Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Monday 28th October 2019 Commons Chamber

[Mr Rees-Mogg]

I am grateful to my hon. Friend for his point. It would indeed be a historic occasion if an EDM were actually something serious that could be given proper consideration.

[Mr Chris Leslie (Nottingham East) (IGC)]

In a supreme act of petulance, even though the Leader of the House and the Government got the Second Reading they so craved, they are now deciding that they are so fed up with this—their determination to put a border in the Irish sea is such—that they are just going to ram this Bill through in extra-unusual, atypical time when there is no time pressure requiring them to do so. Will we be able to table amendments before 10 am tomorrow? Will we have sight of the Bill? How on earth can this be a way to effectively repeal such a key constitutional piece of legislation?

[Mr Rees-Mogg]

It is not repealing a key constitutional piece of legislation; it is amending that piece of legislation to allow, under these exceptional circumstances, for an early general election to take place. That is a perfectly normal legislative process. We legislate to amend Bills and Acts of Parliament the whole time. This is not petulant; it is a decision that has been come to reluctantly because the House will not come to a conclusion, and this House has to come to a conclusion. We have been arguing for three and a half years about this subject in trying to deliver on Brexit—on what the British people voted for. This Government are determined to ensure that that happens, but in a general election others will put forward their case. The hon. Gentleman can try his luck at putting forward his case and will be able to see how well he does.

Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 24th October 2019 Commons Chamber

[Mr Rees-Mogg]

If there were a will to get the Bill through, it could of course be done. Yes, my hon. Friend is absolutely right, and it would satisfy the European Union. It would get the deal done; we would have left; and we could do it by 31 October, and that is what we should aim to do.

[Mr Chris Leslie (Nottingham East) (IGC)]

I wonder if the Leader of the House is familiar with what is known as the wash-up between when an election or a Dissolution is announced and when Parliament then stops. It is normally a time when, through the usual channels, Bills that remain are carved up because they are not controversial. But his attempt to use that period to basically seek a carve-up of the momentous future of generations to come with this Brexit settlement—which, by the way, should never have got a Second Reading but did—is an abuse of the procedures of this place.

[Mr Rees-Mogg]

I am sufficiently familiar with the wash-up to understand what it actually means and what it is for. At the end of a Session, normally of a year or more, Bills that have completed a lot of their passage are concluded. This Session has only begun. There is no washing-up to be done; the cupboards are full of clean crockery.

Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 22nd October 2019 Commons Chamber

[Mr Chris Leslie (Nottingham East) (IGC)]

This is a question to the Leader of the House, as part of the business statement. Will he listen to lots of the voices, from different perspectives on the Brexit question, who are all puzzled why he and the Prime Minister have chosen not to enter into a continuation of the Committee stage tomorrow or on Thursday? It would be perfectly in order for them to have scheduled that, by laying those motions either this evening or at the beginning of business tomorrow. There is a jovial atmosphere this evening, but a lot of people are frustrated—not least me, as I have some amendments that are first up in that Committee stage, whenever it occurs—believing it is the choice of the Leader of the House and of the Prime Minister not to be progressing this Bill tomorrow or on Thursday. They are therefore the architects of their own fate in this regard, and forever more when people ask why this Bill did not make progress before 31 October we will be able to say, “It was his own doing.”

[Mr Rees-Mogg]

It is always a pleasure to listen to the hon. Gentleman’s dulcet tones, which we had the joy of doing last night, at considerable length. I am sorry that his amendments will not be debated now, and that instead right hon. and hon. Members have to listen to me. Had he voted for the programme motion, he would have found that his amendments were being debated. He talks much about listening, but I think he did not listen to my opening comments about the interaction of Standing Orders on the business that we had before us today. Under Standing Order No. 83A, if a programme motion that commits a Bill to the Floor of the House is lost, that Bill is then committed to a Committee, and we would have to have another resolution to pull it out of Committee. So it is not possible just to proceed tomorrow as if nothing had happened.

Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Monday 21st October 2019 Commons Chamber

[Mr Rees-Mogg]

The Government always take the concerns of the devolved Administrations very seriously. Leaving the European Union is primarily a reserved matter—it is a matter for the United Kingdom Government —but that is no reason not to have constructive and continuous engagement with the devolved Administrations.

The Government tabled a programme motion today. You said that it was available in the Vote Office, Madam Deputy Speaker, but I wonder whether it might be useful to Members who have not had a chance to go to the Table Office if I were to run through the timetable briefly, for the sake of Hansard. You nod most elegantly, Madam Deputy Speaker, and I take that as an encouragement to carry on.

The Second Reading debate will be a normal Second Reading debate, and will continue until 7 pm tomorrow. The programme motion proposes three hours of debate after its commencement in the first stage of the Committee procedure. On the second day, there will be 12 hours of sitting divided into four sections of three hours, with a three-hour section specifically reserved—the right hon. Member for Broxtowe (Anna Soubry) may be pleased about this—for motions relating to a second referendum. Members who are concerned about that issue will therefore have an opportunity to debate it. On Thursday, there will be eight hours for proceedings on consideration up to and including Third Reading: six hours on the Report stage, and two hours on Third Reading.

[Mr Leslie]

I am not entirely sure how a programme motion could necessarily relate to amendments that have not yet been tabled, but will the Leader of the House please clarify which parts of the Bill he intends to be covered in the Committee stage tomorrow?

While I have the Floor, may I ask another question? The position of Leader of the House covers some of the role of safeguarding the interests of Members, although I know that that is primarily the role of the Chair. May I ask what facilities will be available this evening to assist Members with the drafting of amendments for a Committee stage that will begin tomorrow?

[Mr Rees-Mogg]

Tomorrow’s proceedings in Committee will be on clauses 1 to 4, new clauses relating to part 1, and new schedules relating to part 1. Further details are, of course, available on the printed paper.

--- Later in debate ---

[Mr Rees-Mogg]

The last moment for submitting amendments will be the point of Second Reading. It will, of course, be at the discretion of the Chairman of Ways and Means, but I should be very surprised if manuscript amendments were refused tomorrow. There will be time for amendments to be submitted right up until the completion of the Second Reading debate.

