Economic Policy

Gordon Birtwistle Excerpts

Monday 25th February 2013 Commons Chamber

[Mr Osborne]

What would be humiliating is if this country lost control of its economic destiny. The way we keep control of our economic destiny is deal with our debt, deal with the imbalances in our economy, and make sure that this country can pay its way in the world, and that is what this Government are doing.

[Gordon Birtwistle (Burnley) (LD)]

Does my right hon. Friend agree that the shadow Chancellor would himself get a triple A rating for his skill in running this country down? Does he also agree that the hard-working people of this country are getting—[Interruption.]

[Mr Speaker]

Order. The hon. Member for Burnley (Mr Birtwistle) should resume his seat. I must say to Members that I am trying to ascertain whether the question is in order; it might or might not be, but it is very difficult to hear. I can make a judgment only if I can hear it, and that means Members need to stop shrieking. Let us hear the hon. Member for Burnley and see whether he is in order.

[Gordon Birtwistle]

Thank you, Mr Speaker. I am sure that you will find that it is totally in order. Does my right hon. Friend agree with the rest of the people that they are getting sick and tired of the shadow Chancellor’s politically motivated antics?

[Mr Speaker]

I am bound to tell the hon. Member for Burnley that I am always very grateful to him for his advice, but I think that on the whole I can probably get by without it, and only by a very generous interpretation—I am in a generous mood—could that be considered to be in order, but I will happily have the Chancellor briefly respond.

Infrastructure

Gordon Birtwistle Excerpts

Tuesday 12th February 2013 Commons Chamber

[Gordon Birtwistle (Burnley) (LD)]

I am grateful to the hon. Lady for giving way. Let me point out to her that spending on PFI schemes amounts to billions and billions of pounds—as I understand it, somewhere in the region of £800 billion—and is totally unaffordable. Is it right to spend money on a hospital—[Interruption.] Opposition Members should listen. Is it right to build a hospital under a PFI scheme whereby at the end of 25 years, we will have paid for it 18 times over? It might have cost £120 million to build, but by the time it is finished it will have cost more than £2 billion. I will not agree to spending money on that basis. We should spend money in the correct manner that is affordable for the people of this country; we should not have to pay for something 18 times over. Would you buy a house and pay for it 18 times over?

[Mr Deputy Speaker (Mr Nigel Evans)]

That means me. Members should speak through the Chair.

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[Andy Sawford]

Some young people from my constituency were here yesterday to learn about parliamentary etiquette —I should have taken more tips, Mr Deputy Speaker. If the Financial Secretary had laughed in front of those young people when I talked about the desperate need to invest in jobs and growth in this country, they would have given him very little credit indeed.

There is a fanciful picture of how the Labour Government did not invest in infrastructure, but hon. Members should come to Corby and east Northamptonshire and drive past the schools that were built there, such as the brand-new Kingswood school, which is a fantastic facility. My nieces get a fantastic education at the Corby business academy—[Interruption.] The Economic Secretary says that we will pay for those projects, but a combination of funding from the public and private sector—[Interruption.] He should listen to bodies such as the Monetary Policy Committee, which says that we need to find ways of investing in infrastructure in this country.

[Gordon Birtwistle]

rose—

[Helen Goodman]

Is the hon. Gentleman going to tell us about Eastleigh?

[Gordon Birtwistle]

No, I am not going to mention Eastleigh at all. Hon. Members are interested in the hon. Gentleman’s point on PFI—[Interruption.] No, he was talking about new colleges. Will he tell us when those massive infrastructure deals will be paid for? Will my grandchildren be paying for them?

[Andy Sawford]

The overwhelming majority of the investment in new children’s centres, schools and health improvement projects in my constituency was publicly funded. Government Members should remember that PFI was dreamt up by a previous Conservative Government, and that they did not oppose a single new school, children’s centre or hospital built by the Labour Government. If they were honest, they would have objected to them being built in the first place—or say they would close them down now. Let us have honesty on that.

The Economy

Gordon Birtwistle Excerpts

Tuesday 11th December 2012 Commons Chamber

[Rachel Reeves]

I will let the good people of Scotland make their decision when the time comes, but I believe that we are stronger together—stronger united than divided.

