Tax Avoidance (HSBC)

Debate between George Osborne and Andrew Love

Monday 23rd February 2015 Commons Chamber

[Mr Osborne]

They don’t want to hear about their record in government, Mr Speaker. Every single alleged offence happened when the Labour Government were in office. The information became publicly known when the Labour Government were in office. Lord Green’s first public appointment was as chair of the Prime Minister’s business council under the Gordon Brown Administration. The information was received from the French authorities under the last Labour Government. So I think the whole House—and, indeed, my hon. Friend’s constituents, who pay their taxes—would like the shadow Chancellor to get up and express a little bit of humility and contrition for the mistakes made when he was in office.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Since 2010 the Chancellor or Treasury Ministers have met HSBC 56 times. Was tax avoidance or tax evasion ever discussed at those meetings, and what was the outcome of those discussions?

[Mr Osborne]

First of all, it is not surprising that the British Government—Conservative, coalition or Labour—would meet one of the country’s largest institutions and banks. So that it is not a matter for surprise. I am happy to write to the hon. Gentleman about any details we have about particular meetings.

Autumn Statement

Debate between George Osborne and Andrew Love

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

My right hon. Friend is absolutely right. Of course, he knows that we embarked on this work on how to extend support to postgraduates when he was Minister for Universities and Science—it might have been him who first proposed the idea to me—and I am absolutely delighted that it has come to fruition. This is one of the biggest reforms I have announced today. It will provide real support for postgrads, who do not currently get any support. In almost all the reports that one reads on social mobility, including the report by Alan Milburn, that has been identified as a barrier to entry for people from low-income backgrounds into the professions. It is a really important step forward. Again, I suspect that it will not be the headline in tomorrow’s newspapers, but that does not mean that it is not going to change lots of people’s lives.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Yesterday, the right hon. and learned Member for Rushcliffe (Mr Clarke), a former Chancellor, gave an extended interview to the BBC in which he said, among other things, that the Government should keep tax increases in the locker in case they are needed. Does the Chancellor intend to consult former Chancellors on his long-term economic plan? If not, will he now deny that a VAT rise will be imminent after the next election?

[Mr Osborne]

I have set out today how our plans to bring the deficit down and bring borrowing down can be achieved through spending reductions in Departments and through welfare savings, and therefore do not require tax increases. I also explained that if we were to achieve over the next period the same as we have achieved during this Parliament in dealing with tax avoidance, tax planning and aggressive tax evasion, we could achieve £5 billion of savings, or extra revenue, in that space of time as well. That is a better way to proceed, and that is the course we have set.

EU Budget (Surcharge)

Debate between George Osborne and Andrew Love

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

My right hon. Friend is absolutely right. Of course, we needed the agreement of all the member states for this budget deal. Any one of them could have blocked the deal, but we got the support of all the other 27 member states, not just to delay the payment and have no interest applied but permanently to change the rules.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

For the fourth time, I think, in this House, may I press the Chancellor to tell us which Foreign Minister or which Commission official agrees with his interpretation of the rebate?

[Mr Osborne]

As I say, it required the agreement of all 28 member states to get the budget deal at ECOFIN. The discussion on the British rebate was a discussion had with the Commission. The Commission confirmed that the rebate would apply, and apply in the amount it did, only on Thursday night. The hon. Gentleman also serves on the Treasury Committee. If he, like every other Labour Member, was so wise about the number, why were they not saying this beforehand? Not a single Labour MP, either in the Chamber of the House of Commons or on the media, said anything other than that we would be paying £1.7 billion. They are trying to be wise after the event, and they have been found out.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. I remember visiting with him Hainsworth & Sons, a textile company in his constituency, which is now exporting to China. In his constituency, as in others, we have seen a dramatic fall in unemployment. Unemployment is down 31% in the last year; youth unemployment has fallen too. Many of those jobs are in full-time employment, as he says, but of course we are also supporting those in self-employment.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Of all those jobs created, many are part time, and part-time jobs for people who are looking for full-time employment—over a quarter of a million people are involved there. What is the Chancellor doing to increase the opportunities for full-time employment in this country?

[Mr Osborne]

What the hon. Gentleman says is not a clear statement of the facts, because actually, full-time employment accounts for three quarters of all the new jobs created since 2010. Of course there are those who want part-time employment, but for those in part-time employment who want full-time employment, the answer is to continue to support the economy, to do the difficult things necessary on the public finances to inspire confidence in that economy, and not to have disastrous things like a jobs tax rise, which would make it more difficult for those people to get full-time work.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 24th June 2014 Commons Chamber

[Mr Osborne]

I do not think that the Bank is doing that. We have taken a big step forward in this Parliament to give the Bank of England macro-prudential tools to intervene in areas such as housing if it thinks that there is a financial risk. Clearly, these things did not exist before, which is one of the reasons why the economy was in the mess that it was in when we came to office. At the Mansion House, I offered the Bank of England new direct powers to impose limits on loan-to-value and loan-to-income ratios. It is, of course, entirely up to the Financial Policy Committee, acting independently of the Government, to deploy any of its tools if it sees risks developing.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The greatest threat to stability in the housing market is the mismatch between supply and demand. The House knows what the Chancellor has done to stoke up demand, but supply is at its lowest level since records began—fewer than 150,000 units. I heard what the Chancellor said in his initial reply. What more is he going to do to boost supply in the housing market?