It is in the nature of the House not to assume anything, and the tabling of amendments is therefore always possible at a late stage if proceedings are taken in close proximity. That will be the position tomorrow, although obviously it is the Chairman of Ways and Means who determines what amendments are taken in Committee. It would be wrong for me to give an authoritative answer, but I hope that that is helpful general guidance on how things tend to work.

[Mr Leslie]

What about assistance for Members?

Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 17th October 2019 Commons Chamber

[Mr Rees-Mogg]

The Government recognise that there is more work to do on raising awareness of conditions such as endometriosis, and ensuring that clinical guidance is being followed and that therefore diagnosis is earlier. It is essential that all of us—Government, Parliament, employers, the NHS and wider society—do what we can to improve the diagnosis, and more generally get rid of old-fashioned taboos relating to women’s health to ensure that people are treated fairly in the workplace and have their rights in law upheld and enforced. A debate on the Adjournment or in Westminster Hall would be a good way of giving this important issue further attention.

[Mr Chris Leslie (Nottingham East) (IGC)]

It was really discourteous of the Leader of the House to wave around his own private copy of whatever has been agreed in Brussels, start the debate off and then try to stop everybody else asking him about it. Will he do something to remedy that discourtesy? I have two particular points to make about this Saturday sitting. First, he is not planning for it to be a 90-minute debate, is he? That would be totally ridiculous. Secondly, will he ensure that the Government publish a full economic impact assessment of what has been agreed, so that we can have it to inform Saturday’s debate?

[Mr Rees-Mogg]

I am slightly puzzled that the hon. Gentleman thinks it is odd that members of the Cabinet receive Government documents; this is the normal process of government in this country. I can give him the assurance that all the documents will be published as required by the Act. [Hon. Members: “ When?”] They will be available online as soon as practicable. They will be in the Vote Office in draft shortly and they will be available as finalised documents once they have been agreed—assuming they are agreed—by the European Council. The surrender Act requires them to be laid on the day of the debate, and that will be done, but because the Government want to facilitate this House’s ability to study the papers, they will be made available earlier than is formally required under the Act.

Business Statement

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 15th October 2019 Commons Chamber

[Mr Rees-Mogg]

I entered the record books for Parliament when I said that while no one was allowed to indulge in the floccinaucinihilipilification of our own judges, one was allowed to do so under Standing Orders and “Erskine May” for foreign judges. That is a freedom that this House is entitled to.

[Mr Chris Leslie (Nottingham East) (IGC)]

The provisions of the Benn Act, or, as it could also be known, the safeguarding Act, do not actually require a sitting on Saturday. It is a bit peculiar about what exactly the Government are planning. I do not necessarily expect the Leader of the House to tell us what will be brought forward on Saturday, but I do think it would be very helpful if he would publish the motion he proposes to use to facilitate the Saturday sitting. Will it be voted on tomorrow night or on Thursday night? Will it be sprung on us and introduced midway through Thursday? A lot of us do not, quite frankly, trust the Government on the way that they will frame the sitting on Saturday, so I hope he will publish it in advance for us all to see and scrutinise.

[Mr Rees-Mogg]

This depends upon events, as I have already said.

Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 26th September 2019 Commons Chamber

[Mr Rees-Mogg]

I think all of us always want access to cash. It is very important, particularly in rural communities, that access to cash remains possible, as many people want to carry on using traditional forms of payment, so what the hon. Gentleman is calling for is not unreasonable. I am afraid, however, that I will once again refer him to the Chairman of the Backbench Business Committee, although he will have been listening closely earlier and so will know that applications are being received until 2.30 pm tomorrow.

[Mr Chris Leslie (Nottingham East) (IGC)]

The fact that the Leader of the House has announced more than a dozen pieces of business disproves the nonsense that we could have had a luxurious five-week Prorogation. There is tons of business that needs to be attended to, including the lack of progress on the Trade Bill. We have a dysfunctional arrangement for scrutinising the trade arrangements with the United States, for example. Those arrangements are continuing, and it is totally unacceptable. When will we get a chance to scrutinise these things according to law?

[Mr Rees-Mogg]

The Trade Bill contains a bit on a customs union, which would be an absolute disaster. It will not come back in that form.

Business of the House

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 25th July 2019 Commons Chamber

[Mr Rees-Mogg]

I am grateful to my hon. Friend for raising that important issue, and it should distress us all that online harassment seems to affect one category of society more than others. It seems to affect women and ethnic minorities more than men, and it would be appalling if that deterred good people from coming into political life. I am extremely keen for my hon. Friend’s suggestion to be looked at, and to try to work out how to lessen that problem, which is something we should all be worried about.

[Mr Chris Leslie (Nottingham East) (IGC)]

Will the new Leader of the House say a little more about how he intends to champion the supremacy of the House of Commons? We have slipped into some bad habits recently—Opposition day motions have not been fulfilled by the Government, and other resolutions have been ignored by the Executive. If the House of Commons resolves something, will the Leader of the House ensure that that resolution is faithfully executed?

[Mr Rees-Mogg]

The hon. Gentleman’s view of history is longer than mine. He said “recently”, but I do not think 1972 is that recent. It was then that the House abrogated parliamentary sovereignty and decided to hand it over to what then became the European Union. I am glad to say that we have taken back control and that Parliament will be sovereign once again. Parliament is sovereign by law, not by mere motion. The last time it was sovereign by mere motion was when it issued ordinances under Oliver Cromwell. Do I wish to go back to that, Mr Speaker? No sir!

Taxation (Cross-border Trade) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

3rd reading: House of Commons & Report stage: House of Commons
Monday 16th July 2018 Commons Chamber

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

The hon. Gentleman misunderstands amendment 73. One of the other amendments, which the Government have also accepted, would stop them having a Henry VIII power for a new customs union. If a new customs union were to be introduced by legislation, amendment 73 could be brought in under that customs arrangement. It simply retains power for this House.

[Mr Leslie]

We have got the hon. Gentleman’s measure now. He used to be an entertaining curiosity, but no longer. He represents a major present threat to the future of our economy and our constituents’ jobs. He is trying to scupper our smooth frictionless arrangements for businesses that currently have to pay VAT but can do so because we treat it as a matter of dispatches and arrivals, rather than its having to be paid upfront. By deleting paragraph 14 of schedule 8, the hon. Gentleman would hole future VAT arrangements below the water line.

