European Council

Julian Brazier Excerpts

Monday 27th June 2011 Commons Chamber

[The Prime Minister]

Of course, everyone is free to speculate about the different paths that Greece might take or might like to take, but it is not for the Government of the UK to speculate about another country’s finances. The Greek Government have made their decision, backed by the eurozone and the European Council, to seek further austerity measures so that they can deal with their deficit. That is the decision they have taken, that is what is supported by eurozone money, and the IMF will lend money only if it believes that it can be paid back.

On deficits, let me just make the point before people get too over-confident that if we look at 2011, we find that the UK’s deficit is 8.6% compared with Greece at 7.4%. That to me underlines the importance of our domestic programme of dealing with our debts and our deficit—[Interruption]—and not of charging around, as the most annoying man in British politics is currently doing, and suggesting a £51 billion VAT cut.

[Mr Julian Brazier (Canterbury) (Con)]

My right hon. Friend rightly acknowledges the tension between, on the one hand, the need to rebuild capital ratios in order to achieve resilience in the banking sector and, on the other, the crying domestic need to get banks lending again. Does he agree that part of the solution lies in tackling the barriers to entry for potential new lenders, and that that could start with Brussels looking again at the uneven regulation on overdrafts, on how banks are allowed to market them and on how other lenders handle short-term lending?

[The Prime Minister]

My hon. Friend makes a very important point. Of course, if we are asking banks to rebuild their balance sheets and their reserves, there is a tension with that compared with asking them to lend. One of the solutions, as he says, is to make sure that there are new entrants into the banking sector, and that is something we are keen to secure.