[Mr Osborne]

Housing starts are now at their highest since 2007, and we have seen an increase in housing starts and planning permissions this year. I was with the hon. Gentleman in his constituency just the other day, talking about what we could do to get more housing going in his part of London on a brownfield site that he knows has been left derelict for many years. He was working very co-operatively with me then, but perhaps the Chamber of the House of Commons brings out a more adversarial encounter.

The Economy and Living Standards

Debate between George Osborne and Andrew Love

Thursday 12th June 2014 Commons Chamber

[Mr Osborne]

Let me make a little progress, as I know many Members want to speak. I want to cover a couple of the key legislative measures in the Queen’s Speech.

I hope that the Bill to support small businesses and enterprise will receive support from across the House, as it will help those small businesses with their exports, reduce tribunal delays and open up even more Government procurement to them. We are, of course, going to help smaller businesses—and indeed all businesses—by taking under-21-year-olds out of the jobs tax altogether. That is in stark contrast to the jobs tax plan that the Labour party is developing.

Then there is the tax-free childcare Bill—a really important measure to help hard-working families. In this Parliament, we have already extended the free nursery care available to parents of three and four-year-olds to 15 hours. From this September, 260,000 two-year-olds from low-income families will be eligible for free hours as well. Now we are taking another big step forward in helping working parents. Once we pass this new Bill, all families with children under 12 will, in effect, be able to get tax relief for their child care costs—up to £2,000 of help every year for every child. That is a huge boost to working families in this country, and this tax-free child care is affordable only because of the difficult decisions we have taken to bring the public finances under control.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The Chancellor mentioned help to small businesses, but surely the help they really need is an increase in net lending to them from the banking sector, yet it is continuing to fall. How does the Chancellor explain that in the light of the funding for lending scheme, which simply does not appear to be working?

[Mr Osborne]

Funding for lending is now, of course, skewed away from mortgages—a decision taken by the Governor of the Bank of England and me before Christmas—precisely to start to apply some macro-prudential controls to the housing market. It is heavily skewed towards small business lending in order to address the issue of an impaired banking system, still deeply damaged by what went on six or seven years ago. The good news is that a huge amount of progress has been made since this debate last year and since last year’s Mansion House speech; we are undertaking a major restructuring of the Royal Bank of Scotland and, of course, starting to return Lloyds to the private sector. All of that will help make sure that our financial system is functioning properly and supporting businesses that want to grow and expand.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 28th January 2014 Commons Chamber

[Mr Osborne]

The employment allowance will help many small firms that want to invest or take on a new member of staff. I saw that for myself when I visited a small business in Enfield that, as a result of the employment allowance, will take on an extra member of staff. That is the support we can give. It is up to those in this House who promote anti-business rhetoric to get up and explain how that could possibly help our economy. The truth is that by being anti-business, they are anti-recovery, anti-jobs, anti-investment and anti-the British people.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The latest figures show that net lending by banks to businesses has dropped by nearly £56 billion since 2010. The Chancellor is on record as supporting lending to small businesses, so what action is he taking to address the problem?

[Mr Osborne]

Credit conditions for small businesses have been one of the huge challenges since the banking crash. The better news is that conditions are starting to ease, as the most recent surveys show, but I am the first to say that the job is not done. That is why we are shifting the focus of the funding for lending scheme with the Bank of England onto small business lending and why we have introduced the British business bank, which did not exist before. We are doing all those things to support credit, including for small businesses.

Autumn Statement

Debate between George Osborne and Andrew Love

Thursday 5th December 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is assiduous in his observation of these matters, and he will have spotted the first step in a quiet revolution. The Treasury has produced a dynamic model for tax reduction—in this case, for corporation tax. At the moment that sits alongside the static, more orthodox, model that the Treasury has always used. That dynamic model—which we have made available and will, of course, be subject to scrutiny—shows that reductions in corporation tax not only increase investment in this country, but as a result cost less than the scorecard method we normally suggest. We certainly intend to roll out that approach, as they say, to other taxes.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does the Chancellor accept that the recovery is too dependent on consumer expenditure? With net exports not increasing at all, the EU stagnating in coming years—as the Chancellor indicated—and business investment on the floor, what positive steps is he taking to secure a more balanced recovery?

[Mr Osborne]

We want a balanced recovery, as the hon. Gentleman says, and if we look at recent GDP data, the good news is that we have growth in manufacturing, construction and services. The forecast is for business investment and exports to increase, but I agree that those remain challenges, particularly because of what has happened to the source of 50% of our exports—the European continent. That is why the Prime Minister’s trade mission and the expansion I announced today of the export finance guarantee scheme will help Britain’s companies go out to emerging markets and ensure that we are connected to some of the fastest-growing parts of the world.

Economic Policy

Debate between George Osborne and Andrew Love

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is absolutely right. Germany and Canada went into the financial crisis with the two lowest structural deficits of the G7, and the United Kingdom went into the financial crisis with the highest structural deficit in the G7—5%. That was confirmed recently by the International Monetary Fund. I think that, quite extraordinarily, the only person in Britain who still denies that we had a structural deficit is the shadow Chancellor. The former Chancellor accepts it and the former Prime Minister, Tony Blair, accepts it; only the shadow Chancellor does not accept it. He cannot accept it because that would mean admitting he got it wrong, and if he admitted he got it wrong, people would not put him in charge again.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

It is suggested that to establish economic credibility we need more growth in the economy, yet—since the Chancellor seems to be quoting former Chancellors—a former Conservative Chancellor said that it will be years before we re-establish proper growth in the economy. How is the Chancellor going to re-establish his credibility?

