Greece

Debate between George Osborne and Baroness Stuart of Edgbaston

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

First, let me join in congratulating my right hon. and learned Friend on his birthday. The points he makes are echoed by many eurozone Governments that we speak to. There are countries in the European Union with lower GDP per capita incomes and there are Governments in the eurozone who have undertaken incredibly difficult structural reforms—he names our close neighbours in Ireland—so these points are regularly made. It is clear that there needs to be major structural reform of the Greek economy and certain conditions set on eurozone membership, and that is why the eurozone is waiting for the latest proposal from the Greek Government. Equally, we urge all parties in this, including those other eurozone Governments, to be open to new offers and to be ready to sit round the table.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

If reports are to be believed that some of the big banks are running out of euro notes and that the Greek Government are able to print only €10 notes—any larger ones have to be imported—has Her Majesty’s Treasury made any provision to fly out euro notes to our pensioners or tourists who may be stranded and simply cannot get hold of euros?

[Mr Osborne]

What I should say, without going into too much detail, is that we have a number of contingency plans. We just hope we do not have to put them into operation.

EU Budget (Surcharge)

Debate between George Osborne and Baroness Stuart of Edgbaston

Monday 10th November 2014 Commons Chamber

[Mr Osborne]

As my hon. Friend says, the key point is that we are offering the people of Britain a vote on the membership of the European Union, which we will then seek to reform. Interestingly, it is not only the hon. Member for Vauxhall (Kate Hoey) who has made her point on Europe, but the last Labour Chancellor, who says he now supports a referendum on Europe. It would be interesting to see what the shadow Chancellor really thinks.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

I am still trying to find a serious commentator who did not think that the rebate would apply to the British contribution. All this banter covers the fact that the Chancellor has not made any progress in reforming the system that led to this completely absurd demand, which made Britain pay and France and Germany receive money.

[Mr Osborne]

I agree that this was a totally unacceptable approach from the previous European Commission. To be fair to the new budget Commissioner, she has engaged constructively and got the rules changed so that it does not happen again. On the hon. Lady’s comment about finding a serious commentator who thought the rebate might not apply, I know the shadow Chancellor is not a serious commentator but he did not at any point raise this issue. The calculation on interest payments that he used in The Guardian on Friday was based on the assumption that we would pay £1.7 billion—that is how he came up with the number that he used to make his point. As a result, he did not expect the rebate to be applied or to be applied at this rate.

Oral Answers to Questions

Debate between George Osborne and Baroness Stuart of Edgbaston

Tuesday 4th November 2014 Commons Chamber

[Mr Osborne]

Thanks in part to the efforts of my hon. Friend and the support he has given to investment in Carlisle, we have seen a 34% fall in the unemployment claimant count in Carlisle in the last year alone. We are also devolving more responsibility for setting the skills agenda to local businesses, so we can have skills that are specific to the Carlisle area. I am always happy to talk to my hon. Friend and to meet people he would bring to see me, to see what more we can do to make sure that Carlisle is part of the strong economic revival of the north of England.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

The Chancellor opened the door for other metropolitan areas to go down the route of the northern powerhouse. Has he given any consideration to what he regards to be an optimum size for those units? In the west midlands, would that be a Greater Birmingham and black country metropolitan area or an entire west midlands metropolitan area?

[Mr Osborne]

I do not think any one area is the same as any other area. There is a specific model for Greater Manchester, and of course the Greater Manchester councils had worked well together as a combined authority. Clearly Birmingham city council is much larger than Manchester city council alone, so I would like to have a conversation with the hon. Lady, and with Albert Bore and other civic leaders in Birmingham, about whether we can move to a mayoral model, perhaps just in the city. That is a discussion to be had with local people, however.

LIBOR (FSA Investigation)

Debate between George Osborne and Baroness Stuart of Edgbaston

Monday 2nd July 2012 Commons Chamber

[Mr Osborne]

Parliamentary Committees have a whole set of powers available to them. Ultimately, as I understand it—the Parliamentary Secretary to the Treasury might correct me if I am wrong—the House itself can call witnesses to Parliament through a vote. That power is available to us—[Interruption.] That is absolutely the case. [Interruption.] What I find astonishing is Opposition Front Benchers’ lack of confidence in Parliament—in the House of Commons, in the House of Lords—to do this job. Looking at how they treated Parliament over 13 years, perhaps that is not surprising. I have confidence in Members from both sides of the House to do the job being asked of them.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Interest rate swaps have been mis-sold. They are complex derivatives. Does the Chancellor still think it right that they are inside the retail banking ring fence?

[Mr Osborne]

We are not proposing to put complex derivative products inside the retail ring fence; that is not part of our proposals. As I say, we are coming forward with plans to implement the Vickers reforms and I hope that the hon. Lady welcomes that.

IMF

Debate between George Osborne and Baroness Stuart of Edgbaston

Monday 23rd April 2012 Commons Chamber

[Mr Osborne]

I welcome the support of my hon. Friend, who chairs the Treasury Committee, for our decision to make a loan to the IMF, along with many other countries.

This weekend, plenty of countries, including the UK, made very clear that a contribution to additional IMF resources must come with strict IMF conditionality. They made clear that there could be no special favours for eurozone countries that needed support, and that there was no question of creating some special eurozone fund for IMF resources. Any contribution from the IMF’s shareholders must go into general resources which could be used for eurozone countries or, indeed, for any other country that needed help.

