Financial Transaction Tax and Economic and Monetary Union

Debate between Graham Stringer and Chris Leslie

Tuesday 18th June 2013 Commons Chamber

[Chris Leslie]

It sounds that way. The Government’s reticence to get involved and start engaging is telling. I still hold out some hope for the Liberal Democrats. The Lib Dem manifesto—who could forget that seminal political tract—promised that Lib Dems will

“work with other countries to establish new sources of development financing, including bringing forward urgent proposals for a financial transaction tax”.

I fully expect Liberal Democrat Members shortly to be in our Lobby—they can call it their Lobby, if they wish—in favour of the amendment.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend is making a much more moderate speech than I expected. He has made some serious logical points, but can he give an unambiguous answer to the question of whether it is his policy to go ahead with the tax if New York and Tokyo do not?

[Chris Leslie]

I want to do what we can to persuade New York in particular that including London and its financial centre in this would be the best way forward. The Americans already have a very small security exchange commission fee on individual transactions. In terms of the American principle, the foot is already in the door. I was in Washington DC in February to talk not only to Members of Congress, but to others involved in the issue. Far from the impression that those on the Government Benches have, I think we could work on the principle across the Atlantic.

It is true that Jack Lew, the American Treasury Secretary, has concerns about some of the extraterritorial aspects, but let us work on a solution and find a design that might fit, if that is an issue of principle. However we do that, we should not turn our minds away from it. Similarly, the cascade risk issues could be dealt with. There are issues relating to the impact on the repo market and the funding that many companies depend on there, but again, there are exemptions and ways of dealing with that problem and others, such as at what point a levy would be applied, whether the sale and buy-back of a security would be treated as one transaction, whether the charge would be waived on overnight repos and closing repos, and closing any loopholes that might fall open in the treatment of longer-term maturities. There are ways of dealing with these issues, but any Treasury worth its salt would be engaging on the issue, weighing up the pros and cons, dealing with them and making sure that we had a design of a financial transaction tax that offered some hope for the future.

A one-size-fits-all blanket approach will not reflect the complexities of our economy or the unintended impact that an FTT could have if it was poorly designed, but learning and adapting those early experiences of the EU approach should inform us in good time to engage in a proper dialogue on the most sensible joint approach between America in particular and the United Kingdom, ideally before 2015, but presumably after a change of Administration here.

Radical action is needed and a financial transaction tax is an idea whose time has come. For all the aversion to reform emanating from Whitehall and from the Minister, the public and the business community know that we are at risk of a lost decade of economic progress in this country if we do not take bold steps and change the rules of the game. A whole generation has been indelibly affected by that global financial failure, and the twin financial centres of London and New York are at the centre of what was a world-changing phenomenon. There is therefore an urgency for the UK to lead the way forward. We must move on from discussion of banks as part of the problem and start to settle on how they will help to repair our public finances and solve the challenges of our economy and society.

It is not clear what the Government’s policy is. They still claim in part that they are in favour of some sort of financial transaction tax, maybe a stamp duty, but they intend to oppose the amendment. Now is the time for action and leadership on an FTT. The public are sick of the Chancellor’s blind refusal to change course and look at alternatives, and it is now clear that we need serious change and new ideas, not more of the same. I urge the House to support the principle of a financial transaction tax and to support the amendment.

Infrastructure (Financial Assistance) Bill

Debate between Graham Stringer and Chris Leslie

Monday 15th October 2012 Commons Chamber

[Chris Leslie]

My hon. Friend is totally correct. Ministers seem to think they can come to the Dispatch Box and make a set of announcements, which will then magically happen as they busy themselves in their part-time political advisory roles or whatever they happen to be doing. If we start to walk through the projects one by one, we realise that Ministers are not gripping the issue.

[Graham Stringer (Blackley and Broughton) (Lab)]

My hon. Friend must have noticed during the Conservative party conference that the chaos and shambles goes right to the top. The Prime Minister claimed that work on the A11 was already under way, but any check on the Highways Agency website will show that the first spade will not be put into the ground until January. The Government simply do not know what they are doing, do they?

