Banking Commission Report

Debate between George Osborne and Baroness Morgan of Cotes

Monday 19th December 2011 Commons Chamber

[Mr Osborne]

There will be clear definitions in the legislation. To be fair, what John Vickers recommended, and what we are proposing, is relatively straightforward. There are certain things that will have to be in the ring fence, such as the deposits of individuals and the overdrafts of small businesses. There are also certain things that cannot be in it, such as classic investment banking activities. There will then be a middle ground, which will essentially involve corporate lending, and that can either be in the ring fence or not. John Vickers thought that it would be wrong to prescribe that, because different banks have different models, so he has left the location of the ring fence flexible. However, the height of the fence will be high, and we are going to introduce it into legislation.

[Nicky Morgan (Loughborough) (Con)]

I welcome the emphasis in the Chancellor’s statement on more choice and competition, which will benefit businesses in my constituency and elsewhere. They often tell me that this is not just about bank lending, and that it is also about poor customer service and unexpected charges being imposed. Will my right hon. Friend confirm that this is just the start of a process, and that there will be continuous monitoring of the way in which banks treat their customers from now on?

[Mr Osborne]

There will be, and part of the new regime will involve a specific authority looking at competition and customer service. In that way, we shall avoid having one institution—namely, the FSA—trying to do both functions of a regulator, which are to look at the point-of-sale service that someone gets to ensure that they are being sold a product correctly, as well as ensuring that the bank itself is being properly managed and is not about to collapse. Separating those functions will be an essential part of our reforms.

Autumn Statement

Debate between George Osborne and Baroness Morgan of Cotes

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

Perhaps I can explain to the hon. Gentleman that taxes come from people working in the public and private sectors. Money spent on infrastructure is well spent. For every £1 spent on infrastructure we have made savings in current spending, so we are not adding to borrowing in order to fund it. It will help to create jobs and support the economy.

[Nicky Morgan (Loughborough) (Con)]

Did my right hon. Friend hear Opposition Members laughing when he initially mentioned help with the cost of living? Does he agree that that is backed up by the shadow Chancellor’s refusal to recognise that low interest rates have kept many families in their homes over the past couple of years, including the very women and children that he says he cares about?

[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.

Global Economy

Debate between George Osborne and Baroness Morgan of Cotes

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

I would make the observation that only every Labour Government in history have left office with unemployment higher than when they came into office.

[Nicky Morgan (Loughborough) (Con)]

Is not the best way to help the hard-pressed families, taxpayers, jobseekers and pensioners mentioned by Members in all parts of the House—people who are not rioting, but getting on with the business of trying to make savings in their budgets and their family’s income—to ensure a stable economy, so that they can make sure that their living standards are maintained in the long term?

[Mr Osborne]

My hon. Friend is right. What we are able to provide in the Government debt market is the stability that is sadly lacking in other Government debt markets. All of us now need to rise to the challenge of removing the obstacles to growth; that will mean confronting some vested interests, pressure groups and, dare I say it, even, potentially, trade unions, but it is absolutely essential that this country wakes up to the competitive pressures of the modern world—the competitive pressures that countries such as China and Brazil present to us—and gets the private sector growing in a way that will create the sustainable jobs that were so lacking in the past 10 years.

Banking

Debate between George Osborne and Baroness Morgan of Cotes

Wednesday 9th February 2011 Commons Chamber

[Mr Osborne]

I just pointed out that a Lehman Brothers executive was one of the biggest donors to the shadow Chancellor’s campaign, and I think the hon. Member for Bolsover (Mr Skinner) shouted at that point, “Well, I didn’t vote for him.” [Interruption.] He repeats it; in fact, he probably did not vote for the Labour party leader, because as far as I can tell virtually no Labour MP did. That brings me to this point: the key thing about the Labour party and its fundraising is that it gets money from the trade unions and changes policy as a result.

[Nicky Morgan (Loughborough) (Con)]

On behalf of the small businesses and voluntary sector in my constituency, may I thank the Chancellor for his announcements about the business growth fund and the big society bank? Is not the reason why the shadow Chancellor’s statement was so empty that the Opposition realise that they did nothing so constructive during their 13 years in government?

[Mr Osborne]

My hon. Friend makes the very good point that we need to see more support for small and medium-sized businesses in our constituencies and in our economy. The regional business fund that I talked about, to which the banks have today made a commitment of an additional £1 billion, is very important because it addresses one of the weaknesses in the British economy—the absence of support, particularly equity support, for small, expanding businesses. I think that this will make a significant contribution to that.

Financial Services Regulation

Debate between George Osborne and Baroness Morgan of Cotes

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

What I said about Northern Rock was that we should have found a way to have a Bank of England-led reconstruction of that firm. The previous Government then introduced legislation in Parliament that would have allowed that to happen in the future. That is exactly how they proposed to handle future bank failures. [Interruption.] The shadow Chancellor says that we voted against it. We did not vote against the Banking Act 2009, by which he introduced the procedures for a Bank-led reconstruction. He continues to shake his head. I seem to remember that I went to his office in the autumn of 2008, pledged my support and delivered on that support.

[Nicky Morgan (Loughborough) (Con)]

As someone who worked with the FSA before I was elected and had to plough through many long consultation papers and then try to help business to understand them, may I perhaps suggest to the Chancellor that the people who are working at the FSA are not the right people to be transferred to the Bank of England and that, in fact, we need people who understand the risks and working in the City of London, rather than those who have just read textbooks about that, as many of the people in the FSA appear to be?

[Mr Osborne]

Of course, it is important that we have the right people doing regulation. The FSA made mistakes, and it has been very candid about them. Lots of institutions made mistakes in the build-up to the crisis—including, of course, the British Government. The people at the FSA have worked incredibly hard in the past couple of years, and I should put on record my tribute to the work that they have done. As for the institutional arrangements that we will put in place, there will be a parliamentary statement tomorrow.

Office for Budget Responsibility

Debate between George Osborne and Baroness Morgan of Cotes

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

If they are similar to the machine tool manufacturers I have met in Birmingham in recent months, they are also very concerned about the size of the budget deficit and that, unless we get a grip on it, there will be an ever higher spiral of tax rises and interest rate increases that would do enormous damage to them and to the people whom they employ.

[Nicky Morgan (Loughborough) (Con)]

I note that the former Chief Secretary who left that infamous note for his successors is in his place. Surely the establishment of the OBR heralds a transparency and openness that we have not seen before, and will mean that such a note could never be left again.

[Mr Osborne]

It would probably have to be published, if it were—[Interruption.] Well, just the contents.

As I noted from the remarks of the shadow Chancellor, it is interesting that we have not actually heard from the Labour party about whether it supports an independent OBR. It opposed that when in government—