The worst aspect of the Chancellor’s two wasted years is the long-term damage being done to our economy. Every month of inaction, every failed initiative and every growth forecast downgraded is another hammer blow to the work force, our businesses and our national infrastructure. The skills and motivation of British workers are going to waste, with one in three of our 2.5 million unemployed out of work for more than a year and 3 million of those with jobs wanting to work more hours, but unable to find the work. In reality, we are falling behind, and the Chancellor has nobody to blame—not the snow, not the royal wedding, not the eurozone.

I agree with the chief economist of UBS, George Magnus—[Interruption.] [Hon. Members: “He’s gone!”] Obviously the hon. Member for Spelthorne (Kwasi Kwarteng) does not want to hear what the chief economist of UBS has to say. I will send him a copy of Hansard. George Magnus said that the Chancellor’s excuse

“falls under the category of ‘Sorry Miss, the dog ate my homework’”.

He also said that

“the problem I think that the Chancellor has with the eurozone is that we are just like them. We have this single-minded focus on austerity and the lack of growth is basically crippling our ability to meet our fiscal targets.”

I agree that the Chancellor and his economic plan are to blame. Two and a half years of austerity, two and a half years of this Chancellor, and what do we have to show for it? We have no growth, more borrowing and a tragic waste of time. [Interruption.] It is good to see the hon. Member for Spelthorne in his place again.

A year ago the IMF warned:

“If activity were to undershoot current expectations and risk a period of stagnation or contraction, countries that face historically low yields (for example…the United Kingdom) should also consider delaying some of their planned consolidation.”

At that time the IMF was predicting 1.6% growth this year; now the OBR tells us that the economy is more likely to shrink by 1.6% this year.

[Gordon Birtwistle (Burnley) (LD)]

Would the hon. Lady like to comment on the 6.4% collapse in GDP in 2008, and at the end of her speech will she enlighten us all on what her economic policy will be?

[Rachel Reeves]

Like other countries around the world, our GDP contracted during the global financial crisis. Germany and the United States have managed to recover that growth; we have not, because our Chancellor chose a different course—austerity—when jobs and growth are needed to get the economy moving and the deficit down. Unlike this Government, we recognise that we need to take action to stimulate jobs and growth. That is why we have said there should be a national insurance holiday for small businesses taking on new workers and a bank bonus tax to fund a programme of youth jobs, and that we should genuinely bring forward infrastructure investment and temporarily cut VAT to 17.5%. Those are the policies that would get the economy moving, get jobs back in our economy and help to bring the deficit down in a sustainable way.

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[Gordon Birtwistle (Burnley) (LD)]

I congratulate the new hon. Member for Middlesbrough (Andy McDonald) on his interesting and excellent maiden speech.

I listened to the autumn statement with a lot of interest because I, a simple mere Back Bencher, was able to put forward a proposal to the Chancellor of the Exchequer and the Chief Secretary to the Treasury, suggesting that industry would blossom and grow if we included in the autumn statement something to help with capital allowances. I was delighted to see that such a measure was included in it. Industry needs confidence to grow and it needs confidence to start to invest. I believe that this major part of the autumn statement has not much been picked up around the country. Companies in Burnley, to which I spoke prior to the autumn statement, assured me that such a measure would help them to invest in brand-new plant and equipment, so I shall follow up to see if they have delivered on that.

Some plant and equipment could be made mainly in the UK, but some of it will come from abroad. The main point, however, is that the companies investing in this plant and equipment will need more people to work on the new pieces of kit. They will also become more efficient and deliver more profits—and hence provide more tax. That will obviously help the country along.

Another interesting feature of the autumn statement that was not published anywhere else was the increase from 100% to 120% in the Government Actuary’s Department rate for self-invested personal pensions. We have tied pensions to the triple lock, so that the vast majority of old age pensioners will receive an increase that is way above the inflation rate. However, this is a major step that will benefit those who have made their own arrangements through various SIPP and self-administered pension schemes. They will now be able to spend more of what they have invested in pension funds, rather than the Government’s holding it back, and that will create growth because they will start to enjoy spending money that they have saved over many years.

