Oral Answers to Questions

Debate between George Osborne and Nadhim Zahawi

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

We are doubling investment in renewable electricity and energy, and much of that is going into Scotland. We also increased the capital budget for the Scottish Government, so instead of lobbying us for capital projects, they now have the resources to pay for such things themselves.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

T3. I recently attended the skills show in Birmingham, which was an incredible example of the opportunities on offer in Britain for young people, including jobs, training and apprenticeships. Does my right hon. Friend agree that the levy he announced in the autumn statement is an excellent further step to ensure that young people in the UK are earning and learning— or preferably both—as that is the route towards a more productive workforce that is ready for jobs in the 21st century?

Greece

Debate between George Osborne and Nadhim Zahawi

Monday 6th July 2015 Commons Chamber

[Mr Osborne]

The risks stem from the fact that we are the world’s largest financial centre. We are also the global centre for the trading of the euro. We are a very open economy; on most measures, we are the most open and interconnected of all the world’s advanced economies. We are therefore affected by financial conditions in Europe. We saw that a few years ago, but we are in a much stronger place than we have been in the past because we have been paying down our very large deficit, because we have been strengthening our economy, because we have been recapitalising our banking system and making sure our banks are stronger, and because we have a much better system of regulation, in which the Bank of England is in charge of regulating the banks. Those are all steps that we have taken. I do not think anyone will be particularly surprised to hear that when we assemble in a couple of days to hear the Budget, we will hear the further measures needed to reduce that budget deficit and ensure that we fix the roof while the sun is shining.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Such external shocks do focus the mind. May I bring the Chancellor back closer to home? He has tough decisions to make on Wednesday. Has he had any representations from the Opposition Benches about where those cost savings should come, and support for the long-term economic plan?

Greece

Debate between George Osborne and Nadhim Zahawi

Monday 29th June 2015 Commons Chamber

[Mr Osborne]

I very much commend my hon. Friend for the work he does. Let me reiterate that HMRC is ready to operate the time to pay scheme to help both the self-employed and small businesses—and, indeed, larger firms—who have problems because there have some kind of financial transaction with a Greek company and have been caught up in the Greek Government’s capital controls. There is advice on the Department for Business, Innovation and Skills website, and they can get bespoke advice by phoning the helpline.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

It is worth placing on the record my constituents’ gratitude to the Chancellor for taking us out of the eurozone bail-out mechanism. London serves as a centre for the Greek shipping industry. What assessment has the Chancellor made of the impact on that industry of the crisis in Greece?

[Mr Osborne]

Frankly, a lot of that industry is pretty international these days, and I suspect quite a lot of those involved in it have foreign bank accounts as well as Greek bank accounts. It is a very important industry, and it is one of the industries that can help the Greek economy if that economy is competitive. One of the big issues in Greece has of course been the competitiveness of the Greek ports in particular.

More broadly, I thank my hon. Friend for his support of the action we took during the last Parliament. More properly, I should credit the Prime Minister, who secured exit from the eurozone bail-outs at an important European summit.

Oral Answers to Questions

Debate between George Osborne and Nadhim Zahawi

Tuesday 27th January 2015 Commons Chamber

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

T1. If he will make a statement on his departmental responsibilities.

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

The core purpose of the Treasury is to ensure the stability and prosperity of the economy.

[Nadhim Zahawi]

We in Stratford-on-Avon are rightly proud of our world-class chamber orchestra, the Orchestra of the Swan, which, as well as playing to packed audiences in Stratford, is busy exporting British culture to the US and China. What assessment has my right hon. Friend made of the extra jobs and growth resulting from the new tax relief for theatres and orchestras?

[Mr Osborne]

The new tax relief for theatres has been a real success. It has been taken up by many theatres and is supporting regional productions. Separately, at my hon. Friend’s request, we have also helped the Royal Shakespeare Company to take its plays to China. Orchestra tax relief, the consultation on which we announced last week, will be another huge boost for British culture and music. We will set out further details in the Budget about how it will work, but it will be there to support a thriving orchestra industry—if that is the right word!

