Rather than hard-pressed taxpayers, it should be the excess profits of the energy companies that pick up the tab.

As for the Prime Minister’s flagship policy for families—a tax break for marriage—why will not the Chancellor admit the truth and tell the Prime Minister that the policy will not even help the families the Prime Minister says it will? His own Treasury Minister has let the cat out of the bag: I have it here in black and white. The Exchequer Secretary says that just under one third of married couples will get the married couples tax allowance. Just one in six families with children will benefit. Contrary to the Prime Minister’s claim in this House a few weeks ago, a married couple both paying basic-rate income tax will get no benefit at all. [Interruption.] No wonder his own Chancellor of the Exchequer has this week told The Daily Telegraph that he thinks the Prime Minister’s policy is

“a turkey of an idea”.

The Chancellor thinks the Prime Minister’s policy is a turkey. Merry Christmas, Prime Minister, Merry Christmas! [Interruption.]

[Mr Speaker]

Order. It is very simple; this just lengthens the proceedings. It does not bother me; I very much enjoy chairing the proceedings. [Interruption.] I think that what Members on both sides of the House will wish to consider is how this conduct is regarded by the public we are here to represent.

[Ed Balls]

I think that on this one the Chancellor is right—it is a turkey of an idea.

On the cost of living crisis, on energy, on supporting families, this Government just do not get it. There is a reason why this Prime Minister and this Chancellor—the Chancellor said it in his statement—believe that people are better-off: it is that the people on their Christmas card lists have seen their bonuses rise and their taxes cut. They have shown that they are willing to stand up for the interests of the energy companies—[Interruption.] We have a Prime Minister and a Chancellor who will stand up for the energy companies, stand up for the hedge funds, and stand up for people earning over £150,000—who get a tax cut—but will not stand up for millions of families and pensioners in our country: people struggling with rising energy bills, falling wages, and rising child care costs.

We all know and agree that rising life expectancy means we are going to have to work longer and that the Chancellor’s failure on growth and the deficit means more tough spending decisions in the next Parliament. But when the country is crying out for a Government who will work with business to promote investment and wealth creation and build an economy that works for the many and not just the few, does this Chancellor really think he can get away with tinkering at the edges, letting the free market rip, and waiting for the wealth to trickle down? Is not what the Chancellor has announced today the clearest evidence yet that the Government just do not understand the scale of the challenge we face to get an investment-led recovery that works for all and not just a few—a strong recovery built to last?

Let me ask the Chancellor—[Interruption.] With the permission of the House, let me ask the Chancellor this: with house building under this Government at its lowest level since the 1920s, does he not see that his Help to Buy scheme to boost mortgage demand can deliver a strong and balanced recovery only if he does what we and the IMF have urged and invests in housing supply—more affordable homes. [Interruption.] Government Members sneer at building more affordable homes. Can the Chancellor tell the House why infrastructure output has actually fallen by 15% since 2010? No wonder the CBI is so upset.

On investment, why has not the Chancellor used the money from the planned increase in spectrum licence fees to endow a proper business investment bank? On tax avoidance, will he tell the House why HMRC has reported that the amount of uncollected tax actually rose last year?

Almost 1 million young people are unemployed; a record number who want to work full time are being forced to accept part-time work; the Work programme is a flop; the welfare bill is rising; and, as we have learned today, universal credit is a complete and utter shambles. There was no mention of universal credit in the statement: IDS—in deep shambles.

Is it not the fact that, for all the shambles and chaos and rising welfare bills, what the Chancellor has announced on youth unemployment is too little, too late? There will be help for under-21s only, and only in the last weeks of this Government in 2015. Why is he not being more ambitious? Why will he not repeat the successful tax on bank bonuses to pay for a compulsory job for all young people—a job they will take or lose?

Why will the Chancellor not remove the winter allowance from the richest 5% of pensioners? Why will he not reverse his tax cut for hedge funds and protect disabled people in our country by scrapping the unfair and perverse bedroom tax this Prime Minister introduced? Why will he not go further on the bank levy and expand free child care for working parents, make work pay and use it to help working parents?

Is not this the truth: will the Chancellor confirm that even after what he has announced today on fuel duty and increases in the personal allowance, his VAT rise, his cuts to tax credits and his cuts to child benefit mean that, on average, families with children are worse off because of his Budgets? That is the truth—giving with one hand, taking away much, much more with the other.

With energy bills still rising this winter, no real action to tackle the cost of living crisis, no proper plan to earn our way to rising living standards for all, surely Britain can do better than this.

This complacent Chancellor sits there and thinks he deserves a pat on the back. I have to say that, with bank bonuses rising and millionaires enjoying a big tax cut, this is a policy that is working for a few. But as this autumn statement shows, with this out-of-touch Chancellor and Prime Minister, hard-working people are worse off under the Tories.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Tuesday 5th November 2013 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

I welcome the Economic Secretary and the shadow Financial Secretary to their new jobs, and let us not forget the former Treasury Whip, the Treasurer of Her Majesty’s Household, the hon. Member for Chelsea and Fulham (Greg Hands), who has finally got the promotion we have been urging him to get for three years.

On this Chancellor’s watch, the UK is experiencing the slowest recovery for more than 100 years, and with prices, including energy prices, rising faster than wages, for millions of people this is no recovery at all. Yet from the Chancellor’s earlier answers to the Chair of the Treasury Committee, he seems to think he can get away with cutting energy bills by simply shifting the burden of his green levies on to the ordinary taxpayer. Let me ask the Chancellor—[Interruption.]

[Mr Speaker]

Order. I think we are going to get a question.

[Ed Balls]

Why will the Chancellor not agree with us and Sir John Major that it is the energy companies that are making the excess profits and that it is they, not the ordinary taxpayer, that should bear the burden?

Points of Order

Debate between Ed Balls and John Bercow

Wednesday 9th October 2013 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. May I just go back to the Prime Minister’s answer to the Leader of the Opposition on the marriage tax break? When asked whether it was true that a third of married couples would benefit, the Prime Minister said that all married couples who are basic rate taxpayers would benefit. Would he like to correct the record, because that is just not true?

[Mr Speaker]

The right hon. Gentleman has made his point. I allowed it as a point of order. If the Prime Minister wants to respond, he is perfectly welcome to do so. [Interruption.] Order. Question Time is—

Points of Order

Debate between Ed Balls and John Bercow

Tuesday 25th June 2013 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

rose—

[Mr Speaker]

Mr Balls, I can always see and hear you. Fear not: your point of order will now be heard.

[Ed Balls]

On a point of order, Mr Speaker. The figures produced on Friday by the independent Office for National Statistics show that borrowing rose from £118.5 billion in 2011-12 up to £118.7 billion in 2012-13. Is there a danger that the Chancellor may have inadvertently misled the House in claiming that the deficit had fallen? Would it be appropriate for him to correct the record now or should he make a statement today correcting the record and saying that borrowing has not gone down but up?

[Mr Speaker]

Every right hon. and hon. Member is responsible for the content, including the accuracy, of his or her answers. I know that neither the shadow Chancellor nor the Chancellor would seek to draw me into a debate on substantive matters. That would be unworthy, and neither of them is an unworthy individual.

The shadow Chancellor has raised his point of order. There is an opportunity for the Chancellor to respond if he wishes—[Interruption.] Order. But he is under no obligation to do so. I have a suspicion that these matters will be aired further in the course of the week, and perhaps in weeks, months and indeed years to come. We will leave it there for now.

Economic Growth

Debate between Ed Balls and John Bercow

Wednesday 15th May 2013 Commons Chamber

[Nadhim Zahawi]

You have to answer it!

[Mr Speaker]

Order. Mr Zahawi, you have already intervened with some gusto, but I would ask you to behave in a seemly manner, as the people of Stratford-on-Avon would expect and are themselves wont to do.

[Ed Balls]

The hon. Member for Hexham (Guy Opperman) has made some wise interventions in these debates. He said just last year that

“too often we are talking about the 50p tax, a tax which affects those on six times the average salary, rather than the taxes on the lowest paid.”

It is a pity his Front-Bench team did not listen to his views in this year’s Budget.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Tuesday 11th December 2012 Commons Chamber

[Mr Osborne]

It is good to see the shadow Chancellor back. Of course tax credits go to some people in work, but we are also helping those people with a personal allowance increase, and working households will be £125 better off. Perhaps he can answer a question, if that is allowed, Mr Speaker: how will Labour vote on the Bill?

[Mr Speaker]

It is very important that the public are not misled, however inadvertently, by a member of the Government. This is not an occasion for shadow Ministers to answer questions. In our system, they ask questions and Ministers are expected to answer them. That is the situation.

[Ed Balls]

I will answer, though, Mr Speaker, but before I do it is important that Members on both sides of the House know the answers to the questions I asked the Chancellor. First, 60% of families hit by his tax and benefit changes are in work. Secondly, according to the Institute for Fiscal Studies, as a result of the autumn statement measures a working family—the average one-earner couple—will be £534 a year worse off by 2015. Those are the very families who pull up the blinds and go to work. Every Tory constituency has, on average, over 6,000 of those families who will lose out. In answer to his question, we will look at the legislation, but if he intends—[Interruption.] He asked me a question and I am going to answer it. If he intends to go ahead with such an unfair hit on middle and low-income working families while giving a £3 billion top-rate tax cut, we will oppose it. Why is he making striving working families pay the price for his economic failure?

Points of Order

Debate between Ed Balls and John Bercow

Tuesday 11th December 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker.

[Mr Speaker]

Exceptionally, I will allow a point of order, for reasons that will be apparent.