Autumn Statement

Debate between George Osborne and Andrew Love

Wednesday 5th December 2012 Commons Chamber

[Mr Osborne]

I suppose we are used to opportunism from the Opposition, but we see no greater opportunism from them than that relating to fuel duty. The fuel duty rises that we have cancelled were not part of some mythical plan; they were voted for by Labour Members of Parliament at the time of the last Labour Budget—including, of course, by the shadow Chancellor. My hon. Friend is absolutely right: fuel is 10p per litre cheaper than it would have been if we had adopted the shadow Chancellor’s Budget plans.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Let me return the House to an answer that the Chancellor gave about PFI. He slipped the new PFI 2 scheme into his statement today, but is it not being criticised on the grounds that it is not good value for money—that value for money will, indeed, fall—that it will cost the taxpayer more, and that most of the projects will still be off the Government’s balance sheet? What has changed?

[Mr Osborne]

I do not accept that characterisation at all. I talked about this matter in the statement, and, of course, I expect people to look in detail at the document we have published. There are two substantial changes. First, there will be public sector investment alongside private investment. The public sector will have a share in the equity and will have representation on the boards of these projects to make sure both that we share in the upside and that we know what is going on with these projects, instead of the absolute scandal that we saw under the last Government when on many occasions the public sector was ripped off. The hospitals in south-east London are living with the consequences of that.

Secondly, there will be more on balance sheet in future, but there will also be off balance sheet, and we are going to have new off balance sheet totals and controlled totals so that there is more transparency. I will say more in the Budget about how we are going to account for off balance sheet.

Bank of England

Debate between George Osborne and Andrew Love

Monday 26th November 2012 Commons Chamber

[Mr Osborne]

The Monetary Policy Committee has not requested additional headroom to conduct QE. As I have said, I think QE has been the right instrument to try to keep yields down and support demand, but any questions about Mr Carney’s view of QE in the British context will be ones that the Treasury Committee can direct at him.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I welcome this appointment and, in particular, Mr Carney’s willingness to come before the Treasury Committee as his first duty. What discussions has the Chancellor had with the Office for National Statistics and the Office for Budget Responsibility about the £35 billion asset purchase facility coupon scheme? Does he accept that it will be an exceptional item in the Government accounts?

[Mr Osborne]

Crucially, I discussed this matter with the Governor of the Bank and he discussed it with the Monetary Policy Committee, and they thought it was a sensible move. As I have said to the shadow Chancellor, when the OBR produces its fiscal forecasts next week it will make very clear—I requested this—the distinction between the public finances with and without the APF move.

LIBOR (FSA Investigation)

Debate between George Osborne and Andrew Love

Monday 2nd July 2012 Commons Chamber

[Mr Osborne]

To give a pithy reply, I certainly do find it odd.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does the right hon. Gentleman regret diluting the Vickers proposals, under pressure from the banks? In the light of revelations in recent days, will he ensure that the ring fence is strengthened, so that this does not happen again?

[Mr Osborne]

We are not diluting the Vickers proposals; we are putting them into law. The House will have the opportunity next year to ring-fence retail banking and separate it from banks’ investment banking arms. When I was the shadow Chancellor, I proposed changes to the structure of banking, and they were completely rejected by the former Prime Minister at this Dispatch Box. We now have an opportunity to change the structure of banking, and I hope that I will have the hon. Gentleman’s support when the law comes before us.

LIBOR (FSA Investigation)

Debate between George Osborne and Andrew Love

Thursday 28th June 2012 Commons Chamber

[Mr Osborne]

The Government whom the hon. Gentleman and I both support have introduced clawback so that the bonuses that were given to executives, traders and others in the banks can be clawed back if necessary. That did not previously exist. We are looking specifically at the responsibilities of directors of failed banks. The consultation on that will be published next week as a result of the FSA inquiry into what went wrong at RBS, and as I say, we are responding to today’s report by looking at the regulation of LIBOR, at the criminal sanctions that are available for prosecution, and at what happens to the fine, so that it is the people of Bristol who benefit from the fine that is paid, rather than other banks in the City of London.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

This inquiry was started by the US authorities. The fines that have been imposed, which have been mentioned by many Members, were four times as large in the United States as they are in the United Kingdom. The US authorities also imposed stringent conditions on the operations of Barclays in this area. When will we get robust regulation in this country? When will the FSA send out e-mails entitled, “You’re nicked, big boy”?

[Mr Osborne]

It sounds like one of the e-mail exchanges that the traders were engaging in at the time, if one reads the report. The US authorities are rightly involved, because much of the manipulation happened with the US dollar market so it is perfectly understandable why they would want to be involved. I have raised this question. Perhaps it is an issue that the Select Committee would also want to consider—why in the US there seem to be more powers available to the authorities than in the UK, and what we can do in this House to make that change here so that the UK authorities have the full range of powers available to them.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 6th March 2012 Commons Chamber

[Mr Osborne]

We are introducing legislation through the Financial Services Bill. It creates the financial conduct authority, which will have additional powers and will, I think, be a powerful champion of consumers. Rather than wait for legislation, we are taking action with the industry’s agreement to introduce a seven-day ban on store card retail incentives so that people cannot take out a store card and immediately get a special offer with it in the shop; and we are stopping excessive card charges being hidden on statements.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

What is the Chancellor going to do about the exorbitant interest rates being charged to vulnerable consumers by pay day lenders, which are now so ubiquitous on our high streets up and down the country?