Autumn Statement

Debate between George Osborne and Nadhim Zahawi

Wednesday 3rd December 2014 Commons Chamber

[Mr Osborne]

First, what the hon. Gentleman’s question reveals is, of course, that when the Labour party says it is committed to fiscal discipline, it does not mean that at all. It opposes welfare changes that bring the welfare budget down, and it opposes all the difficult decisions required to bring public expenditure under control. Because we are able to take those difficult decisions on day-to-day spending, we are able to make investments in infrastructure that will really help all parts of the United Kingdom. A shining example of that is the electrification of the valley lines, which the Prime Minister went to south Wales to talk about. That never happened in all the years that the hon. Gentleman was a Labour Minister and represented the seat as a Labour MP.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

May I, on behalf of the Orchestra of the Swan, thank the Chancellor for the tax relief, which of course comes on top of the tax relief for the Royal Shakespeare Company? Savers were among the hardest hit under Labour’s great recession. Does not today’s autumn statement and the help that we are providing to savers demonstrate that this Government and the Conservative party are on the side of savers, who would be put at risk if Labour ever got anywhere near his position?

[Mr Osborne]

First, may I say that I know the Royal Shakespeare Company does a brilliant job? We were able to help it earlier this year with support for touring around the world. Such people are looking at the theatre tax break and at what they can do to use it. I hope that the orchestra tax break is of help to the Orchestra of the Swan, which my hon. Friend mentioned.

On savers, I have announced today that people can pass on their ISAs to their spouse tax free. That major step forward in the ISAs regime comes on top of the increase to £15,000 for the new ISA and, of course, the new freedoms on pensions.

Economic Growth

Debate between George Osborne and Nadhim Zahawi

Wednesday 15th May 2013 Commons Chamber

[Mr Osborne]

The hon. Gentleman is saying that somehow we have a responsibility for the financial crash or for the problems in the banking industry, but he neatly skips the fact that not only was Labour in office for 13 years, but the shadow Chancellor was the City Minister. He did not have any old job in Government —he was the City Minister when Northern Rock was selling those 120% mortgages and the Royal Bank of Scotland was thinking of taking over ABN AMRO. He is the architect of the tripartite regulation, which failed so catastrophically. He is, literally, the last person to have any credibility on this subject.

[Nadhim Zahawi]

The shadow Chancellor also claimed victory in keeping this country out of the euro. Will the Chancellor remind the House of the cost of the euro preparation unit, and when that unit was closed down?

[Mr Osborne]

The euro preparation unit was shut down by this Government in 2010, but the shadow Chancellor does not seem to know what Labour policy is. The Labour party is committed in principle to joining the euro. [Interruption.] The shadow Treasury team do not know what the monetary and currency policy of their own party is—that is absolutely ridiculous.

--- Later in debate ---

[Mr Osborne]

The policy is this: change the European Union, seek a new settlement, then put that to the British people in a referendum. This debate has revealed that Labour cannot answer the simple question: does it rule out offering an in/out referendum before the next general election? If it cannot answer that question, it will not be listened to on this subject any more, and people will be very, very clear that the only way to get an in/out referendum on Europe is to have a Conservative Government after the next election, so people should vote Conservative in that election and make sure that they have their say.

[Nadhim Zahawi]

Does the Chancellor not agree that the double-speak we heard from the shadow Chancellor and his reluctance to trust the British people feed the people’s mistrust in politics?

Oral Answers to Questions

Debate between George Osborne and Nadhim Zahawi

Tuesday 29th January 2013 Commons Chamber

[Mr Osborne]

I am happy to look at the funding for the metal theft initiative, but I know that the Government have introduced regulation to clamp down on this crime, which can of course endanger people’s lives.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

In a debate in this Chamber, the right hon. Member for South Shields (David Miliband) accepted this Government’s spending envelope, but was quickly shot down by the shadow Chancellor. Is not the real problem here the fact that to be credible on the economy, the Labour party needs to come up with a policy that stands up?

[Mr Osborne]

My hon. Friend has described the comments of the right hon. Member for South Shields as a speech. I think we could describe them as an audition.