[Ed Balls]

May I have your guidance, Mr Speaker? Is it in order for the Chancellor of the Exchequer, pre-empting a written statement, to slip out news during topical questions about Northern Rock that could well have fiscal implications, including for Government borrowing, in a way that is designed to avoid any proper scrutiny or questioning from the Opposition? Is this not just another example of the Chancellor refusing to answer questions in this House? Would it not be in order for the Chancellor or another Treasury Minister to make an oral statement in this House today and be properly scrutinised, rather than once again playing fast and loose with the public finances and Parliament?

[Mr Speaker]

I will hear the Chancellor the Exchequer on this matter, and then I will give a verdict.

--- Later in debate ---

[Ed Balls]

rose—

[Mr Speaker]

The right hon. Member for Morley and Outwood (Ed Balls) is itching to raise a further point of order, but I ask him to hear what I have to say first. This cannot be a debate; there are a couple of points of order to which I am giving a reply. My response, whether Members like it or not, is as follows.

First, I feel sure that the Chancellor of the Exchequer intended to be helpful to the House. It is not for me to impugn motives, and I do not do so. However, was it a good idea to handle this matter via the device of topical questions in the way that it was done? The answer is no, it could have been better done. I am sure that the hon. Member for Braintree (Mr Newmark) was doing his best, according to his own lights, but it was unwise to deal with it in that way.

Secondly, I simply make the point—[Interruption.] It may be topical, but that does not necessarily mean that it should be raised at topical questions. My understanding, which is very easily explained, is that although something is a topical matter, it does not mean that it should be the subject of a topical question if the Government have tabled a written—

Autumn Statement

Debate between Ed Balls and John Bercow

Wednesday 5th December 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Today, after two and a half years, we can see, and people can feel in the country, the true scale of this Government’s economic failure. The economy this year is contracting. The Chancellor has confirmed that Government borrowing is revised up this year, next year and every year. The national deficit is not rising—[Interruption.] I will say it again. Our economy is contracting this year; Government borrowing and the deficit are revised up this year, next year and every year; and the national debt is rising, not falling. It is people who are already struggling to make ends meet, middle and lower-income families and pensioners, who are paying the price, while millionaires get a tax cut—a £3 billion welfare handout to the people who need it least.

Let me spell out the full facts to the House—[Interruption.] Government Members should listen. They might learn something. In June 2010, the Office for Budget Responsibility forecast that our economy would grow by 2.8% this year. In March this year, it said there would still be growth, but revised it down to just 0.8%. Today, we learn that the Chancellor has not managed even that. Growth has not only been downgraded yet again, but he has confirmed, following the double-dip recession, that our economy is now forecast to actually contract inside this year, by 0.1%.

Let me remind the House what the Chancellor promised over two years ago in the June Budget. He said:

“We have provided the foundations for economic recovery in all parts of our nation”.

He said:

“We have set the course for a balanced budget and falling national debt by the end of this Parliament.”

And he said:

“The richest paying the most and the”

most

“vulnerable protected”.—[Official Report, 22 June 2010; Vol. 512, c. 180.]

That was the promise, but far from the Chancellor securing our recovery, our economy has flatlined since the spending review in 2010. Over the past two years, he was expecting 4.6% growth, but he has actually achieved 0.6% growth, which compares with 1.7% in France, 3.6% in Germany and 4.1% in America. We are falling behind in the global race. We learn today that growth is being downgraded this year, next year, the year after, the year after, and the year after that too—the longest double-dip recession since the second world war now followed by the slowest recovery in the past 100 years.

The result of this stagnation—rising long-term unemployment and long-term damage to our economy, falling behind now as other countries move ahead—is that the Chancellor’s fiscal strategy has been completely derailed. The defining purpose of the Government, the cornerstone of the coalition, the one test they set themselves: to balance the books and get the debt falling by 2015, is now in tatters.

What we have learned today is that Government borrowing has been revised up this year, next year and the year after that. We now know that, compared with the Chancellor’s forecast two years ago, borrowing is now forecast to be well above the £150 billion of extra borrowing that he was forecasting in March—[Interruption.] Government Members should listen to this. The Chancellor has confirmed that the Prime Minister’s pledge to balance the books in 2015 is not met in 2015, it is not met in 2016 and it is not met in 2017. The fact is that there is more borrowing this year, next year and the year after.

The Opposition will look at the detail when we get the figures—it was disappointing that the Chancellor failed to give us the cash figures adjusted for borrowing this year, next year and the year after. The unusual thing is that, just a few weeks ago, the independent forecasters were saying that borrowing would be £6 billion higher this year. We will examine the detail of those figures to see whether there has been any dodgy dealing. We will find out in the coming hours. [Interruption.] I do not know because I have not seen the figures, but I do know that there is more borrowing this year, more borrowing next year and more borrowing the year after.

The result is that the OBR shows more borrowing and higher deficits means higher national debt. The national debt—[Interruption.] The Prime Minister should listen to this, even if it might be rather shocking to find out. National debt will be higher at the end of this Parliament than the level inherited; it will be higher at the end of this Parliament than forecast in the plans he inherited; and it is no longer falling as a percentage of GDP in 2015. It is rising in 2015 and rising again in 2016, breaking the fiscal rule for falling debt upon which the Chancellor said his entire credibility depended. In last year’s Budget, the Chancellor said,

“our deficit reduction plan is on course…we will not waiver”.—[Official Report, 21 March 2012; Vol. 542, c. 795.]

On course? Not waivering? He is not waivering, he is drowning.

The Chancellor is now trying to claim that his failure on growth, his failure on borrowing and the debt, and breaking his own fiscal rule, are not his fault—that no one could have foreseen it. What nonsense; he was warned. He was warned that a tough medium-term plan to cut the deficit, tax rises, spending cuts and pay restraint, which every country had to put in place, could work only if the Government first put in place a plan for jobs and growth. He was warned that it was a huge gamble to go too far, too fast, and to rely on exports to bail him out. He was warned that there was a hurricane brewing in the eurozone, and that it was not the time to rip out the foundations of the house here in Britain. Once again, the Chancellor is trying to blame high oil prices and the eurozone crisis for negative growth this year, but they affected all countries, so why, over the last—[Interruption.]

[Mr Speaker]

Order. I apologise for interrupting. Members must calm themselves. Mr Byles, I thought you were normally a model of restraint and civility. Good heavens man! I do not know what has come over you. Calm yourself—take a pill if necessary, but keep calm. Take up yoga.

[Ed Balls]

Growth down, borrowing up, debt up—they don’t like it, Mr Speaker, do they? They don’t like it at all.

Once again, the Chancellor is trying to blame high oil prices and the eurozone crisis, so let me ask him: why, over the past two years, has Britain grown at just one tenth of the average growth rate of the G20 countries? Why has growth here in Britain been even slower than in the eurozone? It is not the rest of the world’s fault—it is his policies that have failed. He claimed that rising VAT alongside accelerated spending cuts would boost confidence, secure recovery and get the deficit down, but they depressed confidence, choked off our recovery and borrowing has been revised up. Let me ask the Chancellor: whatever happened to his Treasury view—his theory of expansionary fiscal contraction? Expansionary fiscal contraction? It is the economy that has contracted and the borrowing and the debt that have expanded. That is the truth.

When the latest figures show business confidence falling, when the world economy is slowing, when the eurozone is in such chronic difficulty, and when on current plans the Chancellor’s fiscal straitjacket tightens further next year, it is simply reckless and deeply irresponsible of this Chancellor to plough on with a fiscal plan that we all know is failing on the terms he set. That is the truth.

What a wasted opportunity this statement was. Can the Chancellor confirm that the independent OBR looked at the measures he has announced today, and that its verdict is that growth is revised down this year, next year and the year after?

Let me congratulate the Chancellor on taking our advice and stopping January’s fuel duty rise, even though Government Members all voted against it just a month ago. We welcome the U-turns on flood defences, in part, on regional pay bargaining in the NHS, and on capital allowances. After churches, charities, pasties, skips, fuel and caravans, I think this U-turning is catching on, but whatever happened to the plans for the business investment bank? As for yesterday’s announcement on infrastructure spending, the extra money for schools is just a fraction of the cut from the cancellation of Building Schools for the Future.

We have been here before. A year ago, the Prime Minister boasted of a national infrastructure plan; 12 months on, not a single road scheme has even started. Why cannot he see that he will not get the deficit down without a plan for jobs and growth? Why is he not using the 4G money to get 100,000 new homes built? Why is he not offering a national insurance holiday for small firms? Why not have a temporary tax cut for families? Even the Mayor supports that. Why is the Chancellor not repeating the bank bonus tax? The Chancellor says he cannot do any of that because it would lead to higher borrowing. Even his political attacks are backfiring, because this Chancellor’s failed plan has given us more welfare spending, higher borrowing and higher debt too. That is the reality. The truth is that the Chancellor has failed on growth and the deficit, but what is his answer? More of the same.

Let me remind the Chancellor what he told the House in the Budget of 2011. He said that

“we have already asked the British people for what is needed, and…we do not need to ask for more.”—[Official Report, 23 March 2011; Vol. 525, c. 951.]

But 18 months on the Chancellor has come back for more, and who does he think should pay? Not the 8,000 millionaires set to get more than £100,000 each in April. I have to ask the Liberal Democrats: whatever happened to the mansion tax? Do they not realise that, even with the changes in the personal allowance, as a result of the other things they have supported the average family with children on £20,000 is worse off—and that is before the VAT rise?

The Chancellor claims that his decision to restrict pension tax relief will make the tax system fairer at the top. Can he confirm that the £1 billion he is raising is less than the £1.6 billion that he gave back in pension tax relief in June 2010? And it is just a fraction of the top-rate tax cut—a £3 billion top-rate tax cut at the same time as the Chancellor is cutting tax credits for working families, cutting child benefit for middle-income families, raising taxes on pensioners in April and cutting benefits for the unemployed.