--- Later in debate ---

[Mr Rees-Mogg]

May I first thank my right hon. Friend the Member for Putney (Justine Greening) for making what I thought was a remarkably gracious speech, in quite a fevered atmosphere, and for putting both sides of the case so generously and kindly?

I want to speak to the four new clauses and amendments that I have supported and, in most cases, put my name to. They are broadly in line with Government policy, which is why the Government have accepted them. New clause 37 relates to the Northern Ireland question. It is clearly Government policy that Northern Ireland should not be removed from the rest of the United Kingdom, and I think that to put that in legislation would be beneficial.

Amendment 72 relates to Henry VIII clauses. I agree with my right hon. and learned Friend the Member for Beaconsfield (Mr Grieve)—or “beacon’s field”, as Benjamin Disraeli pronounced it—that we should not have Henry VIII clauses if we can possibly avoid them, as they are not good legislative practice. The fewer Henry VIII clauses we have, the better. I confess that I would have supported my right hon. and learned Friend in earlier Bills had I not thought that, in so doing, I would have caused suspicion on the other side of the European debate, with people wondering what on earth I was up to. However, I am very pleased that Henry VIII clauses are becoming less popular in the House.

Amendment 73 has been a topic of discussion in relation to no EU VAT regime. This is actually Government policy, as set out by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs on “The Andrew Marr Show”, when he said that once we had left the European Union we would not be part of the EU VAT regime. The difference here is between acquisition VAT and import VAT. Import VAT is the normal way we charge VAT on third countries outside the European Union, whereas acquisition VAT is an EU system. Therefore, if we are leaving, it makes absolute sense to be out of this, and that fits with what the Government have said.

[Mr Leslie]

I do not quite see how the hon. Gentleman can say that that is compatible with the Government’s policy, given that the Chequers White Paper, which was published only last Thursday, states:

“To ensure that new declarations and border checks between the UK and the EU do not need to be introduced for VAT and Excise purposes, the UK proposes the application of common cross-border processes and procedures for VAT and Excise”.

How is his proposal in any way compatible with Government policy?

European Union (Withdrawal) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Committee: 8th sitting: House of Commons
Wednesday 20th December 2017 Commons Chamber

[Mr Leslie]

The delays will probably be of great concern to the companies involved in those shipments, because those goods have to be fresh and delivered on time. However, if we fall back on to WTO arrangements, there is also the potential 8% tariff for fish and crustaceans.

[Mr Rees-Mogg]

I wonder why the hon. Gentleman is concerned for companies on that particular point, when Norway is not in the European Union or the customs union—it is in the single market. Therefore, the customs union aspect simply does not apply to Norway.

[Mr Leslie]

The hon. Gentleman will know that there are concerns. He said Norway was a “vassal state”—I think that was his phrase. I do not think the Norwegians would see it that way, but they have had to simply take instructions, in many ways, in terms of the European Union arrangements on a lot of these questions. With many of our products, particularly in the manufacturing sector, the customs union has given us great opportunity to thrive, and we have done particularly well in recent years on the back of that.

European Union (Withdrawal) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Committee: 3rd sitting: House of Commons
Tuesday 21st November 2017 Commons Chamber

[Mr Leslie]

I agree. I find it odd that Ministers are saying that, somehow, the charter does not matter but are then saying that we must delete the charter in the Bill. They would almost die in a ditch to defend clause 5(4), which simply says:

“The Charter of Fundamental Rights is not part of domestic law on or after exit day.”

If the charter is so benign and so irrelevant, why not have the report? It may be tedious to some, but the report is necessary to explain whether those rights do or do not offer protections. If the charter is so ineffectual, and if this is supposed to be a copy-and-paste exercise to transpose EU law, I do not see the argument for deleting the charter.

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

Has the hon. Gentleman paid attention to protocol 30? Article 1(2) states:

“In particular, and for the avoidance of doubt, nothing in Title IV of the Charter creates justiciable rights applicable to Poland or the United Kingdom except in so far as Poland or the United Kingdom has provided for such rights in its national law.”

The whole point of the charter of fundamental rights, subject to the protocol, is that it does not apply in our national law.

European Union (Notification of Withdrawal) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 31st January 2017 Commons Chamber

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

It took the Supreme Court to remind us that we live in a parliamentary democracy. It is true that Parliament decided that we should have a referendum, and I find it difficult not to respect the outcome of the vote, but Parliament did not cut itself out of the issue altogether. It did not divest itself of involvement in determining what should happen when the UK withdraws from the EU, which is what the Bill enables. We are discussing the UK’s withdrawal from the European Union, not the Maastricht treaty—which, by the way, had 23 days of debate in Committee—or the Lisbon treaty, the Amsterdam treaty or the Single European Act. This Bill is more important than all those Bills wrapped together and multiplied by a large factor.

[Mr Rees-Mogg]

Will the hon. Gentleman give way?

[Chris Leslie]

I will give way to the hon. Gentleman in a moment.

That is why we should look carefully at what this Bill says. This Bill says, grudgingly, that Ministers will come and get permission from Parliament for the notification, but then they try to yank it right back to the Prime Minister, so that it is entirely, 100% back in the hands of Ministers alone to determine our fate outside the European Union. That is why I just cannot bring myself to vote in favour of this Bill: there are so many issues, so many ramifications and so many questions surrounding our withdrawal from the European Union that it is our duty—it is what the Supreme Court insisted we should do—to ensure due diligence and look at all the issues surrounding this question.

That is why I have decided to table a few, very judicious amendments to the Bill, to try to cover off a few corners of the questions that I think it needs to address. What will happen, for example, in our relationship with the single market? What are we doing for potentially tariff-free access or frictionless trade across the rest of Europe? Will we be able to have such advantages again? These are the questions that were not on the ballot paper, which simply asked whether we should remain in or leave the European Union. The ballot paper did not go into all those details, which are for Parliament to determine. It is for us as Members of Parliament to do our duty by performing scrutiny and ensuring that we give a steer to Ministers—that we give them their instructions on how we should be negotiating our withdrawal from the European Union.