Professional Standards in the Banking Industry

Debate between George Osborne and Nadhim Zahawi

Thursday 5th July 2012 Commons Chamber

[Mr Osborne]

The idea that I am going to take lessons in integrity from a man who smeared his way through 13 years of Labour government and who half the people who served with him think was a disgrace in his post is another thing entirely. Let him redeem himself today by not blocking an inquiry into what happened under the last Government. Take part in the inquiry. You are not prepared to do that.

[Nadhim Zahawi]

The shadow Chancellor is creating a smokescreen because the evidence is clear: Ministers in the previous Administration knew of a conversation that took place between Paul Tucker and Bob Diamond. They need to come clean—whether it is shadow Chancellor or the Leader of the Opposition—and answer the question: which Ministers knew about that conversation?

[Mr Osborne]

My hon. Friend is right that throughout this debate and over the past two days, not a single Labour Minister from the previous Government has come forward and told us who was involved. Who was involved? Answer the questions. One of you must know. Hands up, come on. One of you must know who was involved.

IMF

Debate between George Osborne and Nadhim Zahawi

Monday 23rd April 2012 Commons Chamber

[Mr Osborne]

This money comes out of Britain’s foreign exchange reserves and is swapped for an IMF loan. It is therefore not money that we would otherwise spend on public services or use to cut taxes. My hon. Friend is being a little unfair to the countries that are having to undertake difficult structural reforms. For example, Spain has recently passed significant reforms to its labour laws to make its employment market more flexible and Italy has made difficult pension reforms. People will remember the scenes in Italy when those reforms were announced a few months ago. Britain is also having to make difficult reforms and take difficult decisions to make our economy more competitive and to deal with the problems in our public finances.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

The Australian Government made their decision with the backing of the Opposition. Will the Chancellor confirm that his decision will not be affected by the shadow Chancellor’s flip-flopping?

[Mr Osborne]

There is not much danger of my being influenced by the shadow Chancellor’s flip-flopping. My hon. Friend draws to our attention the interesting point that the Australian Liberal party, which is hardly the most Europhile party in the world, understands that Australia has obligations to the international community and to the IMF. Given that Australia is prepared to make a contribution, it would be quite odd if Britain was not.

The Economy

Debate between George Osborne and Nadhim Zahawi

Tuesday 6th December 2011 Commons Chamber

[Mr Osborne]

On the same measure that the hon. Lady uses, child poverty rose by 200,000 in the last Parliament. [Interruption.] She says, “We took those children out.” Child poverty in the last Parliament rose by 200,000 on the exact same measure that she is using. What we are doing is investing in nursery education provision for the poorest children, which never existed before, in a pupil premium, in free schools and in new school places—that is exactly what we are doing to tackle the causes of poverty as well as the symptoms.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

On the question of whom the nation blames, why does the Chancellor think that a recent ICM poll showed that people thought that the debt inherited from the Labour Government was the biggest single cause of the current slow-down?

[Mr Osborne]

The reason they think that is because it is true. This, again, is the absolutely hopeless position that Labour under the shadow Chancellor have put themselves in, but frankly, that is for them to work out. If I may declare an interest, we very much want him to stay in his post for the next three and a half years: he is the best recruiting sergeant we have.

The Governor of the Bank of England—appointed by the right hon. Gentleman, no doubt, when he was the chief economic adviser—said this last week:

“This is exactly the right macro-economic response to the position in which we find ourselves”.

And who is left opposing this credible action, this macro-economic response? The Labour party, which is now advancing this new theory that Britain’s low interest rates in this debt crisis are a sign of policy failure, not policy success. That was the argument we heard last week. The shadow Chancellor talked in his response to my statement of

“the illiterate fantasy that low long-term interest rates in Britain are a sign of enhanced credibility”—[Official Report, 29 November 2011; Vol. 536, c. 812.]

I pointed out that, on that basis, Italy’s rates of 7% were a policy triumph and Greece’s 30% rates were an economic miracle.

In the intervening week, I looked for evidence to support the argument that the shadow Chancellor has been advancing. I have not found it, but I did come across the very interesting “Ken Dixon lecture” to the department of economics at the university of York. It was given in 2004 by the chief economic adviser to the Treasury—Mr Edward Balls. He told a no doubt gripped audience of students about the importance of lower debt, of running surpluses in good times, of keeping deficits under control. He then cited the market interest rates that Britain was paying on its debt, versus neighbouring countries’, as the fruits of economic success. He boasted that the UK was borrowing money more cheaply than Germany and he hailed low interest rates as

“the simplest measure of monetary and fiscal policy credibility”.