[Mr Osborne]

I agree with the hon. Gentleman that there are practices in that industry that we want to see stopped—and I would highlight two in particular. The first is the rolling over of loans, which we are working with the industry to stop; the second is the ongoing use of continuous authorities to take money out of bank accounts, which people might not be aware that they have granted to a pay day loan company or anyone else. We are dealing with those specific abuses and, as I say, we are creating a new powerful consumer champion in the financial conduct authority.

Banking Commission Report

Debate between George Osborne and Andrew Love

Monday 19th December 2011 Commons Chamber

[Mr Osborne]

There is a specific reference to full account portability in the report, as my hon. Friend will see when she reads it, and that is there partly because of the point that she made to me about it in the Treasury Committee. We will consider full account portability if the switching service that we introduce is not effective and does not deliver the expected consumer benefits.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The House is not clear from an answer that the Chancellor gave to my right hon. Friend the Member for Morley and Outwood (Ed Balls) whether he supports the Vickers recommendation that in order to create an effective challenger bank, Lloyds needed to divest itself of a greater number of branches. Does he agree with that recommendation, and if so, when is he going to implement it?

[Mr Osborne]

We are confident that the sale proposed by Lloyds of 600 branches to the Co-op will create a sufficiently strong challenger bank because it is to an existing institution rather than a new institution. Obviously, that sale is subject to commercial negotiations and the deal is not yet done, but we think that it meets the conditions set out in the Vickers report. We have kept in close personal contact with John Vickers throughout this process.

The Economy

Debate between George Osborne and Andrew Love

Tuesday 6th December 2011 Commons Chamber

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

rose—

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

rose—

[Mr Osborne]

I give way first to the shadow Chancellor and then to the member of the Treasury Committee.

Autumn Statement

Debate between George Osborne and Andrew Love

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

My hon. Friend is right. Low interest rates are helping to keep people in their homes, mortgage payments down and businesses going. If hon. Members want to know what the alternative would be, they should look across the Channel to European countries in the middle of the debt storm, with interest rates going up. We can see that is a path that we must avoid, but we will only do so if we do not follow the policies advocated by that lot opposite.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Will the Chancellor now take the opportunity to admit at the Dispatch Box that £158 billion is the deterioration in the forecast that has just been announced? How long will it now take to balance the books, and is not the statement today an admission that this country will have more severe austerity going forward?

[Mr Osborne]

I said that the borrowing forecast had deteriorated, and—unlike the Labour party—I set up an independent body to ensure that those figures are independently verified and not fiddled, as they were by the shadow Chancellor when he was in office. I can confirm that borrowing would be £100 billion higher if we had pursued the spending policies set out by the Labour party.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 1st November 2011 Commons Chamber

[Mr Osborne]

I am very pleased that we were able to announce that additional enterprise zone for my hon. Friend’s constituents, which reflects the fact that the cut in the US defence budget had an impact on BAE Systems. I am glad that we were able to move quickly to create an enterprise zone, not only in the north-west but in east Yorkshire, to take into account the impact of that decision.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

If the Government’s overriding priority is to eliminate the deficit by the end of this Parliament, why is the Chancellor having to borrow an additional £46 billion during that period?

[Mr Osborne]

We inherited the highest—[Interruption.] The Opposition do not want to hear this. We inherited the highest budget deficit in Britain’s peacetime history. That budget deficit is now coming down, and that has contributed to financial stability in this country, in marked contrast with what we see on our television screens around Europe.

Eurozone Crisis

Debate between George Osborne and Andrew Love

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

I cannot confirm that they are dead in the water, because the eurozone is determined to pursue a financial transaction tax and talks about that in its statement. However, I can confirm to my hon. Friend that Britain will not accept a financial transaction tax at an EU27 level while other jurisdictions in the world do not impose one. We are not opposed to financial transaction taxes in principle—after all, we have stamp duty on shares in this country—but we will not have a financial transaction tax at a European Union level while countries such as America, China, Singapore and others do not have one. As their having one is a long way off, we will be waiting a long time—perhaps for ever—for a European Union financial transaction tax.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Over the next few years we are likely to see the emergence of a two-speed Europe, with the Government—or parts of the Government—going in exactly the opposite direction. What can the Chancellor and the Prime Minister do to ensure that we are not locked out of the fundamental decisions that will be made?

[Mr Osborne]

I just do not accept the premise behind the hon. Gentleman’s question. The coalition agreement explicitly states:

“We will ensure that there is no further transfer of sovereignty or powers over the course of the next Parliament. We will examine the balance of the EU’s existing competences”.

The odd one out is the Labour party, which has set itself against taking any power from Brussels back to Britain. That is exactly what the Labour leader said this weekend when asked that question. I suggest that the hon. Gentleman use his lobbying efforts and his questions on his own party leader.

Jobs and Growth

Debate between George Osborne and Andrew Love

Wednesday 12th October 2011 Commons Chamber

[Mr Osborne]

I shall give way to the member of the Treasury Select Committee, the hon. Member for Edmonton (Mr Love) and then the representative of the Scottish National party, the hon. Member for Dundee East (Stewart Hosie), and then I shall make some progress.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

How can the Chancellor possibly describe as credible a deficit reduction programme that ends up increasing debt by £46 billion?

