Budget Resolutions and Economic Situation

Debate between George Osborne and Chris Leslie

Tuesday 22nd March 2016 Commons Chamber

[Mr Osborne]

I will give way in a moment, but let me straightaway address the resignation of my right hon. Friend the Member for Chingford and Woodford Green (Mr Duncan Smith). I am sorry that my right hon. Friend chose to leave the Government. Let me here, in this House, recognise his achievements in helping to make work pay, protecting the vulnerable and breaking the decades-old cycle of welfare dependency. Together, we had to confront a huge deficit and uncontrolled welfare spending. Of course, there is always robust discussion between the Treasury and the spending Departments when money needs to be saved. The decisions we make to keep our economy secure are always difficult, and where we do not get them right, I have always been prepared to listen and learn.

I am very proud that my right hon. Friend and I worked together longer than any two people who have done our jobs before us in any Government, and we have been part of the team that has reduced the number of people on out-of-work benefits to levels not seen for 40 years, reduced inequality, seen poverty fall, seen child poverty fall and seen pensioner poverty fall, and got a record number of people into work—a long-term economic plan and welfare reform delivering a fairer society for all.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I am grateful to the Chancellor for giving way. It is less than a week since he stood up to deliver the Budget and made that decision affecting disability independence payments—something that upset many hundreds of thousands of people across this country. He has made a welcome U-turn, but should not he now acknowledge that that decision was a mistake that he should say sorry for?

[Mr Osborne]

I am going to come on to speak about the disability benefits and our way forward, but I have made it very clear—I have just said it—that where we have made a mistake, where we have got things wrong, we listen and we learn. That is precisely what we have done. Where is the apology from the Labour party for the things that they got wrong? Why don’t they take a leaf out of that book? Why don’t they get up and apologise for the countless decisions that added to the deficit—that bankrupted our country?

The progress we have made on social justice did not happen by accident. It happened because we in this Government set out to turn our economy around, to control spending, to back business and, yes, to reform welfare.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 1st March 2016 Commons Chamber

[Mr Speaker]

We are deeply grateful, but we must try to attend to the questions asked, and to do so in a timely way, because progress is desperately slow. Members can do better than that, one would hope.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Would there not be a double whammy if Britain left the EU? First, there is the widely predicted risk of depreciation, which will lead to higher interest rates. Secondly, any notion that our exporters would benefit from a cheaper pound is more than offset by the additional tariff barriers that those firms would encounter worldwide.

[Mr Osborne]

The former shadow Chancellor is right to point to both the immediate economic shock, which I think is generally accepted—even those who, for perfectly honourable reasons, advocate withdrawal, accept that there would be an immediate economic dislocation—and the longer-term costs. If we tell Britain to make this leap in the dark, we have to be able to answer the question: what is the alternative? How do we reassure the car manufacturer in north-east England that tariffs will not be imposed on its cars, as a result of which it will not be so competitive and there will not be so many jobs in its factory? Those are the questions for this big national debate.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 19th January 2016 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

If the Chancellor keeps shrugging off the threat to the very existence of some of Britain’s core strategic industries, such as steel, is there not a danger that when our country really needs those resources and that extra capacity for our national security no less, they might not be there at all?

[Mr Osborne]

Of course the redundancies that have been announced at Tata Steel and elsewhere in the steel industry are a real matter of regret. We are providing all the support we can to the families who are affected and helping them to get into work. We are backing the steel industry by responding to its requests that we cut energy bill costs—that policy comes into effect today; that we change the rules around procurement so that companies and the Government buy British steel; and that we take action internationally against cheap imports from China. Not one of those things was done when there was a Labour Government, and during that period the number of steel jobs in this country fell by 50%. We will not take lectures from the Labour party, but we will back our steel industry.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

It is fantastic to hear the good news coming from Gillingham, and to hear about the new companies being registered and the jobs being created there thanks to the strong economy, the long-term economic plan that my hon. Friend refers to, and a strong Member of Parliament making sure that the infrastructure comes to that part of Kent. The annual investment allowance will now be set at £200,000, a permanent rate much higher than the one we inherited from the last Government. It will help companies like the fantastic MEMS business, which I visited with my hon. Friend, to continue to grow and expand.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Chancellor announced some significant tax rises for business in his spending review, and also cut quite a lot of business grants through his spending settlement for the Department for Business, Innovation and Skills, but will he give an explanation of table 3.7 of the Office for Budget Responsibility Blue Book? It downgrades productivity for the UK economy—productivity per hour is due to fall from the OBR’s previous forecast for 2016 and 2017 and 2018. What is the reason for that?

[Mr Osborne]

The OBR has made its assessment, but what it shows is that productivity growth picks up through this Parliament. The hon. Gentleman and I have had many discussions about this, and I think we are actually in agreement that productivity is a long-term challenge for the UK and has been a challenge for many decades. We are trying to solve that by measures like the apprenticeship levy which will be one of those so-called taxes he describes. It is not a tax in that people get their money back if they have enough apprentices, so it is a levy, and it is the kind of thing we need to try to deal with the productivity challenges in the UK.

Spending Review and Autumn Statement

Debate between George Osborne and Chris Leslie

Wednesday 25th November 2015 Commons Chamber

[Mr Osborne]

I thank my right hon. Friend for her support for the statement, and of course she is absolutely right that the sound public finances that are at the heart of what we are seeking to build in our country are vital for the working people of Chesham and Amersham. They also enable us not only to afford big infrastructure projects such as HS2, but to mitigate the environmental impacts. We of course have listened to the representations she has made so forcefully and well on behalf of her constituents to ensure that more of that line is in tunnels through her constituency than would have been the case if she had not fought hard for her constituents. Of course I will always listen to the case she makes, but the plans for HS2 are now well developed and construction is going to start in this Parliament. Indeed, one of the major capital commitments in this spending review is to the budget for HS2, which increases during this Parliament, but I think this is exactly the kind of big infrastructure that this country has not been good at providing in the last few decades and is vital for our future.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I am more interested in the wisdom contained in the big Blue Book from the OBR, page 6 of which says that

“the cost of the tax credit reversal is more than offset by cuts to a variety of other benefits”

but in later years. Will the Chancellor confirm that he has delayed the effective changes in tax credits, not U-turned on them? Page 24 of that book states that

“the terms of the welfare cap are set to be breached in three successive years”.