We do need to reform and modernise our welfare state and reduce its cost. Those who can work should work—no ifs or buts. We support a benefit cap, done fairly, with a higher level in London, but let us be clear. The Chancellor claimed he would cut the welfare bill, but higher inflation and long-term unemployment mean that the benefits bill is forecast to be billions higher in this Parliament than he boasted. Let me help him: welfare to work—the clue is in the name. We cannot have a successful welfare to work programme without work, and we know that the Work programme has totally failed, with only two people in 100 going into permanent jobs.

We should require every young and long-term unemployed person to take a job—and make sure there is one there. Let me ask the Chancellor about a nurse, one of the thousands cut from the NHS in the past two years, who is now struggling to find a new job. For that nurse, he has announced today that he is cutting her jobseeker’s allowance for the next three years. How can that be fair when he is cutting the top rate of tax? How can it be fair when someone earning £228,000 a year will get a top-rate tax cut of £75 a week in April, which is more than the £71 the nurse gets to live on through JSA?

We learned today that the Chancellor is not just hitting those looking for work. The majority of people who lose from his cuts to tax credits are people in work—millions of families striving hard to do the right thing. What kind of Government believe that you can only make low-paid working people work harder by cutting their tax credits, but you only make millionaires work harder by cutting their taxes, Mr Speaker? I tell you: certainly not a one nation Government.

The Government must really believe that if taxes are cut at the top the wealth will trickle down. Let me remind the House what the Chancellor told the Conservative party conference in October 2009. He said that

“we could not even think of abolishing the 50p rate on the rich while at the same time I am asking many of our public sector workers to accept a pay freeze to protect their jobs.”

Those were the Chancellor’s words. He continued:

“I think we can all agree that would be grossly unfair.”

What has changed? Nothing has changed. It was all a con and the mask has slipped. We now know that this Chancellor cannot say, “We’re all in this together” without a smirk on his face. They wanted us to think they were compassionate Conservatives. Now we find out that they are the same old Conservatives, and the Liberal Democrats have gone along with all of it yet again.

What a pity it is not to see the hon. Member for Mid Bedfordshire (Nadine Dorries) in her place, back from the jungle. She may not have succeeded in talking for the nation on many things but she did speak for the nation when she called the Prime Minister and the Chancellor

“two arrogant posh boys who don’t know the price of milk.”

It is no wonder the Prime Minister keeps losing his temper, because his worst nightmare is coming true—not snakes and spiders in the jungle, but the Government’s fiscal rule broken, their economic credibility in tatters, exposed as incompetent and unfair. Yes, he’s the Chancellor; can’t someone get him out of here? Growth down, borrowing revised up and the fiscal rules broken: on every target they have set themselves, they are failing, failing, failing. They are cutting the NHS, not the deficit; they are borrowing more than £212 billion more than they promised two years ago; and they are cutting taxes for the rich, while struggling families and pensioners pay the price—unfair, incompetent and completely out of touch.

LIBOR (FSA Investigation)

Debate between Ed Balls and John Bercow

Monday 2nd July 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The systematic lying—[Interruption.]

[Mr Speaker]

Order. Everything will be slowed up, the more noise there is. I do not care what the exhortation is for people to create a wall of noise. That should not and must not happen in this Chamber. If we end up being much slower because people are mindlessly bawling their heads off from either side of the House, we will be slower. I do not think the public will be much impressed by that sort of behaviour from either side of the House.

[Ed Balls]

The systematic lying, concealment and arrogant abuse of power revealed by the FSA report into LIBOR market fixing at Barclays bank is truly shocking. As one member of the Vickers commission said this morning:

“Today’s banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty or their responsibility, but what they can get away with.”

Set against the depths of that malpractice, which has now been revealed, and the scale of the challenge we face in reforming and rebuilding trust in British banking, I am afraid that the Government’s decision to reject Labour’s call for an independent and judge-led public inquiry into the culture and practice of banking in our country just will not do. Just as in phone hacking or the Iraq war, so in banking: only with an independent, forensic and open public inquiry—not politicians investigating bankers—can we rebuild trust for the future.

Banks play a vital role in our economy—they lend to businesses, small and large; they help people to save and borrow for mortgages; and many hundreds of thousands of jobs across the UK are dependent on our retail and our global wholesale banking industries—but banking is a profession that depends on trust, and that trust is currently in tatters. The public are rightly baffled and angry about what they learned was happening at Barclays. We have learned that senior bank executives knew about and covered up deliberate market fixing and manipulation of key interest rates. When ordinary people break the law and defraud the taxpayer or the benefit system, they face criminal penalties and jail sentences; the same should apply to bank executives. The public are now rightly asking who they can trust to clear up this mess and sort this industry out.

First, on the issue of criminal penalties, the Chancellor says he will bring forward amendments to the Bill in the House of Lords—amendments that he did not introduce in the House of Commons. Will he confirm that the powers he needs for an FSA investigation to be followed by a criminal investigation are actually on the statute book and that it is the job of the Serious Fraud Office to take forward those investigations, using the powers in the Fraud Act 2006? Will he confirm that section 2 of the 2006 Act already makes it a criminal offence to make “false representation” for personal gain and that it is an offence under section 4 to “abuse” a position of trust for financial gain? Will the Chancellor explain whether such investigations are already under way, and whether it is true that the Serious Fraud Office initially refused to act because of inadequate resources? There is now a real suspicion that the Chancellor’s new conversion to law making is just a smokescreen for the failure of prosecutors to get a grip.

Secondly, on the LIBOR market, we welcome the limited investigation that the Chancellor rather belatedly announced at the weekend. Self-regulation of this market goes back to the 1980s, but will the Chancellor explain why in March, as this scandal started to emerge, the Financial Secretary denied there was an issue and dismissed our calls for investigation and tougher regulation? When he was asked in the Committee whether he had a view on what needed to be done, he replied with one word: “No.” Given how much the Chancellor is now placing his faith in the Bank of England as the leading financial regulator in the future, will he assure us that the Bank did not turn a blind eye to the manipulation of the LIBOR survey?

However, the problems of culture and ethics that have now been uncovered are wider than the LIBOR market. The public are angry, and they rightly ask whether this generation of politicians, regulators and banks can put right the wrongs for which they are paying a heavy price. I say “this generation of politicians” because we must all admit that regulation should have been tougher, and we should all learn the lessons of an open and independent judicial inquiry. For my part—[Interruption.] For my part, I regret—[Interruption.]

[Mr Speaker]

Order. What we cannot have are individual Members who feel that their contributions from a sedentary position are somehow in a different category from the sedentary interventions of other Members. We do not need them. What we need is a bit of respectful listening to what is said by the Chancellor and the shadow Chancellor.

[Ed Balls]

For my part, I regret—as do Ministers and central bankers around the world—that we did not see the financial crisis building and take action, but let me ask the Chancellor this question: do he and the Prime Minister regret consistently attacking us in the Labour Government for being too tough in our approach to regulation, saying that it would undermine City effectiveness? That is what they said.

As for the future of regulation more widely, let me ask the Chancellor another question. Having rightly commissioned the Vickers report, does he now regret coming to the House a few weeks ago and saying that he was watering down its recommendations and weakening leverage ratios, and arguing, shockingly in the light of recent events, that complex derivatives—the very derivatives that led to the appalling mis-selling of interest rate swaps to small firms—should be inside the retail bank ring fence, contrary to the recommendation of Sir John Vickers? Surely that is one U-turn that we need from the Chancellor.

We all have a responsibility to do better in future, to reform our banking industry and to rebuild trust, but we do not believe that another parliamentary inquiry can do the job, just as we rejected that approach in relation to phone-hacking. The Chancellor said today that we did not need more “navel-gazing when we know what has gone wrong.”

How complacent is that? If the Chancellor and the Prime Minister are so confident that their approach is right, why do they not put two options to a vote, and let the House decide? Labour Members will vote for an independent and open public inquiry, not an inadequate and weak plan cobbled together over the course of this morning. The independent inquiry is what our constituents want, and it is the only way to achieve a lasting consensus on reforms for the future.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Tuesday 24th April 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The Chancellor has had a difficult few weeks since the Budget. To be told by his own side that he is an out-of-touch posh boy who does not know the price of milk must be particularly hard to take. I will ask him today not about the price of milk but—[Interruption.]

[Mr Speaker]

Order. Let me say once and for all to the junior Whip, sitting next to a senior Whip: be quiet, do not heckle, and if you cannot keep quiet, leave the Chamber. Make a habit of that.

[Ed Balls]

Shall I start again at the beginning of the question? I am going to ask the Chancellor today not about the price of milk but about a price that he surely must have considered at Budget time. I will ask him a specific question. What is—[Interruption.] I am going to ask the Chancellor a specific question that he must have considered at Budget time. What is the price of a litre of unleaded petrol at the pumps today, and what was it on Budget day a year ago?

IMF

Debate between Ed Balls and John Bercow

Monday 23rd April 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

In thanking the Chancellor for advance sight of his statement today, let me begin by setting out three propositions on which I believe all parts of the House can agree. First, the ongoing crisis in the euro area is a major threat to the stability of the European and global economies, including Britain’s. Secondly, the International Monetary Fund is a hugely respected organisation that must be properly funded if it is to play its proper role. Thirdly, solving the euro crisis and ensuring that the IMF is properly resourced are both firmly in the British national interest.

However, the agreement that the Chancellor signed up to at the weekend fails on all three counts. It will not speed up, but further delay the decisive action we need from European leaders to kick-start growth and empower the European Central Bank to act. If those extra resources were to result in the IMF stepping in to act when the European Central Bank would not, that would risk weakening the IMF as an institution. Furthermore, in those circumstances, allowing eurozone leaders further room for delay and exposing the IMF and British taxpayers’ money when rich eurozone countries will not act would categorically not be in the British national interest.