The main thing that we must do is invest in manufacturing. I used to be in manufacturing myself: I worked in the aerospace industry. Over the next 20 years, the airlines of the world will spend some $7 trillion on new aeroplanes and helicopters, and, as the second-biggest manufacturer in aerospace equipment, we must get involved. That will mean a growth of 5% in the industry every year, so over 20 years we will have to double our capacity to produce aerospace components. Well over 100,000 people already work directly in the industry, and the supply chain employs even more. The country must get involved, and in order to do that we must expand.

Another aspect of the autumn statement that was not picked up by any of the newspapers was the £100 million that the Chancellor has put into the aerospace supply chain. In Lancashire, the North West Aerospace Alliance has bid for a national aerospace supply chain centre to be built somewhere in the north-west. I hope that it is built in Burnley, but as long as it is built somewhere in the north-west, I shall be delighted. I am sure that you would love to see it built in Chorley, Mr Deputy Speaker, but I suspect that it will go to BAE’s new industrial park in Samlesbury.

We need a massive investment in the aerospace industry, but one of the big problems with the doubling of the industry over the next 20 years is the provision of staff with the necessary skills. Over the last 30 years, various Governments ignored apprenticeships—and the last Government were just as bad as their predecessors. I am glad that the coalition Government are investing in apprenticeships, but the wreckage of 20 or 30 years cannot be turned around in two years. Apprentices need to be given more time in which to learn the job, and I am delighted that that is happening.

The last Government wanted 50%, of students, or even more, to go to university and study subjects which, in the main, were no longer applicable. What we want is for young people either to go into apprenticeships or jobs or to go to university to study the subjects of the future rather than the past: subjects such as high-tech manufacturing, including high-tech food manufacturing.

When I visited the British Aerospace apprentice school in Warton, I met the apprentice of the year, a young lady who had been on BAE’s apprentice scheme. She had been told by her college not to be an engineer but to go to university and study something else, because she was far too clever to be an engineer. It refused even to advise her on what an engineer was.

[Michael Connarty (Linlithgow and East Falkirk) (Lab)]

I have been at a meeting of the all-party parliamentary apprenticeships group in the last couple of hours. About 30 apprentices were present. One of them, a woman who is now at Vauxhall, said that her school had spent all its time trying to persuade her to try to get into university rather than becoming an apprentice. It was clear from what she was saying that those at the school thought that it would be higher in the league table if people passed A-levels and went to university rather than entering what that woman said was a very fulfilling career. That seems to be the pattern in many schools today.

[Gordon Birtwistle]

I am grateful for that intervention, and I entirely agree with the hon. Gentleman. I am the chairman of the all-party group on apprenticeships. Unfortunately, I have been sat here in the Chamber today waiting to speak, instead of being at that all-party group meeting, and I am sorry I missed hearing from those apprentices.

The hon. Gentleman may recall that two Airbus apprentices came to a previous meeting. Both of them had turned down the chance to go to Oxford university in order to be apprentices at Airbus. Both of them said, “We’ve come to Airbus, and it has taken us through its apprenticeship programme and paid for us to go to university.” Both of them were proud to say they had bought new cars and were happy to pick up their friends, who had gone to university and now had not got jobs, and to take them out on a Friday night.

We must encourage young people to go to university via companies such as Airbus, Rolls-Royce and BAE Systems. I agree with the hon. Gentleman that it is wrong for schools to advise young people to go to university just to ensure that their figures for pupils attending university go up. That is outrageous, and it needs to be looked at. I have argued that case for quite some time.

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

First, may I apologise for not having been in the Chamber for long?

I urge the hon. Gentleman to pick up on the issue of how schools deal with people who want to be apprentices. The Business, Innovation and Skills Committee has just undertaken a report on the subject, and that theme came up time and again. It is in all our interests to ensure that what has been described does not happen. We had too much elitism in the past, and we do not want it continuing in the future.

[Gordon Birtwistle]

Once again, I agree with the right hon. Gentleman. It is always a great moment when the right hon. Gentleman rises and speaks in this Chamber—even though he has only just turned up.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

On a point of clarification, Mr Binley is not a right hon. Member. He has been in the Chamber a little longer than suggested, too.