Will he at least have the guts to send a Treasury Minister, preferably himself, each time—each year—to explain why he has failed his own test?

[Mr Osborne]

First, the welfare cap I set at the summer Budget, which of course was reduced from the welfare cap in the March Budget, was made lower by the tax credit changes that were put forward. Now that we are not going ahead with those tax credit changes, clearly welfare spending—spending on tax credits— is going to be higher in the first couple of years. That is why the welfare cap is exceeded in those years, but then, as the hon. Gentleman can see in the table on that page, the spending comes below the welfare cap and we achieve the £12 billion of welfare savings on which we fought the general election. He opposed those but in the end did not carry the day with the British public. The long-term savings we have made today to housing benefit are less than £1 billion but they continue into the future, and because of the phasing out in respect of tax credits, by the time we get to 2019-20 those tax credit changes were saving only about £1 billion. That is why that is the case, and I think it is part of a sensible plan to help families in the transition, which is what I was asked to consider. I have been able to use the improvement in the public finances to achieve that.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 27th October 2015 Commons Chamber

[Mr Osborne]

My right hon. Friend is quite right to call it a debt tax. Indeed, one of the largest items of Government spending is paying the creditors we owe, who fund our national debt. That crowds out the spending that we could be putting into our education and transport systems. We have, of course, taken forward an innovation proposed by a Government Back Bencher in the last Parliament, and we now send a tax statement to every taxpayer so that they can see how much we spend on debt interest and how urgent it is that we remove this deficit and reject those who want to borrow forever.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

On the constitutional point, will the Chancellor read out the specific sentence in the Conservative party manifesto where he promised he would cut tax credits?

[Mr Osborne]

I am very glad that the hon. Gentleman has a copy of the Conservative manifesto. It is an excellent document, which says we are going to deliver better schools for people, we are going to put more money into the national health service for people, we are going to invest in transport for people and we are going to make £12 billion of welfare savings.

Charter for Budget Responsibility

Debate between George Osborne and Chris Leslie

Wednesday 14th October 2015 Commons Chamber

[Mr Osborne]

I will give way to the former shadow Chancellor.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I am clear that we should not turn our face against a surplus, but it is important that the Chancellor’s definition of “normal times” safeguards some of our vital public services and ensures that we protect the most vulnerable in our society. Is there a danger in automatically going for a surplus without protecting some of those very basics for society? [Interruption.]

[Mr Osborne]

I was about to pick up on the point that the hon. Member for Bolsover (Mr Skinner) just made, which is that the hon. Gentleman has shifted his position in the last few days. The former shadow Chancellor was telling us that the position adopted by the Labour party on this charter sends the wrong message to the general public, and in the brief period when he was shadow Chancellor he argued from this Dispatch Box that we should run a surplus. At the time I think he was trying to make the argument that the people who suffer most when Governments lose control of the public finances are precisely the most vulnerable in society and those who lose their jobs or get cast out of work. It is not trade union barons who lose their jobs when the economy fails; it is the poorest, not the richest in society who pay the price, and the most progressive thing that a Government can do is to run a sound fiscal policy and provide financial stability to the working people of this country. That is what we are debating.

What are the objections to our approach? There are those who say—including in the last couple of days—that the economy is not strong enough and that we need more growth before we cut the deficit. That advice on growth and the deficit normally comes from those who gave us the greatest recession and the largest deficit in our modern history, but let us put that aside for a moment. The British economy has been pretty much the fastest growing of any major advanced economy in the world, this year, last year and the year before.

We have had the latest jobs numbers today and they show we have more people in work than at any point in the history of this country—the highest employment rate in the history of this country. Unemployment is down 79,000, full-time work is up and, while inflation is falling, pay is now rising strongly at 3% a year. This is the strong economy that the British people have built with their hard work and sacrifice. If this is not the time to be reducing your deficit and your debt, when is? We are aiming for a budget surplus in 2019, because if we are not running a surplus nine years or more after the end of the recession, when the economy has been growing for these nine years, when will we ever run a surplus? The real answer from people who oppose this charter is never. Speaking of which, we turn to the hon. Member for Bassetlaw (John Mann).

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 21st July 2015 Commons Chamber

[Mr Osborne]

I thank my hon. Friend for the support he has given and welcome the fact that the people of Wimbledon understand that economic security is the bedrock on which we can support the aspirations of working people. The apprenticeship levy addresses the key problem of the lack of skills in the British economy that has bedevilled us for decades. We are now going to introduce a system whereby companies that train their workforces get rewarded, and companies that do not have to make a contribution to the training that they free-ride off.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Was it always part of the Chancellor’s long-term plan to scrap the maintenance grants for students from lower-income backgrounds? The Institute for Fiscal Studies said this morning that this change

“will raise debt for the poorest students, but do little to improve Government finances in the long run.”

Can the Chancellor tell us why this was not in his manifesto?

[Mr Osborne]

We put building a first-class university system right at the heart of our manifesto, and I think the person who made the best observation about this is the person the hon. Gentleman is backing for the leadership of the Labour party: the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper). This is what she said in the House of Commons in 1998 when the last—[Hon. Members: “1988?”] There was a Labour Government then, who abolished grants and introduced loans, and this is what she said:

“I ask the House, having listened to the debate this evening, not to vote for”

maintenance grants which have

“not helped my constituents, but to take the radical approach, to go for the new, fair student loan system”.—[Official Report, 8 June 1998; Vol. 313, c. 831.]

There we have it: support from the right hon. Lady. The hon. Gentleman is old Labour.

[Chris Leslie]

Well, that fell a bit flat. I was asking about the Chancellor’s manifesto and what he promised. Taking away maintenance grants was always part of his plan, but he did not have the guts to tell students and their families before an election. However much he spins it, he is hitting students with more fees, more repayments and more debt—much more debt. Will he confirm that the poorest students will graduate not with the current £40,000 of debt, but now with an average of £53,000 of debt?