Members across the House will find it baffling that that is precisely the view that the Chancellor took, just a few weeks and months ago. Following the G20 summit in October, when euro area leaders tried and failed to get international agreement on IMF resources to bail out the euro, he told the House:

“But the IMF contributing money to the eurozone bail-out fund? No. And Britain contributing money to the eurozone bail-out fund? No. That is Britain’s clear position.”—[Official Report, 27 October 2011; Vol. 534, c. 471.]

He went further in February when he told Sky:

“We are prepared to consider IMF resources but only once we see the colour of the eurozone money and we have not seen the colour of the eurozone money”.

Will the Chancellor tell us what has actually changed since then, because we have categorically not seen the colour of the eurozone’s money? The eurozone agreement that was reached last month was widely dismissed as a “sticking plaster” that merged two funds with no new money. As Wolfgang Münchau of the Financial Times stated:

“Ignore the headlines. This is not an increase in the eurozone’s rescue fund”.

In recent weeks, as market doubts have grown about Spain and Italy, market analysts have been clear that the eurozone bail-out fund has nowhere near the resources that it would need to stop a renewed crisis. There is still no firewall, and the only institution that comfortably has the resources to act—the European Central Bank—is prevented from doing so because rich euro area countries refuse to put sufficient money at risk. So, let me ask the Chancellor this: does he really think that the eurozone’s firewall is sufficient? Is this really the “big bazooka” that the Prime Minister talked about last summer? Does the Chancellor really think that the ECB now has the political backing to act as lender of last resort, and so stop contagion spreading? No, of course he does not. So why is he now signing up to an agreement that will mean that the IMF will be pressured into supporting Italy and Spain because the ECB will not, exposing as meaningless his nonsensical “countries not currencies” slogan?

Is it not the truth that the Chancellor is now conspiring in allowing the IMF to become the de facto central bank of the euro area, putting the resources of UK taxpayers and some of the world’s poorer countries at risk because rich euro area countries will not act? This deal might, for a short period, take the pressure off euro area leaders, but it will be at the cost of delaying a proper solution to the euro crisis, and it will undermine the IMF in the process.

The Chancellor says that his UK critics, on both sides of the House, are “isolated” in the global community in opposing this weekend’s agreement, but the United States has not signed up to give more money either. The US Treasury Secretary said, just this month:

“Europe is a very rich continent and they have the means to solve this on their own…I don’t think it is appropriate for the IMF to take on a larger role. The world needs to see that Europe is working on helping itself first. We are not going to shift our help for them so that the burden is on the American taxpayer”.

Canada is not contributing more money either. This is what the Canadian Finance Minister said about euro area leaders this weekend:

“They need to step up to the plate and overwhelm this issue with their own resources.”

The Chancellor says that we are “out on a limb” on this issue, but with America and Canada there too, that is some limb.

Will the Chancellor tell the House why he chose to tell us on Friday that he was contributing “just under” £10 billion more? With the US not contributing, that is clearly less than the UK’s quota share. Could it be that if he had contributed a fraction more, he would have had to come to the House and ask for parliamentary approval? After the Budget shambles—should I say the “omnishambles”?—of the last few weeks, is not the Chancellor running scared of those on both sides of the House of Commons?

Could the Chancellor also explain what has happened to the UK’s contribution to the IMF through the new agreement to borrow? When an IMF quota was first increased in 2009, it was understood that it would be offset by a reduction in UK exposure to the NAB—the new arrangements to borrow. Let me remind the Chancellor what the Financial Secretary told the House last summer:

“The G20 summit in London agreed on the importance of preserving the IMF status as a quota-based institution…so at the G20 meetings last November, agreement was reached to review the NAB and to reduce it in size once the quota increase was implemented.”—[Official Report, Second Delegated Legislation Committee, 5 July 2011; c. 3.]

So let me ask the Chancellor this: can he update the House? Has the UK contribution to the IMF been reduced through the NAB as the quota increases, as the Financial Secretary said, or has the Chancellor found a back-door route to increase the net UK contribution by more than £10 billion, without the permission of Parliament?

[Mr Speaker]

I am sure the shadow Chancellor is bringing himself to his last sentence.

[Ed Balls]

Finally, Mr Speaker, as for the Chancellor’s claim that the UK has sorted out our problems, unlike the US, the UK is mired with the rest of the euro area in no growth, high unemployment and much more borrowing than was planned, so how out of touch can this deluded Chancellor get? He should have stuck to his guns this weekend. He capitulated. This agreement was bad for the euro area, bad for the IMF, bad for the British taxpayer and bad for the British national interest.

Points of Order

Debate between Ed Balls and John Bercow

Wednesday 18th April 2012 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. Before the Prime Minister leaves, I point out that he has just told the House in Prime Minister’s questions that the 50p rate did not raise any money, a claim that is flatly contradicted by both the documents published on Budget day and the Treasury’s own figures published on Monday. Could the Prime Minister correct the record before he leaves the House? [Interruption.]

[Mr Speaker]

Order. These matters will be the subject of debate later today. If I did not know the right hon. Member for Morley and Outwood (Ed Balls) as well as I do, I would think that he was trying to use the device of a contrived point of order to continue the debate, but because I know him as well as I do, he can take it from me that I know he would not be guilty of such unworthy conduct.

The Economy

Debate between Ed Balls and John Bercow

Tuesday 6th December 2011 Commons Chamber

[Mr Speaker]

That, I think, was a case of either a point of frustration or, as the right hon. Gentleman has a smiling countenance, him getting his point on the record.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. Given that the motion before the House today was on whether there has been a sufficient debate on the economy, given the failure of plan A, given the £158 billion of extra borrowing, given rising unemployment, and given the view of the House that more time is needed for this debate, could you advise on whether the will of the House could be expressed and there could be more time to debate the very important issues facing this House and the country?

[Mr Speaker]

I am grateful to the right hon. Gentleman. The allocation of time for parliamentary debates is not a matter for the Chair, but the right hon. Gentleman has recorded his view, as has the Deputy Chief Whip.

Autumn Statement

Debate between Ed Balls and John Bercow

Tuesday 29th November 2011 Commons Chamber

[Mr Speaker]

Order. I ask the right hon. Gentleman to resume his seat. I said very clearly that people should not shout and yell at the Chancellor. He should be heard in respectful quiet, as the public would hope. The same goes for the reaction to the shadow Chancellor. Let us try to operate at the level of events.

[Ed Balls]

Thank you, Mr Speaker.

Let me start by thanking the Chancellor of the Exchequer for advance notice of his statement, and the Office for Budget Responsibility for ensuring that the Chancellor is today setting out to the House the truth about the state of the British economy and the truly colossal failure of the Chancellor’s plan.

Let us be clear about what the OBR has told us today, which the Chancellor could not bring himself to say: growth is flatlining and will be down this year, next year and the year after; unemployment is rising; and there will be well over £100 billion more borrowing than he planned a year ago, and more than was set out in the plan he inherited at the general election. As a result, his economic and fiscal strategy is in tatters. After 18 months in office, the verdict is in: plan A has failed, and failed colossally. With prices rising and unemployment soaring, families, pensioners and businesses already know that it is hurting. With billions of pounds more in borrowing to pay for rising unemployment, today we find out the truth that it is just not working.

The Prime Minister likes to say, “You can’t borrow your way out of a crisis.” Will the Chancellor confirm that that is exactly what he has been forced to do? He has been forced into higher borrowing to pay for the crisis in growth and jobs in Britain, the higher unemployment and higher benefits bill that his failing plan has delivered.

The Chancellor’s out-of-touch and complacent hubris of a year ago now seems such a distant memory. The Prime Minister boasted that Britain was out of the danger zone and the Chancellor claimed that the UK was a safe haven, but we know the truth: cutting too far and too fast has backfired and all his claims of a year ago have completely unravelled. It is not as if they were not warned, including by their coalition colleagues. Before the election, we said that, like every country after the global financial crisis, we had to get our deficit down, which meant tough decisions on tax and spending cuts. The question is not whether that should be done, but how. That is why the Opposition warned that trying to cut spending and raise taxes too far and too fast risked choking off recovery and pushing up unemployment and borrowing. We said that the Chancellor’s plan was reckless, not cautious, and that he was ripping out the foundations of the house, leaving our economy not safe, but badly and deeply exposed to the growing global storm.

Let me remind the Chancellor what the managing director of the International Monetary Fund warned this summer. She said that

“slamming on the breaks too quickly will hurt the recovery and worsen job prospects.”

What has happened? Consumer and business confidence has slumped in the past year. Our recovery was choked off over a year ago. Since then, Britain has had slower economic growth than any G7 country other than Japan, and it had an earthquake. Unemployment is at a 17-year high and over 1 million young people are out of work. Today we hear that growth this year will be not the 2.3% he so confidently predicted in the June Budget this year, but just 0.9%. It will be even lower next year and lower than forecast the year after. It is the fourth time the OBR has downgraded his growth forecasts in just 18 months.

Today we learn that the Chancellor, even when judged by the one objective he set himself—getting the deficit down—is failing. With lower growth and rising unemployment pushing up the cost of failure, will he confirm that he will now have to borrow not £46 billion more than set out in his autumn statement last year, as he said in March, but a staggering £158 billion more? Will he also confirm that, despite the pain of the £40 billion of extra spending cuts and tax rises he boasted about a year ago, because the recovery has been choked off and unemployment is higher he will be borrowing more at the end of this Parliament than he would be under the balanced plan inherited from the Labour Government at the last election? That is a fact.

A year ago the Prime Minister told the CBI:

“In five years’ time, we will have balanced the books.”

That was not some kind of dodgy rolling target, but a clear commitment to eliminate the deficit by 2015. Can the Chancellor tell the House whether he will meet that fiscal mandate? Is not the truth that, with unemployment and borrowing up, going further and faster has been utterly counter-productive and self-defeating and has backfired? We have had all the pain, but none of the gain.

