Finance Bill

Jake Berry Excerpts

Tuesday 3rd July 2012 Commons Chamber

[Catherine McKinnell]

My hon. Friend read my mind as I gazed across the Chamber.

Giving a tax cut to millionaires and the banks but making it harder for self-employed women and their customers reveals a Government who are, once again, truly out of touch with ordinary people’s lives. New clause 12 seeks to go further on VAT and create a temporary reduction in the rate from 20% to 17.5%. The Liberal Democrats ran for election on a manifesto that warned of the dangers of a VAT rise with their pledge to protect constituents from the “VAT bombshell” threatened by the Conservatives. The Deputy Prime Minister pledged:

“We will not have to raise VAT to deliver our promises…Let me repeat that: Our plans do not require a rise in VAT.”

Why were they so against VAT? Perhaps it is because the evidence clearly shows that people on lower incomes are hit proportionately much harder than the rich by VAT because they tend to spend more of their income rather than save and invest it. Government Members will claim that, looking at different measures, more VAT is paid by the rich—the hon. Member for Brigg and Goole (Andrew Percy) fell into that trap—but there is absolutely no doubt about the fact that VAT is regressive and that those on lower incomes spend a higher proportion of their income on it than those on higher incomes. Even the Prime Minister agrees. In 2001, he said:

“If you look at the effect...as compared with people’s income then, yes, it’s regressive”.

[Jake Berry (Rossendale and Darwen) (Con)]

Does the hon. Lady concur that those on lower incomes pay a higher proportion of their income on fuel, and will she therefore welcome the postponement of the 3p increase in fuel duty?

[Catherine McKinnell]

I not only welcome it but point out that we proposed it, and the Chancellor shortly followed us on the same day. Our proposal to bring about an immediate reduction in VAT to 17.5% would deliver that 3p fuel duty reduction for drivers and put money in their pockets not only in respect of fuel but right across the board. It is a measure that is absolutely required to turn our economy round from the double-dip recession we are in.

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We did not have that clarity before. There were all sorts of loopholes that companies sought to exploit at huge cost to the Exchequer and, ultimately, to us taxpayers, because we pay the bills. I find it astonishing, therefore, that the Labour party is on the side of wealthy companies, with their deep pockets, and the lobby in favour of tax avoidance. I find that absolutely extraordinary.

[Jake Berry]

Of course, it was not just a pasty tax; it would also have affected the fantastic Cissy Greens pie shop in Haslingden. We are dancing from the River Ogden to the River Irwell in celebration of the fact that we can enjoy our Cissy Greens pies without VAT.

[Sarah Newton]

My hon. Friend makes a good point. This affects master bakers, whether of pork pies, sausage rolls, steak pies or chicken pies, the length and breadth of the country. Those self-employed, highly skilled master craftsmen can carry on producing their much-loved regional foods, which we enjoy all over the country and which make our country so distinct, as we celebrate our rich and varied food heritage. I hope that that addresses any misapprehensions among Labour Members about the benefits of the pasty tax.

Much has been made of the Government’s U-turns. I welcome having a Government who, when they launch a consultation, as they did after the Budget, actually listen to representations on a range of measures, and I am pleased that the Chancellor is driving our economy in the right direction. We have to reduce our deficit and get our expenditure under control. The hard-working families and small businesses in my constituency understand that, and frankly will feel let down by this retread idea of a 2.5% reduction in VAT—the only proposal we hear from Opposition Members. But, of course, we do not know whether that will be their proposal tomorrow, next week or next month, because the shadow Minister could only say that it was the proposal today. If that is their only proposal and if it is only for today, how can families in my constituency have any confidence that they would drive the economy in a better direction? I am confident that the Chancellor is on the right road, and I am certain that focusing on the Budget, making sensible changes along the way, is the right way to go.

Interest Rate Swap Products

Jake Berry Excerpts

Thursday 21st June 2012 Commons Chamber

[Mr Streeter]

My hon. Friend makes an important point. Thousands of people in this country, dozens of whom are in the Gallery, are looking to the FSA to put right some of the terrible wrongs that have been done in the past few years.

It turned out that the company of which I speak had been persuaded to enter into a swap arrangement for 10 years at a fixed rate of 6.4%. Although it had been told that the deal contained a break clause after three years, it transpired that that enabled only the bank to withdraw and not the customer. The company later learned that breaking the swap arrangement would incur a penalty that seemed to fluctuate on a daily basis but would total millions of pounds. This was not known to it at the time of signing the agreement. The way in which the swap was sold patently breached the terms of the financial regulations surrounding such transactions, as other hon. Members have said.