[Mr Osborne]

We are increasing the maintenance support that students have. We heard all that in the previous Parliament, when the Opposition said our reforms would put off people from low-income backgrounds going to university. In fact a record number of students from low-income backgrounds are now going to university. The Labour party that he is a member of once supported getting rid of grants and introducing loans, but this shows the distance it has come—that it now opposes this measure to support our university system. It has a new intake of old Labour MPs dragging them back to the 1980s, and we know the direction they are heading in: left, left, left—away from the centre ground of British politics and away from support for working people.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 16th June 2015 Commons Chamber

[Mr Osborne]

Of course. Perish the thought, Mr Speaker. The Government will introduce their new approach to fiscal policy in the Budget. It will include a commitment to a surplus in normal times, and we look forward to wide cross-party support for that approach.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Tomorrow the House of Commons will debate productivity, probably the central challenge facing our economic recovery. Will the Chancellor of the Exchequer be leading for the Government in response to that debate?

[Mr Osborne]

No, I will not.

[Chris Leslie]

The Chancellor clearly feels that productivity is not a priority of his. I am surprised that he will not be responding on this central question. After all, he will be here, as he will be acting as Prime Minister in Prime Minister’s questions tomorrow. If I can bring him back to the economy and he could rein in his personal ambitions for a moment, will the Chancellor set out where productivity features in his ambitions? While we have got the Chancellor here today—he is obviously not bothered about the debate tomorrow—will he explain why he failed to mention productivity in his March Budget speech just three months ago?

[Mr Osborne]

Well, I never thought I would say, “Bring back Ed Balls.” The Labour party needs to look at the productivity of its own Front Bench after those two dismal questions. I spoke in the Mansion House about the importance of raising the productivity of the United Kingdom. It is a challenge that has existed for many decades, as the hon. Gentleman knows. We will bring forward further proposals in the Budget to tackle the productivity gap in skills and infrastructure and the regional imbalance of our economy. Perhaps the Labour party could find some credible economic spokesman to take part in the debate.

The Economy

Debate between George Osborne and Chris Leslie

Thursday 4th June 2015 Commons Chamber

[Mr Osborne]

But it is anti-aspiration to deny working people in housing associations the right to buy their own homes. That will be an early, key test of whether the Labour party has learned anything from its massive election defeat.

The enterprise Bill supports the small businesses that are the productive engine of the modern economy. The High Speed 2 Bill commits us to the vital modern transport infrastructure that we need. The Childcare Bill supports the working parents—especially the working mothers—who have never had the backing that matches their contribution to our economy. The full employment and welfare Bill delivers the 3 million apprenticeships and creates the work incentives in our welfare system so that every citizen who can work is able to.

Yesterday, we discovered that the UK had climbed up the global employment league table, overtaking Canada to have the third highest employment rate of any of the major advanced economies in the world, on the path to full employment that we have set out. There is the promise of further devolution, delivered in the legislation, to Scotland, Wales and Northern Ireland. Then there is the Cities and Local Government Devolution Bill, which helps to dismantle the failed model that says that we have to run the entire country from the centre of London. Instead, it empowers our great cities across England and adds to the foundations of the northern powerhouse that we are building.

That is the agenda that we offer—full of ambition, brimming with ideas, not afraid of the future but excited about what it can bring. What of the alternative? The Labour party has taken the unusual approach of erecting the headstone first and then conducting the post-mortem. What conclusion has it reached? The shadow Chancellor just said that this is not the Queen’s Speech that he would have wanted. The Queen’s Speech that he does want is not entirely clear. He said that Labour’s economic policy was not credible; that its spending policy meant that it spent too much; that its tax policy was punitive and, in his word, “crude”; that its housing and rent policy was unworkable; that its energy policy meant higher energy bills; that its European policy was anti-democratic; and that its business policy was anti-business. Other than that, it was all okay!

[Chris Leslie]

rose—

[Mr Osborne]

I will give way, but I should properly welcome the hon. Gentleman, along with the rest of his shadow Treasury team. One of the great pleasures of doing this job has been the opportunity to work with four different shadow Chancellors. I wish the hon. Gentleman the same success as his predecessors enjoyed.

[Chris Leslie]

Very funny. I asked the Chancellor about an issue of substance—whether he is planning to cut the 45p rate of tax on earnings of £150,000. Is he able to rule that out as unfair and inappropriate?

[Mr Osborne]

There was a very good intervention which pointed out that there was a 40p rate for almost the entire period of Labour government. But let me say this. My tax priorities are clear: to raise the tax-free personal allowance to £12,500 and the higher rate threshold to £50,000. Those are my priorities and they will be reflected in the Budgets presented from this Dispatch Box.

The shadow Chancellor is a thoughtful man. Last weekend, he gave an interview to The Guardian, in which he tried to pinpoint what went wrong. This was his conclusion:

“It’s the Which? magazine strata of society that somehow we just didn’t understand”.

To be honest, I would stop worrying about Which? magazine and start focusing on which leader. There are four members of the Labour Treasury team. Three have backed different potential Labour leaders and the shadow Chancellor has led from the front by deciding that he is not going to back anyone at all. The truth is that it does not matter which of the leaders they pick—none of them understands the aspirations of working people because, in the devastating words of the right hon. Member for Normanton, Pontefract and Castleford (Yvette Cooper), Labour has become the “anti-worker” party. That is what she said. That is a quote that I suspect we will hear again in this Chamber in the coming years.

--- Later in debate ---

[Mr Osborne]

I will make a little progress, if the hon. Lady does not mind. As I say, lots of Members want to get in on this debate later.

In every year of the previous Parliament, Government Departments kept their spending not just within budget but well under budget. Outside key protected areas like the national health service, those budgets have been reduced year on year to more sustainable levels. At the start of this Parliament, it is important that we continue to control spending in the same vein. Two weeks ago, my right hon. Friend the new Chief Secretary asked Government Departments to seek further savings beyond the £13 billion of savings that they are already delivering this year. I can report today that together we have got straight back to the task in hand. We have found a further £4.5 billion of savings that we can make to the Government budget this year, including sensible asset sales. Some £3 billion of these extra savings come from finding more efficiency in Whitehall Departments and from the good housekeeping of coming in under budget. The breakdown per Department is being published by the Treasury today.

