Oral Answers to Questions

John Redwood Excerpts

Tuesday 21st June 2011 Commons Chamber

[Mr Osborne]

My hon. Friend draws attention to the completely ludicrous policy put forward by the shadow Chancellor last week—it was mentioned just on that Thursday, and has not been repeated by any Labour politician since—for a £13 billion unfunded tax change, or £51 billion over the Parliament. The policy is totally incredible, and was rejected by every serious economic commentator on the day. It just shows how far those on the shadow Front Bench have to go to make good for the mistakes that they made in office.

[Mr John Redwood (Wokingham) (Con)]

Given the large amount of state bank debt still on the balance sheet, will my right hon. Friend consider a scheme to make an early transfer of shares in the state-owned banks to taxpayers for free, on condition that, as and when people sell, they send money back to the Treasury to represent the Treasury cost of those shares?

[Mr Osborne]

I am always happy to discuss the ideas of my right hon. Friend or other Members on how we dispose of those bank shares. The House will know that we announced last week that we are putting Northern Rock up for sale—the good bank in Northern Rock, of course; the state will hold on to the bad bank for many years to come. We want to exit from our shareholdings in RBS and Lloyds in due course, but we do not judge now to be the right time.

--- Later in debate ---

[Mr Hoban]

The hon. Lady is right to highlight the increased number of repossessions. We want to see a strong and stable housing market. The Government have taken action to support those who wish to stay in their homes through an extension of the scheme for mortgage interest support. We are continuing to make sure that advice is available to people who are facing difficulties in meeting their mortgage payments. The important thing, however, is to keep interest rates as low as possible for as long as possible so that families are not faced with an increase in their mortgage payments.

[Mr John Redwood (Wokingham) (Con)]

Given the lack of growth in money and credit, is there anything else that the Government can do to promote the growth in the economy that is so crucial to their plans?

[Mr George Osborne]

As my right hon. Friend will know, the supply-side reforms that were set out in the growth review, including the reduction in corporate tax rates, are key. At the same time, as banks’ balance sheets inevitably contract after the credit crunch and after the dramatic increase in the size of balance sheets over recent years, we need to ensure that we try to protect small and medium-sized businesses from the effects of that. That is why we concluded the Merlin deal with the banks.