Interest rates subsequently plummeted in a way that nobody had forecast. We all know that if companies enter into a bad bargain, that is something they have to accept, but this was not just a bad bargain: the company was mis-sold the hedging product to further the interests of the bank, not the customer, and the detailed and complex terms were never fully explained to or understood by the directors of the company.

[Jake Berry (Rossendale and Darwen) (Con)]

The case that my hon. Friend describes is extremely similar to one that I am involved in, which also involves RBS. The company concerned has now gone into administration and the directors have exited. Does he agree that the long-term implication of a company becoming impaired when the bank has taken a haircut, as it were, is that when those involved try to set up businesses subsequently they are unable to borrow from the banks, with or without an interest rate swap, so there is a generational effect on business?

[Mr Streeter]

I completely agree that the effects of this mis-selling scandal will ripple down through the generations.

Interestingly, on several occasions London and Westcountry tried to ascertain how much profit the treasury branch of RBS made on entering into the swap arrangement, but that has never been disclosed. Once the recession began to bite and values of commercial properties plummeted, companies such as London and Westcountry began to struggle. A significant variation in the company’s loan-to-value calculation meant that it was in technical default of its loan agreement. It was worse placed than many companies because its interest rate was pegged at 6.4%. When the borrowing facilities fell to be renewed in 2011, RBS insisted that the interest rate would rise still further to 7.5%—a figure that it knew to be unsustainable. Sadly, the story does not end there.

In 2011, I became involved in trying to negotiate with RBS to find a solution to the difficulties. Not once throughout that time did the company default on any interest payments to the bank. Indeed, the company got its act together, reduced its overheads and increased its profitability. However, because of the loan-to-value challenges and because the RBS board had made a strategic decision to withdraw from commercial property, the London and Westcountry loan was bundled up with other troubled loans and sold by RBS to a new company, Isobel Assetco Ltd, 25% of which is owned by Blackstone, the US venture capital company, and 75% by RBS. That removed the potential bad debt from the RBS balance sheet. However, that £1.36 billion deal was done at a 30% discount, meaning that it was funded to the amount of £550 million by RBS or, indeed, by the taxpayer.

It seemed to us that RBS was dragging its feet in trying to resolve matters with London and Westcountry, while we were negotiating in good faith. The company was seeking to refinance its business with another bank, but RBS insisted on full repayment of the loans, plus the swap penalty of about £13 million. It simply would not budge. We subsequently found out why: that debt had been earmarked for the Blackstone transaction, and RBS had no interest in resolving it sensibly with London and Westcountry. RBS would not give London and Westcountry any discount, but it gave Blackstone a 30% discount. For a bank that is owned by the taxpayer, that is an utter disgrace.

It was like going from the frying pan into the fire. The hard-nosed American venture capitalists were not remotely interested in the company’s welfare, nor in its strategic importance to the south-west. They were interested only in making as much money as possible from the deal. Within weeks, despite my protestations and those of other Members of Parliament from the region, London and Westcountry was placed into a completely unnecessary administration. Its business parks are now being flogged off one by one at a fraction of their true worth.

We have a credit crisis triggered by the corporate greed of our investment banks; we have inappropriate swap arrangements sold to companies simply to make a fat bonus for bankers; and, in the case of London and Westcountry, we have an off-balance sheet sale to a US loan shark, funded by the taxpayer, resulting in the almost immediate administration of a successful company and asset stripping on a breathtaking scale.

I think that swap mis-selling will become as big a scandal as the mis-selling of payment protection insurance. We all know that banks must make a profit, but this was not about profit; it was about greed, pure and simple. I hope that the family behind London and Westcountry will successfully sue RBS for many millions of pounds. I will do all that I can to help them. As a taxpayer, I hope that we will be able to sell RBS one day, but the bank should certainly be making provision on its balance sheet for many millions of pounds in future claims for swap mis-selling.

I hope that the FSA investigation concludes that in the mis-selling of swaps, our banks have once again behaved disgracefully, and that they should compensate all their victims. That is the important thing. I hope that the individual bankers—and in the case of London and Westcountry, senior members of Blackstone—feel thoroughly ashamed of their disgraceful conduct and unbridled greed. I also hope that Ministers will hold the directors of state-owned banks to account and recognise that although the Government are keen to sell the banks, issues of justice and compensation must be dealt with first.