There is another component to this: I am today announcing that the Government will begin selling the remaining 30% shareholding we have in Royal Mail. It is the right thing to do for Royal Mail, for the businesses and families who depend on it, and, crucially, for the taxpayer. That business is now thriving after we gave it access to investment from the private sector in the last Parliament. There is no reason we should continue to hold a minority stake. That stake is worth about £1.5 billion at current market prices.

Of course, share prices fluctuate and the final value will depend on market conditions at the point of sale. We will sell our stake only when we can be sure that we are getting value for money, but let us be clear: holding over £1 billion of Royal Mail shares in public hands is not a sensible use of taxpayers’ money. By selling it, we help that important national business to prosper and invest in the future, while we use the money we get to pay down the national debt and pay less interest on that debt as a result. It is a double win for the taxpayer, for we on this side never forget that it is not our money or the Government’s money; it is the money that people work for and pay in taxes, and entrust to us to spend wisely.

[Chris Leslie]

I warned in my earlier remarks about the Chancellor’s hidden agenda. Before he went into the section on Royal Mail, I think I heard him announce upwards of £4.5 billion or more of in-year cuts to public services. [Hon. Members: “Savings!”] I think he called it “good housekeeping”. He announced in-year savings of that magnitude without coming to the House to give an oral statement or publishing them for the House, so that we can scrutinise what he has just announced. It sounds to me as though any semblance of a long-term plan has been totally ripped up, and that there is panic in the Treasury and chaos, with in-year public spending decisions being taken. Why did he not announce those in the March Budget if they were part of some sort of long-term continuum? Has he suddenly decided rapidly to change his course when it comes to public expenditure? And why do it in such a shabby way?

[Mr Osborne]

Only the Labour party would think it shabby to make an announcement first in the House of Commons.

[Chris Leslie]

rose—

[Mr Osborne]

The shadow Chancellor can sit down.

We set out two weeks ago that we were going to find further efficiencies and savings in Government, and that is what we deliver today.

[Chris Leslie]

On a point of order, Mr Speaker. It is the usual convention, if there are significant changes to the estimates and supply that support public services, that the documentation and details for every single Department are laid before the House of Commons, so that all Members can be informed of what is happening with our public services within a financial year. This is ripping up any semblance of long-term continuity, and it is a shabby way to treat Parliament and the public services.

[Mr Speaker]

The shadow Chancellor has spoken, but this is not a matter with which the Chair needs to deal. He has made his point and it is on the record, but the Chancellor will now continue.

[Mr Osborne]

We made this announcement to the House of Commons, and the detail is there for people to examine. There will be estimates debates as usual, but there is a very simple question: does the Labour party support further savings in public expenditure? If it does not, that means the Labour party wants to increase borrowing, increase taxes and take this country back to square one and repeat all the mistakes it carried out in office—and, indeed, repeat all the political mistakes that meant it went down to a historic election defeat just a month ago.

[Chris Leslie]

rose—

[Mr Osborne]

I have given way to the hon. Gentleman. He will have his opportunity.

Further savings in Departments this year, selling our stake in Royal Mail, getting on with what we promised, and reducing the deficit—that is how to deliver lasting economic security for working people, for as everyone knows, when it comes to living within your means, the sooner you start, the smoother the ride.

We continue today to deliver on our long-term economic plan. The measures in this Queen’s Speech back aspiration and opportunity, but they rest on the bedrock of economic security that our plan has delivered and continues to deliver. We have taken further steps today to prioritise that economic security. It is the security that the working people of this country elected this Government to provide, and I commend the Queen’s Speech to the House.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 4th November 2014 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

We did in Scotland.

[Mr Osborne]

Not in England. In regard to playing catch-up, I would say to the hon. Lady that we have heard from Labour’s civic leaders in Greater Manchester that they want a directly elected mayor. We have heard from the Conservative Chancellor of the Exchequer. What is the view of those on the Labour Front Bench on this proposal? Last week, the Labour leader was in Manchester saying that the Labour party would never sign up to such a deal, but four days later all his civic leaders did so. What is the policy of the Labour party?

--- Later in debate ---

[Mr Osborne]

As my hon. Friend knows, people earning up to £100,000 who are paying the higher rate have seen the benefit of the increase in the personal allowance. They have seen their income tax bills fall. He is right to say that more people have been pulled into the 40p rate, however, and that is why we are proposing to increase the threshold to £50,000. That will be in our election manifesto, and it is something that we can deliver in the next Parliament so that people on middle incomes, as well as those on lower incomes, can benefit from a tax-cutting Conservative Government.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

The Chancellor did not give us the small print relating to the promises that he has just repeated: terms and conditions apply. Will he acknowledge that there is a price tag attached to those promises, and will he tell us specifically what the cost of those commitments would be?

[Mr Osborne]

What I would say to the shadow Chief Secretary to the Treasury is—

[Mr Osborne]

It is around £7 billion when we add it all up. That would be paid for by lower public expenditure. These are tax cuts that are paid for. I note that that is not the approach taken by the Labour party, which would increase tax, increase borrowing and increase spending, sending the economy back into the mess that it left it in.

[Chris Leslie]

So we have established that this would mean £7 billion of lower public expenditure. What elements of public expenditure would be involved? Would the Chancellor cut the police again? Would he take the money from schools and hospitals? Or are we to judge him on his usual track record, which would mean that after the election he would simply add it on to VAT?

[Mr Osborne]

What we have seen under this Government is a party that is able to bring our public finances under control; to reduce the welfare bill; and to make sure the egregious waste in Westminster and Whitehall that took place under the previous Government no longer takes place. We will fund that by lower public expenditure, because once we get the public finances under control we are going to keep them under control.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 2nd September 2014 Commons Chamber

[Mr Osborne]

I agree with the sentiment that my hon. Friend expresses that we want to make it easier to employ people. I would argue that the reductions that we have already made in national insurance on coming into office and the provision of an employment allowance, which has been enormously popular among smaller businesses, and next year’s move to remove under 21-year-olds from the jobs tax are all steps we are taking to support the creation of jobs in the economy. Of course, the Labour party would like to put up the jobs tax, but that would be deeply counter-productive and put people out of work.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Does the Chancellor find it a cause for concern that the Bank of England has halved its forecast for wage growth for the rest of this year?