It is worth remembering that there are 53 IMF programmes, three for eurozone countries and 50 for other countries in the world, and that two of the largest programmes are for Poland and Mexico, which are not members of the IMF.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Does the Chancellor not accept that the credibility of the IMF itself is put in question if it continues to provide support for eurozone countries that are, and remain, insolvent?

[Mr Osborne]

No, I do not accept that. For the IMF to walk away from the enormous problems that we all know exist in the eurozone would be a betrayal of why we and other countries created the IMF: to be there to help countries, including groups of countries, that get themselves into trouble. The IMF also provides advice and conditionality along with its loans. Having set up an institution to deal with global economic problems, it would be bizarre if, when some of the largest economic problems the world has ever known arise, we were to say that the IMF is not going to help.

Eurozone Crisis

Debate between George Osborne and Baroness Stuart of Edgbaston

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

That would have been catastrophic. We would have been the only IMF shareholder not to have ratified the deal initiated at the London G20 summit, which would have completely isolated Britain. We might have had to leave the IMF, and we would certainly have lost our permanent seat on the board. We heard all the talk from the shadow Chief Secretary about ensuring that Britain is at the table—but she wants us to get up and leave the IMF table.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

In his statement, the Chancellor said, quite rightly, that the euro would not work unless the periphery countries regained their competitiveness. How is that possible if those countries do not have the full IMF package, including currency devaluation? In that context, does he think that the IMF will get its money back?

[Mr Osborne]

It is perfectly possible for areas within a monetary union to increase their competitiveness relative to other areas in the union—parts of the United Kingdom and the United States have done so in the past 20 or 30 years. It is possible, but it is very hard work—I agree with the sentiment that the hon. Lady is expressing—and requires people to tackle tough issues, such as labour market reform, pension ages, tax rates and so on, which, of course, are controversial. However, people in countries such as Italy, Spain and Greece have been confronted with the reality of the need to make change—although we will see whether they do indeed undertake that change. The IMF is the guardian of its own programmes and makes constant assessments of its programmes in Ireland, Greece and Portugal. I do not want to be premature, but I think that we are seeing substantial improvement in the Irish economic performance after the difficult decisions that they have taken in that country.

Eurozone

Debate between George Osborne and Baroness Stuart of Edgbaston

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

I am not against a financial transaction tax in principle; after all, Britain already has one—the stamp duty on shares. What I am against is a European financial transaction tax that operates only on the European continent and is imposed in Europe. If we can get global agreement, with the United States, China and others, on a world financial transaction tax, all well and good, although I do not think that is terribly likely. If we do not have that, all this business currently conducted in the UK would immediately depart to the United States. We saw the same thing happen when Sweden imposed a financial transaction tax—all the business departed to London. I am therefore against a European financial transaction tax, although, as I say, if we can get global agreement, all well and good.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

It is deeply uncomfortable to hear Ministers say from the Dispatch Box that they give advice in private but they do not share it with the House. I wish to give the Chancellor another chance by asking him whether he agrees that as Greece is unable to regain its competitiveness—because it cannot devalue—he is therefore in favour of permanent bail-outs. Another term for those is “permanent gifts”, because that country cannot regain competitiveness.

[Mr Osborne]

As the hon. Lady knows, these are very market-sensitive issues and I have to be careful, as the UK’s Finance Minister, in what I say about the Greek situation. However, I was pretty clear in my statement in saying that the debt sustainability of Greece had to add up. That is the issue that has to be confronted with Greece in the coming weeks.

Oral Answers to Questions

Debate between George Osborne and Baroness Stuart of Edgbaston

Tuesday 10th May 2011 Commons Chamber

[Mr Osborne]

The shadow Chancellor is not just out of his depth; he is drowning. The truth is that he has had absolutely no impact in the several months that he has been doing the job. He had one policy, a VAT cut on fuel that the European Union ruled illegal. He had one idea, which was to follow America, but now the Obama Administration have announced a deficit reduction plan as fast and as deep as the UK’s. He had one prediction, which was that there would be a double-dip recession, and that has not happened. We know that he is a man with a past, but we are beginning to discover that he has absolutely no ideas for the future. If we want any proof of that, this is what the CBI said this week when asked what the outcome would be if Britain followed Labour plans:

“The economy would be weaker because of the impact of a loss of confidence”.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

4. What assessment he has made of the effects of the increase in the standard rate of VAT on levels of economic growth in the first quarter of 2011.

Financial Assistance (Ireland)

Debate between George Osborne and Baroness Stuart of Edgbaston

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

I am a believer in national sovereignty, so I do not propose to tell other countries what they should do with their currencies. I would just make this observation, since this has been a debate I have heard in recent years: Ireland has all its sovereign debt denominated in euros.

[Ms Gisela Stuart (Birmingham, Edgbaston) (Lab)]

Ultimately, the bail-out will work only if Ireland can retain its competitiveness. Traditional International Monetary Fund packages always include reducing public spending, increasing tax rates and devaluing the currency. The third element, which is essential for Ireland’s recovery, is missing. What makes the Chancellor believe the bail-out will work under those conditions?

[Mr Osborne]

If it is not possible to devalue the currency, there is a more difficult route, which is to try to enforce competitiveness through, for example, wage cuts, and that, of course, is part of the Irish package. It does make things more difficult, but, as I say, those of us who argued against Britain joining the euro made all these arguments at the time. That makes for a very good discussion, but at a very theoretical level given the very practical immediate challenges we face in Ireland.