Amendment of the Law

Jake Berry Excerpts

Wednesday 21st March 2012 Commons Chamber

[Stephen Mosley]

If the hon. Gentleman, my neighbour, will bear with me for 30 seconds, I will get to broadband.

[Jake Berry (Rossendale and Darwen) (Con)]

That is very fast.

[Stephen Mosley]

Ultra-fast is, I think, the current term. Mr Deputy Speaker, I know that you have been involved with the Parliamentary Internet Communications and Technology Forum. We recently arranged a series of meetings with parliamentarians and industry representatives, including the UK chief executive officers of some the world’s leading IT businesses—for example, Facebook, Intel, IBM and Fujitsu, among many others.

The universal message emanating from the meetings was that the UK technology industry must be promoted by Government whenever possible, and that greater care is needed if the UK is to attract, train and retain the highly skilled individuals who will help our economy to grow. Specifically, five key recommendations were made. The first had to do with the broadband issue: the Government must speed up the roll-out of superfast broadband. I totally support that, which is why I am absolutely delighted to welcome the Chancellor’s commitment to investing more than £780 million in broadband infrastructure to make sure that Britain has the best superfast broadband network in Europe by 2015. I am also pleased about the Government’s commitment to start the roll-out of 4G mobile networks, with the spectrum auctions planned for later this year.

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[Jake Berry]

rose—

[Stewart Hosie]

I give way one last time.

[Jake Berry]

The hon. Gentleman is being extremely generous in giving way. Before I came to this place, I worked in a law firm. We had three offices—one in Manchester, one in Liverpool and one in London. We all did the same job, but we were all paid different salaries. Does the hon. Gentleman think that that was wrong?

[Stewart Hosie]

That was in the private sector. I am sure that the hon. Gentleman would say that he would negotiate his own wages or join others in a union to negotiate wages. We are talking about public service. If the hon. Gentleman’s attitude is the same as that of his party’s Front Benchers, he will seem to be saying that a public servant in Dundee or Dudley is not worth the same as a public servant doing the same job in Dartmouth. That would be worrying.

The real actions needed to kick-start the economy were almost wholly absent from today’s statement. The limited action on bank lending was announced yesterday and we have heard many of the promises before. I hope that the national loan guarantee scheme works, but to ensure that it does can we have transparency? Can we disaggregate the numbers so that no sector and no part of the UK is sold short in respect of that additional covered lending?

There was no specific action to get people to work or keep them in their jobs. Nowhere is that issue more important than with young people. The introduction of a national insurance break to help employers take on youngsters who do not meet the criteria for the Work programme would have been very welcome, but that was missing.

Shamefully, there was no action on direct capital investment, the most important thing that any Government can do. I am surprised that those on the Treasury Bench did not listen when the OBR said in 2010 that the impact multiplier for direct investment was 1:1, that for tax cuts it was 1:0.3 and that direct capital investment was three times more important and three times more beneficial at creating GDP growth than tax cuts. The Government even kept the squeeze on the very businesses that we need to create the growth. There was no change to the miserly annual investment allowances and that was a shame.

The Chancellor said that the Budget was fiscally neutral. To pay for his tax cut for the rich, he is squeezing the cash for services for those who need them most. When one considers that the total cost of the fiscal consolidation by 2015-16 will be £155 billion, that year and every year after that, and given a ratio of 4:1 spending cuts over tax increases, we can see where the priorities of the Government lie—not with people, not with jobs and not with growth.

Banking (Responsibility and Reform)

Jake Berry Excerpts

Tuesday 7th February 2012 Commons Chamber

[Mr Jones]

I will not give way. We need to be careful that we do not vilify people whom we entrust with such positions—we should not vilify wealth creators, because they are the very people we need to get UK plc back on to its feet.

That brings me on to regulation. The tripartite system given to us by Labour clearly failed; we had banks that were thought too big to fail, with no proper checks or balances on their activity. I am pleased to say that the Financial Services Bill, which had its Second Reading yesterday unopposed, will change that situation of ring-fencing banking, so that we no longer have banks that are considered too big to fail.

That leads me on to other issues, particularly the bailing out of the banks, state ownership of banks and state guarantees for banks. They are all probably undesirable for the taxpayer and it is important that we work to try to reverse the unsustainable position that the taxpayer has been put in. We need to consider carefully how we facilitate our banking and finance industry to ensure that we can try to right the wrongs. One way of doing that is through the regulatory framework, which we are dealing with, but we can also do it through competition. We must be well aware of global competition.