[Mr Osborne]

As I have said, the British structural deficit is coming down because of the measures that we are taking, but the proposal put to the House today would push the budget deficit this year into double figures. No country in the world would consider that a sensible approach at a time such as this for a country such as Britain. It is economic nonsense, and I suspect that the hon. Gentleman knows it.

Independent Banking Commission Report

Debate between George Osborne and Andrew Love

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

One thing that has dramatically changed under this Government is the relationship between those in No. 10 and No. 11. We not only talk to each other, but also occasionally share a friendly drink.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The commission appears to have diluted its interim proposal to place a duty on the regulator to promote competition, but the Treasury Committee stated in its report on this subject that that was a crucial recommendation. The Chancellor has mentioned the importance of competition on numerous occasions today. Will he look again at this recommendation and ensure that we maximise the opportunities to improve competition in the market for the benefit of consumers and taxpayers?

[Mr Osborne]

I do not think the hon. Gentleman is being entirely fair. A specific part of the report deals with the remit of the new Financial Conduct Authority, and it says that—although we have changed our proposal in the light of the interim report, as I announced at the Mansion House—we could go further and make the requirement to promote competition an overriding duty on the authority. We should look at that over the next couple of months. I would welcome the input of the Select Committee, and we could respond later this year.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 22nd March 2011 Commons Chamber

[Mr Osborne]

My hon. Friend is right. The share of manufacturing in our economy halved during the years of the Labour Government. However, there is good news today: the CBI industrial trends survey shows that total order books are growing for the first time in three years. We are determined to move from an unbalanced economy that placed all the bets on the City of London to an economy that grows across the regions and in all sectors.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The trade-weighted exchange rate has fallen by 20% in the last few years. Manufacturing has not increased as much as we expected, and there are even worse figures for the investment industry. What is the Chancellor doing to ensure that we gain the advantages of that exchange rate depreciation?

[Mr Osborne]

I do not know why Opposition Members want to talk down the British economy. What the chief economist at the CBI said contrasts with the hon. Gentleman’s remarks about manufacturing. The chief economist said:

“The outlook for UK manufacturing output growth is very encouraging.”

We are going to support manufacturing. We have the corporation tax cut that I announced in last June’s Budget, and we have the new centres for innovation and manufacturing. We are going to help manufacturing, whereas Labour shrank manufacturing.

Banking

Debate between George Osborne and Andrew Love

Wednesday 9th February 2011 Commons Chamber

[Mr Osborne]

I am not only disappointed by it; it has been a constraint in what we have been dealing with. It is very explicit—[Interruption.] The shadow Chancellor says this is rubbish, but that was the agreement that he and his colleagues signed up to. That is the problem on this issue, and I think that that is beginning to dawn on them. They have a past—they have a record. It is a record of letting the City get away with murder, and of the rest of us having to pick up the pieces.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Following the statement on bankers’ bonuses, how would the Chancellor respond to the one in ten of my constituents who are unemployed and looking for work; the many low-paid workers who face real reductions in their living standards over the next few years; and the many public sector workers who face the possibility of redundancy? Please do not respond by saying, “We’re all in this together.”

[Mr Osborne]

To repeat what I said in my statement, I completely understand the anger and resentment felt by the many people who have lost their job or faced their income being squeezed because of the mess that was created in the British economy by the banking system and those who were regulating it. That is the situation we are dealing with. My priority today has been to put the economic recovery first and to ensure that we get banks to lend to small and medium-sized businesses, so that they can take on the people the hon. Gentleman is talking about. Small and medium-sized businesses are the engine of job creation in the British economy and they are crucial to our revival. It is also crucial that we rebalance the economy so that we are not as dependent as we were on the success of the financial services sector.

Bank Bonuses

Debate between George Osborne and Andrew Love

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

Well, I think we still have the haystack at the end of all that. My hon. Friend makes an important point, however. Of course I understand and share the feeling of anger that if we do not get a change of behaviour, these bonuses could be paid, and that is what we are addressing. However, this House will have an equally important—indeed, possibly even more important—issue to deal with later this year: the report from the Independent Commission on Banking, which we have established, again in the face of Labour opposition, to look at the whole issue of “too big to fail”. That is what my hon. Friend was talking about. The commission will look at how we can ensure that the British taxpayer does not stand behind the banks, but that the banks can be allowed to fail in an orderly way without bringing down the British economy.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

In August 2009, the right hon. Gentleman said that it was “totally unacceptable” for bonuses to be paid while the Government were guaranteeing the banking system, and added, “It must stop.” Why has it not stopped?

[Mr Osborne]

Because I am clearing up the mess left to me by the hon. Gentleman’s party. This Government have done more in the last seven months to create a safer, more properly regulated banking system than Labour did in 13 years. As of the beginning of this year, we have a new code of practice that applies to 2,500 firms, compared with the 25 firms that were regulated under the previous Government, and, as I have said, we are seeking this new settlement with the banks that will, I hope, lead to a material increase in the amount of money that they lend to the British economy, and a material decrease in the amount they would otherwise have paid in bonuses.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 21st December 2010 Commons Chamber

[Mr Osborne]

The reduction in corporation tax from 28% to 24% keeps the UK as an incredibly competitive place to do business and, over the next few years, will help to ensure that Britain gets its fair share of the growing global economic cake. The Office of Tax Simplification, which we have created, is specifically looking at the burden of tax on smaller businesses so that we can also bring benefits to them, although we have been able to avoid Labour’s increase in the small companies tax rate.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

T6. The recent Institute for Fiscal Studies report referred to by my hon. Friend the Member for Walsall North (Mr Winnick) shows clearly that both relative and absolute poverty will increase in every year up to 2014. Is not that the final nail in the coffin of the Government’s claim to be both progressive and fair in their policies?