[Chris Leslie]

A pattern is emerging, but I shall not use the word “omnishambles”, which is probably past its best. There is great concern about these schemes. Thameslink, for example, is a project that is slipping considerably. The contracts for rolling stock were due to be awarded by early 2012; then it was by the summer, and now the Department says that the contract with the preferred bidder will be signed in the autumn. The Transport Select Committee is on top of that issue. It is writing to Secretaries of State asking why there is a delay with the rolling stock procurement, and I am sure that the Minister will be able to reply to that question when he responds to the debate. However, many other significant questions about delay need to be answered.

We need to know about the ongoing programme of work on the north Doncaster chord, a rail link that is greatly needed in that part of Yorkshire. The national infrastructure plan of 2011 promised that a business case would be provided by April 2012, but the proposed development is still awaiting a decision from the Secretary of State, which must be delivered before production can continue and construction can start.

The preferred bidder for the extension of the Northern line to Battersea was announced in June. A Treasury source then told the Evening Standard:

“The entire weight of the Government is being thrown behind the extension of the Northern Line”,

but nearly a year after the Chancellor’s autumn statement, the extension is still subject to the existence of funds. Despite backing from the

“entire weight of the Government”,

Transport for London can only say:

“Subject to funding being in place and permission from the Secretary of State for Transport, the new stations could be open by 2019.”

The construction of the Green Port Hull was due to begin this year, but Siemens now says that it will not sign a contract for the wind turbine factory until 2013. As for carbon capture and storage, the Department for Energy and Climate Change was supposedly

“developing a streamlined selection process”,

and £1 billion of capital was supposedly available to support the project, but construction is not due to begin until 2014.

Planning permission was granted in March for biomass electricity generation at Royal Portbury dock, but E.ON is currently taking time to

“review the prospects for the project in light of the UK Government’s current banding review”.

Again, a Government decision is awaited.

I am sure that I do not need to mention the issue of the 4G mobile spectrum auction and roll-out. Many Members may be checking their not necessarily 4G-compatible handsets as I speak. However, I will say that a very messy approach was taken to the auction of that particular regulatory arrangement, and that anyone who may be thinking of buying an iPhone 5 should be careful, because it will not necessarily be compatible with many possible providers. This is an example of our falling many years behind the United States, Germany, Sweden and parts of Asia. Unlike this country, they already have 4G services which are giving businesses opportunities to benefit customers.

We need only compare the much-vaunted promises of the 2011 national infrastructure plan with the actuality of the infrastructure pipeline that was announced in April. Although 182 new projects had been added, 63 had disappeared without explanation. Of the 357 projects announced in November that were updated in April, nearly two thirds were still in pre-procurement stages, and just 38 had proceeded to procurement or construction. Of the 229 that were still at the pre-procurement stage, three quarters were still at the same stage as had been reported in November 2011, and 36 had moved backwards.

Members may recall the regional growth fund, the supposed successor of the regional development agencies and, supposedly, the Government’s flagship alternative for regional economic development. Although the winners were announced in, I believe, April 2011, fewer than half the final offer agreements in rounds 1 and 2 of the fund have been put in place. Only £60 million of the £1.4 billion fund to spur growth has been released to businesses, and, according to a report by the Public Accounts Committee, the £364 million spent by the fund so far has been held up in intermediaries such as banks and local authorities.

Connecting Europe Facility

Debate between Graham Stringer and Chris Leslie

Thursday 19th January 2012 Commons Chamber

[Chris Leslie]

We are all waiting to see what proposals come forward. The Chancellor has said that he will come to Parliament and let us have a say on many of these things. Indeed, perhaps the Minister can help us out with the timing of those proposals—[Interruption.] If he would care to listen to my questions, perhaps he could also tell us when we will get the Bill to enact the European financial stabilisation mechanism permanent bail-out fund. We are all waiting for that. The eurozone countries are supposed to be rolling together the European financial stability facility and the EFSM into that permanent arrangement, but as I understand it we will have to legislate for that. Will he tell us when that will happen, because it is related to this question about potential IMF funding? We need clarity from the Government—and from the IMF as well.

[Graham Stringer]

I completely follow my hon. Friend’s logic, but surely this is not the largest issue facing the future of the European economy. The largest issue is that the people running Europe are determined to keep a political project going by competitive deflation in the countries of Europe. The best solution for the whole European economy is for an orderly break-up of the euro, particularly for those economies, such as Greece and probably Italy and Portugal, that are, in effect, bankrupt.