[Gordon Birtwistle]

I apologise. The hon. Member for Northampton South (Mr Binley) must have been so quiet that I had not seen him in his place.

I agree that the schools and colleges in this country must no longer downgrade apprenticeships, and must no longer say to students, “If you don’t pass, you’ll be an apprentice.” That is an outrageous statement for schools to make. It is time they woke up. I must say that it is also time that this Government’s Department for Education woke up to the fact that going to university is no longer the be-all and end-all, because there is far more to life than going to university.

I am a little upset that the Secretary of State for Education does not think a right lot about careers advice, because I believe that careers advice in schools is crucial. Young people need to be told about, and shown, what is available these days outside the school gates. The Secretary of State and his Department must realise that and advise schools that careers advice is crucial to young people’s futures. Perhaps even more importantly, it is crucial to the economy of this country, because if we do not train people for the jobs of the future, we will all go down the pan.

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[Mr Meacher]

Of course I believe that there is a problem with the level of debt and the level of the public sector deficit; everyone accepts that. The issue is how it should be dealt with. I believe that the way this Government are dealing with it is profoundly self-defeating.

The Chancellor has failed in the sense that, according to the OBR, despite an output gap that remains incredibly high at 3.7%, the net effect of all his measures in the autumn statement will be to raise the general growth rate by a footling 0.1%. That is an extraordinary judgment on the Chancellor.

The Chancellor also failed his second test, which was to shift the economy on to a more sustainable long-term footing, moving away from his over-dependence on finance—a move we all agree with—and towards a much stronger industrial and manufacturing base. Eighteen months ago, he announced with great fanfare the march of the makers. That never happened, however. He has now promised a £40 billion guarantee for private infrastructure investment, but the problem is not one of too little credit; it is one of too little demand for credit. The latest figures show construction plummeting ominously, largely because of its great dependence on the public sector, which the Chancellor is shrinking. Moreover, UK manufacturing will this year suffer the biggest deficit in traded goods in its entire history—a deficit of roughly £110 billion, or 7.5% of gross domestic product. That is utterly unsustainable, and if that trend is not reversed, it will inevitably lead to an almighty crash in British living standards before long.

[Gordon Birtwistle]

rose—

[Mr Meacher]

I will not give way again, as I do not have much time left.

Why is the Chancellor not meeting his own tests? It is because he is obsessed with a neo-liberal ideology that forbids any public sector lead role in the economy. In fact, the Chancellor is crucifying Britain today on a cross of dogma. What should a sensible steward of the British economy do now? He should do two things: reinstate the capital spending programmes cancelled in the great drive towards deficit reduction, with special priority given to house building, energy and transport renewal and green technology; and set up a national investment bank with its own portfolio of investment projects, focused on key infrastructure and cutting-edge technology.

How will that be paid for? There are three options. Instead of any further £50 billion tranche of quantitative easing being used to consolidate bank balance sheets, as has happened every time up till now, the Chancellor should divert at least a portion of it towards generating 1 million or more jobs by investing it directly in industrial and manufacturing projects. Or he could levy a capital gains tax charge—I know that this would not be welcome on the Government Benches—on the colossal gains made by a minuscule proportion of the mega-rich, which The Sunday Times, a Murdoch paper, believes to have been in the order of £155 billion in the past three years. Or he could justify—yes, I think he could—a temporary increase in borrowing, of, say, £150 million to raise £30 billion at an interest rate of 0.5% on the reasonable grounds that with such a weak economy but cyclically adjusted net borrowing forecast at only 3% this year, he has given himself enough leeway to delay tightening. Those are the three options, and not to do any of them is a culpable negligence for which he will not be forgiven.