[Mr Osborne]

The hon. Gentleman seems to forget that child poverty was rising under the last Labour Government and we have put forward policies to increase social mobility and tackle the causes as well as the symptoms of poverty.

Loans to Ireland Bill

Debate between George Osborne and Andrew Love

Wednesday 15th December 2010 Commons Chamber

[Mr Osborne]

I know that my hon. Friend is assiduous on these points, but I think that on this occasion he is not correct. This is simply a fall-back mechanism for us to say that if Ireland in some way renegotiates its loan from the eurozone, from the EU or from the IMF, it is a condition of our loan to Ireland that we can step in at that point and examine our situation. That protects the British taxpayer and has absolutely nothing to do with European law or anything else; it is simply there to make sure that other parties to this international agreement must have due regard to what they are doing, and how that might have an impact on the ability of the British taxpayer to be repaid.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Two things are happening in Ireland at the moment. The first is that austerity reigns and the economy is going down on a daily basis. The second is that a whiff of elections is in the air. The right hon. Gentleman talks of renegotiation, but is it not a fact that renegotiation of a new Government in Ireland is very much on the cards?

[Mr Osborne]

Obviously we are not going to prejudge the outcome of any Irish general election. Of course we—not just us, but the IMF and others—negotiate with the Government of the day. Although the principal Opposition parties in Ireland have concerns about the Irish budget and the like, I understand that they have accepted the principle of international assistance, and the IMF has been in direct contact, and has engaged in discussions with them. The international community, including the UK, is satisfied that we are in a position to make this offer to the Irish Government, which is why I am bringing the Bill to the House today.

As I was saying, Ireland agreed to seek IMF and other support worth €85 billion, and the money will be used as follows: €35 billion will be used to support Ireland’s banking sector, with €10 billion going towards immediate bank recapitalisation; and the remaining €50 billion will be used for sovereign debt support. In terms of contributions to the cost of the package, Ireland itself will provide €17.5 billion towards the total. The remaining €67.5 billion will be split, with one third coming from the IMF, one third from the European financial stability mechanism, and one third from the eurozone facility and bilateral loans from the UK, Sweden and Denmark. I have agreed that our contribution should amount to €3.8 billion, or £3.25 billion at today’s exchange rate.

This significant package will help Ireland to deal decisively with its problems. It will help it to recapitalise its banks and set up a contingency reserve for future problems. It will also help the Irish authorities to cover the shortfall in their budget, which was passed by the Irish Parliament earlier this month. Their budget will see a fiscal consolidation of €15 billion by 2014, of which €6 billion will be implemented next year, as part of their strategy leading to a target budget deficit of 3% of gross domestic product in four years’ time.

Of course people ask why we are extending the loan to Ireland. We are doing so because it is overwhelmingly in our national interest to have a strong Irish economy and a stable banking system. This is not just about the Irish economy and Irish jobs; it is about the British economy and British jobs. A loan does not add to our deficit, and any increase in borrowing is matched, of course, by the commitment of the Irish to repay with interest. The answer to the question asked by my hon. Friend the Member for Stratford-on-Avon earlier is that if Ireland takes out all the loan that is being made available to it and pays it back with the interest that has been forecast, it would pay us £440 million in fees and interest over this period.

Let us remember that Ireland is the fifth largest market for British exporters and accounts for 5% of our total exports abroad. An interesting way for the House to think about it is that every man, woman and child in Ireland spends an average of £3,600 per year on British goods—that is how connected our economies are. Indeed, as has often been pointed out, we export more to Ireland than to Brazil, Russia, India and China put together, although we are trying to increase our exports to those four very large emerging markets. For some of our industrial sectors, such as food and drink or clothing and footwear, Ireland is our top export market. Ireland is also the only country with which we share a land border, and in Northern Ireland our economies are particularly linked, with two-fifths of exports going to the Republic.

I wish to reassure Members representing Northern Ireland that I am very aware of their constituents’ worries and the difficulty they face as a result of the problems in Ireland. That is why my hon. Friend the Financial Secretary recently visited Belfast to discuss these issues directly. I am open to any discussions that Members from Northern Ireland wish to have with me or the Treasury about the economic situation and indeed the banking situation in Northern Ireland. Just as our two economies are linked, our businesses and banking sectors are also interconnected. More Irish companies are listed on London exchanges than companies from any other foreign country. The two main Irish-owned banks have an important presence in the UK, holding between them about £30 billion of customer deposits. In Northern Ireland, two of the four largest high street banks are Irish-owned, accounting for almost a quarter of personal accounts.

--- Later in debate ---

[Mr Osborne]

My hon. Friend makes a very good point. A sudden flight of international investment from Ireland is not in anybody’s interest. All countries seek to compete against each other for such inward investment, but, as I say, it would set a poor precedent for the UK if one nation state or a collection of nation states started dictating to another nation state what its tax rate should be.

[Mr Love]

Will the right hon. Gentleman give way?

[Mr Osborne]

If the hon. Gentleman just allows me to make a little progress.