[Mr Osborne]

Of course one of the challenges across the western world has been wage growth. The shadow Chancellor put it very well in an interview he gave last week. He said:

“I think that the fact that you had the massive…financial crisis which happened on our watch meant people saw their living standards hit.”

There is an admission of where the source of the problem is, and the solution is to grow our economy, create jobs and help people get on in life, and that is what we are doing.

[Chris Leslie]

I am not sure whether I detected any concern from the Chancellor. But if he is concerned about this issue, why is it that under his plans it is always those with the lowest incomes, those in the poorest areas and those who are most vulnerable in society who end up being hit hardest by these measures? Will he now prioritise action to ensure that we have proper enforcement of a decent minimum wage, end those exploitative zero-hours contracts and promote some incentives to have a living wage?

[Mr Osborne]

We are introducing new measures to strengthen enforcement of the minimum wage and to ensure that there is not an abuse of zero-hours contracts. Might I add that for 13 years the Labour party had the opportunity to introduce those measures and it did not? The record under this Government, despite the incredibly difficult economic inheritance, is that child poverty is down by 300,000 and inequality is lower than it was on average under the previous Labour Government, so we are proceeding to deal with the enormous problems that we inherited in a way that is consistent and fair.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 5th November 2013 Commons Chamber

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I shall return to the actual question of duties. Has the Chancellor found the £750 million that is needed to pay for the freeze? At the party conferences, he also promised to spend a further £700 million on school meals, a further £300 million on his Work programme, and a further £600 million on a marriage allowance. That is £2.3 billion of promises. Let us be clear about this. Is the Chancellor going to raise taxes or cut services to pay for those promises, or is he planning simply to borrow even more? Which is it?

[Mr Osborne]

What a question from a Labour Front- Bench team that wants to spend £27 billion more, and to borrow every penny of it. If this is the hon. Gentleman’s debut performance as shadow Chief Secretary, I am afraid that he will have to do a lot better. His job should be to control the promises that he makes. As for our side, we are paying for the commitments that we are making to the hard-working people of this country.

[Mr Osborne]

I will tell the right hon. Gentleman how: by sorting out the mess that he created.

[Chris Leslie]

Despite all that hot air, it seems that there are still £2.3 billion of unfunded promises. Would it not be far easier if all those promises were fully costed and funded and independently checked by the Office for Budget Responsibility, just to ensure that the Chancellor’s sums add up?

We have proposed that all the main political parties should be able to submit tax and spending plans to the OBR ahead of the election manifestos. Surely we can all agree that—as the Chair of the Treasury Committee has suggested—an independent audit by the OBR for all the main political parties would be good for the democratic process, so will the Chancellor now join us in a cross-party consensus on that?

[Mr Osborne]

As to a cross-party consensus, I remember when I was speaking from the Opposition Dispatch Box and the hon. Gentleman’s party was in government that it opposed the creation of the OBR—opposed it time and again. I believe it is important that we preserve the independence and integrity of this new body, which is working well but is entrusted with the very important task of providing the economic forecasts for whoever is in government. That should be its primary purpose and the changes to the primary law that the hon. Gentleman is proposing are not very practical.

Economic Growth

Debate between George Osborne and Chris Leslie

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

We have spent more on pensions, and we are proud that we have done so, and we have a triple lock on pensions and pensioners last year got the biggest ever increase in the state pension. As for other areas of the welfare state, we have cut welfare entitlements by £19 billion a year.

Let me conclude, because there is a five-minute limit on Back-Benchers’ contributions. We have spoken about Europe, but many of the economic challenges that we face remain at home. We spoke about banking regulation, and an important part of the legislative programme this year is the Financial Services (Banking Reform) Bill, which is a carry-over Bill. We are making the changes necessary to fix our banking system, ring-fence our retail banks and make sure that we deal with the too-big-to-fail problem. We also have legislation to support small businesses. It will not be the most controversial Bill, because I suspect that the Labour party will not dare to oppose it, but it will be of enormous help to our constituents and to many businesses throughout the country. Our new employment allowance will cut the tax on jobs—

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Not for another year.

[Mr Osborne]

We have to get the legislation because we need a national insurance Bill, which is what—[Interruption.] The hon. Gentleman had 13 years to do something for small businesses, and the only idea he came up with was to put up the small companies’ tax rate.

From next April, every business and every charity will have their employer national insurance contributions bill cut by £2,000 a year. It means that a business will be able to employ four adults on the minimum wage without paying any employer NICs at all. I know that the shadow Chancellor does not want to hear it, because his policy was to put taxes up on jobs. That is what he fought the general election on, and that is what he still talks about when people listen to him in his interviews. That is the point. The Opposition offer more borrowing; we are reducing the deficit. They want to increase the size of government; we want it reduced. They penalise enterprise and wealth creation; we support it. They would put a tax on jobs; we are abolishing it. While they would repeat all the mistakes of the past, we are engaging in the great economic challenges of the future. We are building an economy that will enable Britain to compete and succeed in the world. We are building an economy that helps people who want to work hard and get on. I commend the Queen’s Speech to the House.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 12th March 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is right that our credibility as a nation is tested every day when we seek to borrow money to pay for the deficit that the Opposition racked up. We can borrow at historically low rates, which means low rates for people’s mortgages and low rates for people’s small business loans. Of course, if we lost that credibility by pursuing the Opposition’s policies, interest rates would rocket, people would be put out of their homes and businesses would go bust. That is exactly what we will avoid.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I am sorry; we cannot let the Chancellor wriggle out that easily. Does he remember writing his pre-manifesto paper, “A New Economic Model: Eight Benchmarks for Britain”, just before the last general election? In it, he said that

“for the first time, the British people will have eight clear and transparent benchmarks—Benchmarks for Britain—against which they can judge the success or failure of their Chancellor and their government over the next Parliament. We will be accountable.”

Will he remind the House of his first benchmark test?