The OBR forecasts show that the Chancellor’s entire economic and fiscal strategy is now in complete disarray, yet all we get are excuses. He has blamed anyone and anything, including the Labour Government, the snow, the royal wedding, the Japanese earthquake, higher inflation, VAT, the eurozone and low-paid dinner ladies and teaching assistants—anybody but himself. [Interruption.] It is he who is to blame. It is his failing plan that has pushed up unemployment and borrowing. It is his reckless gamble that has made things worse here in Britain, not better.

If eurozone countries continue to fail to sort out their problems, of course that will have an impact here. [Hon. Members: “Ah.”] However, Britain’s economic recovery was choked off a year ago, before the euro crisis. The OBR has downgraded growth in Britain this year but upgraded growth in the euro area. Of the 27 countries in the EU, only Greece, Portugal and Cyprus have grown more slowly than Britain in the past year. Not only is it not too late for the Chancellor to change course, but the deepening euro crisis makes it even more important that he sees sense. Instead he is still clinging to the fantasy that any change of course would make things worse. He still clings to the illiterate fantasy that low long-term interest rates in Britain are a sign of enhanced credibility and not, as they were in Japan in the ’90s and in America today, a sign of stagnant growth in the economy. [Interruption.] This summer the head of the IMF warned the Chancellor—[Interruption.]

[Mr Speaker]

Order. The situation is very simple: however long it takes, the shadow Chancellor will be heard. That is all there is to it.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Tuesday 6th September 2011 Commons Chamber

[Mr Speaker]

Order. I think the shadow Chancellor will want to refer to taxation levels on the banking industry.

[Ed Balls]

The argument that I am making is that the Chancellor is ignoring the case for repeating the bank bonus tax for a second year, even though youth unemployment has gone up by 18%—119,000 more. Let me ask him a second—

[Mr Speaker]

Order. I say to the shadow Chancellor that what we need now is a very brief question. We need to move on; there are a lot of questions to cover.

[Ed Balls]

The question that people will be asking is if the Chancellor will not change his mind on the bank bonus tax, on VAT and on the pace of deficit reduction, why is he now changing his mind on stalling bank reform? He said that we were all in it together. Why is there one rule for the banks and another rule for everyone else?

Global Economy

Debate between Ed Balls and John Bercow

Thursday 11th August 2011 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The shocking and inexcusable events of recent days in our cities are today rightly the Government’s first and immediate priority. However, looking ahead, the global economic events of recent days are an equal and perhaps even graver threat to our stability and cohesion, putting small businesses, jobs and mortgages at risk throughout our country. It is therefore right that the Chancellor is today updating the House and the country on the parlous state of the global economy and, I am afraid to say, the parlous state of the British economy.

In the same spirit of bipartisan co-operation that we have just seen from the Prime Minister and the Leader of the Opposition, let me set out where Opposition Members agree with the Chancellor of the Exchequer as well as where we have grave concerns. First, the Chancellor is right: we made the right decision not to join the single currency in 2003. We agree with him that the crisis in the eurozone requires more decisive and radical action than we have seen so far. I welcome the fact that he is now, at last, involving himself in those discussions, and preparing contingency plans if British banks come under threat.

Tough fiscal decisions in Europe are vital, but is it not clear that the approach of European leaders so far—demanding ever more austerity from smaller countries—is not working because it does nothing to get those economies growing? Without that, countries find it harder and harder to convince the markets that they can repay their debts. Should not the Chancellor finally take a lead in brokering a plan in Europe for growth, alongside European-wide guarantees to reduce debt service costs, and stop the contagion?

I also agree with the Chancellor that months of political wrangling and uncertainty in the US about the pace of deficit reduction have depressed confidence and US growth. However, does the Chancellor agree with those wise heads who favour a balanced and sensible approach to deficit reduction, and fear that rapid US retrenchment could drive the world back into recession? Or does he agree with his friends—we know he has many in the Republican party and in the Tea party movement—who have urged deeper and faster cuts, and hailed the recent budget deal as delivering 98% of their demands? Is the Chancellor on the side of the Federal Reserve, former Treasury Secretaries and Nobel prize winners, or on that of, in the words of the Business Secretary, “right wing nutters”?

It is also right that G7 finance Ministers are finally discussing a co-ordinated response to a global crisis. However, listening to the Chancellor’s analysis, one would think that Britain was a bystander, watching public debt crises unfold in the eurozone and America that are best solved by individual countries taking their own actions to get debt down—on his analysis, the faster, the better. But the growth crisis is now global.

Does the Chancellor agree that the coming together of powerful negative forces in every continent, including in Britain—continued deleveraging by banks and the private sector, drastic tightening of consumer spending and fiscal retrenchment from Governments—now means that some commentators warn that the crisis could become as grave as that of the early 1930s, when Governments around the world ignored their collective responsibility to promote growth, ploughed on with austerity and retrenchment and ushered in a decade of depression, unemployment, protectionism and political instability? Here in Britain, families and businesses, deeply worried about their jobs and mortgages, will hear the Chancellor’s talk of safe havens and conclude that he is either deeply complacent or in complete denial about what is happening in our country.

Since the Chancellor’s economic policies have started to kick in, well before the latest bout of financial market instability, confidence has collapsed and our economy has flatlined for nine months, growing slower than that of the US and the eurozone. On the latest OBR figures, before growth forecasts—which the Chancellor today confirmed—were to be downgraded yet again, the borrowing forecast was £46 billion higher than the Chancellor planned.

We need a tough, medium-term plan to get our deficit down, but it is the Chancellor’s reckless—[Interruption.]

[Mr Speaker]

Order. The House must come to order. I repeat what I have said many times: if Members shout their heads off, then expect to be called, they are suffering from an element of self-delusion.

[Ed Balls]

The Chancellor’s reckless policies—too far, too fast—have ripped out the house’s foundation and left our economy deeply exposed to the brewing global hurricane. Yet, despite all the evidence and with our stock market falling 10% or more this week, the Chancellor still claims that his policies are working and that we are a safe haven. Despite the evidence of the past two years from credit default swaps and the fact that, in the past week, long-term interest rates have fallen in Britain and in the US, he still claims that falling UK long-term bond yields are a sign of enhanced credibility and not of stagnant growth in our economy. Does he not remember that the Japanese Ministry of Finance briefly took some comfort from low and falling bond yields in the early 1990s, at the beginning of a lost decade of no growth and stagnation? However many times he says that his plan is working, that does not make it true. However, many times he claims that he has restored confidence or delivered on deficit reduction, that does not make it true.

We know that the Chancellor has spent the past fortnight in Hollywood, but he cannot just write the script and watch it come to life. That is not how things work in the real world. If he will not take it from me, perhaps he should hear the words of Paul Krugman, the Nobel prize winner, who said:

“Britain’s experiment in austerity is going really, really badly. But the Chancellor of the Exchequer is finding solace in… fantasy… the wolf is at the door and Osborne thinks it’s the confidence fairy.”

The Chancellor finds the state of the British economy reassuring; we find it deeply worrying. He rejects our call for action now, including a temporary VAT cut, and vows to plough on regardless. We say that this approach is deeply incautious and reckless. The eurozone is in crisis. America is in political paralysis. The British economy is flatlining. Global markets are in turmoil. The world desperately needs strong and united leadership. Here in Britain, we need our Chancellor to get out of his complacent denial and get back to reality before it is too late.

The Economy

Debate between Ed Balls and John Bercow

Wednesday 22nd June 2011 Commons Chamber

[Ed Balls]

No; perhaps I need to say this to the hon. Gentleman again. I will take his intervention after I have established my argument.

The Chancellor ignored the fact that we were not in the euro, and that—[Interruption.]

[Mr Speaker]

Order. I know that I have done this many times before, but I appeal to right hon. and hon. Members to have some regard to the way in which our proceedings are viewed by the people whose support we were seeking only 13 months ago. I do not care whether this sort of behaviour was traditionally thought to be a good thing; it is not, and if people behave like this and expect to be called, they will be disappointed.

[Ed Balls]

Thank you, Mr Speaker.

In the Budget debate, I took 16 interventions from Members on the Government side of the House. I will take interventions, but not from people who shout and are aggressive while I am still establishing my argument. Let me establish my argument; then I will take interventions. I will start with the hon. Member for Sevenoaks (Michael Fallon) in just a moment.

The Chancellor insisted, despite the fact that we were not in the euro, that our debt maturity was long and that our long-term gilt yields were historically low and had started to fall well before the election. He made the economically illiterate and preposterous claim that, like Greece, Britain was on the brink of bankruptcy. Having already abolished the child trust fund and the future jobs fund, he announced in the Budget immediate plans to take billions more out of the economy through a combination of deep spending cuts and tax rises. That included an increase in VAT to 20% and a cut in tax credits for thousands of families. It also included cuts to housing benefit, pensions and disability benefits. The Chancellor boasted in that speech that the Budget was progressive, not regressive, and that it would be an extra £40 billion fiscal hit in this Parliament. Labour Members warned him of the dangers, but the Chancellor said it would work. Let me cite what he said a year ago:

“These forecasts demonstrate that a credible plan to cut our budget deficit goes hand in hand with a steady and sustained economic recovery, with low inflation and falling unemployment.”—[Official Report, 22 June 2010; Vol. 512, c. 168.]

Things did not turn out that way last year.

Since the Prime Minister foolishly said in October that the economy was out of the danger zone, we have had the biggest fall in consumer confidence for 20 years; our economy has flatlined and not grown at all since the autumn; inflation is now higher than in every country except for Estonia and Turkey; the Institute for Fiscal Studies has declared the Chancellor’s Budget to be regressive, not progressive; and child poverty is expected to rise this year, next year and the year after, with women hit harder than men and families with children hit hardest of all. I have to say that this anniversary—unlike your anniversary, Mr Speaker—is not one worthy of celebration. It is certainly not an anniversary worthy of a 40th birthday party bash at Dorneywood. I do not know whether you were invited to the party at the weekend, Mr Speaker. I was not, which might be because I am not a Knight of the Garter.