I personally do not have faith in the Prime Minister’s vision for a hard Brexit—because it is a hard Brexit. We may currently be falling very gently through the air, like the skydiver who has jumped out of the aeroplane—“What seems to be the problem? We’re floating around”—but I worry about the impact. I worry about hitting the ground and the effect not just on our democracy, but on our constituents and their jobs and on the growth that we ought to be enjoying in the economy to keep pace with our competitors worldwide.

Budget Resolutions and Economic Situation

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 9th July 2015 Commons Chamber

[Chris Leslie]

Wait for it. Can the Secretary of State confirm—

[Mr Jacob Rees-Mogg (North East Somerset) (Con)]

On a point of order, Mr Deputy Speaker. Is it in order for the shadow Chancellor to say that he will give way to the Secretary of State and then not give way? [Interruption.]

Finance (No. 2) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 1st April 2014 Commons Chamber

[Chris Leslie]

We have said that a 50p rate needs to be the policy for the next Parliament. We make judgments in manifestos from one Parliament to the next. Tax policy should never be written in perpetuity. We have said that while the deficit is likely to be as high as it is, the 50p rate is justified. The hon. Member for Cities of London and Westminster (Mark Field) talked about social cohesion. While the process of deficit reduction will now have to continue well into the next Parliament, when it was not expected, the 50p rate is perfectly justified for good social cohesion reasons.

[Jacob Rees-Mogg]

Will the hon. Gentleman give way?

[Chris Leslie]

How could I resist the hon. Member for North East Somerset (Jacob Rees-Mogg)?

[Jacob Rees-Mogg]

I am extremely grateful on behalf of North East Somerset to the hon. Gentleman for giving way to me. Is he therefore saying that he believes that the 50p rate is a good thing in and of itself for the symbolism that it brings to bear, even if it does not raise any money?

[Chris Leslie]

I think it will raise a significant sum to help to alleviate the burden on lower and middle earners, and that is why it is important to have it. If it is there for not just a temporary period, but for a significant period, it would settle and be an important part of the tax system. But generally speaking, of course we all want all taxes to come to a lower level. I do not want to see taxes higher than they need be, but the hon. Gentleman has to understand that the context will be, I am told, a potential £75 billion deficit to be inherited by the next Government—I hope the next Labour Government—a significant amount of borrowing, hanging around the necks of whoever wins the general election, made worse by the fact that the Government promised that it would have been eradicated altogether.

--- Later in debate ---

[Chris Leslie]

Of course the banking sector is very important. It has been dysfunctional for a prolonged period. Net lending to business has fallen consistently throughout this Government’s time in office. But I have to tell the hon. Gentleman that when the Treasury said that the levy would raise £2.5 billion, it should have got that money in. All our constituents are paying more in tax and have lost out significantly because that money has not been forthcoming from the banks, which after all owe a little bit back to the taxpayer for the bail-out that followed their reckless lending decisions in previous years.

The very least we should do is ensure that we have a functioning bank levy that brings in the expected sums. We would ensure that it raises a further £800 million. We would use that money to expand free child care places for working parents of three and four-years olds by extending free nursery care from 15 to 25 hours a week. That would also be a good way of helping parents to get back into the labour market and to get the jobs they need. A 15-hour arrangement—three hours a day—for child care does not give a parent looking after a youngster the opportunity to get into work, but 25 hours a week would make a significant difference. We could do that through a reasonable and modest change to the bank levy.

[Jacob Rees-Mogg]

Following the point made by my hon. Friend the Member for Cities of London and Westminster (Mark Field), does the hon. Gentleman recognise that an £800 million additional bank levy would reduce the ability of the banks to lend into the real economy by between £8 billion and £12 billion?

[Chris Leslie]

I disagree with the hon. Gentleman on that point, not least because the shortfall in the amount the Treasury said it would raise from the levy has been so much larger than £800 million. I think he needs to speak with Ministers. If he disagrees with £2.5 billion, he needs to tell them now. The Exchequer Secretary is in the Chamber, because he is the one—unbelievably—who was responsible for designing the bank levy. He must be massively embarrassed by its total failure. Why has it raised so little? How does he explain the shortfall? I will give way to him if he wishes to offer an explanation.

Financial Services (Banking Reform) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Monday 8th July 2013 Commons Chamber

[Chris Leslie]

That raises the question of the operation of the inflation target. If I draw a parallel between a leverage target and an inflation target, clearly the Chancellor has been setting out his inflation target. It has been missed on a number of occasions—quite a few months and quarters have gone by—so the interplay between the Chancellor and the Bank of England is critical here. I am more than happy to come back to the issue. My point in the new clause today is that we need to start seriously discussing how, from a UK perspective, we are going to deal with the issue of leverage from a home-grown point of view, rather than waiting for the European Union to come along with a set of arrangements which may or may not fit our circumstances.

[Jacob Rees-Mogg]

There are two points that occur on the hon. Gentleman’s target weighting. One is that it is very arbitrary. If the regulator could set it for each individual bank, that would give a very strong arbitrary power to the bank to meet that overall target. The second is that although people say that their assets are particularly good ones and better than others, that is exactly what they said in the crisis and it turned out not to be reliable.

[Chris Leslie]

I agree with the hon. Gentleman, but it would be invidious for us as politicians to try to delve into the specific analysis of bank-by-bank asset or liability, quality and the risk weighting of assets. That is why we have regulators and what their job should be, but it is important that as a body politic, so to speak, we make a judgment about the level of leverage that we should have in the economy as a whole. That is why I raise the issue today.

For us, tackling the leverage question is incredibly important. We should not wait for the European Union to decide these things for us. We sought in Committee to clarify this in part. Rather than put it in the “too difficult to handle” box, as the Government seem to be doing, we should try to move forward constructively. The approach that we have taken is on the amendment paper. First, it is necessary to prevent the banks from over-extending themselves beyond the point of safety. Ring-fencing does not do that. We think ring-fencing changes should go alongside capital requirements and leverage regulation.