--- Later in debate ---

[Mr Osborne]

First, I am dealing with the situation as I found it, and as I found it we were committed to that mechanism under qualified majority voting, but I am trying to extricate us from that. Secondly, the permanent arrangements might come into play sooner than 2013. That is a subject for discussion at the European Council, and, certainly as far as we are concerned, the sooner we get on with it, the better. I am doing everything I can to ensure that the UK is extricated from the commitment that was entered into, and we are making good progress.

[Mr Love]

Will the right hon. Gentleman give way?

[Mr Osborne]

If the hon. Gentleman will allow me, I have already taken an intervention from him. Many Members want to speak, and I have spoken for an hour.

Autumn Forecast

Debate between George Osborne and Andrew Love

Monday 29th November 2010 Commons Chamber

[Mr Osborne]

Of course, I am a believer in trying to reduce the tax burden and trying to reduce taxes. However, I have always believed that the best way to achieve that is from stable public finances, otherwise one cuts taxes one year and has to put them up the next. So I am a fiscal conservative with a small c as well as a tax-cutting Conservative with a big C.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

In reference to the answer to my hon. Friend the Member for Streatham (Mr Umunna), the Chancellor, through the OBR, is suggesting that there will be 8% growth in business investment yet there is scant sign of it at present Net trade, it has been suggested, will increase by 6% in each of the next four years yet, according to the Governor of the Bank of England, there are doubts about whether the euro area or the United States will deliver the sort of export growth that is being suggested. Is not the Chancellor just a little worried about the optimism in the estimates and is he concerned about whether they will be delivered over the next four years?

[Mr Osborne]

The hon. Gentleman says that I made the forecasts, but they are independent forecasts by Mr Robert Chote, whom I do not think anyone would claim is in anyone’s pocket. He is totally independent. The hon. Gentleman is on the Treasury Committee, which interviewed Mr Chote for the job and passed him. These are Mr Chote’s, Mr Nickell’s and Mr Parker’s estimates and they have made a central forecast. He says that there is scant evidence, but that is not what the Office for Budget Responsibility believes. It is independent and it has forecast that business investment is set to grow by more than 8% for each of the next four years and that exports are set to grow by an average of more than 6% a year.

Financial Assistance (Ireland)

Debate between George Osborne and Andrew Love

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

We have made it clear that we would accept a treaty change—of the kind that, for example, Germany is talking about—only if it created a eurozone bail-out mechanism that we were not part of, and of course a treaty change requires unanimity.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Will the Chancellor confirm that the UK is Ireland’s largest creditor, being owed about £100 billion or 7% of our GDP? It is understandable that we would want to be in there and protecting our investment. During his speech, he mentioned that we were at the centre of discussions to shape the conditions of the agreement, but does he intend those conditions to include a further retrenchment of the Irish economy, or, like Opposition Members, will he go for growth in order to help the Irish economy get back on its feet?

Comprehensive Spending Review

Debate between George Osborne and Andrew Love

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

We have already announced a record investment in apprenticeships, and many tens of thousands of additional apprenticeships. That is because of the difficult decisions that we made elsewhere in the Budget, and I think it shows that we are investing in the skills that our economy needs for the future.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The Chancellor has announced the loss of 490,000 jobs in the public sector, and has not challenged the forecast by PricewaterhouseCoopers that 500,000 jobs will be lost in the private sector as a consequence. What estimate has he made of the number of jobs that will be lost in the construction sector, in view of what was said by my hon. Friend the Member for Sheffield South East (Mr Betts) about cuts in funds for social housing? Given the accepted sluggishness of the private sector recovery in the economy, will we not see significant increases in overall unemployment in the next year?

[Mr Osborne]

The hon. Gentleman, who is a member of the Treasury Committee, knows that the budget deficit was threatening the economic stability of the country. He also knows that his party proposed to eliminate the structural deficit over a slightly longer period than we propose. That, however, would not have reduced the scale of the cuts; it would merely have prolonged them. A structural deficit is a deficit that does not return when the economy grows. That is the definition of a structural deficit.

We are investing in road projects, and in housing projects: we are providing 150,000 new homes. The hon. Gentleman probably has not had time to study the document, but the capital cuts that have been set out today are less than the capital cuts in the March Budget presented by the Labour party.

Oral Answers to Questions

Debate between George Osborne and Andrew Love

Tuesday 12th October 2010 Commons Chamber

[Mr Osborne]

Decisions on local government allocations are properly a matter for the Secretary of State for Communities and Local Government, but I make the observation that we face a series of tough decisions because of the economic mess that the Labour party left us. To date, it is living in complete denial: there is not one single suggestion from one single Labour Member on how to reduce the budget deficit, or even achieve the £44 billion of cuts on which Labour fought the last election.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Can the Chancellor confirm or deny reports in the weekend press that he has given the Governor of the Bank of England the green light to increase quantitative easing, to deal with the policy that the Chancellor is pursuing on the deficit?

[Mr Osborne]

What I said at the weekend was that I would follow the exact same procedure that my predecessor, the right hon. Member for Edinburgh South West (Mr Darling), pursued when he was Chancellor of the Exchequer. The fact that that is regarded as something of a surprise by the Labour party shows how far it has departed from the centre ground of British politics.