On the Chancellor’s second objective of rebalancing the economy, several measures need to be taken urgently. First, British manufacturing clearly needs a larger flow of qualified skilled workers. The academic underpinning of the STEM subjects—science, technology, engineering and maths—should be steadily increased; a viable and effective post-14 vocational route, with a much stronger work component, should be established in schools; and employers should be made to take responsibility for on-site training. Secondly, the bane of short-termist bank lending to British manufacturing must be tackled by giving incentives to develop a long-term ongoing relationship between banks and their customers, as is done very successfully in the German Mittelstand. Thirdly, the supply chains, which are crucial to any successful manufacturing economy but which have been broken up by privatisation and foreign sell-offs over the past 30 years, urgently need to be restored to achieve a secure base for SMEs. Fourthly, the sacrifice of key industrial sectors and companies to uninhibited acquisition in the international markets—Pilkington, P&O, Corus, BT, O2, Smith Electronics, Cadbury and BA; it is a very long list and a laissez-faire policy that no other major country in the west would ever allow—should be reversed if Britain’s economy and its survival are to be secured.

All those things need to be done, because the alternative under present policy is semi-permanent continuation of a condition of semi-slump.

Financial Services Bill

Gordon Birtwistle Excerpts

Monday 10th December 2012 Commons Chamber

[Alison McGovern]

As I have said, this morning I listened to a presentation from the UN Secretary-General’s special representative on global food security. We discussed the matters that the hon. Gentleman mentions, but there was strong interest in whether the trading of commodity derivatives has played a role or had an impact in increased prices. The hon. Gentleman may suggest that its effect is negligible, and I would be happy to see any evidence he can forward to me. As I try to understand the phenomenon, I am happy to look at numbers and think about the evidence. I am an empiricist if nothing else; we should always consider the evidence. One of the problems to date, however, has been the availability of information, and making it clear and evident for all to see. I have tried to make the point that people looking at the world economy could not, for specific reasons, necessarily see the problems relating to sub-prime mortgages. As my hon. Friend the Member for Nottingham East has suggested, we should try to get ahead of the problem and ensure that there are no longer problems that we simply do not see.

[Gordon Birtwistle (Burnley) (LD)]

The hon. Lady is making a good point, but did the person whom she met this morning give her alternatives to the derivatives and commodities markets? The worldwide food supply is decided by commodities buying. There is a drought in America, so the price of wheat goes up. There is heavy rain in this country, so we have problems ourselves. There are problems in Bangladesh and all around the world that push up the price of food. The same is true for oil; when there is a shortage of oil, the oil price goes up. Did the gentleman whom she spoke to this morning provide an alternative to what we have now? Maybe we could look at it and come up with some suggestions ourselves.

[Alison McGovern]

I thank the hon. Gentleman for his intervention and his compliment that he thinks my point is not wholly without merit, but it might test your patience, Mr Deputy Speaker, if I tried to shoehorn into the debate on the amendment possible solutions to the global food crisis and productivity in agriculture.

On derivatives, in agriculture production there is a need to hedge. There needs to be some kind of financial security to take account of unforeseen weather events and so on, so of course there is a need to hedge, but that is not what I am talking about. The question is whether some of the recent high-volume, high-speed forms of speculation and trading have had an impact on the global food price. I suspect that they might have, but it would be nice to have more information.

Autumn Statement

Gordon Birtwistle Excerpts

Wednesday 5th December 2012 Commons Chamber

[Gordon Birtwistle (Burnley) (LD)]

I congratulate the Chancellor on his decision on capital allowances, which I think will be a major boost for industry. Over the next 20 years, the aerospace industry across the world will invest between $6 trillion and $7 trillion on new aeroplanes. This country is the second biggest aerospace provider in the world, and this is twice the capacity we have now. Does the Chancellor agree that we must continue to invest in advanced manufacturing, particularly in aerospace, and that we should carry on trying to get young people involved?

[Mr Osborne]

I completely agree with my hon. Friend. I congratulate him on the work he has done to make the case for capital allowances to help small and medium-sized businesses in Lancashire and in his Burnley constituency. He wrote a report, which I thought was compelling, and he put in the work of listening to his local manufacturers. He is completely right about manufacturing. I have been to some very high-tech manufacturing businesses in north Lancashire, which make components for some of the most up-to-date jet engines in the world. We are investing more money in the aerospace supply chain, and as I announced today, we are investing more in the advanced manufacturing supply chain. With the help of my right hon. Friend the Business Secretary, we are determined to make sure that Britain’s premier place in aerospace is maintained.