Does he still believe that?

Autumn Statement

Debate between George Osborne and Nadhim Zahawi

Tuesday 29th November 2011 Commons Chamber

[Mr Osborne]

I would certainly like to see even more money coming from British pension funds, but £20 billion is an ambitious target. It is a shame that we have not been able to mobilise private sector resources from the pension funds in the past decade in the way that we should. The Government are making a determined effort to change that, and I hope that the memorandum of understanding that we signed with two groups of pension funds will lead to more infrastructure investment in the Tees valley and elsewhere.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

I commend my right hon. Friend for his statement and for doing so much for hard-pressed families and working people. Today, Italy had to borrow billions of pounds at almost 8% interest. The UK borrows at German rates because of the confidence in our economic policy. The strikes planned for tomorrow will damage confidence in the British economy. Will the Chancellor condemn the strikes and urge the Opposition to come out and condemn them?

[Mr Osborne]

My hon. Friend is absolutely right. Let us look at the Italian bond auction this morning—that is the sort of interest rate we might have to pay if Britain’s ability to pay its way in the world lost credibility. Was it not surprising that the shadow Chancellor did not mention the fact that there are strikes tomorrow? It is because he is a wholly owned subsidiary of the Unite union.

Jobs and Growth

Debate between George Osborne and Nadhim Zahawi

Wednesday 12th October 2011 Commons Chamber

[Mr Osborne]

The policies that we have set out deliver the low interest rates that are essential for economic growth.

[Nadhim Zahawi]

The shadow Chancellor has quoted the IMF. Why does the Chancellor think that the Labour party voted against our subscription to the IMF? Why did the Labour Government not put their best people to work to deal with the deficit and the debt, but instead hire 17 people and spend £4.8 million on the euro preparation unit?

[Mr Osborne]

My hon. Friend reminds me that one of the first things I did in the Treasury was shut down the euro preparation unit. More importantly—

Eurozone

Debate between George Osborne and Nadhim Zahawi

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

I think the phone would have been flying through the air rather than ringing, if it had been the last Prime Minister. Of course we have made our own examination of the impact of QE. When I became Chancellor, I set out the procedures I would follow if there were a request from the Monetary Policy Committee. I set it out within weeks of coming into office and I said I would follow exactly the procedures set out by my predecessor—that if there were a request, we would accede to it. I also believe that the MPC has come to the right judgment; its judgment was independent, but I believe it was right.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

The shadow Chancellor would like a pat on the back for keeping us out of the euro. Will the Chancellor tell us how much the euro preparations unit cost under the previous Government?

[Mr Osborne]

I am afraid I do not have the figures to hand, although I will definitely bring them to our debate on Wednesday. What I do know is that when I arrived in the Treasury, the euro preparations unit still existed, and we had to shut it down. Perhaps it was something that the shadow Chancellor did not get round to in all those years at the Treasury when he was running British economic policy during the golden era.

Independent Banking Commission Report

Debate between George Osborne and Nadhim Zahawi

Monday 12th September 2011 Commons Chamber

[Mr Osborne]

Net lending targets were tried by the previous Government, and when we looked at that in detail on coming into office, we saw why they had failed so spectacularly, and decided not to repeat the mistake.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

May I commend the Chancellor on setting up the commission and on making such an unambiguous statement today? Will he confirm that he has the full backing of the Government, and that No. 10 will not be unleashing the “forces of hell” on No. 11?

[Mr Osborne]

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

The Economy

Debate between George Osborne and Nadhim Zahawi

Wednesday 22nd June 2011 Commons Chamber

[Nadhim Zahawi]

I can inform the Chancellor that, in the west midlands, unemployment has fallen by 28,000 this quarter. At the height of the previous Government’s economic drive, employment in the west midlands still shrank.

[Mr Osborne]

My hon. Friend makes two good points. First, there was a very welcome recent reduction in unemployment—the biggest fall for a decade. Secondly, he draws attention to one of the most staggering facts about the past decade: private sector employment in the west midlands fell in the decade leading up to the financial crisis. That shows how unbalanced the British economy became under the last Labour Government.