Proposed Public Expenditure Cuts

Debate between George Osborne and Andrew Love

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

The answer is simple: there would be a catastrophic loss of confidence in Britain and an increase in market interest rates, which would hit every business and family. That would lead to an increase in unemployment, which is why we are not prepared to take the prescription offered by at least some of the people standing for the leadership of the Labour party.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

The Chancellor ought to read the International Monetary Fund report on that subject. The economy is slowing, business confidence and business investment are flat, and net trade is going through the floor rather than through the roof. In those circumstances, is it not folly of the first order to cut public expenditure? Is not the Chancellor threatening a double-dip recession—the very thing we do not need?

[Mr Osborne]

The people who are talking down the British economy are the Opposition. Since the hon. Gentleman mentioned the IMF, let me remind him what it said this weekend:

“Fiscal consolidation remains essential for strong, sustained growth over the medium term.”

Financial Services Regulation

Debate between George Osborne and Andrew Love

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

I am surprised, and I am not sure whether the shadow Chancellor is committing his party for the rest of this Parliament to be against reform of the structure of banking. I see quite a lot of heads shaking, so perhaps he is not. We shall wait and see. It is worth noting that on 8 June Lord Young of Norwood Green, a Minister at the Department for Business, Innovation and Skills in the last Government, referred to

“the tripartite relationship that was supposed to identify and regulate the systemic risk in British banking—a relationship that we all know failed somewhat spectacularly.”—[Official Report, House of Lords, 8 June 2010; Vol. 719, c. 630.]

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Given the continuing difficulties in the banking sector, does the right hon. Gentleman accept that the proposals he is putting to the House today will lead to greater uncertainty and greater blight in the financial services sector, and make it more difficult for banks and financial institutions to recover?

[Mr Osborne]

No, I do not accept that. We cannot ignore in this House that a debate is raging not just in our country but across the world about the structure of the banking industry and the best way to regulate it. The hon. Gentleman may have decided that he has all the answers and the Labour party may have decided that the system it established 13 years ago was the right system and we should stick with it, but I think we should be more open. We should have a process that brings that debate to a conclusion. Tonight I am going to the Mansion House dinner, as I believe the shadow Chancellor is too. I have sat at Mansion House dinners as shadow Chancellor and listened as the Governor of the Bank of England said something completely different from what the Chancellor of the Exchequer said on the same occasion. We have to resolve the debate, so we have to set up a process that resolves it, and I believe that an independent commission in which everyone can engage, including Members of the House, is the right approach.

Office for Budget Responsibility

Debate between George Osborne and Andrew Love

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

My hon. Friend is right—[Interruption.] I see one of the leadership contenders barracking from the Opposition Benches. I do not know whether the right hon. Member for Doncaster North (Edward Miliband) wrote the speech for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) in which he told the Labour party conference in 1996:

“Losing control of public spending doesn’t help the poor”.

That is one area in which I agree with the former Prime Minister.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

Does the right hon. Gentleman accept that a major contributor to the reduction in the growth forecasts for next year is the increasingly gloomy situation developing in Europe? Is he at all concerned about the competitive austerity that is breaking out across Europe? Is he also concerned that, if he goes ahead with the programme that he is outlining, we might face a double-dip recession as a consequence?

[Mr Osborne]

I suspect that everyone in the House is concerned about the situation in the eurozone, but let us be clear what has brought that about. It is a result of market concern about the sustainability of public finances in eurozone countries such as Greece. Those countries are having to take action to reassure markets and therefore keep their interest rates lower. I think that interest rates in Greece rose to more than 10% higher than those of other eurozone countries at one point. That is what happens to countries that do not get a grip on their public finances, and I want to ensure that no question mark is ever put against the name of the United Kingdom.

Economic Affairs and Work and Pensions

Debate between George Osborne and Andrew Love

Tuesday 8th June 2010 Commons Chamber

[Mr Osborne]

Unemployment is rising. We have the highest youth unemployment in Europe. We have the highest proportion of children growing up in workless households of any country on the European continent—that is not a record of which I would be particularly proud if I were a Labour MP. We are going to introduce a comprehensive work programme, and reform welfare to create genuine incentives to make work pay. One of the issues that came up time and again in the general election—for me at least, and perhaps for other Members—was the frustration felt by working people on low incomes who go out to work every single day and find that their next-door neighbour has been sitting on out-of-work benefits for years. That is going to be part of the reform that we introduce in our welfare Bill.

I was discussing the Budget, which needs to address the immediate debt situation that the country faces. However, it will also begin the long-term task of moving an economy based on debt—too much consumer debt, too much banking debt, too much Government debt—to an economy in which we save, invest and export in future. If anyone needs to be reminded why the immediate debt situation we have inherited is so serious, I suggest that they read the report on the UK produced by one of the world’s three credit-rating agencies today, which warns of

“a rise in public debt... faster than any other AAA rated sovereign”

country, and points to

“the largest cyclically-adjusted budget deficit in Europe”.

The rating agency says that the previous Government’s plans to reduce the deficit are “distinctly weak” and lack “credibility”. It says that we are the only European economy set to run a budget deficit above 3% in five years’ time. That is all at a time when, as it points out, the fiscal crisis in Greece and other eurozone countries has caused a major shift in investors’ attitude to sovereign risk.

[Mr Andrew Love (Edmonton) (Lab/Co-op)]

I thank the right hon. Gentleman for giving way. He spoke earlier about judgment. Is he not concerned about the outbreak of competitive austerity across Europe? Does he not think that that may well lead to European economies all bumping along the bottom because we cannot get international trade up and running again to sort out the difficulties of our economy?