I did not take part in last night’s debate on the Financial Services Bill, but spent some time listening to speech after speech from Opposition Members saying that regulation of our banking system needed to take into account the global situation that our banking industry found itself in. I totally agree, but they must therefore acknowledge in tonight’s debate that our banks must be competitive within that global market. Vilifying our banking and business sectors with an unbalanced argument and approach and putting excessive taxes on those sectors will move us away from having banks that are competitive in that global environment.

That brings me, quite neatly, to the bankers’ bonus tax, which is mentioned by the Opposition time after time. They seem very keen on that tax, which they mentioned before the Government put in place the bank levy, which raises £2.5 billion a year, rather than the £2 billion that the bankers’ bonus tax would have raised. The goalposts seem to have moved again and the Opposition seem now to be advocating that it should be an additional tax for the banks to pay.

[Jake Berry (Rossendale and Darwen) (Con)]

Will my hon. Friend give way?

[Mr Jones]

I shall give way to my hon. Friend in a moment.

[Mr Jones]

The Opposition’s position is interesting, as we are now trying to encourage our banking sector to lend, particularly to small businesses, to put their balance sheets in good order and to keep bank branches open—we expect them to do an awful lot of things as well as pay additional taxes. We need to be careful about how we approach this matter.

[Jake Berry]

My hon. Friend makes an important and powerful argument. On the specific point of the Opposition’s proposals for the banker bonus tax, is he aware that it is a tax that keeps on giving, because—

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. The intervention is far too long. The hon. Gentleman has just come in; I am not sure whether the hon. Member for Nuneaton (Mr Jones) was aware of that when he gave way. We are short on time.

Youth Unemployment and Bank Bonuses

Jake Berry Excerpts

Monday 23rd January 2012 Commons Chamber

[Mr Mudie]

I would rather the Government had not trebled tuition fees. I would rather that instead of spending £150 million they were taking the opportunity to raise £2 billion to put into youth employment. This is a very serious, non-political matter and people’s lives are going to be ruined unless they get urgent help. We should see that as a priority, and we should have no compunction about taking that money from the people who caused this difficulty. Governments, rating agencies and regulators also played a part but the sheer greed and irresponsibility of the banking and financial industry takes my breath away.

[Jake Berry (Rossendale and Darwen) (Con)]

Will the hon. Gentleman give way?

[Mr Mudie]

No, because I am short of time.

The people who caused the difficulty earn huge salaries because of gambling in the investment market, which has brought country after country and bank after bank to their knees, and which is now imperilling people’s standard of living—their homes, jobs and future. I find that unacceptable.

The shadow Minister has called for leadership, but real leadership would not involve avoiding questions about whether there is going to be a limit of £2,000 on bank bonuses. The senior director of RBS will be disappointed if he is not allowed to take his £4 million and the chief executive is expecting £2.5 million, but this is in a bank that the Government own. If we want leadership, it should come from the Chancellor and the Government, who should take the steps that are needed.

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[Mr David Ruffley (Bury St Edmunds) (Con)]

Youth unemployment and bankers’ bonuses are both too high, and the Opposition hope that by taxing the latter they can help the former. Let us first agree that help for the young unemployed is vital. The scar of joblessness destroys self-respect and will also damage the long-term economic growth rate of this country. What are the Government doing about it? They have already announced a record number of apprenticeships—440,000 in this Parliament—as well as a £1 billion youth contract and more than 250,000 more work experience places. The proposal for a tax on bankers’ bonuses is what I want to focus on. My starting point is that crony capitalism and big financial rewards for failure not only are morally offensive but they subvert the principles on which successful capitalism depends.

[Jake Berry]

Let me pick up on the point about things being morally offensive. We have heard about the Leader of the Opposition calling for Fred Goodwin’s knighthood to be removed. Does my hon. Friend agree that if that happened it would also make sense for former Labour Cabinet members who were part of the Government who led to this bankruptcy for Britain to give up their peerages in the other place?

[Mr Ruffley]

That is an interesting suggestion. I also think that the former Prime Minister should make a personal apology when our Prime Minister, who is an infinitely better one, strips Sir Fred Goodwin of that ill-deserved knighthood.