[Mr Osborne]

Our benchmark was to restore the fiscal credibility of this country and that credibility has earned us record low interest rates. The hon. Gentleman talks about wriggling out of things we did in the late period of the last decade, but he ran the leadership election campaign for the right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown)—he was the campaign manager—and he should apologise for that disastrous premiership and the chancellorship that preceded it, which put this country in this mess in the first place.

[Chris Leslie]

We are all deeply moved by the Chancellor’s remorse and contrition, but let me remind him of his first benchmark test:

“We will safeguard Britain’s credit rating”.

He has failed on the other benchmark tests, too: he said that he would ensure greater availability of credit to small and medium-sized enterprises; he has failed on economic growth; he is failing on borrowing and the deficit; and he is failing on living standards. After three years of failure, when will it dawn on the Chancellor that his strategy is not working?

[Mr Osborne]

We have cut the deficit by a quarter, a million new jobs are being created in the private sector and there is record employment in our economy, as well as record female employment. We are rebalancing the British economy after all the problems of the past. The hon. Gentleman talks about remorse and contrition, but until we hear some remorse and contrition from those on the Labour Front Bench about the economic mistakes they made, no one will pay the slightest attention to what they, and in particular the shadow Chancellor, have to say.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 29th January 2013 Commons Chamber

[Mr Osborne]

My hon. Friend is right to remind us that fuel duty is 10p per litre lower than it would have been if we had stuck with Labour’s Budget plans. We have also, as a medium-term measure, abolished the fuel duty escalator that the previous Government put in place. He mentions the Treasury Committee’s report. I hope that, as Chair of the Committee, he will welcome the fact that we have got the money in from Switzerland, because one of the issues that the report raised was whether that money would be forthcoming, and the fact that it came last night was very welcome.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

While the headline rate of unemployment is falling, is not rising long-term unemployment bad for society, as my hon. Friends have been saying, but bad for the Exchequer too, because it is one reason why so far this year the deficit has been going up, with £7 billion more borrowing than in the same period last year? Can the Chancellor at least bring himself to admit that?

[Mr Osborne]

Unemployment rocketed because of the disastrous economic policies of the Labour party, and the deficit rocketed too. The good news is that 1 million jobs have been created and that the deficit has come down by 25%. Perhaps one day we will get an economic policy from the Labour party and we can make comparisons with what it would do in office. Until then, the hon. Gentleman should get behind the measures to clear up the mess that he left behind.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 24th April 2012 Commons Chamber

[Mr Osborne]

Again, my hon. Friend is absolutely right. We have very low interest rates in an environment in which many other European countries have much higher interest rates. That is a reflection of market confidence in the UK’s deficit reduction plan, and of course if we had pursued the path advocated by the Opposition—the same path that led us into this economic mess—we would be paying a higher interest rate, and there would be higher interest rates and families would have higher mortgage bills.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

May I very gently and in the friendliest way possible suggest that the Chancellor should not be quite so arrogant about his record on public borrowing? In Washington this weekend, he said that

“we have sorted out our problems.”

That is what the Chancellor told us. We have high unemployment and slow to non-existent growth. When will he realise that public borrowing is £150 billion higher than he predicted in his spending review?

[Mr Osborne]

As today’s public finance numbers show, we have hit the deficit reduction target we set out in the autumn statement and in the Budget. I am glad that the hon. Gentleman brings up Washington and the IMF summit. Perhaps we will hear later from the shadow Chancellor, as we did not have a chance to yesterday, what he thinks about the fact that the previous Chancellor of the Exchequer completely disagrees with the position that he has taken on behalf of the Labour party.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 6th March 2012 Commons Chamber

[Mr Osborne]

I have noticed in the Budget representations from Labour Members that they are always very good at suggesting things we can spend money on but never have any ideas about how to save money, despite leaving us with the largest budget deficit in our peacetime history. They are all over the place: one week it is a tax cut, the next it is a spending increase. The truth is that we need economic credibility. The budget deficit is coming down but it is still far too high. Of course, we will not have the unfunded giveaways that got this country into a mess under the previous Labour Government.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

At the budget a year ago, the Chancellor published his “Plan for Growth” with the rhetorical flourish that it would create

“a Britain carried aloft by the march of the makers.”—[Official Report, 23 March 2011; Vol. 525, c. 966.]

A year later, we can see that he has achieved less than half of the downgraded growth forecast made at the time. We had a shrinking economy in the last quarter with—and this is true—only one private sector job created for every 13 public sector jobs lost. Looking back at the past year, where did his plan go wrong?

[Mr Osborne]

We have secured for this country economic credibility and stability in the most intense global storm, with the eurozone crisis and rising oil prices. Of course it is difficult, but where is the credible economic policy from the Labour party? It is completely absent. Is it not striking that we have not had a single Labour MP get up and talk about the good news from Nissan today? The car is called the Invitation, but the only invitation the hon. Gentleman is interested in is one to the lasagne parties held by the shadow Chancellor.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 1st November 2011 Commons Chamber

[Mr Osborne]

We have already extracted a price for the European Stability Mechanism treaty that the eurozone wants to put forward by getting ourselves out of the EU bail-out mechanism to which the last Government had committed us. We are working to keep the increase in the EU budget to a real freeze. In other words, we have, I think, proved in office that we can extract important concessions and in the case of the EU bail-out fund we have actually taken a power back to Britain. That will be the approach we take to future discussions and negotiations—putting Britain’s national interest first.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Why did the Chancellor’s statement last Thursday about economic governance in the eurozone fail to mention the most important missing ingredient—a strategy for jobs and growth? Was it an accident or was it deliberate? He has been telling us all summer that Britain is a safe haven, yet growth is weak, unemployment is rising and construction and manufacturing are both contracting. What kind of safe haven is that?

[Mr Osborne]

First, may I congratulate the hon. Gentleman on keeping his job in the clear-out of the Labour Treasury Front-Bench team—although on the basis of that question, I am not sure why he did? The whole purpose of our negotiations in Europe and the whole purpose of what we are doing at home is to stabilise the British economy and set it on a path of growth and jobs. We inherited a situation where unemployment had rocketed under the Labour Government and we had the deepest recession of any country in the world, apart from Japan. We are rescuing that situation, and it is reflected in the very low interest rates paid in this country in comparison with all those other countries.