--- Later in debate ---

[Mr Osborne]

Will he answer my question? No? I am not taking an intervention. [Interruption.] The question we have here was put by John Hutton himself—

[Nadhim Zahawi]

On a point of order, Madam Deputy Speaker. Should not the hon. Member for Rhondda retract the disparaging remark he has just made about the Chancellor?

[Madam Deputy Speaker (Dawn Primarolo)]

Nothing has been said that is unparliamentary, but some of the behaviour in the Chamber could be a little better than it is currently. That is not a point of order for me, but a matter for each Member of the House.

--- Later in debate ---

[Mr Osborne]

Let me conclude—

[Nadhim Zahawi]

Will my right hon. Friend give way?

[Mr Osborne]

I will certainly give way.

[Nadhim Zahawi]

That goes to the heart of this debate—the credibility that the shadow Chancellor talks about. The public are deaf to the Opposition’s arguments because of their political opportunism and the cynical way in which they are dealing with the most important issue facing our nation.

[Mr Osborne]

My hon. Friend is absolutely right, and I am glad that I gave way to him so that he could make that important point.

Banking

Debate between George Osborne and Nadhim Zahawi

Wednesday 9th February 2011 Commons Chamber

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Thank you, Mr Speaker.

“If the City is doing well, the country is doing well. When it prospers, we all prosper”.

They are not my words but those of the shadow Chancellor. Did my right hon. Friend take any advice from him?

[Mr Osborne]

No, instead I learned from the example of all the things that went wrong when the shadow Chancellor was City Minister. As one does on these occasions, I came into the Chamber armed with many of his quotes about what a golden legacy he was leaving in the City, how bonuses were at the appropriate level, and how he was going to resist all calls in Parliament to toughen up regulation. It would take a couple of hours to read them all out, but no doubt over the next few years we will have plenty of opportunities to remind him that he is a man with a past.

Bank Bonuses

Debate between George Osborne and Nadhim Zahawi

Tuesday 11th January 2011 Commons Chamber

[Mr Osborne]

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

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Is the Chancellor aware that Sir Fred Goodwin took home £15 million under the previous Government?

[Mr Osborne]

The clue is in the question: his title is “Sir”—and he was given that knighthood by the previous Prime Minister.

Loans to Ireland Bill

Debate between George Osborne and Nadhim Zahawi

Wednesday 15th December 2010 Commons Chamber

[Nadhim Zahawi]

I thank my right hon. Friend for giving way. Setting aside the technicalities of why we are debating this measure and how long we shall do so, and getting down to the substantive issue of the loan, can the Chancellor share with the House what the fees and the interest to the UK Government will be over the period of the loan if the Irish Government draw down the whole of the loan?

[Mr Osborne]

The second intervention draws me back into the rest of my speech, but in response to my hon. Friend the Member for Clacton (Mr Carswell), I have common-law powers to issue the loan and sign the loan agreement. I then have to seek statutory authority, but that could be done retrospectively. I thought it more appropriate to seek parliamentary approval first, and that was a discretionary choice that I had.

I will answer my hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi) directly a bit later in my remarks, when I get on to the terms of the loan that we are going to consider.

--- Later in debate ---

[Mr Osborne]

I do not think it has materially changed. I have been quite focused on trying to land it at the 5.9% rate, because that sits between the 6.1% and 5.7% rates of the other international parts of the package. That rate reflects some of the circumstances that relate to my hon. Friend’s earlier intervention.

The IMF will charge a floating rate, with a margin above its funding costs, in line with its pre-existing loan terms for an extended fund facility. The European loans, like ours, will charge a fixed rate on each tranche set using a margin above their own cost of funds. We will charge interest every six months and there will be a repayment of the principal at the end of the 7.5-year term of each tranche.

In common with the IMF, we will also charge a commitment fee for making the loan. We will charge half a percentage point on the total amounts that may be drawn on under the loan agreement for the forthcoming 12-month period. If the loan is drawn on, the fee will be waived and effectively replaced with the interest charged on the loan.