Currently, there are excessive bonuses within the sector that give capitalism a bad name. They have fostered the belief that there is a class of people who pay themselves pretty much what they like while the rest of the country has to deal with the consequences of what many of those people served up to this country by way of financial crisis. The idea that this is something that Conservatives are casual about is utterly false. The speculation by the Mayor of London about what the greatest pro-enterprise Prime Minister of the previous century would have thought of today’s sorry state of affairs was interesting. He said that we should ask

“what Margaret Thatcher would have thought of a system where directors sit on each other’s “remcoms”—remuneration committees—and defend each other’s expanding awards, even when the directors in question have presided over commercial disaster of one kind or another. She would have thought it was absurd.”

All Conservatives think that is absurd and that something must be done about it. We think that two things should be done. First, we want to encourage people of talent to come to the UK, stay here and make the City of London the greatest financial capital on planet Earth. The second thing we need to do is foster a regime in which performance is more closely tied to reward. Quite frankly, that is not extant.

I suggest that a new blanket tax on bankers’ bonuses would undermine those aims, or at best do nothing to advance them. It would do nothing to distinguish between cases in which an executive had genuinely earned a reward by turning around a failing organisation, increasing profitability or increasing returns to shareholders, and cases in which executives had taken advantage of lax scrutiny to take excessive rewards for their failure. There is a distinction between the rich and the undeserving rich, of whom Sir Fred Goodwin is a terrible exemplar.

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[Jake Berry (Rossendale and Darwen) (Con)]

It is clear to everybody in the House, regardless which side they sit on, that we are facing exceptionally difficult economic times in this country. I calculated that by the end of this speech, with a six-minute time limit in force and with no interventions, we will have spent in excess of £500,000 just on debt interest. Our national debt is like a credit card, and the sooner we get to grips with it, the better. I do not want to have to look the next generation of young people in the eye and say, “We were the Government, we were the group of MPs, who shoved our heads in the sand and refused to tackle our national debt,” so that we could pass it on to them.

We have seen a hugely unwelcome increase in unemployment, and an exacerbation of the existing problem of youth unemployment. The Leader of the Opposition admitted in November last year that youth unemployment was not invented by this Government, but was a problem under the previous Government. The motion seeks to link the problem of youth unemployment simplistically to a failed tax on bankers’ bonuses.

This truly is the tax that keeps on giving. So far, there have been proposals to use it to tackle unemployment among older people, to tackle unemployment among younger people, to fund capital projects, to reverse VAT increases, to cut taxes on fuel, to cut VAT on home improvements, to build 25,000 more houses, and today to create 100,000 new jobs. That clearly shows that the Labour party has no new ideas. It cannot be only today’s ICM/Guardian poll that is depressing them. It is also the fact that a party that claims to represent the workers has come to represent the something-for-nothing culture, a party that claims to fight inequality increased inequality in 13 years in government, and at the end of the largest economic boom that we have ever witnessed, Labour left 270,000 more young people out of work than when it came to office. That is an appalling legacy. The solution is not more of the same, not to pile debt on debt, not to try and spend ourselves rich.

The motion sounds like the Opposition are being advised by Charles Ponzi and has about as much credence as the claim by the captain of the Costa Concordia that he slipped and fell into the lifeboat. The Government, however, must take true steps to tackle youth unemployment, and there is no panacea.

One thing we must do is tackle the skills gap. The hon. Member for Leeds West (Rachel Reeves), who is no longer in her place, said that she hoped MPs would today bring forward positive solutions on the question of what they can do. A little-known fact about the junction 4 retail park in Darwen—unless one is the MP for the area—is that it is the country’s specialist area for the creation of computer games. When I ask those businesses how many young people from the area they employ, they say none, because young people in Darwen are leaving our schools without the menu of skills that the businesses want when they recruit. That is why it is vital that we continue to increase the links between schools and local employers.

[Esther McVey]

It is not just computer games and electronics companies that say that. The Institute for Manufacturing, the Institute of Physics and the chemicals industry say that we have not produced enough people in science to be the technicians and engineers, that we have a dearth of those skills and that they have had to bring in people from outside the country to do those jobs, which is a crying shame.

[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.

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[Mr Iain McKenzie (Inverclyde) (Lab)]

It will come as no surprise that I want to focus on the UK unemployment blackspot that is Scotland. Scotland’s unemployment crisis has become a national tragedy with 250,000 people out of work, and our young people are one of the hardest hit groups. The number of young people claiming jobseeker’s allowance for more than six months has soared by 93% in my constituency and unemployment in Scotland has risen by 8.6%, with some 19,000 more people out of work this year. Scotland now has higher unemployment than the rest of the UK, with 200 Scots losing their job every day. Those figures only confirm what families in my constituency already know, which is that we are facing an unemployment emergency.