Secondly, we have been hearing arguments recently about the leverage ratio as anathema to bank lending into the real economy. Sometimes it is characterised as one or the other. I do not necessarily agree that there is a seesaw trade-off between the two. Andrew Bailey at the Prudential Regulation Authority has recently made the particularly pertinent argument that capital can be lent onwards in any case, so it should not be a case of one or the other.

For the sake of clarity, in new clause 9 we looked to address this explicitly by framing a leverage target strategy for the system as a whole, which must be constructed in such a manner so as to maintain adequate credit availability to support a growing economy. It is important to recognise that we will always operate with a degree of leverage. That is part and parcel of the way our banking system works, and our constituents rightly want us to focus on getting the economy moving, while preventing excessive risk-taking. In the spirit of constructive engagement, we hope the amendment strikes the right balance.

It is sometimes argued that leverage should be a back-stop rather than a front stop. The argument about what is a back-stop and what is a front-stop can get rather theological. Andy Haldane makes the point in his famous “The Dog and the Frisbee” speech that leverage needs to be brought much further forward as a primary tool for the regulators, and that other capital and risk-weighting issues should be subordinated. The main point is that leverage should be recognised as a key dynamic in our economy and needs to be regulated in a way not dissimilar to the regulation of inflation.

For us, there are three essential elements: set a leverage target for the system as a whole, which is a task for the Government; measure that risk—the threats to whether loans are going to be repaid—more accurately by sector, to determine which sector needs more capital to make it safe if leverage is rising and which could be dealt with in a normal way; stress-test to back-test the pressures in those particular institutions to be clear that the choice of the leverage target is correct. The regulator should do that.

New clause 9 would also augment Bank of England independence in relation to operational decisions on monetary policy and take into account the need to supply credit to the wider economy. I am glad that the Building Societies Association and others support it.

Financial Transaction Tax and Economic and Monetary Union

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 18th June 2013 Commons Chamber

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

I beg to move amendment (a), leave out

‘further notes that the proposals for the Financial Transaction Tax have been challenged by the Government in the European Court of Justice’;

and insert

‘calls on the Government to support the principle of an FTT and to learn lessons from the EU proposal and work with other global financial centres, especially the US, to reach a consensus on a design set at a modest rate without creating negative economic consequences and which minimises international tax arbitrage;’.

Before I discuss the amendment, let me briefly deal with the latter set of issues that the Minister raised—the general issues of national parliamentary sovereignty, the remit of EU policy, enhanced co-operation and so on. Clearly, the European Scrutiny Committee is right to monitor the relationship between EU decisions and the need for public engagement and accountability. Most Labour Members, however, take a more positive view of the role that Britain should be playing in Europe, because the European Union should be a force for good that increases the chances of greater prosperity, peace and the values we hold being asserted with greater impact across the world. We are comfortable, though, with a degree of flexibility and variance across member states; “enhanced co-operation” could be used to our advantage here in the UK for the future.

Individual member states should have some latitude rather than follow a blind adherence to anything and everything emanating from Brussels. There is a danger that sometimes those who regard themselves as good Europeans—pro-Europeans—end up defending the poor decisions that the Commission and the European Parliament can sometimes come out with. There is nothing wrong at all with national Parliaments disagreeing with the European institutions; it is a healthy sign of an internal dialectic, a constructive challenge and a reality check for those who are more distant from public opinion. We should acknowledge that both the European Commission and the European Parliament need to be reformed to improve their accountability and transparency.

In the short time available to us today, let us not lose sight of what our electors sent us here to do. Our view is that the British people want us to focus right now relentlessly on getting jobs created, boosting prosperity, creating wealth, and helping to stimulate the economic recovery which is now three years overdue. Navel gazing into the constitutional niceties that fall between the gap of domestic or European institutions is slightly indulgent in that context; we should not lose sight of the most important priorities that our constituents want us to focus on. That is why we tabled this amendment.

[Jacob Rees-Mogg]

There seems a slight illogicality in what the hon. Gentleman has been saying. He says that he wants to create jobs but it has already been established that the financial transaction tax would destroy half a million jobs across Europe. How can he have it both ways?

[Chris Leslie]

The Minister was talking about the European variant of the FTT, but of course he was forced then to admit that we have already got a partial FTT of sorts—the stamp duty that is in place. I will discuss that in a moment, but it was very instructive that he was vehemently against the extra-territoriality aspects of the European version. Of course the EU version does need to change, and I am not saying in any way that it is perfect. His argument is, “They should stop extra-territoriality aspects in their financial transaction tax”, but our stamp duty contains many of those characteristics, and individuals—those trading UK shares and UK equities—are liable wherever that trade takes place in the world. So the Government clearly have not thought through their position on these things.

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[Jacob Rees-Mogg (North East Somerset) (Con)]

I begin by referring Members to my declaration of interests and by celebrating the 198th anniversary of the battle of Waterloo. We are debating Europe on Waterloo day, which commemorates an occasion when an alliance of nation states came together to defeat the ambition of a Frenchman to have a single European state, so it could not be a better day for debating these matters.

I will deal first with the financial transaction tax, because it is a rotten idea. The fact that we have stamp duty, a tax that has been around for centuries and is not paid on rapid transactions—it is paid only on long-term holdings—or by market makers, or for contracts for difference, or on American depositary receipts, is not an argument for saying that a financial transaction tax can work in the sophisticated financial system that the world operates today.

What the hon. Member for Nottingham East (Chris Leslie) consistently ignores is who the tax would ultimately fall on. In the wonderful world that he was creating, there was a tax that could be designed—not, of course, the one that the Europeans have designed, but another, imaginary tax—that would never seem to fall to anybody. It could take £10 billion out of the economy without anyone really having to pay for it, apart from some nasty, evil bankers who, when they take their hats off, can be seen to have horns underneath.

However, that is not the real world, because the transactions that take place in the City represent an underlying reality, be it the debt issued by the Government, mortgages sold on by banks, or pension funds being invested around the globe. Individuals would end up paying that tax because the costs of their doing business with banks would increase. We know that clearly from the mortgage market, complicated as it may be, because the ability to package mortgages and sell them reduces the cost of capital to banks and reduces the cost to people of buying their own homes. What the Opposition are saying is that they want to make mortgages more expensive. They want to put a tax on people who are least able to pay.