--- Later in debate ---

[Ed Balls]

rose—

[Mr Speaker]

Order. I am glad that the exchanges so far have been good-natured, but may I remind colleagues of the merits of brief interventions? A lot of Members want to make speeches, and I want to help them to do so.

[Ed Balls]

I think the question that people will be asking in the hon. Gentleman’s local newspaper is this: why does he oppose a tax cut that would provide £450 for every family this year, and would boost failing confidence?

The hon. Member for West Suffolk does not seem to have turned up. It is so disappointing that he is not here, as he was last time, because I had a very good contribution for him.

Let me now set aside the Chancellor’s wild and nonsensical political attempts to draw parallels between Britain and Greece, and make a serious point about what is happening in Greece and how it affects the United Kingdom. The issue now is not whether Britain does or does not contribute to a further EU financial package for Greece. Like the Chancellor—I think—I believe that that would be the wrong thing for our country to do. It seems to me that we have reached a point at which talk of more temporary liquidity austerity packages, and further tough talking, is no longer working.

EU Finance Ministers must face the fact that Greece needs economic growth to succeed. Otherwise, it will be stuck in a debt trap. It is now very hard to see how Greece can stay in the single currency without a change of strategy on fiscal austerity and a substantial restructuring. The fact is, however, that it is precisely because the UK is outside the eurozone—and thank goodness we are; I will take an intervention on that if any Member wishes to intervene—and because our banks are less exposed to Greek debts than those in Germany and France that Britain should be an honest broker in these discussions. We are in a position to present an objective argument for immediate and co-ordinated action to restore jobs and growth and start reducing the debt, along with a sustainable, long-term plan for its reduction. However, we can do that without being accused by the people of Greece that we are merely looking after our own interests.

Banking

Debate between Ed Balls and John Bercow

Wednesday 9th February 2011 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

Given that this statement was not on the Order Paper, I thank the Chancellor for the eight minutes’ advance notice he gave me of it. Yesterday, he confirmed in his “Today” programme mini-Budget that he is cutting taxes for the banks this year, compared to last year. [Interruption.] Today we find out what the Chancellor has got in return from the banks, after weeks and months of negotiations with the UK banking industry, culminating in the complete shambles of the past 24 hours, and the result is: precious little. From a Chancellor who talked so tough in opposition and who even yesterday continued to promise much, this is a pitiful outcome and an embarrassing climbdown. [Interruption.]

[Mr Speaker]

Order. Earlier I made it clear that heckling and abuse of the Prime Minister when he was answering questions should not take place and that his answers would be heard. I say to hon. Members who are now heckling the shadow Chancellor, stop it. It is a disgrace. The public loathe it. Do not imagine for one moment that while screaming abuse you have the slightest prospect of being invited to ask a question. Behave and get the message.

[Ed Balls]

Thank you, Mr Speaker. They tend to heckle when they are worried.

A “damp squib” is defined in the dictionary as something potentially explosive but that fails to perform because it has got wet. That is this Chancellor all over. This negotiation has turned from Project Merlin into “The Wizard of Oz”: the curtain has been pulled back and there is nothing there. Of the leading players on the Government Front Bench, who is the one without courage, who is the one without a brain and who is the one without a heart?

Let us review what the Chancellor has achieved. On lending, he claims to have secured an agreement with the banks to lend £190 billion this year, but financial experts are clear that the deal he has announced is vague, toothless and unenforceable and not a proper substitute for proper competition. How will he be able to measure in detail whether the deal is delivered? Can he tell us the detail of how it will be enforced? Is there a sanction if the lending does not materialise? Was not a senior banker right when he told the Daily Mail on Monday that this lending agreement is “meaningless”? Is not the Financial Times right to say today:

“With much noisy showmanship, the Conservative-Liberal Democrat coalition is puffing demands that are little more than cosmetic”?

Is not that the truth?

On pay transparency, again we have a damp squib. The Chancellor claims that we will now have the most open regime in the world, but what does it actually add up to? The answer is transparency for pay and remuneration of only the seven most senior bank executives, whose anonymity is still fully protected. The Government are demanding that local authorities publish the salaries of anyone in local government earning more than £58,200, but he is allowing a taxpayer-owned bank and publically quoted companies in the financial sector to continue to pay staff millions of pounds in pay and bonuses with no transparency at all.

Why is the Chancellor not activating the legislation that we put on the statute book that would require the publication of the remuneration of any individual paid more than £1 million? It is there on the statute book and ready to go, so why not just sign the order and get on with it? Why has he failed so abjectly to make any progress in international negotiations with European and global Governments on transparency? There has been no progress because there is no sign that he has even tried.

On bonuses, I am afraid that the country will conclude that the Chancellor has thrown in the towel in the face of extensive lobbying by people with whom he and his Conservative colleagues have just become too close and too cosy. Does he remember what the Prime Minister said just two years ago—when Leader of the Opposition—when attacking the previous Government? He said:

“Because of this dithering we could see bonuses paid out for a second year to executives in taxpayer owned banks, which is unacceptable.”

After months of dithering from this Chancellor, what will we see over the next fortnight? We will see exactly that: bonuses running into millions of pounds, in cash and shares, paid to executives in taxpayer-owned banks. What he should be doing today is announcing proper reform of corporate governance and taking up our proposal to repeat last year’s £3.5 billion bank bonus tax, in addition to his levy, and use the money to support jobs and growth to kick-start his stalled recovery.

I have told the Chancellor that I will support him on long-term banking reform, enforceable lending agreements and proper statutory action on transparency and pay. Our economy badly needs a reformed, transformed, vibrant and globally competitive financial services industry for the future. He is right that hundreds of thousands of jobs depend upon it. However, this is not an agreement to secure the long-term future of our economy, but a short-term and shabby political deal. There have been talks that dragged on for weeks, a mini-Budget on the “Today” programme, crisis conference calls with the banks yesterday afternoon, a hasty compromise cooked up overnight and a Chancellor finally coming to the House with little to offer in return for his tax cuts for the banks.

I have to say that this is a Chancellor who, as the former CBI head has said, puts politics before economics. He talked tough in opposition, but in government he looks increasingly out of his depth and out of touch. We have rising VAT, rising fuel prices, rising unemployment and deep spending cuts hitting living standards of families, and yet his first priority is a tax cut for the banks. Millions of families up and down the country will now be asking, whose side is this Government on?

Points of Order

Debate between Ed Balls and John Bercow

Wednesday 12th January 2011 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr. Speaker. The House has been waiting for the conclusions of the counter-terrorism review since the end of the summer. It now seems that we will not have a statement this week, and that we may not have one next week either. It appears, however, that the full details of the review were leaked to a BBC television station last night. Is that not a shambolic and contemptuous way in which to treat the House in respect of an issue of such vital national importance when, as the Prime Minister said today, consensus is the right way forward? Have you any information, Mr. Speaker, on when we are likely to have a statement, and should that not happen tomorrow or as soon as possible?

[Mr Speaker]

The short answer to the right hon. Gentleman’s question is that I have no knowledge of when a statement is to be made, and I do not want to become involved in hypothetical questions. I am not aware of the disclosure to which the right hon. Gentleman has referred, but as the whole House—including Ministers—is aware, when decisions have been made they must first be announced to the House.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Monday 6th December 2010 Commons Chamber

[Ed Balls]

The deputy to the Home Secretary will have to do a lot better than that. These cuts are front-end loaded and go well beyond the 12% over four years that Her Majesty’s inspectorate of constabulary said was do-able. I am pleased that he has not repeated the 11% smear against our police, which he knows is a completely corrupt and erroneous statistic. Hon. Members should look at the numbers. In north Wales, 230 officers are to go; in the west midlands, 1,100; and in Greater Manchester, 1,387. The chief constable of Greater Manchester police said that

“there will be a reduction in frontline police officer numbers”.

The Home Secretary was not willing to stand up for the police in the spending review, and she is not willing either to stand up in the House and answer my questions on the police. She can refuse to answer my questions, but she cannot refuse to answer the questions from police officers and the public all around the country. Today—

[Mr Speaker]

Order. We must have a one-sentence question.

[Ed Balls]

I call on the Home Secretary to listen to police chiefs and the public, and I demand that her spending settlement be reopened, that there is an end to front-end loading and that there is a better deal for the police.

Points of Order

Debate between Ed Balls and John Bercow

Tuesday 23rd November 2010 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. Of course, I commend your chairing. Given that we have just witnessed a U-turn on a U-turn, I am tempted to ask whether you might allow the Home Secretary to start again, but I fear that that might be ruled out of order.

On a more serious point, may I ask whether the Home Secretary contacted you today about the leak of her statement to the BBC? Did she explain why the statement was leaked to the BBC, and do you think it would be appropriate for her to explain to the House why the details of her statement were leaked to the BBC this morning?

[Mr Speaker]

I sometimes wonder whether these generous initial remarks are a ruse by Members to get me on their side, but I am grateful to the right hon. Gentleman. I was not contacted by the Home Secretary about the matter to which the right hon. Gentleman refers, but he makes his point with force and clarity. I am always concerned that the House should hear key announcements first. However, I would say that when different numbers are being bandied around that is sometimes a sign of a matter for debate rather than a point of order. However, I shall keep my eyes and ears focused firmly on these matters because the House must hear first.

[The Secretary of State for the Home Department (Mrs Theresa May)]

Further to that point of order, Mr Speaker. As you have more or less indicated, I think that the Home Secretary—

--- Later in debate ---

[Mr Speaker]

The Home Secretary nods assent to that proposition. I hope that such a mistake will not happen again.

[Ed Balls]

rose—

[Mr Speaker]

The right hon. Member for Morley and Outwood (Ed Balls) is insatiable today.