[Jake Berry]

As the hon. Gentleman is addressing his concerns to unemployment in Scotland, can he confirm whether it went up or down during the last quarter?

[Mr McKenzie]

Unemployment in Scotland is suffering the double-whammy of not only the UK Government but the Scottish Government. It is obvious where the Scottish National Members are tonight—they are not in the Chamber debating unemployment in Scotland.

For my constituents and millions of hard-pressed families, reports in the news that RBS is preparing to offer a bonus of more than £1 million to its chief executive look like nothing more than huge reward for failure. That leaves my young constituents to ask only one question: what about us? So, what about them? Labour has for some time argued for a tax on bank bonuses to fund 100,000 jobs for young people. Our country needs a new plan for jobs, so the Government should adopt Labour’s five-point plan for jobs, incorporating the tax on bankers’ bonuses to fund those 100,000 jobs for young people and a temporary VAT cut to help people struggling with rising prices, and kick-start the economy.

Jobs for young people in my constituency of Inverclyde are of the utmost importance, which is why we cannot wait for the UK or Scottish Government to act and have commenced putting in place our own plans. I acknowledge the efforts made by the hon. Member for Rossendale and Darwen (Jake Berry) in going around all the businesses in his constituency and I can tell him that I will be taking up that challenge over the coming weeks and months. Unfortunately, I might not have the handsome list of businesses that I have visited to quote, which is unfortunate and will make the challenge more difficult. I, along with my Labour-controlled council and my MSP, will commit to searching for jobs and, I hope, to attracting other businesses to the constituency.

I have highlighted in the House before the Labour-led council’s brave decision to go it alone with the future jobs fund after that initiative was scrapped such a short time ago by the Government. We are uniquely successful: we were the second best-performing local authority in the country as regards the future jobs fund, putting some 500 young people a year into employment, 80% of whom remained in those jobs. That again will prove successful. Now, after clever procurement by my council, which has delivered projects under budget, we are in a position to put more funds into alleviating the disgrace of youth unemployment.

As a small council we cannot continue to finance such projects indefinitely, so we need both the UK and Scottish Governments to act now and implement plans to alleviate youth unemployment. Getting people, and especially our young people, back to work is the best way to put the UK, Scotland and Inverclyde back on the right course. As the Deputy Prime Minister said:

“I think fairness starts with doing the right thing for our young people”.

He went on to outline a £1 billion plan to provide subsidised work and training placements to thousands of young people. That initiative has all the hallmarks of a watered-down version of Labour’s future jobs fund, which the coalition scrapped after coming to power. The initiative guaranteed under-24s out of work for six months or more a job or training. The young people in my constituency need work and they need opportunities. They do not wish to live on benefits, but they still await action from this Government and the one in Edinburgh on tackling youth unemployment.

Our young people cannot take another year of failure from Government to react to the crisis. They need, they deserve and they have the right to a job. It should be the duty of all Governments to eliminate unemployment.

Oral Answers to Questions

Jake Berry Excerpts

Tuesday 1st November 2011 Commons Chamber

[Mr Osborne]

The Chief Secretary will shortly set out the full details of our pension offer to the public sector. When people see it, they will see that it is fair to the public sector—people in the public sector will get a much more generous pension than is available in almost any part of the private sector—but it is also fair to the taxpayers. It is, of course, based on the work of John Hutton, a former Labour Pensions Secretary.

[Jake Berry (Rossendale and Darwen) (Con)]

T3. Labour-controlled Blackburn with Darwen council has abandoned pensioners and schoolchildren in my constituency because of a £10,000 bus cut, but it can still find £94,500 to fund trade union officials. Does my right hon. Friend think it is right that the taxpayer picks up the tab for trade union officials?

[Mr Osborne]

In central Government we have announced that we are reducing the facility time, as it is called, in the civil service because we do not think it is fair that taxpayers should be paying for so many full-time trade union officials. Obviously, it is up to Blackburn with Darwen council to decide how it spends its council tax payers’ money, but from what my hon. Friend is telling me, it does not look as if the council is spending it particularly well.

Jobs and Growth

Jake Berry Excerpts

Wednesday 12th October 2011 Commons Chamber

[Jake Berry (Rossendale and Darwen) (Con)]

I am delighted to see that the reshuffle of the shadow Cabinet has had a real effect on its sense of humour. Government Members are of course used to the fake outrage all the time, but the terms of the motion suggest that the Opposition seem to have discovered irony.