Finance Bill

Gordon Birtwistle Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Rushanara Ali]

When my party was in government, we cut unemployment. We got a million young people into work. After the financial crisis, when unemployment started to increase, we did something about it. I urge the hon. Gentleman’s Government to do something about unemployment, instead of looking backwards. Do something about the unemployment rate which is causing so much damage to our country, instead of doing what his party did when it was in power in the 1980s, which was to go around telling people that unemployment was a price worth paying.

The hon. Gentleman’s party is demonstrating that the nasty party is back with a vengeance. That is devastating for people in constituencies such as mine. They do not want to see the nastiness of the party. They want jobs. I suggest that his party focuses on creating jobs and growth. That is what people want.

[Gordon Birtwistle (Burnley) (LD)]

rose—

[Rushanara Ali]

I should like to conclude my speech. I have given way enough, but if the hon. Gentleman wants to hear more about the issues affecting our country and my constituents—[Interruption.] I give way.

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[Gordon Birtwistle]

I am very grateful to the hon. Lady. Would she concur with the noble Lord Mandelson when he said that the Labour party was intensely relaxed about people being filthy rich?

[Rushanara Ali]

The noble Lord Mandelson said that those people should pay taxes, and when my party was in power we brought unemployment down. That is what I urge the hon. Gentleman’s party to act on. I urge the Government, instead of defending bankers’ bonuses, to think about the 3 million people who are out of work. That is the responsibility of his party and his Government. He should talk to them about solving the current problems, instead of looking backwards.

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[Bill Esterson]

My hon. Friend gained vast experience of dealing with young people before coming to Parliament, and she has been a strong advocate for them ever since. Her experience is very similar to mine. It is absolutely disgraceful that we have Ministers sitting there laughing at what is happening to young people up and down this country, who cannot get jobs because we have a Government who entered office when the economy was growing strongly—[Hon. Members: “Oh!”]—despite a global economic downturn and a global economic and financial crisis caused by the friends of people like the hon. Member for Gloucester (Richard Graham).

[Gordon Birtwistle]

Will the hon. Gentleman give way?

[Bill Esterson]

Let us hear what the Lib Dems have to say for themselves.

[Gordon Birtwistle]

Would the hon. Gentleman like to comment on the large number of young people who have come from abroad and now have jobs in the UK?

[Bill Esterson]

I am not sure what that has to do with what I was talking about. Perhaps the hon. Gentleman can agree with me that what we need is action from this Government—action to help young people find jobs.

The hon. Member for Dover (Charlie Elphicke), who is no longer here, mentioned several times the fact that the banks are not lending and said that that is the problem, but he forgot to say that the reason the banks are not lending is that they have no confidence in this Government—the Government who have pushed us back into a double-dip recession so that we are now one of only two countries in Europe in that position, the other being Italy. That lack of confidence is why banks would rather shore up their own position—and, of course, pay exorbitant bonuses to their top executives. The banks are not lending to the small businesses that need the money to create the jobs and drive the growth that is needed. Unless the banks start to do that, the Government need to step in.

That is why the proposal from Labour is so important. It is why repeating the bankers’ bonus tax would make so much difference to young people and to this country as a whole. But what did we get from this Government? The cut in the 50p tax rate. Three hundred thousand of the wealthiest people in the country will benefit from a tax cut paid for by the rest of us, particularly the poorest and pensioners through the granny tax. That is the reality of the Government’s proposal, which they are pushing through tonight. That is why we should oppose the Bill.

What I expected was an end to the sort of heckling we have heard from Ministers, who clearly enjoy the prospect of young people being out of work. I would like to think that that is not what they really think. I had hoped for a degree of fairness from the Government—perhaps I was being unreasonably optimistic. There is nothing fair in 300,000 of the wealthiest—

Finance Bill

Gordon Birtwistle Excerpts

Monday 2nd July 2012 Commons Chamber

[Cathy Jamieson]

I thank the hon. Gentleman for making that point. It is important to understand that the fact that this was a universal benefit ensured that everyone who ought to have had it and who needed it was able to get it. When we debated this topic in the House previously, some Members tried to characterise our concerns about these proposals as Labour trying to protect a universal benefit paid to high earners, rather than looking at the overall principled position, and some may try to do so again this evening. I should repeat what I said both earlier this evening and in that earlier debate: that kind of argument does not wash at all in terms of fairness from a Government who have given a tax cut to millionaires while millions of ordinary families are feeling the pinch.