[Chris Leslie]

The hon. Gentleman was doing so well, but unfortunately the level of scaremongering undermines his whole argument. Is he really saying that there is absolutely no case for a tiny fraction, less than a tenth of one percentage point—[Interruption.] I am talking not about the EU variant but about the principle of a financial transaction tax. Is he saying that there is absolutely no case to be made for a financial transaction tax on derivatives or bonds when we have 50 basis points—half a percentage point—of stamp duty on UK equities, or is he also calling for repeal of UK stamp duty?

[Jacob Rees-Mogg]

There is no case for a financial transaction tax. It would be enormously destructive of this country’s financial system. The cascade effect to which the Minister referred is at the heart of this. When things are being traded dozens of times a day, what starts off as a little tax suddenly becomes a very big tax. The hon. Gentleman conjures £10 billion out of the air. We cannot withdraw £10 billion from the economy without it having an economic effect and without it being paid for by somebody.

Finance (No. 2) Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 18th April 2013 Commons Chamber

[Jacob Rees-Mogg]

I obviously do not know about the individual cases that come to the hon. Gentleman’s surgery, but with a benefits bill for this country of £220 billion a year, there really ought to be—

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

And rising.

[Jacob Rees-Mogg]

It is rising, as the hon. Gentleman says. There is a huge amount of money in the benefits system. If it is not going to the right people, that will be rectified by the reforms being pushed through by my right hon. Friend the Secretary of State for Work and Pensions, which are some of the Government’s most ambitious and important changes.

Banking Union and Economic and Monetary Union

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 6th November 2012 Commons Chamber

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

No pressure there, then, Mr Deputy Speaker.

I have a lot of sympathy with the Minister today. Let us hope that he is a little luckier than he was last Wednesday, although of course the curse of Tunbridge Wells will have its way. In a way, as he explained, banking union is a natural downstream consequence of monetary union. It would be wrong to resist it for the eurozone, as the eurozone crisis has exposed a series of risks to economic stability, not least of which is the relationship between sovereign debt and banking debt and the need to find credible ways to prevent private banking losses from dragging down sovereign fiscal positions. The UK has its own banking union and our monetary policy sovereignty has given us a measure of protection during the sovereign and bank debt crises that have engulfed the eurozone.

I thought the Minister was perhaps labouring under the impression that his plucky Members of Parliament kept us out of the euro between 1997 and 2010—that is too funny, as of course that was the decision of the previous Labour Administration. It was the right decision.

[Jacob Rees-Mogg (North East Somerset) (Con)]

rose—

[Chris Leslie]

I will not give way yet, as I am conscious of the time.

We were right, too, to bail out the banks in 2008, but that came at a high cost for the taxpayer and for the country’s economic prospects. UK public debt was adversely affected by the purchase of banking assets and the subsequent loss of revenues from financial services. These issues are now affecting countries around the world, especially in the EU. Monetary policy sovereignty has allowed the UK to adopt an active interest rate policy to counteract those economic headwinds—something less available to those in the eurozone.

To save the euro, the eurozone has looked at new rules to grip the fiscal policies of its member states. Fiscal union in the EU is now widely recognised as dependent on banking union. Germany initially insisted on that, and it has asked that the single supervisory mechanism—the eurozone nation state regulators and Governments—be completed before banks can access the European stability mechanism and the European Central Bank’s outright monetary transactions programme, hence the imperative to agree these matters. In recent weeks, however, Germany is rumoured to have lost some enthusiasm for that tougher banking union and its consequences, especially as some of its smaller banks face major regulatory upheaval.

It is right that the ECB’s role in supervisory policy should be triggered, by unanimity if necessary, as required in the Maastricht treaty. Central banks are increasingly in the driving seat in financial regulation, as is the case in the UK, and it is necessary for the ECB to have a clear capability in its role overseeing the operation of the eurozone. The ECB is a full treaty institution, and it must be governed by treaty rules and member state unanimity, as we heard from the Minister. In that process, the rights of non-eurozone members, particularly the UK, must be safeguarded in several ways. We should not be party to any deposit guarantee mechanisms or pre-fund recovery or resolution mechanisms. The UK has undertaken its own measures in that respect, and there are no proposals on the table that would affect our taxpayers directly.

The rules for the single market, including a single rule book for the financial services sector in the EU, should involve all 27 member states. The European Banking Authority—as well as other European supervisory authorities—is the vehicle for preserving the integrity of the single market. The Commission says in its documentation that

“it is proposed that voting arrangements within the EBA should be adapted to ensure EBA decision-making structures continue to be balanced and effective and preserve fully the integrity of the Single Market”.

That is absolutely crucial, but we need far more details about how that will work. The 17 eurozone countries will act en bloc through the ECB in their seats on the EBA, which could represent a permanent majority on all issues, as the Minister explained. The EBA has rule-making powers under qualified majority voting decisions, it mediates between supervisory institutions, and it shares supervisory best practice. There is a real risk of the ECB bloc acting as a permanent caucus to overrule the 10 non-eurozone nation states.

--- Later in debate ---

[Chris Leslie]

I do not want to get too much into the history of these things. We could go back to the Maastricht treaty, the formation of the eurozone and the inexorable logic of how we have got to where we are today. All I know is that it is important that we try our best and redouble our efforts to ensure that we have a negotiating strategy that secures the best deal possible for the UK.

[Jacob Rees-Mogg]

Will the hon. Gentleman give way?

[Chris Leslie]

I should like to make a little progress if I may.

I know that hon. Members will say, “How can we manage to secure these particular arrangements? What should our stratagem be?” Government Members will recall Lady Thatcher’s invocation of the Luxembourg compromise—a quiz question for hon. Members who recall that device. It has not been in use in recent times, but it was a way, in certain circumstances for qualified majority voting arrangements, to ensure that there was a capability of promoting vital national interest. There was at one point a recognised device for ensuring that one could stay in the room. If vital national interests were affected, then certain levels of protection were possible. I do not in any way deny that that is a difficult position, but that is the sort of scale of proposition that the Government should be more actively asserting. The Government need to negotiate a clearer and more distinct set of rules that protect our status outside the eurozone while ensuring that we have an ongoing role in how new rules develop across the whole EU. In our view, that must be the Prime Minister’s negotiating objective.

