Spending Review

Debate between George Osborne and Brian Binley

Wednesday 26th June 2013 Commons Chamber

[Mr Osborne]

We have drawn on the best economic evidence that the recovery from a banking crisis of the severity that we went through is long and protracted, but we have to de-lever as an economy and try to fix our banking system. That is what I set out at the Mansion House. We also have to have a credible fiscal policy in order to allow monetary policy to be loose. I think that is the best economic approach.

[Mr Brian Binley (Northampton South) (Con)]

My grandmother taught me that there are only two things people can do when they are in serious financial difficulty: cut spending, and earn more. The Chancellor’s record on cutting spending has been commendable, but more needs to be done on earning more. What will he do to enhance productivity to help this country earn more?

[Mr Osborne]

My hon. Friend is absolutely right that Britain has got to earn its way in the world, and that is about increasing our earnings as well as dealing with our expenditure. In the Budget, we set out a number of tax changes, such as the new employment allowance, which I know he strongly supports and which will help small firms by wiping out the first £2,000 of national insurance, taking a third of those firms out of national insurance. We have made a series of other tax changes to promote investment, and where we had to make tough spending choices, I have chosen in this spending round to prioritise things that will help businesses to create jobs.

Global Economy

Debate between George Osborne and Brian Binley

Thursday 11th August 2011 Commons Chamber

[Mr Osborne]

The question that I would ask the hon. Gentleman is this: who in the world does he expect to be lending money to countries with very high budget deficits if they do not have credible deficit reduction plans? What group of people would put their money on the line? That is precisely the problem that we have at the moment in the global financial markets.

The hon. Gentleman asked about inflation. Yesterday, at his press conference, the Governor of the Bank of England said that he expected it to hit 5% this year. Let me draw attention to another silver lining to the dark clouds. Commodity prices have fallen in the last few weeks, and the oil price has fallen somewhat from its high. One of the biggest challenges that all developed and, indeed, developing countries have faced in the last year or so has been the very big increase in the oil price.

[Mr Brian Binley (Northampton South) (Con)]

I welcome the Chancellor’s comments about the need to cut deficits. Let me also remind him that a healthier market is important to our export performance, and that growth requires buyers and sellers to have the confidence to transact. Will he therefore, while steering the economy, remember that the need to instil demand in the British economy is very important to households and businesses? May I ask him not to lose sight of that?

[Mr Osborne]

Of course I agree that we need demand. I think that demand comes partly from confidence, and that confidence comes from economic stability. If we think of the difference between the statement that I have been able to make today in the House of Commons and the emergency statements and emergency budget cuts that many Finance Ministers have had to announce in the last two weeks, we have, in a nutshell, the reason why we made the right decisions last year to get ahead of the curve, and why so many other countries are now trying to catch up.

Oral Answers to Questions

Debate between George Osborne and Brian Binley

Tuesday 16th November 2010 Commons Chamber

[Mr Brian Binley (Northampton South) (Con)]

10. What recent steps he has taken to increase levels of bank lending to small and medium-sized businesses.

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

The Government have increased and extended the enterprise finance guarantee to support lending to small businesses. We have increased our share of the enterprise capital fund to enable extra investment in start up for small businesses, and we have encouraged the new business growth fund set up by the banks. But more needs to be done to ensure that the banks are lending to small and medium-sized businesses. It is a complex issue with no single answer, but it is crucial to our recovery, and my hon. Friend has my assurance that this is a key priority.

[Mr Binley]

I thank the Chancellor for that answer. Lionverge, a Northampton company employing 80 people, had an overdraft with Barclays of £70,000, backed by security of £130,000. A new manager was recently appointed, and in August he wrote to the company doubling the security, and cutting the overdraft by £20,000 with further cuts of £10,000 a month to end the facility. The company had not defaulted, no warning was given, and no other options were offered. What can the Chancellor do to stop such unacceptable bank practices that undermine the Government’s growth strategy?

[Mr Osborne]

I recently met the leading chief executives of our largest banks, and they have come forward with proposals to improve the way they treat their customers, and to increase their lending to small businesses. We welcome the fund that they have set up. As I said, there is still more to do. The issue is complex, and one complexity has been the uncertainty of international regulation and how much capital and liquidity banks need. At the G20 that took place recently in South Korea, there was at last agreement on the new international rules, and a very lengthy transition period to them. I hope that British banks will take heed of that, and as a result, be able to increase their lending to small businesses.