During the earlier debate, I also reminded Members of article 27 of the United Nations convention on the rights of the child, which the UK has signed up to. It outlines the obligations on states to assist parents to meet the needs of their children, and I pointed out that a number of organisations—as well as a number of Members—had highlighted the importance of those obligations. Sadly, that exhortation to make this debate about fairness to children and families seems to have gone largely unheeded, apart from some honourable exceptions. There have been Westminster Hall debates looking at this issue in more detail, in which a number of Members highlighted both the unfairness of the proposals and their practical difficulties.

[Gordon Birtwistle (Burnley) (LD)]

Does the hon. Lady agree that it is unfair to expect a family in my constituency where the parents might work in manufacturing industry for about £8 an hour to be contributing from their taxes to pay benefits to people who earn over £50,000 a year?

[Cathy Jamieson]

Well, there were some robust exchanges on that issue in previous debates. If the hon. Gentleman feels that is a difficult point, I cannot understand why he does not also feel that it is unfair that people on the very top earnings—those earning millions of pounds each year—are to get a tax cut of £40,000 per year, instead of focusing on the needs of children. I find that extremely odd, and I shall say a little more about the unfairness of the proposals later.

Banking (Responsibility and Reform)

Gordon Birtwistle Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Umunna]

I completely agree with the point my hon. Friend makes.

[Gordon Birtwistle (Burnley) (LD)]

rose—

[Mr Umunna]

I will move on.

Given that market mechanisms since the crash have not operated to rein in excessive pay in the banking sector, the bank bonus tax, we have argued, should be repeated, on top of the bank levy, in recognition of the fact that the banking sector owes a responsibility to society in general. If the claim that we are all in it together is to mean anything, the reintroduction of that tax is a must. It would create 100,000 youth jobs and 25,000 affordable homes. It would do immeasurable good to the reputation of the sector and support jobs, growth and business in the UK economy.

Financial Services Bill

Gordon Birtwistle Excerpts

Monday 6th February 2012 Commons Chamber

[Harriett Baldwin (West Worcestershire) (Con)]

rose—

[Gordon Birtwistle (Burnley) (LD)]

rose—

[Ed Balls]

I will make some progress and take both interventions in a minute.

I understand why politically the Chancellor is so keen to blame the structure of UK regulation—the tripartite relationship between the Bank, the Treasury and the FSA. He wants to claim that his particular institutional reforms are the solution, but my advice to him is to be very careful indeed, because this was not a peculiarly British crisis; it was a global crisis. It hit countries with tripartite systems of regulation, quartet systems, twin peaks, more powerful central banks, less powerful central banks and statutory and non-statutory regulators alike, and it was not a failure of regulatory structure, but a collective global failure to see the risks inherent in the structure of the global financial services industry.

We heard from central bankers earlier, but Alan Greenspan, the former chair of the US Federal Reserve and architect of the US system, when asked by The New York Times about his and the world’s understanding and management of risk, said:

“The whole intellectual edifice…collapsed”.

He was right. It was not simply a failure of structure, but a flaw in the way regulators understood the financial system, and that is why the British Bankers Association is right in its submission on the Bill to say that

“we consider that successful regulation depends more on regulatory culture, focus and philosophy than structure.”

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[Ed Balls]

In a second.

And yes, it was a failure shared here in the UK, across the Treasury, the FSA, the Bank of England—and I have to say the then Opposition, too.

Let me remind the House that the legislation to give the Bank of England independence, and to shift from self-regulation to statutory regulation after 1997, for the first time established a Bank of England deputy governor with explicit responsibility for systemic financial stability and with an ex officio seat on the FSA board. As the seeds of the crisis were sown in the years before it, neither the FSA nor the Bank of England nor the Treasury rang the alarm bells, despite meeting every month in the tripartite standing committee.