[Ed Balls]

Further to that point of order, Mr Speaker. Having heard the Home Secretary’s remarks, I fully accept that it was not her or her Department who made this leak. I hear you saying two things from the Chair: first, that these leaks are undesirable and, secondly, that they are even more undesirable if people get the numbers wrong when they are doing the leaking.

[Mr Speaker]

The question of whether it was or was not a leak remains undetermined. All I can say is that I am Speaker of the House, but I am not Sherlock Holmes. Moreover, as usual, the right hon. Gentleman has used his ingenuity to put his point firmly on the record. If there are no further points of order, perhaps we can come to the ten-minute rule Bill, for which the promoter and some of his supporters have been eagerly waiting.

Academies Bill [Lords]

Debate between Ed Balls and John Bercow

Monday 26th July 2010 Commons Chamber

[Ed Balls]

If the hon. Gentleman looks at the facts over the past decade, he will see that of the 20 local authorities that had the biggest increase in results, half were in the poorest 10% of boroughs in the country, all of which were in London. The London Challenge programme and our academies focused on tackling disadvantage. Of course there is a long legacy of social division and inequality in our education system. We were addressing it; the Government are going to re-entrench it. That is the difference.

Let us look at the amendments that—[Interruption.] The Secretary of State, who chose not to participate in this Third Reading debate—[Interruption.]

[Mr Speaker]

Order. Let me say that we have 15 minutes left to complete our consideration of Third Reading. We do not have enough time to go back to 1931 and Ramsay MacDonald.

--- Later in debate ---

[Ed Balls]

It would have been better if the Secretary of State had contributed to this debate, given that it was so truncated. The only thing that I will say, Mr Speaker, is that in 1931, Ramsay MacDonald cut public spending to try to get us out of a recession. That caused a depression, and I am afraid that he ended up going into a coalition with the Conservatives. In that debate the Liberal Democrats opposed the cuts that were being made; unfortunately, this time they are propping up the coalition. However, I did not raise the issue of Ramsay MacDonald, Mr Speaker, so I will move on.

Let me look at the amendments tabled that have been rejected. First—

[Mr Speaker]

Order. Let me gently say to the shadow Secretary of State—this is a point often not fully comprehended on either side of the House—that contributions to Third Reading debates have to be on the remaining content of the Bill, and must not focus on matters that have been excluded from it. But I know that the right hon. Gentleman will reorient his remarks readily.

[Ed Balls]

In that case, Mr Speaker, I will make no reference to the fact that a requirement that the admissions code should attach to such schools was excluded from the Bill, nor will I refer to the fact that parental consultation could have been strengthened, but that that was ignored.

Let me come to the substance of the Bill as we find it. The thing that worries me most is this—

Academies Bill [Lords]

Debate between Ed Balls and John Bercow

Monday 19th July 2010 Commons Chamber

[Mr Stuart]

The right hon. Gentleman is seeking to be a leader, but he seeks leadership in the luddite tendency. He has always opposed reform: he opposed it from the Back Benches when he first came into Parliament, and he continues to oppose reform that will raise standards.

To return to the subject of Building Schools for the Future, my right hon. Friend the Secretary of State was absolutely right to intervene. He took a brave decision to intervene on a programme that is wasteful and that does not lead to results in our schools. We will now have a system that prioritises need, not political fixes, and that ensures that the money goes on school buildings—

[Mr Speaker]

Order. Let me just say to the hon. Gentleman that even though he is the elected Chair of the Select Committee on Education, he must be economical in his interventions.

[Ed Balls]

The former Chair of the Select Committee on Children, Schools and Families and I did not always see eye to eye, but he always had respect on both sides of the House for his independence. The hon. Member for Beverley and Holderness (Mr Stuart) got some respect yesterday for saying that the Bill was being railroaded through Parliament, but he loses it for that ridiculous, partisan and stooge-like performance. Maybe he should call some witnesses and hear some evidence before he decides to write his Select Committee’s report—unless it is being written for him by Conservative Front Benchers. His credibility is very substantially undermined.

--- Later in debate ---

[Ed Balls]

The hon. Gentleman has obviously done a good job of whipping some colleagues, but it is a pity that he did not speak to the Liberal Democrat Education Association, which has condemned the very Bill that he is being asked to vote for today. We must wait and see whether the hon. Gentleman signs the association’s petition—I do not know whether he is thinking about leadership elections to come.

My point is that visits to metropolitan areas and apologies are not enough. That is not what people want. Parents, teachers and children do not want the Secretary of State to say sorry; they want him to change his mind, to throw out this Bill and to let them build the new schools that they were promised. The people I spoke to today also said to me, “Can’t you get an answer from the Secretary of State?” I wrote to him two weeks ago to ask whether the money was being diverted away from Building Schools for the Future to fund the proposals in this Bill, but I have had no reply so far. I am going to ask him the question again, because a lot of taxpayers’ money rides on the answer. During the weekend before he announced the cancellation of Building Schools for the Future, did he at any point receive written or oral advice from departmental officials or from Partnerships for Schools urging him not to publish a list of schools until after he had consulted local authorities to ensure that his criteria were sound and that his facts were right? I would be very happy to take an intervention from him. Would he like to answer the question? No.

[Mr Speaker]

Order. We do not have forced interventions.

[Ed Balls]

After two weeks of waiting for an answer, my expectations were not very high.

Let me try another question. Is it not the case that the Secretary of State was also advised of the risk of legal challenges from private contractors, and did he not personally decide to ignore that advice? He can set the record straight now, or we can keep on asking these questions. People want to know the answers. This is about the cack-handed way in which he did this, and about whether there will be legal challenges from the authorities and contractors who will have been left out of pocket by hundreds of millions of pounds as a result of his decision.

--- Later in debate ---

[Pauline Latham (Mid Derbyshire) (Con)]

Would you say that the shadow Secretary of State is going back 20 years and coming back with the same arguments and fears that the Labour party put out about grant-maintained schools, when there was absolutely nothing wrong with them? They did a very good job for schools, raised standards and raised attainment for many pupils. They did a really good job, but, like then, you are just coming back and trying to bully people into saying that the Bill will not work and should not go ahead.

[Mr Speaker]

May I gently say that I am not coming back to bully anyone? I have never done that before and I would not do it in future. I know that Members will not want to use the word “you” again.

[Ed Balls]

The hon. Lady is absolutely right that we have been here before. We have had freedoms and resources given to higher-performing schools in more affluent areas, and we all know what resulted from it. The academies policy that we introduced was the exact opposite of that, but our policy is being undermined.

The reality is that this Bill gives extra resources to higher-performing schools in more affluent areas while at the same time removing any obligation for consultation with parents, local authorities or external sponsors. Indeed, the requirement for a sponsor is removed entirely under this legislation. We have talked about consultation, but the fact is that the only consultation any school need have about how it proceeds and how it teaches its curriculum is with the Secretary of State. The role of the local authority is entirely removed. This is the biggest centralisation in education policy in the post-war period.

Although the Bill makes clear that the academies will be accountable to the Secretary of State, it is interesting to note that the model funding agreement circulated by the Government contains no requirement for teachers to have qualified-teacher status. It also contains no requirement for co-operation in regard to behaviour and exclusion: schools can go their own way and exclude at will. There will be no independent appeals panels for excluded children, which will hit children with special needs disproportionately. There is no requirement for a named member of staff to be responsible for children in care. There is no requirement for careers education. There is no requirement for academies to observe nutritional standards, or to provide sex and relationship education. We will address all those issues in our amendments, and I urge Members to vote for them so that we can put the Bill on to the straight and narrow.

Points of Order

Debate between Ed Balls and John Bercow

Wednesday 14th July 2010 Commons Chamber

[Mr Speaker]

It is, indeed, amazing and it also enables the hon. Gentleman, whose work on trafficking is respected across the House, to underline the importance of the campaign. That is precisely what he has done and I have a feeling that he will share the Hansard report of his point of order with people in Wellingborough.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. The issue of the five lists and the mishandling of the Building Schools for the Future announcement was raised at Prime Minister’s questions. You will know that, on Sunday, I wrote to the Secretary of State for Education and copied the letter to you, to ask for a clear answer to the question of whether, a week ago, before the first list was published, the Secretary of State was advised by his departmental officials not to proceed on this course but to consult local authorities instead, because of the danger of getting the lists wrong and causing both confusion and legal challenge. I have had no reply yet from the Secretary of State. I wonder whether you think that that is in order or a gross discourtesy both to you and myself.

[Mr Speaker]

I do not think that there is anything disorderly at all at this stage, but if the right hon. Gentleman is dissatisfied by the absence of a reply to his letter, it is perfectly open to him to table questions to inquire when he can expect a reply. I have a feeling that that device, and possibly other parliamentary devices, will spring into the right hon. Gentleman’s fertile mind.

Oral Answers to Questions

Debate between Ed Balls and John Bercow

Monday 12th July 2010 Commons Chamber

[Mr Speaker]

Order. Both the Secretary of State and the shadow Secretary of State have had their say, and I know that we will now want to return to Ilkley and Bingley.

[Ed Balls]

The right hon. Gentleman cannot give a straight answer to a straight question. The people of Bingley and Ilkley will not be satisfied by that answer, and nor are we. Interestingly, his letter today says very clearly that his fifth list has been validated by local authorities—presumably a clear admission that the information should have been validated before the list was published in the first place, including by Bradford authority, in which the schools of Bingley and Ilkley are situated.

Let me ask the right hon. Gentleman another straight question. Is it not the case that he was advised of the risk of legal challenge from private contractors, but that he personally decided to ignore that advice and take that risk with taxpayers’ money? That is a very simple question. We all know that he is on shaky ground, and that he is fast losing the confidence of pupils, parents and teachers. If he had any sense, he would end this shambles, withdraw these error-strewn lists, and let our communities have new schools.