Eurozone Crisis

Debate between George Osborne and Chris Leslie

Thursday 27th October 2011 Commons Chamber

[Mr Osborne]

I can confirm that we have lost our veto on financial assistance. That was one of the issues with the so-called EFSM—the European financial stabilisation mechanism—which was the EU27 bail-out fund, which we joined a couple of days before this Government were created. Getting us out of it—[Interruption.] The former Chancellor’s memoirs are very clear about this.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Who wrote them?

[Mr Osborne]

The former Chancellor wrote them! What I would say to my hon. Friend is that we did not have the power to veto disbursements from the EFSM, so we had to negotiate our way out of it. That is precisely what the British Prime Minister has done.

Independent Banking Commission Report

Debate between George Osborne and Chris Leslie

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

Let me start by welcoming the right hon. Gentleman’s support for the report of the Independent Banking Commission. I welcome the fact that he now wants to see it implemented in this country, as I understand it, even if the changes are not implemented abroad. That is a change in his position from April, which I welcome. We all enjoyed his apology for what went wrong. He has another four years of those, I think, before he makes up for the horrendous mistakes that were made.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Where’s your apology?

[Mr Osborne]

The right hon. Gentleman was the Minister responsible for the City when Northern Rock totally lost control of its wholesale funding; he was the Minister responsible for the City when RBS launched its takeover of ABN AMRO; he was the Minister responsible for the City when HBOS was making all those unsupportable loans. No one in this House knows more about how to get it wrong than the right hon. Gentleman. He talks about unseemly bickering on the Government Front Bench, yet we have just been reading the memoirs of a former Chancellor of the Exchequer, the right hon. Member for Edinburgh South West (Mr Darling), who is no doubt about to speak. What he reveals about the regime that the shadow Chancellor operated shows that this is the pot calling the kettle black, to put it mildly.

Let me come on to the specific points that the right hon. Gentleman made. First, on the legislation in this Parliament and the draft Financial Services Bill, he is trying to make hay by exploiting a completely false distinction between principle and practice. We support these measures in principle and will put them into practice through detailed legislation. One cannot support all of this in practice because it requires detailed legislation, which even John Vickers says is not for the commission. Let there be no doubt that we support the Banking Commission’s report and that we will legislate in this Parliament. The draft Financial Services Bill might well be a vehicle for implementing some of the changes, but we might also require a separate Bill. That is partly because we need to get the draft Financial Services Bill through the House so that the new regulatory regime, which we are also introducing, is up and running by the beginning of 2013. As I said, I think it is sensible to stick with the proposal put forward by John Vickers that we set ourselves the deadline of legislating in this Parliament.

Secondly, the right hon. Gentleman talked about the international environment. He knows, as many hon. Members do, that there has been a lot of movement on the international front to introduce the new Basel requirements, which are, of course, on the same timetable as the Vickers proposal that the changes should be completed by 2019. Those are sensible changes, but we will argue for other changes that we would like to see at international level, not least the implementation of some of the agreements made under both this Government and the previous one at G20 level, on such things as bankers’ pay and remuneration. We want to see those properly implemented in all regimes. Of course, we hope that other jurisdictions, the Financial Stability Board and others will look at the report, but John Vickers was not asked to produce a regime for the world; he was asked to produce a regime for the UK to reflect the fact that we have 500% banking assets as a proportion of our GDP.

Thirdly, I am afraid that I just do not agree with the right hon. Gentleman on competition, and nor does John Vickers. The right hon. Gentleman says that we should have a Competition Commission inquiry in 2013, but my office has contacted the secretariat of the Banking Commission today to ask it for its view. The commission said that the reason why it chose 2015 is that three vital things that it wants to be operational, including the new challenger bank and the new switching of bank accounts proposals, do not come into effect until 2013. By the way, the latter is a very significant proposal, and I hope that it will get some coverage in the media among all the discussion of investment banking—the proposal is that people can easily switch their current accounts, and their direct debits and so on will follow automatically. However, that does not come into effect until 2013, and the Financial Conduct Authority is not operational till 2013.

The Banking Commission considered that timetable, and it thinks that 2015 is the right year in which to consider whether the changes are working in practice. I agree very much with that—[Interruption.] The shadow Chancellor says “12 months”, but he had 13 years to get these changes right. At the last general election, I remember having a debate with my colleague the Business Secretary and others in this House. The only party arguing against structural change of the banking system was the Labour party, so it is simply ludicrous of the shadow Chancellor to suggest that we are dragging our feet. We are getting on with it. We have produced this report within a year and a half of being in government, and now we are getting on and putting it into practice, so that we do not make the mistakes he made when he was in office.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 16th November 2010 Commons Chamber

[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.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Why is the Chancellor so afraid to make the banks play their full part in picking up the mess that they created? He has refused to do anything about the excessive bonuses, and we read in the paper that he is about to U-turn on the publication of remuneration. We also read that he is climbing down on the bank levy and, in his answer to the hon. Member for Northampton South (Mr Binley), he is now suggesting that it is too complex to make the banks lend to small businesses. The Government are not afraid to hit children and families with cutbacks, but if we are all in this together, why is the Chancellor letting the banks off the hook?

[Mr Osborne]

One does wonder where the hon. Gentleman has been for the past couple of years. We are picking up the pieces of the biggest banking crash of our lifetimes, caused by the poor regulation of the previous Government. Since coming to office, we have announced major changes in regulation, putting the Bank of England in charge—which we still do not know whether the Opposition support—and a permanent bank levy, which was opposed by every single Labour Member during the general election. We are determined to sort out the problems left to us by the previous Government.

Proposed Public Expenditure Cuts

Debate between George Osborne and Chris Leslie

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

It is not often that I say this, but I agree with the right hon. Member for Kirkcaldy and Cowdenbeath on that. Maybe one day he will turn up in the House of Commons and explain what he meant.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Instead of hitting the sick and the disabled with these cuts, why does not the Chancellor tackle the bankers’ welfare bill by reversing his ridiculous decision to give a £1 billion cut in corporation tax to the banks?