The Chancellor, in a second breath a moment ago, said that we are now rightly taking the Treasury out of making such decisions, having criticised the Treasury for not triggering a crisis meeting that neither the Bank of England nor the FSA asked for—a point that seemed to be deeply confused. That demonstrates not that structures do not matter, but that there is no evidence from Britain or throughout the world that a different and arguably more complex structure, the new quartet structure before us, would have spotted a crisis that neither the Bank of England, the FSA, the Treasury, the Federal Reserve, the European Central Bank nor anybody in a regulatory position of responsibility spotted.

[Gordon Birtwistle]

Will the right hon. Gentleman explain the regulatory things that went on when the previous Prime Minister pushed Lloyds bank into buying HBOS, which was a catastrophe in itself? How much regulation went on then, and how much discussion went on between the Bank of England and the previous Government before it was pushed through by the previous Prime Minister?

[Ed Balls]

Those were decisions for the Chancellor and the Prime Minister of the day. I cannot give the hon. Gentleman a blow-by-blow account or any detail of what happened between the FSA, the Treasury and the Bank of England, because at the time I was the Secretary of State for Children, Schools and Families and was dealing with the failure of the test administrators to deliver the standard assessment tests for year sixes at the end of key stage 2.

Youth Unemployment and Bank Bonuses

Gordon Birtwistle Excerpts

Monday 23rd January 2012 Commons Chamber

[Jake Berry]

I agree. Of particular joy to me is the fact that my constituency has a new academy school, which has entrepreneurship and technology at its heart. We are starting to have those conversations with business in order to equip our young people for the jobs market.

I want to talk about what hon. Members can do positively in their constituencies to tackle youth unemployment. As we have heard, much of it is about leadership. At the start of next month I will launch the “100 in 100” campaign in my constituency, which is my pledge to get 100 people into 100 apprenticeships in 100 days. Building up to this, I have visited as many local companies as I can to talk with them about what we hope to do, and I have found that there is a huge appetite for giving young people a chance.

[Gordon Birtwistle (Burnley) (LD)]

I congratulate my hon. Friend on the initiative he is leading in his constituency. I did the same thing only last year, and the companies in Burnley were delighted to take on 107 apprentices in 100 days, which shows that there are companies that are keen to take on young people. A vast number of skilled people working in the manufacturing sector in our area are now in excess of 40 years of age, and the companies recognise that in future they might not have the skills to deliver the products that the world wants.

[Jake Berry]

I thank my hon. Friend for making such an eloquent point. As my near neighbour, he is really throwing the gauntlet down, but I am confident that Rossendale and Darwen will more than beat 107 apprenticeships in 100 days.

I want to talk about some of the businesses that I have been to see that are going to support us and that, even before we started, pledged to give a young person a chance by taking on a new apprentice. Businesses from every section of the economy are involved, not just those in the biblical trades or manufacturing. They include Home Manor residential nursing home, Whitehead’s traditional butchers, DHJ Weisters Ltd, Aquasoft Solutions, which is a computer company, McCambridge Group, Crown Paints, WEC Group, which is an engineering company, Turnbull Prints and Anglo Recycling. We have across the entire constituency a commitment from business to give young people a chance.

When I talk with those businesses, they tell me that the Government’s signal that they want to rebalance the economy and will support apprenticeships has helped them to decide to take on apprentices. One thing in particular has changed their mind: the pledge to give a £1,500 incentive to smaller firms to take on a young person. We can get involved in the debate about what is right and wrong about the apprentice scheme and what else we should be doing, but I appeal to all hon. Members to go out there, speak to businesses in their constituencies, advocate why they should support young people, why they should invest in their work force, why young people would be good for their business, bringing fresh ideas and new skills, and ask them whether they will take a young person on and give them a chance.

If just throwing money at the problem solved youth unemployment, the previous Government would have done so, because they threw lots at it. The only way we can solve part of the youth unemployment problem is through training and leadership, and leadership should come from hon. Members, from employers and from the Government. There is nothing more important than getting our young people back to work.