I will not support the motion, because it demonstrates the Opposition’s fundamental failure to have any credible economic policy whatever. This five-point plan is a nationalised Ponzi scheme on steroids. Even in itself it would add £3.1 billion to our deficit. The Opposition probably do not understand what a Ponzi scheme is, but they should look at their own manifesto. People in my constituency do not believe that the way out of debt is to take on more debt. They do not believe that the way to reduce their personal liability is to spend more money.

[Alison McGovern]

The hon. Gentleman is incorrect, because if there were investment it would not be a fake Ponzi scheme—the assets would be real, unlike in an actual Ponzi scheme.

[Jake Berry]

I never said it was a fake Ponzi scheme, I said it was a real Ponzi scheme. That is the basis of the Opposition’s entire policy.

The markets believe in our plan and want us to stick to plan A: actually, so does every hard-working family in my constituency. They are struggling with personal loans and do not want interest rates to go up. Like so many of us, they are struggling with mortgages and cannot afford that to happen. The Prime Minister has offered real leadership throughout this, and the Chancellor of the Exchequer has been honest. That is in stark contrast to the Labour party’s constant line of “too far, too fast”.

What is the Opposition’s alternative? This five-point plan is simply too little, too late. They believe, “Why repay borrowing today when we can have business as usual and bankrupt Britain tomorrow?”

[Andrew Bridgen]

Does my hon. Friend agree that, like a compulsive gambler believes that one more big bet will solve all his problems, the shadow Chancellor and the Labour party believe that one more credit splurge will get us out of a debt crisis?

[Jake Berry]

I do, and for all addicts the hardest thing to do is admit that they have a problem. When this Government came to power in May 2010, we admitted that we had a problem with debt. Even if we fall off the wagon temporarily, we know we have that problem and so we get straight back on it. The Labour party has not even admitted it—it thinks it gave us a golden economic inheritance.

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

Can the hon. Gentleman tell us by how much unemployment has risen in Rossendale and Darwen in the past 12 months?

[Jake Berry]

I am sure that the hon. Gentleman will provide me with the figures—

[Rachel Reeves (Leeds West) (Lab)]

Do you not know?

--- Later in debate ---

[Jake Berry]

I do know. However, I can guarantee my constituents one thing, and one thing only: unemployment has not gone up by as much as it would have done if we had had Labour’s Ponzi scheme.

[Several hon. Members]

rose—

[Jake Berry]

I am sorry, but I will not give way again because I am running out of time and I have many points to make.

Let us look at the facts. Back in May 2010, when we came to power, we had 0.1% less debt than Greece as a proportion of GDP. Labour Members can criticise us and say that making cuts damages growth, but let us look at their alternative. Their alternative—too little, too late—would mean, as in Greece, a 15% pay cut for every doctor, nurse and policeman, and every public sector worker; and a cut of up to 40% in pensions. That is what too little, too late means.

[Emma Reynolds (Wolverhampton North East) (Lab)]

Will the hon. Gentleman give way?

[Jake Berry]

I am sorry, but I will not give way. I want to make progress.

The Labour party opposes the Government’s public spending cuts, but its alternative—the too little, too late alternative—would mean that our economy, like Greece’s, would shrink by 5% this year, and that mortgage rates would rocket. One of the things that Government Members are most proud of is our desire and aspiration to increase the tax threshold to take many of the lowest paid in our society out of tax altogether. Had we followed the too little, too late approach, as Greece did, we would have had to cut our tax-free allowance by 50%.

The Chancellor has been frank about the choppy waters ahead, yet businesses in my constituency of Rossendale and Darwen still strive to succeed. Businesses such as J&J Ormerod, the largest employer in my constituency, B&E Boys, Crown Paints and WEC engineering, are doing their best to manufacture proper products and to rebalance the UK economy, despite tough times. Those businesses know about the Labour party’s economic illiteracy. That is why, before the general election, some of them signed a letter opposing Labour’s jobs tax. Businesses in my constituency will not forget that the previous Government were the enemy of enterprise and industry, and that Labour is the party of the jobs tax.

[Rachel Reeves]

Will the hon. Gentleman give way?

[Jake Berry]

Sorry, I will not.

How ironic it is that the Opposition motion calls for a cut in national insurance. That is too little, too late, and business in my constituency knows that the Labour party is not the solution but, in fact, the problem.

[Rachel Reeves]

Will the hon. Gentleman give way?

[Jake Berry]

Sorry, but I will not.

Looking at today’s job figures, including the increase in unemployment in my constituency—

[Rachel Reeves]

The increase was 29.2%.