We have other concerns and questions about the SSM. How can it connect with the wider public and be subject to democratic accountability? That is an important point, because the bodies at the heart of the SSM will need to be more transparent. I am not clear whether they will publish their minutes in the same way as the Bank of England or the Federal Reserve, but we need to start addressing some of those transparency questions. Furthermore, what will be the relationship between the ECB’s monetary policy stance and its approach to decisions on financial supervision?

The composition of the SSM is complex and lines of accountability are extremely confused. For example, the European Central Bank is a superior treaty institution, yet the EBA will in theory sit on a junior institution. It is extremely difficult to see lines of accountability and how the legal issues raised in the amendment will be resolved. What will happen in the intervening months and potentially years before this complex constitutional wiring is settled? What if new market pressures force banking crises that require the stability mechanism or outright monetary transactions to be triggered, and what if there is no SSM in place?

How do we prevent City of London institutions and firms, which contribute about one sixth of Britain’s GDP, from changing their opinion about London in the long run as the right place to locate, when there is a risk that we will be marginalised in the decision-making forum for EU banking rules? They will worry about the prospects of operating under a different set of rules from those on the continent. Our vital national and economic interests are at stake, so we need to ensure that we keep involved, do not get pushed out and avoid being marginalised, while of course reserving our rights.

Draft European Union Budget

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 12th July 2012 Commons Chamber

[Chris Leslie]

I am glad that the hon. Gentleman is, as ever, in his place.

If people realised how weak the Government were being in their negotiating stance, they would be totally appalled.

[Jacob Rees-Mogg]

The hon. Gentleman is very reasonable in all these matters and of course he wants answers from the Government, but in that spirit of frankness, does he personally regret the loss of £10 billion to the UK Government by giving away the rebate? I know he was not personally responsible for that.

[Chris Leslie]

The hon. Gentleman has to realise that the European Union was going through a totally different era of accession countries and enlargement. Now, we are in a post-financial crisis era, in which it is absolutely clear that, as my hon. Friend the Member for Blackley and Broughton (Graham Stringer) said, serious spending cuts are taking place in our domestic economy and budget. Many of our constituents want pro-job, pro-growth and pro-stimulus measures to be priorities here in the UK, and they feel aggrieved that some administrative budgets in the EU will continue to roll forward without the UK Government showing the restraint that they ought to show while they are at the height of their potential negotiating powers—hence the amendment that we have tabled.

Despite the Financial Secretary to the Treasury’s sudden animation when I asked him what exactly the Government are doing, the motion does not set out clearly the view, which ought to be and would be shared by all hon. Members, that the budget and the multi-annual financial framework should be reduced in real terms. It is a simple statement that would help the Government in their negotiations, and that is why the House should support the amendment.

Connecting Europe Facility

Debate between Jacob Rees-Mogg and Chris Leslie

Thursday 19th January 2012 Commons Chamber

[Chris Leslie]

I hope that I am not striking a lecturing tone. I am simply imploring the Government to pull their finger out and do something about economic growth in the UK and Europe. I am making the point that what happens in Europe affects our economy. The regulatory debate did indeed go on for many years. The Minister himself called for deregulation and light-touch approaches across the City and elsewhere. We have to get regulation issues correct, and we all have lessons to learn from what went wrong in that regulatory debate. We have admitted that mistakes were made, but I am still waiting for the Minister to accept that he too made poor decisions in calling for deregulation, particularly in financial services.

Nothing in the Government’s motion seeks to steer the Commission towards a more activist role in boosting and stimulating European economies, particularly in the short term. There is no sense that the Government are seeking to influence this connecting Europe facility in order to re-phase capital investment and bring real help now to an economy on the brink. One-dimensional collective austerity, as advocated by our Government—and also, unfortunately, by the Germans and others—makes it harder to get deficits down, not easier to reduce public debt.

Hon. Members do not have to take my word for it. Six days ago, the credit ratings agency Standard & Poor’s, after downgrading the status of some eurozone nations, stated that

“a reform process based on a pillar of fiscal austerity alone risks becoming self-defeating, as domestic demand falls in line with consumers’ rising concerns about job security and disposable incomes, eroding national tax revenues”.

Even the credit rating agencies are now worried about the lack of growth in the European economy and about whether the eurozone has the right strategy for building its way out of the fiscal hole in which it finds itself.

[Jacob Rees-Mogg (North East Somerset) (Con)]

Given that we are net contributors to the EU budget, which puts a great burden on our taxpayers, will the hon. Gentleman explain how building a railway in Romania would help the UK economy?

[Chris Leslie]

It is important that the European Commission, and the eurozone in particular, focus on getting economic growth. My simple point is that it is not happening. An austerity-only approach is being taken, but it is not working, just as it is not working in this country. Of course we have to ensure that we reduce the proposed budget increases—we do not disagree with that—but there are ways to stimulate an economy within that envelope, including through a phased approach towards the European spending review process. That is my point. It is the glaring omission from the Government’s plans so far.

Credit Institutions and Investment Firms

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 8th November 2011 Commons Chamber

[Chris Leslie]

I am simply highlighting the anxieties felt across the City, the financial service sector and by many hon. Members, who are worried that we are stepping into a new set of financial service regulation structures domestically within the UK that are far away from those bodies we need to be influencing, steering and having our voices heard by. It may well be that we are stepping in the wrong direction. That is the anxiety I am voicing today.

[Jacob Rees-Mogg (North East Somerset) (Con)]

I am very grateful to the hon. Gentleman for allowing me to interrupt his characteristically thoughtful speech. Given what he is saying, does he think that this would be a very good, if not ideal, area in which to repatriate powers?