[Chris Leslie]

I do not agree with my hon. Friend that the break-up of the euro would be in the UK’s interests, but there are dangers with a permanent deflationary lock in the fiscal policies of the eurozone countries. That is why, both in the UK and across the eurozone, far more must be done to get growth into those economies. They have to grow in order to build their way out of the hole that they are in. In that sense, the ambitions, which many people share, of improving infrastructure across the EU, while laudable, need to be seen in the context of the affordability criteria that must be applied to them. We have to act to unblock the clogged arteries of Europe, connecting the major cities of the continent, making it easier for business and opening new opportunities for growth in the single market. Capital investment in infrastructure is extremely important as a driver for growth.

What progress are Ministers making in shaping the European spending review? That is absolutely at the heart of today’s debate. After December’s phantom veto—the first veto in history that stopped precisely nothing—the UK has to pick up the pieces and try to influence the important EU budget process. The Minister was throwing around history lessons about the common agricultural policy and various other things. However, we need to know what exactly this Government are going to do about the common agricultural policy. What is he going to do about the spending proposals? Rather than walking away before the negotiations even begin and leaving another empty chair, the Minister has to raise his voice, build some alliances and secure a more appropriate level of expenditure that also shifts priorities.

Credit Institutions and Investment Firms

Debate between Graham Stringer and Chris Leslie

Tuesday 8th November 2011 Commons Chamber

[Chris Leslie]

Which proves the point that we need to ensure that we negotiate firmly.

The motion before us is worded correctly. It focuses very much on subsidiarity, and on article 443 and the proposals that would give the Commission the right to vary national regulations, even though it would prevent member states from changing their own rules beyond the maximum harmonisation arrangements—a step, I believe, too far. I agree with the draft reasoned opinion and, therefore, with the motion that the Clerk of the House forward this view to the presidents of the European institutions.

Article 443 does indeed go too far, and it would not be appropriate. Paragraph 18 of the European Scrutiny Committee’s report sums that up well, stating there is no evidence to prove that

“the Commission is better placed than the competent authorities of Member States to address national prudential concerns. Indeed, there is a strong argument to say that national authorities are not only better placed, but can react more quickly than the Commission can by means of delegated legislation, thereby enhancing financial stability.”

[Graham Stringer (Blackley and Broughton) (Lab)]

Does my hon. Friend agree that the Commission almost certainly knows that it would not be better at that than the regulatory authorities, and that what is behind this regulation is an attack on the City in order to up the game of Frankfurt and Paris? It must be resisted at all costs. It is much more malevolent than just a bureaucratic mistake.

[Chris Leslie]

It is difficult to ascribe motives to the Commission in all circumstances. My hon. Friend may well be right, but then again I have also talked to some of the City’s large banking institutions, which have in some ways argued in favour of harmonisation, so it is a mixed picture. I agree with the Government on the point before us, however, and it is important that we stand firm and retain the flexibility of higher standards if we possibly can.

Finance (No. 3) Bill

Debate between Graham Stringer and Chris Leslie

Tuesday 3rd May 2011 Commons Chamber

[Chris Leslie]

As I said, we would repeat the bank bonus tax that we instituted last year, and we think that the bank levy needs to be more substantial.

The Government’s original design suggested that it would yield £3.9 billion—that was reported in The Observer, I think, back in November. Of course, that was why they panicked and decided that they would have to go back down to the £2.5 billion or £2.6 billion level. They stepped away from that original yield level.

Of course, we are not the Government; we are the Opposition, and we are not even allowed under the rules of order to table our suggested variants of the rate of the levy or the design of the clause. All that we can do for now is advocate a fairly urgent review of the general levels of bank taxation in this country.

[Graham Stringer (Blackley and Broughton) (Lab)]

Is not the irony, when comparing pay cuts in the public sector with bankers’ bonuses, that in effect some bankers are public sector workers because the taxpayer has had to bail them out? Does my hon. Friend agree that if we mainly own a bank, such bonuses should not be paid while the bank is still in deficit?

[Chris Leslie]

It is absolutely mystifying. There is a sense that the shareholder—the taxpayer—somehow has to allow all sorts of activity to take place as though it was nothing to do with them, even though those banks would not exist had we not intervened to save them. That shows the incredibly laissez-faire, hands-off attitude of Ministers, who are the shareholders of the banks making large awards.