--- Later in debate ---

[Jake Berry]

The Opposition Front Bencher says from a sedentary position that the increase is 29.2%. I have real sympathy for those experiencing the increase in unemployment. People are facing an unbelievably tough time. These are uncertain times for all of us. However, if we are to have a successful economy in Rossendale and Darwen, and if we are to get people back into work, we must keep low borrowing rates and support the new enterprise zone in Lancashire, which will create jobs. Our manufacturing businesses are not thriving, but they are still growing. Companies such as Linemark in my constituency, which has just won the Queen’s award for enterprise, are growing through innovation.

The key to our success in east Lancashire in business, jobs and families is low interest rates, so we must stick to plan A. We must enable jobs and growth in Rossendale and Darwen.

Eurozone

Jake Berry Excerpts

Monday 10th October 2011 Commons Chamber

[Mr Osborne]

There is greater recognition in other European member states that we need to make the European continent more competitive, and the pamphlet that we sponsored on making Europe more competitive, which the Prime Minister presented at the European Council, was endorsed by a number of other member states.

[Jake Berry (Rossendale and Darwen) (Con)]

International media, particularly in the USA, are beginning to say that it is a matter of when, not if, Greece defaults on her sovereign debt and leaves the euro. If “I told you so” is not the basis of a good economic policy, what credible and mature plans do we have to deal with the Greek default?

European Union Fiscal Union

Jake Berry Excerpts

Wednesday 14th September 2011 Westminster Hall

[Mr Cash]

Opinion polls in this country have regularly indicated that 70% want a referendum and, moreover, would vote yes against the idea of the continuation of our present relationship with the European Union. People want renegotiation and if they do not get it, they want to leave. That is the position.

We are confronted with an incredibly serious situation that is getting worse. There will be a telephone conference this afternoon—it might already be in progress, at the very moment when we are debating this question—between Monsieur Sarkozy, Angela Merkel and Papandreou, because the system has failed. If, however, we raise the question of its failure, the response is, “We don’t want less Europe; we want more,” so they want more integration, not less.

[Jake Berry (Rossendale and Darwen) (Con)]

Will my hon. Friend concede that the system was set up to fail by the fiddling of figures when it was established?

[Mr Cash]

Yes, I certainly will. In the case of Greece, it is perfectly clear that, to put it bluntly, misrepresentations —and even lies—were contained in the statistical base on which it was brought in. Indeed, even the present German Chancellor has criticised the way in which it was allowed to come in when it did.

In his speech, Mr Barroso said:

“The conclusion I draw is crystal clear—The only right way to stop the negative cycle and to strengthen the euro is to deepen integration, namely within the Euro area, based on the Community method.”

He went on to say:

“What we need now is a new, unifying impulse—‘un nouveau moment fédérateur’”.

Let us get this clear—he means a new moment of federal fervour, although that is my translation. He continued by saying,

“let’s not be afraid of the word, moment fédérateur is indispensable.”

He went on:

“It has become clear that we need an even greater integration of our economic and budgetary policies.”

Do not get the impression that he is referring exclusively to the proposed fiscal union. His ambitions extend to the whole European Union. This is a call to arms by the Eurofanatics—let us be in no doubt about that.

On eurobonds, Mr Barroso, having said that we need even greater integration of our economic and budgetary policies, confirms that the Commission, again, on behalf of the European Union,

“will soon present options for the introduction of Eurobonds”,

on which, as it happens, the German constitutional court has cast grave aspersions. Indeed, I understand that the President of the German Republic has also said that he regards them as illegal. I could spend a lot of time going into that, but I do not need to for the moment. Mr Barroso said:

“Some of these options could be implemented within the terms of the current Treaty”—

that is the abominable Lisbon treaty, which we accepted after we had opposed it as a party, united together, and called for a referendum that we never got—

“and others would require Treaty change.”

I wanted to draw all those matters to the attention of my colleagues, because they are the latest emanations from the European Commission. This is what it is about and, as we speak, none of it is being reported.

Oral Answers to Questions

Jake Berry Excerpts

Tuesday 6th September 2011 Commons Chamber

[Mr Hoban]

I wonder whether the hon. Gentleman’s remarks about the loss of credibility for Treasury Ministers reflect his own experience.

[Jake Berry (Rossendale and Darwen) (Con)]

Given how badly prepared the UK economy was for the financial crisis, does the Minister think that it was delusional to believe that its effects would be over in six months?