[Mr Osborne]

Over the past 13 years, Labour allowed the banking system to become completely unregulated and presided over the biggest banking crisis of our lifetime. At the time of the general election, I remember arguing in the television debates for a bank levy to be introduced in this country even if other countries did not introduce it. The then Chancellor opposed me on that. We have now introduced the levy, and I see that it has been universally accepted by the people who opposed it just a few months ago. The receipts from the levy massively outweigh any gain that comes from the lower corporation tax, and that was taken into account when I set the level of the bank levy at £2.5 billion.

Financial Services Regulation

Debate between George Osborne and Chris Leslie

Wednesday 16th June 2010 Commons Chamber

[Mr Osborne]

My right hon. Friend is absolutely right. The overall objective is to move away from a process of regulation that is simply about ticking boxes to one where more judgment is exercised and people start to ask those such as Sir Fred Goodwin, “What are you doing with your bank? Is it right that you are taking over ABN AMRO?”, instead of asking him whether he wants a knighthood.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Can the Chancellor explain who will be responsible under these reformed arrangements for the regulation of derivatives—financial instruments that are obviously sometimes very opaque and complex and could present a major risk to our financial system? Is it the Bank of England, the FSA or the Treasury?

[Mr Osborne]

The details of the institutional arrangements will be set out in a parliamentary statement tomorrow. As I said, it is right to allow the institutions involved to conduct their internal procedures, such as speaking to the court of the Bank. I know it is a completely novel idea not to bounce every institution in the country into the decisions the Government take, and actually to allow a proper process to take place, but I happen to believe that that is the right approach. The serious issue of the regulation of derivatives is the subject of intense international debate to try to create a better regulated system—or indeed to provide regulation where none existed—and to provide some central clearing operations for derivatives so that we can avoid some of the systemic risks that built up in recent years.

Office for Budget Responsibility

Debate between George Osborne and Chris Leslie

Monday 14th June 2010 Commons Chamber

[Mr Osborne]

I am always against unnecessary point scoring. I say this to my hon. Friend: I think the new process is a big departure in how Budgets are put together. It is worth reflecting for a moment on what I did in this statement. I have read out what would normally be the first part of the Budget. Everyone now knows the forecasts and the assumptions behind them. He says that the forecasts were produced with the help of Treasury people, but Sir Alan Budd is an enormously respected independent person, and I do not think his independence can be questioned. We now have a set of accurate national accounts. Indeed, when the OBR is on a statutory footing, I want it to do more work on the true state of the national accounts, with regard to private finance initiative liabilities and the like. The big difference is that I must now fit the Budget to the figures, rather than fit the figures to the Budget.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

I welcome you to the Chair, Mr Deputy Speaker.

Page 11 of the OBR forecast has an illuminating table about the contribution that various elements of spending—in this case, Government investment—make to GDP growth. For 2011, it shows a potential minus 19% effect in one year. Will the Chancellor confirm that his Budget and the spending review will not worsen that contribution to GDP, and will the OBR report on an analysis of the Budget and the spending review in terms of those components shortly after they take place?

[Mr Osborne]

I will set out measures in the Budget, and the hon. Gentleman will have to wait for that. He highlights the point that I was making—that the forecast is based on the plans inherited from the previous Government. It identifies huge spending cuts, but they never told us where those cuts would fall. I am sure that he wants a future in the Labour party, so perhaps he can take a lead over some of the leadership contenders and tell us what those cuts would be.

Oral Answers to Questions

Debate between George Osborne and Chris Leslie

Tuesday 8th June 2010 Commons Chamber

[Mr Osborne]

Unfortunately, my hon. Friend would have to tell his constituents that interest rates would start to rise and international investor confidence would be lost. Today, one of the credit rating agencies has published a report that makes the observation that the UK’s deficit reduction plan is particularly weak. That is the situation that we have inherited, and we are going to put it right.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the Chief Secretary to the Treasury rule out the means-testing of child benefit?

Economic Affairs and Work and Pensions

Debate between George Osborne and Chris Leslie

Tuesday 8th June 2010 Commons Chamber

[Mr Osborne]

The Public Accounts Committee will, I hope, be very involved in the process, and I want to involve the expertise not only of its current membership, but of my hon. Friend the Member for Gainsborough (Mr Leigh), who chaired the Committee with such distinction during the previous Parliament. I served on the Public Accounts Committee when I first entered the House, and it is perhaps our most effective parliamentary tool for dealing with some of the big issues of public expenditure and value for money. One has only to read its reports on, for example, the big Ministry of Defence procurement contracts over recent years to realise that it has identified a very serious problem and, with the National Audit Office, brings a considerable expertise to solving those problems.

[Chris Leslie (Nottingham East) (Lab/Co-op)]

Will the right hon. Gentleman give way?

[Mr Osborne]

I shall give way, but then I must bring my speech to a close.

[Chris Leslie]

At Treasury questions some time ago, I was concerned about items of expenditure that might have met the tests that the Chancellor has set out in the spending review. On some of those tests, will the Chancellor now go where the Chief Secretary to the Treasury could not and say whether he has any plans to means-test child benefit? Many people are quite worried about that.

[Mr Osborne]

I welcome the hon. Gentleman back to the House, but I shall not be drawn down the path whereby new, eager and young—or no longer so young—Members jump up with every cherished item of Government expenditure and pose such questions. The hon. Gentleman will have to wait for the spending review and Budget for a discussion of the whole Government programme, but he should not assume anything from that answer.

The next thing that we will do is bring together, from within the Government and outside, the best people in their fields. We want the best civil servants helping us in that collective effort, not defending their Whitehall Departments. We want the inspirational head teachers, the chief inspectors in the police service and the nurses with new ideas to have their opportunity to put their ideas to us. The remit will be to innovate, to challenge entrenched ways of doing things and to identify the best ideas from throughout the world; and, in order to ensure that the resulting reform programme is achieved, we will establish robust mechanisms to ensure accountability to the public.

Thirdly, the spending review will cover the large, cross-cutting areas of Government spending. We will set out our plans to reform the welfare system and restrain the cost of public sector pay and pensions, and for capital spending we will undertake a fundamental review of spending plans to identify the areas of spending that will achieve the greatest economic returns. Opposition Members should know that we have inherited a capital budget that is set to halve.