There are two conditions, which are set out in terms to which I draw the House’s particular attention. The first is that the IMF, as well as the EU, must be satisfied that Ireland is complying with the agreed restructuring plan. I think that that is a very important safeguard for British taxpayers. The second, crucial, condition is that there must be

“no amendments to the Restructuring Plan that would have a material adverse financial impact on the UK operations of Anglo Irish bank, Allied Irish Banks and Bank of Ireland”.

Given the scale of those banks’ operations in the UK, that second condition is significant, and it shows in a practical way why I believe it was right for us to provide the loan. It allows us to have a say in a restructuring plan that could otherwise have had a major impact on the UK and its banking system, and could potentially have cost the British taxpayer considerable sums of money without our voice even being heard. Making the loan has enabled us to set that condition, and to be part of the discussion about the restructuring plan and its impact on the UK subsidiaries of banks which have significant presences in Northern Ireland. I know that there is concern about the potential impact of the plan on jobs and the availability of credit in Northern Ireland, and, indeed, about its potential impact throughout the UK, given that Bank of Ireland owns the Post Office card account.

[Nadhim Zahawi]

What the Chancellor is saying is particularly pertinent, given that the Post Office cash machine in Portcullis House was provided by the Irish banks.

May I ask a quick question?

--- Later in debate ---

[Nadhim Zahawi]

Are we the only lender that is lending in a currency other than the euro?

[Mr Osborne]

Sweden and Denmark are at this moment finalising their loan agreement, and I do not think they have yet made that decision. As I have said, we decided to lend in sterling so that the exchange rate risk would be borne by the Irish rather than the British Government.

The official advice from the Treasury is that the loan agreement represents value for money for the British taxpayer. As I said earlier, it is also in line with the terms offered by both the IMF and the eurozone. I have laid before the House a summary of the key terms of the agreement, and a final written agreement will be forthcoming in the next few days—or, potentially, weeks—once the European and IMF assistance has also been agreed. I will, of course, keep the House informed.

One thing is clear: Ireland is a friend in need, and it is because our economy is currently in a stronger position than Ireland’s that we are able to offer it such reasonable and sensible terms for our bilateral loan.

Financial Assistance (Ireland)

Debate between George Osborne and Nadhim Zahawi

Monday 22nd November 2010 Commons Chamber

[Mr Osborne]

I would say to those students, and, indeed, to the hon. Gentleman, who represents them, that their prospects of getting a job later in their lives depend on a stable UK economy that is growing and a stable Irish economy that is not having contagion effects on the UK or anywhere else. That is why we are taking action domestically to put our own house in order. Even his students, I am sure, would recognise that, in the end, we cannot live beyond our means and we cannot sustain an economy on debt alone. I am also sure that if his students asked themselves what connections they had to Ireland, they would find quite a lot of connections in their family, in the businesses that they know about and the like. Our two economies are interconnected.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

People at home will be listening to this statement, or they will read it tomorrow, and wonder whether we can borrow a few more billion and spend a few more billion. Does the Chancellor agree that market concerns over sovereign debt remain, and that the priority for the coalition Government must be to keep the UK out of the financial danger zone?

[Mr Osborne]

The sovereign debt concerns are very heightened at the moment—that is a statement of the obvious—and a Chancellor of the Exchequer who represents the country with the largest budget deficit in the G20, and the largest budget deficit in the EU until Ireland started to overtake us, must make moving Britain out of the financial danger zone their immediate priority, which is what this Government have done.

Comprehensive Spending Review

Debate between George Osborne and Nadhim Zahawi

Wednesday 20th October 2010 Commons Chamber

[Mr Osborne]

I shall make a couple of observations. First, the independent Office for Budget Responsibility—the hon. Lady is, after all, quoting its forecast, so I presume that she would accept its whole forecast—has predicted that unemployment will fall and that more private sector jobs will be created. Secondly, she must accept—even the deficit deniers in the Labour party must accept it, and they admitted it during the general election—that there would have been a reduction in the public sector head count if there had been a Labour Government. I do not know whether the hon. Lady agrees with that—she can shake her head, nod or whatever—but that is the truth. We have had to make some decisions, but there is a high turnover in the public sector anyway, so we hope that much of this can be accommodated by posts not being filled. There will be redundancies—I think the Labour party has accepted that there would have been redundancies under its plan—but we are going to do everything we can to deal with that situation and help those people to find work. In the end, however, the current size of the budget deficit means that we have to deal with this situation, or many, many more jobs would be at risk. Let us remember that this Government came into office with unemployment rising, and that is what we have had to deal with.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

The shadow Chancellor, although very good at the jokes, demonstrated in his response his confusion about the difference between fiscal and structural deficit. I wondered whether the Chancellor could help by explaining that difference to him.