[Chris Leslie]

I do not think it is wrong to try to have some level of co-ordination on financial services regulation across the EU. This is a global industry, and that is broadly sensible. However, we now know very well how those supervisory institutions of the EU are to be structured, and yet we are designing new arrangements for the post-Financial Services Authority world that do not match very suitably with those. There may be different approaches to how we can make the fit more effective and improve Britain’s voice. However, there is genuine concern that even though we knew about these arrangements 18 months ago, the Government have not yet provided the capability to adapt the regulatory reforms to ensure that we do not lose influence—and, in fact, build our influence.

As regards the capital requirements directive, it is clear that for the time being we need to resist the Commission’s challenge to proper subsidiarity and give our reasons for retaining national discretion to have safer and higher standards for financial regulation here in the UK.

We support the motion but hope that Ministers will take the opportunity to think more strategically about how best to address the structural mismatch between their proposed reforms and the European arrangements, because that risks marginalising the UK’s voice time and again.

Section 5 of the European Communities (Amendment) Act 1993

Debate between Jacob Rees-Mogg and Chris Leslie

Wednesday 27th April 2011 Commons Chamber

[Chris Leslie]

There are several factors underpinning the German economy. The Germans do not pursue the same degree of hard and fast austerity that we are pursuing, they have a different approach to productivity, and they are achieving higher levels of growth. Our economy needs a pro-growth strategy. I do not say that as a whim—it is a hard-headed credible necessity for reducing the deficit and getting the economy moving again. Without growth, the Treasury will be losing revenue.

[Jacob Rees-Mogg (North East Somerset) (Con)]

When the hon. Gentleman talks about a pro-growth strategy, does he mean spending? If so, where on earth is the money coming from?

[Chris Leslie]

As the hon. Gentleman knows, the paradox of austerity and of an anti-growth strategy is that it costs more in the long run. I quite understand that many Government Members do not understand the causes of the deficit. It is therefore improbable that they are the right people to solve the deficit. If they understood its causes, perhaps I would accept their rationale on how to solve it, but they do not.

Savings Accounts and Health in Pregnancy Grant Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 26th October 2010 Commons Chamber

[Jacob Rees-Mogg]

The hon. Lady makes a brilliant and inspired point with which I completely agree, and it is therefore wise to ensure that such benefits as there are are directed to the people who need them, not wasted on people who do not need them. [Interruption.] If the hon. Member for Nottingham East (Chris Leslie) wants to say something, I am more than happy to give way.

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

The Bill does not achieve what the hon. Gentleman wants, however. While I am on my feet, may I ask him whether he knows how many children in the United Kingdom are born with spina bifida each year, possibly as a result of a folic acid deficiency?

[Jacob Rees-Mogg]

The hon. Gentleman says the Bill does not say where the money is going to be spent, but that is an absurd point to make because the public finances are in such a weak condition that, at this moment, money needs to be saved. The first principle for the Government—their first ambition and intention—must be to get the finances of this country on to a stable footing so that they can then, with economic growth, ensure that the money is there to help people in the future.

[Jacob Rees-Mogg]

My hon. Friend makes an extraordinarily good and important point. The payment of this £190 comes too late in the process to be of benefit to people whose children may be at risk of spina bifida.

[Chris Leslie]

I would be surprised if many mothers—I certainly include my wife in this, when we were having our daughter—were able to discover that folic acid is available on the NHS. A multivitamin and folic acid supplement costs about £10, I think. Do the hon. Gentleman and the hon. Lady really think it is absolutely essential that these women having children should potentially be deprived of help to pay for that folic acid supplement because of this deficit reduction strategy?

[Jacob Rees-Mogg]

As my hon. Friend the Member for Truro and Falmouth (Sarah Newton) wonderfully and accurately pointed out, the hon. Gentleman had got the wrong part of the pregnancy; we have to go back, not forward.

Finance Bill

Debate between Jacob Rees-Mogg and Chris Leslie

Tuesday 6th July 2010 Commons Chamber

[Jacob Rees-Mogg]

I am sorry to say that the hon. Lady left my train of thought at the wrong station. The point I was making was that, if we carry on issuing gilts at an even faster rate, long-term interest rates will rise, and it is on long-term interest rates that mortgages end up being priced. If we look at the gilts market, we see that the very thought—the prospect, the hope—of a Conservative Government saw it rally, therefore reducing the cost of borrowing to people in this country, whether Her Majesty’s Government or private individuals. So yes, we have very low overnight rates, but the long-term rate set by the gilts market is more important for mortgages.

[Chris Leslie]

Will the hon. Gentleman give way?

[Jacob Rees-Mogg]

It would be a privilege.

[Chris Leslie]

But surely the hon. Gentleman, as a sensible and grounded individual, will recognise that there is a world of difference between the Greek situation, to which some of his more hot-headed colleagues have compared our country, and the rather sturdy and well managed way in which we deal with our debt and gilts issuance in this country.

[Jacob Rees-Mogg]

I do not believe that I had mentioned Greece in the few words that I had spoken. I would say, however, that it is better to cut before getting into a Greek situation. I admire my right hon. Friend the Chancellor of the Exchequer because, in his foresight, he has brought forward action early. Countries in a Greek situation find that they can get no money from the financial markets and have to go cap in hand to the International Monetary Fund or the European Central Bank. How much better it is—how much more “prudent”, to use a word once popular with Labour Members—to get our house in order before reaching that state of desperation.

--- Later in debate ---

[Jacob Rees-Mogg]

I think that Neville Chamberlain managed to balance the budget, so we had a Chancellor who was a Conservative doing quite a good deal of work in the 1930s. However, we may be getting a little abstruse and far away from the 2010 Finance Bill.

[Chris Leslie]

Can I ask one last question on the 1930s?

[Jacob Rees-Mogg]

I know that I am accused of being old-fashioned, but I do not want to conduct the whole debate in the 1930s.

Let us move back to 2010 and the need for the tax rises to be as they are, not higher. Clearly, at 36.4% of GDP, we are at a tax level that it is very difficult to surpass. I remind Labour Members who disparage the great Professor Laffer that when tax rates were at 83%, they still failed to get above 36.4% of GDP, so taxation is as high as it can be.

My final point is on spending. The problem with spending is that it got out of control post the period when Labour followed the Conservative plans for public spending. It is simply not sustainably to have Government spending at 48% of GDP when the tax base is 36.4% of GDP.