Points of Order

Debate between Ed Balls and John Bercow

Monday 5th July 2010 Commons Chamber

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

On a point of order, Mr Speaker. A Member of the House doing an interview with the BBC at 5.25 this afternoon was given the full list of schools in her constituency on the departmental list. It transpires that that was sent out to the media by the Department at 5.20, but at 5.45 there was still no list in the House of Commons Library. Is that not a shameful way to treat the House? How can Members respond when they are not given the information being given to the press?

Further, at 4 o’clock this afternoon, the Chief Secretary to the Treasury made a written ministerial statement in which he announced a £1 billion cut to the budget of the Department for Education—a cut that was not mentioned subsequently in the Secretary of State’s statement, which was labelled a statement on school funding. How can that happen?

Further, allegations have been made in the House about financial improprieties that happened before the election. I said clearly that there had been no direction, and that everything was agreed with the Treasury. The allegations were then repeated. Can we have chapter and verse and a reply from the accounting officer at the Department before the House rises tonight, so that we can clear up the matter and find out who is telling the truth?

[Mr Speaker]

I am grateful to the right hon. Gentleman for his point of order. Matters of procedure, or indeed of process, are matters for me in the Chair. Matters of content of statements are not. What I can say to him, and to the House, is the following. Obviously, I have done, or have had done for me, a little bit of research in anticipation of the possibility of points of order on this matter. “Erskine May”, on page 441, makes it clear that

“a document which has been cited by a Minister ought to be laid upon the Table of the House, if it can be done without injury to the public interest.”

That principle does seem to apply to the list—the document, or documents, in this case. It, or they, should be available to the whole House, rather than just to individual Members when they ask or through correspondence afterwards. I think that the thrust of what I have said is clear.

We had extensive exchanges and considerable dextrousness was required from the Secretary of State for Education. He was asked a great many questions and sought to answer them. It seemed to me a pretty unwieldy process, to put it mildly, for us not to have the documents available at the appropriate time. I have noted what the right hon. Member for Morley and Outwood (Ed Balls) has said about the timing of the passing of documents to members of the media and so on, but before I pass any comment on that matter, I think it is only right to ask the Secretary of State for his comments in response to the point of order and to what I have said.

--- Later in debate ---

[Mr Speaker]

In response—I do not want to have an extended exchange with the right hon. Gentleman, and I am grateful for his efforts to co-operate —[Interruption.] Order. If the Secretary of State says that he is not aware—he is a person of his word—I of course accept that he was not aware, but what I would say is that the Secretary of State should be aware of whether something has been passed to the media before the statement is concluded. If he is not aware, it is inevitably possible that something would be passed to the media, as it has been suggested has happened, before the statement is concluded. That would be a rank discourtesy to the House. I have known the right hon. Gentleman for 20 years, and I have always known him to be a person of the utmost courtesy, but it is fair to say that there has been something of a breach of courtesy today.

[Ed Balls]

Further to that point of order, Mr Speaker. On your ruling, I told the House five minutes ago that the list was circulated to the press at 5.20. Either the Secretary of State for Education doubts my word, or he should apologise to the House for the list being sent to the media 25 to 30 minutes before it was placed in the Library of the House. Can we also have answers to the question on the allegations about my impropriety? Will he provide a reply with evidence about these allegations of financial impropriety from the accounting officer and the permanent secretary of the Department before the House rises tonight?

[Mr Speaker]

The shadow Secretary of State has now twice, very clearly, made his point about the timing of the release of the documents to non-Members of Parliament. The Secretary of State has offered a form of apology; whether he wishes to add to that is a matter for him.

As for the other important matter raised by the shadow Secretary of State, namely what he regards as a slur on his good name, I must tell him that, procedurally, it is not a matter for me. It is a matter of debate, and I have a feeling that it will be the subject of continued exchanges between the two titans for some time to come.

Education Funding

Debate between Ed Balls and John Bercow

Monday 5th July 2010 Commons Chamber

[Mr Speaker]

Order. I am sorry to say that the Secretary of State significantly exceeded his time, which he will not be allowed to do again. In fairness, I shall also have to allow some modest leeway for the shadow Secretary of State.

[Ed Balls (Morley and Outwood) (Lab/Co-op)]

The Labour Government built or refurbished 4,000 schools—the biggest school building programme since the Victorian era—and today is a black day for our country’s schools. It is a damning indictment of this new Tory-Liberal coalition’s priorities and it is a shameful statement from this new Secretary of State, who will for ever go down in history as the man who snatched free school meals from 500,000 poorer pupils and has now, today, in one stroke axed hundreds of brand-new schools from communities across the length and breadth of our country.

Building Schools for the Future was a once-in-a-generation chance to transform the whole local fabric of education—of secondary education, special schools and vocational learning, too. The freezing of the programme that has just been announced is a hammer blow for many hundreds of thousands of children, parents, teachers and governors who will now not get the transformed new school they were promised.

I predicted this day during the general election, and, after weeks of indecision, uncertainty and media speculation that has led to widespread confusion and concern in schools and in the construction industry, too, I am grateful that the right hon. Gentleman has finally made a statement to this House. However, is it not a disgrace that, even now, the Secretary of State has not provided a list of all the schools that will be affected? How can hon. Members on both sides of the House ask questions of the Secretary of State when they do not know which of the schools in their constituencies will be affected? The Secretary of State knows the names of the schools. I believe that he has a duty to tell the House and the country and that he should agree to publish the list now—straight away—so we can give it proper scrutiny.

Let me turn to the some of the detailed issues that the right hon. Gentleman mentioned. On standards, will he confirm that in the recent trends in international mathematics and science study—or TIMSS—England has risen from 25th in the world to seventh in the world and that among 10 to 14-year-olds we now have the highest achievement in mathematics of all European countries in that study? Why cannot he stop running down the achievements of our children and teachers in our schools?

On teaching, does the Secretary of State agree that we have the best generation of teachers that we have ever had? Will he confirm that the previous Government had already invested in expanding Teach First, including pilots for primary schools? Is he aware that it was the leadership of Teach First who warned me that to accelerate the expansion of the programme any faster would put at risk the quality and success of Teach First—a risk that he has just taken in this statement?

On the Building Schools for the Future programme, the National Audit Office looked into the programme last February and said that originally the forecasts were “overly optimistic”, and that local authorities were asked

“to spend more time to improve their proposals, because…it was more important to improve the quality than to accelerate the programme.”

The NAO concluded that the processes for procurement had “significantly” improved and also found that the total capital cost of each BSF school was similar to that of other schools and 17% cheaper than that of previous academies.

In the next year, as the Secretary of State travels around the country opening the 200 new schools set to open under the BSF programme, will he tell pupils, parents, governors and contractors that their school is part of a programme he believes to be “dysfunctional” and a “waste” of money? Or will he withdraw these unrepresentative and vindictive remarks? It is not the bureaucracy that he is abolishing, but hundreds of new schools for children in our country.

As for my record as Secretary of State, some very serious allegations have been made. I have this afternoon written to the permanent secretary at the Department for Education, who was also the accounting officer for the whole time I was Secretary of State. I have asked him to confirm that all capital funding announcements, including those on BSF, were made with prior agreement between the Department and the Treasury in a normal and fully legitimate way and with his full agreement as chief accounting officer and to confirm that if that had not been done properly, the accounting officer would have insisted on a ministerial direction but that no such directions were issued by me and none were requested. If the right hon. Gentleman has evidence that the proper processes were not undertaken, it is incumbent on him to provide that evidence to the House, rather than make these allegations. I hope that he will agree that his permanent secretary must be encouraged to clarify these issues as soon as possible today.

The right hon. Gentleman has chosen today to freeze BSF and to ask one of the Prime Minister’s old university chums to review the whole programme. He has offered no assurance that this review is anything more than a fig leaf, however. Is it not the truth that 750 schools that have not yet signed their contracts will now be told that they will not get their new school building? We need to know how many schools will be affected, where they are, and how much money has already been spent on those programmes. Is it correct, as the Financial Times reports, that more than £1 billion-worth of new undertakings have been signed since the general election? Does the right hon. Gentleman have an estimate of how much his Department will now have to pay in legal and contractual costs associated with those frozen or cancelled contracts? How many private sector jobs does he think will be lost as a result of these decisions?

The Secretary of State says that this decision is inevitable. That is what Ramsay MacDonald said in 1931, and Margaret Thatcher said to the House in 1980 about investment spending cuts. Only a few weeks ago, the Chancellor of the Exchequer told the House in the Budget statement that

“an error was made in the early 1990s when the then Government cut capital spending”

and said that he had decided that there

“will be no further reductions in capital spending totals”.—[Official Report, 22 June 2010; Vol. 512, c. 170.]

Is it not the truth that, while I won my battles with the Treasury for rising education spending, the Secretary of State has lost his battle and is now planning cuts of between 10% to 20% to the schools budget? Will he also confirm that his top priority for the spending review will be his free-market schools policy, which will see new schools being built in an unfair two-tier system paid for by cuts to the Building Schools for the Future programme and to the new schools that were promised over the past year or two in the constituencies of hon. Members on both sides of the House?

What we have seen from the coalition today is another attack on jobs, another assault on opportunities and a huge blow to the life chances of children in communities across our country. This was not an unavoidable decision; it is a choice that the right hon. Gentleman has made, and in my view, he has made the wrong choice. I say to every family, every school, every Member of Parliament and every community blighted by this decision that we on this side of the House will fight to save our new schools. We not stand idly by and see this happen.

Free Schools Policy

Debate between Ed Balls and John Bercow

Monday 21st June 2010 Commons Chamber

[Mr Speaker]

Order. I am grateful to colleagues for their co-operation, but all good things come to an end. Time is pressing and we must move on.

[Ed Balls]

rose—

[Mr Speaker]

The shadow Secretary of State will know that points of order come after statements, so he will have to raise his point of order later.