Proposed Public Expenditure Cuts

Debate between George Osborne and Nadhim Zahawi

Monday 13th September 2010 Commons Chamber

[Mr Osborne]

First of all, I note that there has still not been a word of apology about leaving this country with the worst public finances in its history. Nor, by the way, has there been an apology for the complete failure, by the right hon. Lady and her predecessors as Secretary of State, to reform the welfare system, despite all those promises.

In the Budget speech, I made it very clear that we were looking for additional savings from welfare. If the Labour party wants to propose some ideas to make up its £44 billion part of the savings package, perhaps it will contribute to this debate. Sadly, at the moment, we have had absolutely no ideas from it. It opposed the VAT rise; the pay freeze; the in-year savings; the housing benefit reforms; the tax credit reforms; the switch to the consumer prices index for benefits; and the abolition of child trust funds. It opposed all those things. They are £33 billion worth of cuts.

Where are the Labour party’s numbers? Where are its ideas? If it wants to engage with us in a real debate about how we reform welfare, protect the most vulnerable and help people who can work into work, we will be all ears. But at the moment there is a deafening silence from the Labour party.

The right hon. Lady talks about my right hon. Friend the Secretary of State for Work and Pensions not being here. He happens to be at a conference in Europe about international labour market reforms. The shadow Chancellor is not here, and nor is a single one of the Labour party leadership contenders. That is because instead of talking about the national interest, they are courting the votes of vested interests.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

I congratulate the Chancellor on his innovative way of taking suggestions from the public on the spending challenge. Has he had any suggestions from the shadow Chancellor or the Labour party leadership contenders?

[Mr Osborne]

The answer to my hon. Friend is no. Since Labour Members called for a vote on the value added tax rise, we have discovered that actually the shadow Chancellor supports the VAT rise. So he did have ideas; he just did not tell us about them.

Financial Services Regulation

Debate between George Osborne and Nadhim Zahawi

Wednesday 16th June 2010 Commons Chamber

[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.

[Nadhim Zahawi (Stratford-on-Avon) (Con)]

Does the Chancellor agree that the previous Government’s idea of regulating our banks was to have a midnight cocktail party, where they twisted the arm of the chairman of Lloyds Banking Group to take over HBOS?

[Mr Osborne]

Indeed, my hon. Friend is right: certainly, if the accounts are true, that was the approach taken by the former Prime Minister. I am not sure whether he did so with the knowledge of the former Chancellor, but I guess that we have to wait for the flurry of memoirs to find out.

Oral Answers to Questions

Debate between George Osborne and Nadhim Zahawi

Tuesday 8th June 2010 Commons Chamber

[Mr Osborne]

I attended the G20 in South Korea this weekend. The G20 communiqué calls on countries with significant fiscal challenges—we have the highest budget deficit in the G20, so that includes us—to accelerate the reduction in the structural deficit. It has also been part of the European Union discussions that I have taken part in, that countries with significant budget deficits need to get on and reduce them. I am afraid that the Labour party, as it continues to oppose what we are doing, finds itself outside the international mainstream.

[Nadhim Zahawi]

Has my right hon. Friend the Chancellor read yesterday’s International Monetary Fund report, which warns that the current crisis management was no alternative to fundamental economic restructuring? Does he agree that the previous Government either naively or deliberately chose to mislead the nation?

[Mr Osborne]

My hon. Friend is absolutely right. I have, of course, seen the IMF report, and the lesson we learned is that you have to fix the roof when the sun is shining. That is what the previous Government completely failed to do. They had 13 years to fix the national finances, and now it is up to us to clear up the mess that they left behind.